ALL SEASONS FUND: Q3 2025 COMMENTARY LETTER
The All Seasons Fund was up +4.01% in the third quarter of 2025 and is up +4.78% year-to-date, as of 9/30/2025.
Market Review
Q3 2025 – Quick Recap
Q3 was a continuation of the AI-led growth narrative and a broad risk-on tone. Large-cap tech again drove headline gains while market breadth improved as equal-weight and small-cap indices picked up steam. Investors increasingly priced in near-term Fed easing, which supported higher-multiple sectors and sometimes encouraged rotation back into cyclicals. That said, episodic macro/political shocks (tariff headlines earlier in 2025 and a late-September Washington scare over a possible government shutdown) produced sharp, short-lived bouts of volatility and headline-driven repricing. In short:
• Q3 2025: markets advanced on AI and rate-cut hopes, but with clear event-driven volatility.
• Valuations are elevated (CAPE high; forward P/E still above long-run average), which raises the risk that negative surprises may produce outsized drawdowns.
For Q4, it is important to closely monitor Fed communication, Q3 corporate guidance, and policy developments across the political and fiscal landscape. In our view, market risks remain elevated. Investors focused on reducing single-name concentration and seeking smoother expected outcomes may explore diversified approaches and strategies that incorporate dynamic hedging or demonstrated downside management, such as the All Seasons Fund UNAVX.
Themes that Mattered
1. AI and Concentration: AI/semiconductor leaders delivered outsized returns and continued to compound indexes’ gains; this reinforced a market structure where a handful of names dominate performance, keeping headline returns high even when breadth is mixed.
2. Rate-Cut Expectations: As data softened in parts of the labor market and inflation trended toward the Fed’s band, futures markets moved to price earlier or more aggressive cuts than earlier in the year—this underpinned multiple expansion, especially in growth names.
3. Cyclical Catch-Up and Rotation: Equal-weight rallies and small-cap strength in parts of Q3 signaled investors testing risk outside mega-cap tech. Seasonality and positioning also played into the late-Q3 uplift.
Volatility (What we saw and what it means)
• Implied volatility stayed relatively subdued by historical crisis standards: the VIX spent much of Q3 in the mid-teens, reflecting a calmer option market baseline but with clear skew when risk headlines arrived. The market’s “calm” masked periodic spikes tied to specific events (tariff headlines, Washington fiscal headlines).
• Term structure and option markets showed investors paying up for short-dated protection around known political/economic windows, which is consistent with a market that expects ongoing, event-driven jumps rather than a sustained regime of fear.
Takeaway: lower average VIX + event-driven spikes = environment where active risk management (position sizing, tactical hedges, nimble rebalancing) still matters. Calm doesn’t mean “safe”.
Fundamental Analysis – US Valuations & Risks (Where we stand)
Long-run valuation gauges are elevated. The Shiller CAPE (10-year cyclically adjusted P/E) is currently in the high 30s–40s range, levels only seen near the dot-com peak and a few other rare periods, flagging that long-term valuations are rich versus historical norms. This implies lower long-term expected real returns if mean reversion occurs.
Near-term forward multiples are elevated but less extreme. The S&P 500 forward P/E sits in the low- to mid-20s (roughly ~23–24x), a bit lower than a year ago but still above long-run averages; that multiple is justified by robust earnings growth expectations, but it leaves little margin for negative macro surprises.
Earnings Momentum vs. Valuation Tradeoff: Q3 corporate earnings expectations (positive year-over-year growth driven by tech and some cyclical sectors) support current prices in the near term, but high valuation starting points increase sensitivity to downgrades or recession risk.
Key Risks from a Fundamentals Standpoint:
1. Re-Rating Risk: If earnings growth disappoints, multiples could contract rapidly because the market’s “growth premium” is already priced in.
2. Macro Policy Surprises: Faster-than-expected inflation or a Fed that pauses cuts could push rates higher and compress valuations.
3. Concentration Risk: Heavy reliance on a few mega-caps makes headline indices vulnerable to idiosyncratic shocks.
4. External Shocks: Geopolitical escalation, tariff cycles, or fiscal instability in Washington can generate outsized volatility even without a macro recession.
Looking ahead to Q4 2025 – What to watch (catalysts & scenarios)
• Fed communication and rate path: The single most important variable. We believe a clearer path to cuts (and the timing) will keep risk assets elevated; any delay or hawkish surprise will be immediate downside for high-multiple names. (Watch the Fed-speak calendar and PCE/jobs prints.)
• Earnings guidance and margin trends: Q3 earnings season (early Q4 reporting) will test whether AI capex and sales translate into sustainable margin expansion across sectors. Negative guidance would potentially be punished more severely than in a cheaper market.
• Political & fiscal events: Budget fights, regulatory actions, or tariff news can trigger outsized short-term moves; keep windows around major Washington deadlines on the calendar.
• Seasonality and flows: Q4 historically favors risk assets (holiday tailwinds, window dressing), but flows will be driven by whether investors continue to rotate outside mega-cap tech and whether real yields move materially.
Sincerely 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 Fund seeks capital appreciation in all economic cycles.
Standardized performance as of (9/30/2025) Fund Inception (2/01/2002)
| YTD | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception | |
| UNAVX | 4.78% | 6.53% | 6.91% | 6.41% | 7.05% | 10.03% |
| S&P 500 Index | 14.83% | 17.60% | 24.94% | 16.47% | 15.30% | 9.91% |
| S&P 500 Target Risk Conservative Index (TR) | 9.83% | 7.58% | 10.64% | 4.28% | 5.22% | 5.09% |
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 expenses are 2.79% and 1.96%.
The Fund’s adviser, USA Mutuals Advisors, Inc. (the “Adviser”), has contractually agreed to reduce its fees and/or absorb expenses of the Fund, at least until July 31, 2026, to ensure that total annual fund operating expenses after fee waiver and reimbursement (but does not include: front-end or contingent deferred loads, shareholder servicing plan fees, taxes, borrowing costs such as interest and dividends on short positions, brokerage fees and commissions, acquired fund fees and expenses, extraordinary expenses such as litigation expenses (which may include indemnification of Fund officers and Trustees, contractual indemnification of Fund service providers (other than the Adviser)) and class-specific expenses like distribution (12b-1) fees) will not exceed 1.96% of the Fund’s average daily net assets for each share class.
Definitions:
The S&P 500 Index: An unmanaged composite of 500 large capitalization companies. Professional investors widely use this index as a performance benchmark for large-cap stocks. You cannot invest directly in an index.
The S&P Target Risk Conservative Index: Designed to measure the performance of conservative stock-bond allocations to fixed income, seeking to produce a current income stream and avoid excessive volatility of returns. Equities are included to protect long-term purchasing power.
The Cyclically Adjusted Price-to-Earnings (CAPE) Ratio: Also known as the Shiller P/E ratio, assesses the stock market’s pricing by adjusting past earnings for inflation over a decade. Popularized by Yale’s Robert Shiller, it gives investors insight into whether markets are undervalued or overvalued based on historical earnings data.
The VIX: VIX most commonly refers to the Cboe Volatility Index, which measures the market’s expectation of 30-day forward-looking volatility for the U.S. stock market based on S&P 500 index options.
The Price-to-Earnings (P/E) ratio: A valuation metric that compares a company’s share price to its earnings per share (EPS). It’s calculated by dividing the current share price by the earnings per share. A high P/E may suggest investors expect high growth or that a stock is overvalued, while a low P/E might indicate an undervalued stock, but it can also reflect poor company performance or unfavorable market conditions.
Mega-cap: A designation for the largest companies in the investment universe, generally defined as having a market capitalization of $200 billion or more.
Personal Consumption Expenditures (PCE): A measure of consumer spending on goods and services in the U.S. economy, and the PCE Price Index is the Federal Reserve’s preferred measure of inflation. PCE is the primary driver of economic growth, accounting for about two-thirds of domestic final spending, and is released monthly by the Bureau of Economic Analysis.
Capital Expenditures (CapEx): The funds companies allocate to acquire, upgrade, and maintain essential physical assets like property, technology, or equipment, crucial for expanding operational capacity and securing long-term economic benefits.
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. Past performance is no guarantee of future results.
SYMBOL: UNAVX
