August 12, 2019
US equities continued their rise throughout July though the pace was more measured than might have been expected. Investor hope that the Federal Reserve would cut rates in July seemed to keep stocks well supported throughout the month and, of course, on July 31 the Fed did just that. The yield curve remains slightly inverted, but otherwise relatively unchanged. The front end of the curve moved up slightly and by month's end the US Treasury 3-month note was at 2.08% and the 10-year note at 2.02%.1
Our allocation at the end of June was 77.5% Equities [51% U.S. & 26.5% International], 17.5% Fixed Income, 3% Precious Metals, and 2% Cash. U.S. Equities showed increased strength in our rankings during July and we moved to a slightly more aggressive allocation. The following trades were made during July: On July 12 we moved a portion of our EFA (Europe, Far East, Australasia) holdings, as tracked by the MSCI EAFE Net Total Return Index, and short-duration treasury holdings to an exchange traded fund (ETF) that tracks the NASDAQ 100. We closed June holding 80% Equities [56% U.S. & 24% International], 15% Fixed Income, 3% Gold, and 2% Money Market.
We are at our long-term average for Equity holdings and the International component now represents less than one-third of the exposure. Our Fixed Income investments are all on the short-end of the yield curve due to their low volatility and steady gains. We will continue to monitor our rankings and holdings and attempt to build a diversified portfolio of ETFs that compensate well for risk.
Stadion Tactical Growth returned 0.16% for the month of June while our benchmark, Morningstar Moderately Aggressive Target Risk returned 0.33%.
To view the most recent performance for the Stadion Tactical Growth Fund, click here.
1https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2019; Accessed August 2, 2019
The NASDAQ 100 Index includes 100 of the largest domestic and international non-financial securities listed on The Nasdaq Stock Market based on market capitalization.
An Exchange Traded Fund (ETF) is a fund that tracks a specific index (bonds, commodities, etc.) but trades on stock exchange in the same manner as common stocks. ETFs tend to have higher liquidity than mutual funds.
The MSCI EAFE Net Total Return Index is a free float-adjusted market capitalization index that is designed to offer a representation of equity market performance of developed markets in Europe, Australasia and the Far East.
The 3-Month Treasury note is a short-term U.S. government security with a constant maturity period of 3 months.
The 10-year Treasury note is a debt obligation issued by the United States government with a maturity of 10 years upon initial issuance. A 10-year Treasury note pays interest at a fixed rate once every six months and pays the face value to the holder at maturity.
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 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.
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.
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.