ALL SEASONS FUND: JULY 2021 – COMMENTARY LETTER
For the month of July, the All Seasons Fund gained +2.36%.
Market Review
All Seasons had a few large opportunities in the month and was able to convert for a positive monthly gain. Volatility returned to markets mid-month as Chinese tech markets tanked on government intervention. It is our belief that this heightened volatility set up trades with risk/reward imbalances favored for positive returns.
As we move towards the last days of summer, we feel it is important to analyze how market participants view the coming autumn months that historically are more volatile. The CBOE SKEW index is one measure of the potential risk of large downside moves. The index simply indicates concern among investors and traders of a black swan move lower compared to higher. It remains at near all-time highs historically, meaning traders are handicapping the potential for a very large down move more than any time in the history of the index.
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 have no opinion whether markets will go higher or lower. However, we feel if an investor is concerned about valuations, and clearly many market participants are concerned by the SKEW index measures, then All Seasons may offer an alternative to stay invested. As we move into an uncertain autumn, we believe All Seasons offers a potential solution.
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 (06/30/2021) Fund Inception (02/01/2002)
| 1 Year | 5 Year | 10 Year | Since Inception | |
| UNAVX | 2.03% | 6.34% | 6.51% | 10.44% |
| S&P 500 Index | 40.79% | 17.65% | 14.84% | 9.33% |
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
6530-NLD-09152021