Some friends in Turkey mentioned this fund TLY: https://fonlarca.com/en/fon/tly.html
The returns are the definition of "too good to be true":
- 2025: +4,200%
- 2026 YTD: +230%
- Sharpe apparently around 2.2
It supposedly became really popular with retail investors, which makes sense when the chart looks like this 🙂 (check the link!).
From what I can tell, there seems to be a pretty circular setup where the fund owns closely-related/shell-like companies connected to the same broader ecosystem, money flows into the fund, the fund buys those stocks, the stocks go up, NAV goes up, more retail money comes in, etc.
I’m not saying it’s necessarily fraud or a Ponzi, but the whole thing looks extremely circular to me, especially if the fund owns a huge percentage of the free float of some of these companies.
My basic thought is:
retail inflows → fund buys illiquid stocks → stocks rocket → NAV rockets → more inflows
The fund reportedly went from about TRY 35bn AUM in Dec 2025 to TRY 245bn now (\~$5bn USD).
So I’m wondering:
- Is there actually a way to short this fund TLY?
- Can you short / buy puts on the main underlying Turkish stocks instead?
- Is there some structural reason this can keep working much longer than it looks like it should? I guess can't grow beyond Turkey's total GDP :)
- If redemptions start, does this become a death spiral because the fund has to sell the same illiquid stuff that created the gains?
Obviously “this looks insane” is not a timing strategy and if the Sharpe really is 2.2 maybe just stay away 😂