August 12, 2019-After beginning the month at, or near, all-time highs the market enjoyed a relatively quiet July. While continuing to climb it was still subject to low-volume trading which can be typical of Summer. Additionally, markets were waiting for a decision by the Federal Reserve over whether the central bank would cut rates. Sure enough, the Fed cut its Federal Funds rate by 0.25% at the end of July and thus held true to its promise of providing economic support if needed. All three major domestic indices made new all-time highs in July and ended the month positive. The S&P 500 Index ended the month up 1.44%, the NASDAQ Composite Index rose 2.16%, and the Dow Jones Industrial Average Index gained 1.12%. International markets struggled to keep up in July after their positive June and there remains a handful of geopolitical risks that are cause for concern in both developed and emerging markets. The most looming of these is that which we have seen dominate headlines over the last year: the uncertainty regarding the US-China trade war. The MSCI Emerging Net Total Return Index ended July down -1.22% and the MSCI EAFE Net Total Return Index lost -1.27%.
The Stadion Tactical Defensive Fund began the month of July in a fully invested portfolio with 100% equities. There were no trades in the Tactical Defensive Fund as the underlying indicators in both the Dynamic Trend model and Cyclical Trend model only strengthened over the month. If we happen to see an increase in market volatility, our Dynamic Trend model’s underlying indicators should react, and we will go to a more defensive portfolio. The Cyclical Trend model looks to be locked in showing a favorable equity environment for the long term.
The Stadion Tactical Defensive Fund is a conservative equity fund seeking to participate in expanding market cycles and retains the ability to become 100% defensive if conditions deteriorate. Over a full market cycle, the Stadion Tactical Defensive Fund tends to have a conservative profile It combines two elements of trend following: a focus on longer-term cyclical trends (the core portfolio) and the balance of risk-mitigation and returns-seeking among shorter to intermediate trends (the satellite portfolio). The goal of these collaborative strategies is capital appreciation as measured across full market cycles.
In July, the Tactical Defensive Fund’s I-share returned 0.84% versus its benchmark of the Morningstar Moderate Target Risk Index of 0.32%.
To view the most recent performance for the Stadion Tactical Defensive Fund, click here.
The S&P 500 Index is the Standard & Poor’s Composite Index of 500 stocks and is a widely recognized, unmanaged index of common stock prices.
The NASDAQ Composite is a stock market index of the common stocks and similar securities listed on the NASDAQ stock market and it is highly followed in the U.S. as an indicator of the performance of stocks of technology companies and growth companies.
The MSCI EAFE Net Total Index (Europe, Australasia, Far East) is an unmanaged free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. As a total return index, it tracks the capital gains of a group of stocks over time and assumes reinvestment of any cash distributions.
The MSCI Emerging Markets Net Total Return Index consists of 23 economies including Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and the United Arab Emirates. The MSCI is a float-adjusted market capitalization index. As a total return index, it tracks the capital gains of a group of stocks over time and assumes reinvestment of any cash distributions.
The Morningstar Target Risk Index family is designed to meet the needs of investors who would like to maintain a target level of equity exposure through a portfolio diversified across equities, bonds and inflation-hedged instruments. The Morningstar Moderate Target Risk Index seeks approximately 60% global equity exposure.
One cannot invest directly in an index.
The Reports’ commentary, analysis, opinions, advice, and recommendations represent the personal and subjective views of the author and are subject to change at any time without notice.
There are additional costs and potential risks associated with investing in domestic and international Exchange Traded Funds (ETFs). Investment in the Fund is subject to investment risks, including, without limitation, market risk, management style risk, risks related to “fund of funds” structure, sector risk, fixed income risk, tracking risk, risks related to ETF net asset value and market price, foreign securities risk, risks related to portfolio turnover and small capitalization companies’ risk. Since each Stadion Fund is a “fund of funds,” an investor will indirectly bear fees and expenses charged by the underlying ETFs and investment companies in which a Stadion Fund invests in addition to a Stadion Fund’s direct fees and expenses. More information about these risks and other risks can be found in the Fund’s prospectus.
Diversification does not eliminate the risk of experiencing investment losses. There are risks associated with the potential investment of the Fund’s assets in fixed income investments, which include credit risk, interest rate risk, and maturity risk among others. These risks could affect the value of investments of the Fund, possibly causing the Fund’s share price and total return to be reduced and fluctuate more than other types of investments. Additional information about fixed income risks can be found in the Fund’s SAI. Investment Objective: Seek long-term capital appreciation.
An investor should consider the investment objectives, risks, and charges and expenses of the Stadion Funds carefully before investing. The prospectus contains this and other information about the Funds. A copy of the prospectus is available by calling Stadion Funds directly at (866) 383-7636 or Stadion Money Management, LLC., the investment advisor, at (800) 222-7636. The prospectus should be read carefully before investing.
The Stadion Funds are distributed by ALPS Distributors, Inc. An investment in the Funds involves risk, including loss of principal.