NAVIGATOR FUND: JANUARY 2021 – COMMENTARY LETTER
For the month of January, UNAVX was -1.96%.
Market Review
Global equity markets pulled back dramatically at month-end. The bearish sentiment was mostly due to concerns over COVID-19 variants and their potential to slow down the economic recovery that started in late 2020. Even the better-than-expected news from J&J that their single shot vaccine dramatically reduces death in serious COVID cases was not enough to stop the end-of-month selling. January short-term trading opportunities were generally uninteresting from a risk/reward standpoint, and unconverted when opportunities arose.
Interestingly, February has revealed the power of “herding behavior” in individual equities. Although there is precedent for coordinated groups of retail investors buying heavily shorted stocks (think Yahoo! Message Boards of the early 2000s), this month shows that a wide swath of individual investors acting in unison can meaningfully move markets – at least for a little while.
We believe this is an important development because the Navigator strategy is designed to exploit the movement of broadly-based indices by detecting signals driven by markets internal forces. While external or fundamental drivers move markets on longer time horizons, we believe the internal forces are the primary driver of short-term moves.
We believe our strategy will perform with high risk-adjusted returns if many market participants with differing agendas are trading the markets. This heterogenous population of investors/traders is on full display in February – coordinated retail short squeezers, hedge fund shorts needing to cover, trend-followers jumping on large moves, and natural sellers unloading their positions.
In short, if market participants believe they can predict markets, then we have an edge in using statistical analysis to exploit their behavior. This has been made clear in February’s equities movements which ostensibly trickles into the index futures markets.
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
