April 14, 2021
The Collared Equity bucket gained 1.80% in March. The Collared Equity bucket was the largest contributor to Trilogy’s positive return in March as the S&P 500 Index rallied and Trilogy’s stocks participated in the gains. The Fund rotated some of its upside short calls to higher strikes on the collar strategy, which helped the Fund participate even more in the market’s move higher over the month.
The Market Movement bucket attributed 0.80% in March. The long calls the Fund held in the Market Movement bucket outgained the losses from the short call positions in March. The Fund was able to opportunistically take advantage of lower volatility by holding a longer delta position in this bucket. By being net long in the Market Movement bucket, the Fund participated in the market rally over the month.
The Option Income bucket added 0.30% to the Fund in March. The Option Income bucket benefited from the market staying relatively range bound from February to March. This helped the short positions in the option strategy expire cheaper than we originally sold them for, adding to the gains. The gains from the option strategy outweighed the losses from the Fixed Income ETFs the Fund holds as Fixed Income struggled in March.
Overall, the Stadion Trilogy Alternative Fund A-Share gained 2.88% in March. The Bloomberg Barclays US Aggregate Index lost -1.25%, the HFRX Absolute Return Index rose 0.26%, and the S&P 500 Index increased 4.38%.
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.
Delta measures the degree to which an option is exposed to shifts in the price of the underlying asset.
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.