September 9, 2020
Markets climbed yet again to all-time highs during August and the biggest gainer to the Stadion Trilogy Fund was the Collared Equity bucket. Trilogy’s stock holdings participated in the market’s rally and the Collared Equity bucket added 0.95% to the Fund’s performance. The collar option strategy, however, was a slight drag on performance in this bucket as the Fund did not need the collar’s risk-mitigating characteristics during the strong equity rally in August.
The second-best performer in the Trilogy Fund for August was the Market Movement bucket. Looking deeper, the long calls we own added the most value in this bucket as the S&P 500 Index had its best August in 34 years. The Market Movement bucket added 0.60% to Trilogy in the month of August.
Given the steady rise in equities and decreasing volatility, the Option Income bucket lost -1.00%. This bucket does best when volatility is at higher levels or markets stay in a range bound market environment. Neither of those situations existed in August which is why the Option Income bucket struggled.
Overall, two of Trilogy’s three buckets performed positively enough to provide gains for the Fund in August. The Stadion Trilogy Alternative Fund A-Share increased 0.55%, the Bloomberg Barclays US Aggregate Index declined -0.81%, and the S&P 500 Index gained 7.19%.
To view the most recent performance for the Stadion Trilogy Alternative Return Fund, click here.
An option gives an investor the right, but not the obligation, to buy or sell a stock at an agreed upon price and date.
A collar is an option strategy that limits the range of possible positive or negative returns on an underlying security to a specific range.
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.
Bloomberg Barclays Capital U.S. Aggregate Total Return Bond Index is an unmanaged index of prices of U.S. dollar-denominated investment-grade fixed income securities with remaining maturities of one year and longer.
One cannot invest directly in an index.
The Report’s 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 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.
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.
Not all investors are eligible for each share class. Performance and expense may vary between share classes.
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The Stadion Funds are distributed by ALPS Distributors, Inc. An investment in the Funds involves risk, including loss of principal.