Market insights and analysis

How dynamic, risk-managed investment solutions are performing in the current market environment

2nd Quarter | 2021

Market insights and analysis

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Updates on how dynamic, risk-managed investment solutions are performing in the current market environment.

U.S. equity markets posted gains in all three indexes last week. The NASDAQ Composite gained 1.73%, the S&P 500 gained 1.23%, and the Dow Jones Industrial Average gained 1%. Eight of the 11 sectors were up last week; Energy, which posted the largest gain, was up 4.33%. Seven of the eight Quantified Funds were up last week: The Quantified Common Ground Fund (QCGDX) gained 3.75%, the Quantified Market Leaders Fund (QMLFX) was up 3.74%, the Quantified Evolution Plus Fund (QEVOX) was up 3.33%, the Quantified STF Fund (QSTFX) was up 2.82%, the Quantified Alternative Investment Fund (QALTX) was up 2.34%, the Quantified Pattern Recognition Fund (QSPMX) gained 0.63%, the Quantified Managed Income Fund (QBDSX) was up 0.11%, and the Quantified Tactical Fixed Income Fund (QFITX) was down 0.66%.

The Market Environment Indicator (MEI) remained bullish last week. Equity asset-class allocations in the Quantified Market Leaders Fund remained at the following: Small-Cap Growth (30.26%), Small-Cap Value (22.70%), Emerging Markets (15.14%), and Mid-Cap Value (7.56%). Total sector ETF weightings remained at 56.76%, holding equal exposures in Banking, Electronics, and Biotechnology. The individual ETF positions with the leading portfolio weightings were the iShares Russell 2000 Value ETF (IWN, 22.70%), the iShares Semiconductor ETF (SOXX, 18.92%), and the SPDR KBW Regional Bank ETF (KRE, 18.91%). Total cash remained at 14.80%.

Within the Quantified Alternative Investment Fund (QALTX), the Long/Short Market Neutral Alternative subportfolio made no major changes last week. There were a few changes among the largest positions: Allocation to the Vivaldi Merger Arbitrage Fund (VARBX, 3%) increased, while allocation to the iShares S&P Global Materials ETF (MXI, 0%) decreased. Last week, the funds were up 0.18% and 2.02%, respectively.

The cash level within the Quantified Alternative Investment Fund increased to 23.16% last week. The daily trading of S&P 500 Index futures with 10% fund capital allocation remained neutral for the week. The 7.50% capital allocation of the volatility-based systematic trading of NASDAQ 100 Index futures started the week at 5% net long, increased to 6% net long on Thursday’s close, and remained there through the end of the week.

The QFC Self-adjusting Trend Following strategy started the week with 160% exposure to the NASDAQ 100 Index (NDX), increased to 200% on Wednesday’s close, and remained there through Friday’s close. The Quantified STF Fund (QSTFX) was up 2.82% for the week, compared to a gain of 1.50% on the NASDAQ 100 Index (NDX) and a gain of 1.49% for the Rydex Series NASDAQ 100 Fund (RYHOX), a current potential holding of the STF strategy.

The Quantified Managed Income Fund’s (QBDSX) two leading broad-bond index ETF holdings are the iShares Barclays 1-3 Year Treasury Bond (SHY, 22.81%) and the SPDR Barclays Capital High Yield Bond ETF (JNK, 9.10%). Last week, the funds were down 0.01% and up 0.35%, respectively. Cash remained at 12.20%.

The 10-year U.S. Treasury yield closed the week down 0.35%. The 12% active portfolio exposure to 30-year U.S. Treasury bond futures in the Fund started the week at 0% net neutral exposure, increased to 11% net long on Wednesday’s close, decreased to 6% net long on Thursday’s close, and increased to 16.50% net long on Friday’s close. The S&P E-mini Futures started the week with 5.50% net short exposure and increased to 6% net short exposure on Thursday’s close.

The Quantified Pattern Recognition Fund (QSPMX) started the week with 80% net long exposure, decreased to 78% exposure on Monday’s close, decreased to -4% exposure on Wednesday’s close, increased back to 78% exposure on Thursday’s close, and decreased to -40% exposure on Friday’s close.

The Quantified Tactical Fixed Income Fund (QFITX) started the week with a 20.40% exposure to long-term Treasurys, 24% exposure to high-yield bonds, and 63% exposure to money markets. On Wednesday, it changed to 64.80% exposure to long-term Treasurys, 24% exposure to high-yield bonds, and 26% exposure to money markets. On Thursday, it changed allocations to 46.80% in long-term Treasurys, 24% exposure to high-yield bonds, and 41% exposure to money markets. On Friday, it changed to 91.20% exposure to long-term Treasurys, 24% exposure to high-yield bonds, and 4% exposure to money markets.

The allocation of the Quantified Evolution Plus Fund (QEVOX) remained at the following: 33% in gold, 23% in emerging markets, 21% in international equity, 16% in the S&P, and 7% in the NASDAQ.

The cash exposure in the Quantified Common Ground Fund (QCGDX) remained at 2.50%. The Fund’s largest allocations were to Halozyme Therapeutics (HALO, 7.50%) and Omnicell Inc. (OMCL, 7.07%). Last week, the stocks were up 1.88% and 4.34%, respectively.

 

Total Return

Fund (Inception) Symbol Qtr Ending (12/31/20) YTD Ending (12/31/20) 1 Year Ending (12/31/20) 3 Year Ending* (12/31/20) 5 Year Ending* (12/31/20) Since* Inception Ending (12/31/20) Annual Expense Ratio
The Gold Bullion Strategy Fund (7/5/13) QGLDX 0.22% 19.28% 19.28% 10.20% 9.75% 3.65% 1.51%
Quantified Managed Income Fund (8/9/13) QBDSX (0.71%) (9.22%) (9.22%) (0.96%) 1.58% 0.84% 1.64%
Quantified Market Leaders Fund (8/9/13) QMLFX 22.58% 37.94% 37.94% 14.60% 15.71% 10.71% 1.68%
Quantified Alternative Investment Fund (8/9/13) QALTX 10.73% 1.01% 1.01% 0.37% 3.03% 2.58% 2.11%
Quantified STF Fund (11/13/15) QSTFX 16.13% 77.44% 77.44% 24.27% 22.61% 21.52% 1.72%
Quantified Common Ground Fund (12/27/19) QCGDX 15.59% 14.67% 14.67% N/A N/A 14.61% 1.86%
Quantified Evolution Plus Fund
(9/30/19)
QEVOX 7.86% (1.84%) (1.84%) N/A N/A (3.01%) 1.81%
Quantified Pattern Recognition Fund (8/30/19) QSPMX 2.72% (0.34%) (0.34%) N/A N/A 8.20% 1.78%
Quantified Tactical Fixed Income Fund (9/13/19) QFITX 1.02% 10.36% 10.36% N/A N/A 8.98% 1.77%

* Performance for periods of greater than one year are annualized.

As of the most recent prospectus, the expense ratios for the Gold Bullion Strategy Fund are as follows: Investors’ Class (No Load), 1.51%; Class A, 1.51%; Class C, 2.10%. The maximum sales charge imposed on Class A share purchases (as percentage of offering price) is 5.75%. An additional 2% redemption fee applies to all share classes, including Investors’ Class, when shares are redeemed within 7 days of purchase.

The performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate and an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted. To obtain performance data current to the most recent month-end please call 1-855-647-8268.

Risks associated with the Quantified Funds include active frequent trading risk, aggressive investment techniques, small and mid-cap companies risk, counter party risk, depository receipt risk, derivatives risk, equity securities risk, foreign securities risk, holding cash risk, limited history of operations risk, lower quality debt securities risk, convertible bond risk, non-diversification risk, investing in other investment companies (including ETFs) risk, shorting risk, asset backed securities risk, commodity risk, credit risk, interest risk, prepayment risk, mortgage backed securities risk, hedging and leverage risk, preferred stock risk, and MLP and REIT risks. For detailed information relating to these risks, please see prospectus.

The principal risks of investing in The Gold Bullion Strategy Fund are Risks of the Sub-advisor’s Investment Strategy, Risks of Aggressive Investment Techniques, High Portfolio Turnover, Risk of Investing in Derivatives, Risks of Investing in ETFs, Risks of Investing in Other Investment Companies, Leverage Risk, Taxation Risk, Concentration Risk, Gold Risk, Wholly-owned Corporation Risk, Risk of Non-Diversification and interest rate risk. “Gold Risk” includes volatility, price fluctuations over short periods, risks associated with global monetary, economic, social and political conditions and developments, currency devaluation and revaluation and restrictions, trading and transactional restrictions.

An investor should consider the investment objectives, risks, charges and expenses of each Quantified Fund and The Gold Bullion Strategy Fund before investing. This and other information can be found in the Funds’ prospectus, which can be obtained by calling 1-855-647-8268. The prospectus should be read carefully prior to investing in The Quantified Funds or The Gold Bullion Strategy Fund.

There is no guarantee that any of the Quantified Funds or The Gold Bullion Strategy Fund will achieve their investment objectives.

Flexible Plan Investments, Ltd., serves as investment sub-advisor to The Gold Bullion Strategy and Quantified Funds. Advisors Preferred, LLC serves is the Funds’ investment advisor.



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