February 12, 2021
January’s market action was both helpful and a hinderance to the Trilogy Alternative Return Fund.
The Market Movement bucket attributed 0.79% in January. This bucket was the largest contributor to the Fund’s performance for the month as the Market Movement bucket was able to take advantage of the elevated levels of volatility, especially over the final week of the month. The short calls that were opened during the month, added nice gains over the last week as the S&P 500 Index fell -3.64%.
The Option Income bucket detracted -0.60% to the Fund in January. Timing of the trades placed in this bucket along with the strong up trend from December hurt the performance in this bucket. Even with the range bound month of January, positions we opened in December ended with losses, which is the main reason for the underperformance in this bucket.
The Collared Equity bucket was relatively flat at -0.01% in January. The Fund’s stock holdings outperformed the overall market which is why the Collared Equity bucket was flat instead of down in January. The Fund added Target, Home Depot, and IBM to its stock holdings.
Overall, the Market Movement performance outgained the Option Income and Collared Equity bucket enough to give the Stadion Trilogy Alternative Fund A-Share a positive return of 0.18% in January. The Bloomberg Barclays US Aggregate Index lost -0.72%, the HFRX Absolute Return Index decreased -0.16%%, and the S&P 500 Index lost -1.02%.
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.
A short call is a strategy involving a call option, which obligates the call seller to sell a security to the call buyer at the strike price if the call is exercised. A short call is a bearish trading strategy, reflecting a bet that the security underlying the option will fall in price.
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 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.
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.