The biggest gainer for the Stadion Trilogy Alternative Return Fund in May was the Option Income bucket which gained 0.88%. Luckily this was enough of a gain to make up for the losses in the Collared Equity and Market Movement buckets. For most of the month, the market was range bound which is a good market environment for the Option Income bucket.
Trilogy’s equity holdings underperformed slightly compared to the overall market and we also had to pay for our collar protection. This caused a drag in this bucket. The Collared Equity bucket lost -0.45% for the month of May.
As markets moved higher, this hurt our Market Movement short calls and long puts we had in place. Fortunately, we started getting closer to in the money with the long calls we have in this bucket which helped offset some of the losses. The Market Movement bucket lost -0.24%.
For the month of May, the Stadion Trilogy Alternative Return Fund A-Share 0.19%, the Bloomberg Barclays U.S. Aggregate Index rose 0.47%, and the S&P 500 Index gained 4.76%.
To view the most recent performance for the Stadion Trilogy Alternative Return Fund, click here.
A collar is an option strategy that limits the range of possible positive or negative returns on an underlying security to a specific range.
A short, or short position, is selling first and then buying later. The trader's expectation is that the price will drop; the price they sell at is higher than the price they buy it at later. The difference between the sale price and the buy price produces a profit or loss.
A long position is the buying of a stock, commodity, or currency with the expectation that it will rise in value.
A short option strategy is a short position in which the tradeable interests are options.
A put is an option which conveys the right to sell something at a specific price.
A call option is an option to buy assets at an agreed price on or before a particular date.
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.
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