January ushered in a new regime for the U.S., as President Trump immediately started shaking things up. Despite the political turmoil caused by what seems to be an increasingly unpopular stance on foreign policy, the markets more or less shrugged it off, at least for now, resulting in a rather benign January. The S&P 500 rallied over the first two days of the month, then traded sideways, and ended with another positive 2-day blip on the 24th and 25th. So while overall the index returned +1.9%, most of the action only occurred over four trading sessions. Interest rates also appeared puzzled as the 10-year Treasury bond traded in a 15 basis point range and closed the month essentially unchanged. There were some small signs of trepidation, as small caps slightly underperformed large caps which we interpret as potential weakness. Additionally, gold was very strong at about +5% on the month, and the dollar sold off about -2.5%.
As a dynamic asset allocation strategy, the Stadion Tactical Growth Fund follows an investment framework that analyzes the Sharpe ratio of all Exchange Traded Funds (ETFs) over multiple time periods. Given the simplicity of the Sharpe ratio, we have a unique lens into market activity by observing the interaction of risk and return. Our rankings evaluate over 1500+ ETFs, with our focus list concentrating on those that track well known asset classes, indexes, and markets.
So where does that leave the Fund? While there were some signs of potential rotation in the market, the risk/return profiles of our existing holdings did not shift significantly enough to cause a change in position. As such, our holdings remained unchanged during January at an approximate 70% equity-correlated position with a continued higher allocation to small caps and a 30% non-correlated position, which maintained an allocation to positions taking advantage of higher interest rates.
As time progresses, we will continue to monitor changing market dynamics, ignoring what others may forecast, and adjust our exposure accordingly.
To view the most recent performance for the Stadion Tactical Growth Fund, click here.
Performance data quoted represent past performance. Past performance is no guarantee of future results. Investments are subject to risk, and any of Stadion’s investment strategies may lose money. Stadion’s actively managed portfolios may underperform in bull markets. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance data may be lower or higher than the performance data quoted. To review our most recent monthly performance, please visit www.stadionfunds.com.
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 index shown is defined as follows.
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.
One cannot invest directly in an index.
All Benchmarks composite data supplied by third party vendors, assumes re-investment of all dividends.
Sharpe ratio: Measures the excess return per unit of deviation, or risk.
Beta is a measure of systematic risk, or the sensitivity of a manager to movements in the benchmark. A beta of 1 implies that you can expect the movement of a manager’s return series to match that of the benchmark used to measure beta.
Diversification does not eliminate the risk of experiencing investment losses.
Correlation is a measure of how investments move in relation to one another. A correlation of 1 means two asset classes move precisely in line with each other, while a correlation of -1 means they move in the exact opposite direction.
*Performance numbers as of January 31, 2017
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.
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.
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.
The Stadion Funds are distributed by ALPS Distributors, Inc.
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.