March 10, 2021
February shocked U.S. markets quickly and effectively as rising yields pulled investors out of what had been somewhat reliable growth equities and into the bond market. While still early in the year, risk free rates proved more attractive than market risk even though market investors had been, thus far, rewarded for keeping the faith.
Equities were further pushed down due to inflation worries even as the Federal Reserve sought to cool those concerns by reiterating its monetary policy as appropriate and taking the position that the U.S. would not experience rapid inflation during 2021. Even so, the with the relatively calm bond market turning red hot practically overnight it may be reasonably said that investors are not aligned with the Fed’s sentiment.
The Stadion Tactical Growth Fund’s allocation at the start of February was 81% U.S. Equities, 5% International Equities, 7.5% Fixed Income, 2.5% Gold Miners, and 4% Cash. Our holdings performed very well in the first half of the month. Small Cap and Value lead the way with nearly all our holdings’ rankings improving strongly.
Market weakness at the end of the February caused us to give back some of our year-to-date gains but only moved the rankings enough to generate two changes. On February 26 we sold both our Gold Miners and Japan to cash. As of February 28, the fund held 82.5% in U.S. Equities, 7% Fixed Income, and 10.5% Cash. We run our rankings daily and we will continue to try to build a diversified portfolio that compensates well for risk.
For February, the Stadion Tactical Growth Fund Class I returned 1.87% versus its benchmark Morningstar Moderately Aggressive Target Risk which returned 2.28%.
To view the most recent performance for the Stadion Tactical Growth Fund, click here.
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.
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.
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The Stadion Funds are distributed by ALPS Distributors, Inc. An investment in the Funds involves risk, including loss of principal.