Back

Stadion Tactical Growth Fund Commentary August 2020

September 9, 2020

Domestic economic news in August continued to tread murky waters in terms of historically elevated unemployment numbers, lack of a fully renegotiated stimulus bill, and still-depressed consumer spending. There have been select moments of temporary relief, though, through moratoriums on evictions, the authorization of payroll tax deferrals, and extended enhanced unemployment benefits authorized through the Lost Wages Assistance (LWA)1 program administered by the Federal Emergency Management Agency (FEMA).

As we know, the market is not necessarily reflective of the overall economy and 2020’s stark disparity continued through August as stocks once again reached all time highs.

The Federal Reserve statement this month2 was very supportive of stocks as Chairman Jerome Powell stated they expect rates to remain near zero over the next 5 years. This helped stocks shrug off the Fed’s new stance on a wider inflation target surrounding the traditional 2% hard target.  With the COVID stimulus increasing the money supply and rates being held near zero that money seems to be finding its way into equities as it is one of the few places to get desired returns on investment. 

Tactical Growth’s allocation at the end of July was 64% U.S. Equities, 5% International Equities, 20.5% Short-term Fixed Income, 5% Precious Metals, and 5.5% Money Market.  We made one change to the portfolio during August.  On the 25th we sold our 10% position in U.S. 7-10 year Treasuries and put the proceeds in our money market account.  Therefore, our allocation percentages are the same as above, we only changed the duration of our fixed income holdings.

Our four different asset classes [U.S. equity, International equity, U.S. fixed income, and Precious metals] and working well together.  Our U.S. equity is heavily weighted to Large Cap Growth and Technology.  We will continue to try to build a diversified portfolio of well-run ETFs.

For August, the Stadion Tactical Growth Fund Class I returned 5.41% versus its benchmark Morningstar Moderately Aggressive Target Risk which returned 4.07%.

To view the most recent performance for the Stadion Tactical Growth Fund, click here.

Past performance is no guarantee of future results. Investments are subject to risk, and any of Stadion’s investment strategies may lose money. The investment strategies presented are not appropriate for every investor and financial advisors should review the terms and conditions and risks involved. Stadion’s actively managed portfolios may underperform during bull markets. Some information contained herein was prepared by or obtained from sources that Stadion believes to be reliable. There is no assurance that any of the target prices or other forward-looking statements mentioned will be attained. Any market prices are only indications of market values and are subject to change.

1https://www.dol.gov/newsroom/releases/eta/eta20200812-0 Published August 12, 2020; Accessed September 2, 2020

2https://www.federalreserve.gov/newsevents/speech/powell20200827a.htm; Published August 27, 2020; Accessed September 2, 2020

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 Moderately Aggressive Target Risk Index seeks approximately 80% global equity exposure.

One cannot invest directly in an index.

The Report’s commentary, analysis, opinions, advice, and recommendations represent the personal and subjective view of the author and are subject to change at any time without notice.

The Lost Wages Assistance (LWA) program is authorized by Presidential Memorandum, and provides claimants in most Unemployment Insurance (UI) programs up to $400 per week additional benefits, starting with weeks of unemployment ending on or after Aug. 1, 2020, and ending Dec. 27, 2020 at the latest. LWA will be administered by states and territories through a grant agreement with the U.S. Department of Homeland Security’s Federal Emergency Management Agency (FEMA) and with support from the Labor Department.

Risks

There are additional costs and potential risks associated with investing in domestic and international Exchange Traded Funds (ETFs). Investment in the Fund is subjective 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.

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 statement of additional information (“SAI”). Investment Objective: Seek long-term capital appreciation.

Not all investors are eligible for each share class, including I shares. Performance and expense may vary between share classes.

The Fund’s foreign investments generally carry more risks than funds that invest strictly in U.S. Assets including currency risk, geographic risk, and emerging market risk. Risks can also result from varying stages of economic and political development, differing regulatory environments’ trading days and accounting standards, and higher transaction costs of non-U.S. markets.

STN002794

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.