ALL SEASONS FUND: JULY 2023 – COMMENTARY LETTER
The All Seasons Fund ended the month of July with a return of +1.21%.
Market Review
US equities rallied higher in July with both the Nasdaq and S&P 500 rising for the fifth straight month. Notably, the breadth of the rally also extended to both small and micro-cap equities reversing the recent trend of a narrow breadth rally. This was impressive considering Q2 2023 earnings to date have marked the largest decline in earnings since Q2 2020. A potential Fed pause in hikes is potentially leading the way higher, not earnings, as Fed Chair Powell indicated that a September hike is less likely. The Fed clearly has believers that the narrow path to avoiding recession is now more likely than not.
Historically, markets are entering the most volatile season of the year. August and September have average returns that are both negative in the last fifty years. August offers few scheduled events to drive markets in either direction. The mid-month CPI and Jobless claims were in line with expectations. Volatility markets are pricing in more volatility in September with an important Fed meeting scheduled.
The fund strategy converted enough small winning trades for a positive month in July. As volatility ticks higher, the fund strategy is designed to be robust in the face of potential market swings. The fund strategy has multiple layers of risk management designed to mitigate downside during challenging periods. This downside mitigation is critical to allow trading during periods of high volatility when larger-than-normal opportunities tend to flourish.
The All Seasons Fund (symbol: UNAVX) remained an overall 4-STAR Fund in Morningstar’s Equity Market Neutral Category (out of 33 Equity Market Neutral funds) from its inception on October 13th, 2017 to July 31, 2023, based on risk-adjusted return.
Morningstar uses this step to calculate this rating:
- Morningstar Risk-Adjusted Return: Adjust Morningstar Return for risk to get MRAR. Morningstar Risk is then calculated as the difference between Morningstar Return and Morningstar Risk-Adjusted Return.
Very truly yours,
Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call 1-800-MUTUALS or visit our website at www.USAMutuals.com. Read the prospectus or summary prospectus carefully before investing.
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 (6/30/2023) Fund Inception (02/01/2002)
| 1 Year | 5 Year | 10 Year | Since Inception | |
| UNAVX | 9.44% | 5.99% | 7.72% | 10.57% |
| S&P 500 Index | 19.59% | 12.31% | 12.86% | 8.76% |
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 3.26% and 1.99%. The advisor has contractually agreed to limit expenses to 1.96% of the average net assets of the Fund through 7/31/2024.
Definitions:
The S&P 500 Index: 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.
Fund holdings and/or sector allocations are subject to change at any time and are not recommendations to buy or sell any security.
Performance data quoted prior to October 13, 2017 represents the past performance of the Goldman Navigator Fund, L.P., a limited partnership (the “Predecessor Partnership”). From its inception on February 1, 2002 through October 13, 2017, the Predecessor Partnership maintained investment policies, objectives, guidelines, and restrictions that were, in all material respects, equivalent to those of the Fund. The Predecessor Partnership was not registered under the 1940 Act, and was not subject to certain investment limitations, diversification requirements, and other restrictions imposed by the 1940 Act and the Internal Revenue Code of 1986, as amended (the “Code”), which, if applicable, may have adversely affected its performance. On a going forward basis after October 13, 2017, the Fund’s performance will be calculated using the standard formula set forth in rules promulgated by the SEC, which differs in certain respects from the methods used to compute total returns for the Predecessor Partnership. Please refer to the Financial Statements section of the Fund’s SAI to review additional information regarding the Predecessor Partnership. The Navigator Fund name was changed to the All Seasons Fund on July 21st, 2021.
UNAVX received Four-Star Morningstar Ratings™ for overall, 5-year, and 3-year, each out of 33 funds, for the period ending July 31, 2023. All in Morningstar’s Equity Market Neutral category, based on risk-adjusted returns. The 10-year returns are not included in the Morningstar rating because the Predecessor Partnership was not registered under the 1940 Act.
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The Morningstar Rating™ for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes.
It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. UNAVX was rated against the following numbers of Equity Market Neutral funds over the following time periods: 33 funds in the last three years, 33 funds in the last five years, and 33 funds in the last ten years. Past performance is no guarantee of future results.
SYMBOL: UNAVX
