ALL SEASONS FUND: AUGUST 2021 – COMMENTARY LETTER
For the month of August, the All Seasons Fund gained +1.15%.
Market Review
The equities bull market continued through the summer with most major equities positive. The gains have been across market sectors with Materials, Information, and Technology as the highest performers over the period.
While the All Seasons fund historically has a low beta to equities, and there’s no guarantee of a low beta going forward, we believe the potential for pullbacks on equity valuations has increased. The options markets reflect this fear with downside protection continuing to be more expensive than upside opportunity as priced into call and put markets. We feel the Chicago Board Options Exchange SKEW Index (SKEW), which some market participants consider to be a fear gauge, reflects this as it remains near all-time highs.
We have mentioned the current high SKEW ratings in recent letters, and believe it is a warning to investors. In recent periods when SKEW was at current levels, the market reaction was as follows:
- Late October 2017: equities continued to rally for three months until January marked the start of the February 2018 mini flash-crash.
- August 2018: equities rallied for two months before the 2018 Q4 sell-off.
- December 2020: equities rallied for another two months before the historic February/March sell-off.
- August 2020: equities sold off one month later in September.
We feel the All Seasons fund may offer an alternative to equities during the coming years after the recent bull market.
Sincerely yours,
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Share prices and investment returns fluctuate and an investor’s shares may be worth more or less than the original cost upon redemption. For performance data as of the most recent month-end please call 1-866-264-8783.
Fund Objective:
The All Seasons Fund seeks capital appreciation and preservation with lower volatility throughout market cycles. The resulting portfolio targets a high correlation to the S&P 500 in bull markets and a lower, or negative, correlation in bear markets.
Standardized performance as of (09/30/2021) Fund Inception (02/01/2002)
| 1 Year | 5 Year | 10 Year | Since Inception | |
| UNAVX | -4.11% | 5.33% | 6.81% | 10.20% |
| S&P 500 Index | 30.00% | 16.90% | 16.63% | 9.24% |
Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-866-264-8783. Returns over one year are annualized. The Gross and Net expense 2.36% and 2.01%. The advisor has contractually agreed to limit expenses to 1.99% of the average net assets of the Fund through 7/31/2022.
Definitions:
CBOE SKEW Index: A measure of the perceived tail risk of the distribution of S&P 500 investment returns over a 30-day horizon.
Black Swan: An unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, severe impact, and the widespread insistence they were obvious in hindsight.
The S&P 500 Index is an unmanaged composite of 500 large capitalization companies. This index is widely used by professional investors as a performance benchmark for large-cap stocks. You cannot invest directly in an index.
SYMBOL: UNAVX
