NAVIGATOR FUND: FEBRUARY 2021 – COMMENTARY LETTER
For the month of February, UNAVX was +0.95%.
Market Review
All signs continue to point to a robust economic recovery. The House passed President Biden’s $1.9 trillion pandemic relief package. The bill, which is facing revision before it is passed to the Senate, provides a $350 billion lifeline to the states and $1,400 checks to many Americans. It is a massive spending bill that will likely increase demand just as the number of new COVID cases are taking a nosedive due to increased vaccinations and eventual herd immunity.
It is hard to overstate just how large this spending package is. According to Former Treasury Secretary Larry Summers’ Washington Post editorial, Biden’s stimulus package is three times larger than the projected economic shortfall caused by the pandemic. And how might such a huge fiscal stimulus package effect the chances for further expenditures on public works like infrastructure? The era of massive government spending may be just beginning.
Meanwhile, Federal Reserve Chairman Powell reiterated that the Fed funds rate will remain low and that the Fed will keep buying bonds to support the US economy. He continues to push back against fears of higher inflation, even as commodity prices continue to rise.
As this is all occurring, the yield curve is steeping (i.e., long-term interest rates are increasing more quickly than are short-term rates). This has spooked the equity markets, as evidenced by a 7% drop in the Nasdaq 100 in the last two weeks of February. But it should be noted that higher rates and higher stock prices have occurred in lockstep in several periods, especially if the reason for increasing rates is more robust economic growth.
As always, the strategy has no bullish or bearish tilt. We are only interested in positive expected returns over nearly every 12-month rolling period independent of equity markets movement up or down. We believe the current wide range of views of market participants is important. We expect our strategy to have more opportunities as a variety of market participants excite markets in either direction. These behavioral dynamics are mathematically detectable and actionable for the kinds of return streams we value – relatively consistent with modest drawdowns.
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 original cost upon redemption. For performance data as of the most recent month-end please call 1-866-264-8783.
Fund Objective
The Navigator 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 (12/31/2020) Fund Inception (02/01/2002)
| 1 Year | 5 Year | 10 Year | Since Inception | |
| UNAVX | -8.37% | 6.86% | 7.29% | 10.80% |
| S&P 500 Index | 18.40% | 15.22% | 13.88% | 8.72% |
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 7/31/2021.
SYMBOL: UNAVX
