The close of June 2017 marks one of the best first halves of the year for the S&P 500 since 2013. Just as with all markets, forces driving price action are in constant flux. For example, in 2013 International markets were up minimally compared to the S&P 500’s advance, whereas this year International markets are actually outpacing the S&P 500. Also, the S&P 500 has been up each month this year, which is a feat that hasn’t happened since 1996. With a bull market comes investor complacency and low market volatility. Mainstream financial media has been flaunting repetitively the extremely low Volatility Index (VIX) readings, but they usually do not report on true risk, which we define as loss of account value. As you might suspect, these two measures are somewhat related, and we saw the largest S&P pullback being -2.80%.
With the bull market continuing higher in June, the Stadion Tactical Growth Fund did not have any portfolio changes during the month. Stadion Tactical Growth Fund uses a Sharpe-ratio based selection process geared toward identifying alpha opportunities over key market dates. As a tactical allocation strategy, the Fund's goal is to maintain a well-diversified portfolio, at times including non-correlated positions and fixed income. Our diversification levels can change based on market conditions, positioning for growth when needed but also diversifying against loss of account value when signaled. The Fund is approximately 14% in non-correlated positions and fixed income for diversification purposes. U.S. equity came in at 74% with the majority invested in Small Caps, Nasdaq 100, S&P 500, and Vanguard Growth complemented with targeted exposures to Banks, Consumer Staples, and Real Estate. With International markets showing favorable risk and return characteristics, we built up to a 10% international position last month and continue to hold India and Eurozone exposure.
Given the markets’ focus on higher churning equity prices in the face of the U.S. Federal Reserve raising rates despite weakening economic indicators, we will continue to keep an eye on our Sharpe-ratio rankings for changing market dynamics. We anticipate a continued transition toward international investments by investors or a risk-off environment for which we can adjust and react. However, for now, we are positioned for continued market appreciation with a well-diversified, growth-oriented asset allocation. Stadion investors can rest easy knowing that our time-tested process will guide the Stadion Tactical Growth Fund's future allocations.
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.
The NASDAQ is a broad based capitalization-weighted index of all NASDAQ National Market and Small Cap Stocks.
The NASDAQ-100 Index includes 100 of the largest domestic and international non-financial companies listed on The NASDAQ Stock Market based on market capitalization.
The VIX Index measures annualized implied volatility as conveyed by S&P 500 stock index option prices and is quoted in percentage points per annum
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.
Alpha is a risk-adjusted measure of the so-called active return on an investment.
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 June 30, 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.