The 2019 rally came to a screeching halt in May as market volatility picked up on increasing geopolitical concerns. The S&P 500 Index ended May down -6.35% and the Dow Jones Industrial Average lost -6.32 %, The NASDAQ Composite Index was the hardest hit index as the trade war talks have significantly impacted the technology industry. The tech-heavy index ended May down -7.78%. Emerging markets, too, are feeling the effects of the US-China trade war and the MSCI Emerging Markets Index ended May down -7.26%. International developed markets, represented by the MSCI EAFE Net Total Return Index, lost -4.80%.
Our allocation on May 31, 2019 was moderately aggressive and consisted of 77% Equities [47% U.S. & 30% International], 18% Fixed Income, 3% Precious Metals, and 2% Cash. We moved to a more conservative allocation during the month and made the following trades: On May 14 we sold Japan and a portion of both our China and NASDAQ 100 holdings. On May 16 we bought Consumer Staples and added to our Real Estate position. On May 23 we sold Oil Services and on May 31 we sold Energy. The portfolio at the end of May was 68.5% Equities [46% U.S. Equity, 22.5% International Equity], 18% Fixed Income, 10.5% Cash, and 3% Precious Metals.
Stadion Tactical Growth returned -5.16% for the month of May while our benchmark, Morningstar Moderately Aggressive Target Risk returned -4.41%.
We are now marginally below our long-term average of Equities with U.S. weighted 2:1 against International. Our holding in Real Estate moved strongly up our rankings while most of the Equities started to show weakness. We will continue to monitor our rankings and holdings and attempt to build a diversified portfolio of Exchange Traded Funds (ETFs) that we believe add balance to market risk.
To view the most recent performance for the Stadion Tactical Growth Fund, click here.
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 Composite is a stock market index of the common stocks and similar securities listed on the NASDAQ stock market and it is highly followed in the U.S. as an indicator of the performance of stocks of technology companies and growth companies.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange.
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 MSCI Emerging Markets Index consists of 23 economies including Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and the United Arab Emirates. The MSCI is a float-adjusted market capitalization index.
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 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.