January 11, 2021
December’s bullish market action was a boon to the Trilogy Alternative Return Fund and was solidly illustrated by the S&P 500 closing the year at an all-time new high. This upward movement can most likely be attributed to the U.S. congress passing a new stimulus bill as well as positive COVID-19 vaccine news.
The Market Movement bucket attributed 1.65% in December. This bucket was the largest contributor to the Fund’s performance for the month as the Market Movement bucket held a net-long call exposure with its quantity of long calls outweighing the quantity of short calls. This helped the Market Movement bucket participate in the December rally.
The Option Income bucket added 0.74% in December. This was a positive month for the Option Income bucket as the market was fairly range bound for most of the month. As the market chopped back and forth on its way to all time highs, this market environment helped the Option Income provide gains as the Fund was able to buy back some of its options for a profit.
The Collared Equity bucket lost -0.48% in December. Markets rallied in December but the stock holdings in this bucket slightly underperformed the overall market. On top of that, the collar employed for risk mitigation detracted from the Fund’s overall performance as the downside protection was not needed during the month.
Overall, two of the three buckets (Market Movement and Option Income) provided enough gains to outweigh the loss in the third bucket (Collared Equity).
For December, the Stadion Trilogy Alternative Fund A-Share increase 1.91%. The Bloomberg Barclays US Aggregate Index rose 0.14%, the HFRX Absolute Return Index gained 1.30%, and the S&P 500 Index increased 3.84%.
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.
The HFRX Absolute Return Index is designed to be representative of the overall composition of the hedge fund universe. It is comprised of all eligible hedge fund strategies; including but not limited to convertible arbitrage, distressed securities, equity hedge, equity market neutral, event driven, macro, merger arbitrage, and relative value arbitrage.
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 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.
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.