ALL BLOG CONTENT IS FOR INFORMATIONAL PURPOSES ONLY. ANY REFERENCE TO OR MENTION OF INDIVIDUAL STOCKS, INDEXES, OR OTHER SECURITIES ARE NOT RECOMMENDATIONS AND ARE SPECIFICALLY NOT REFERENCED AS PAST RECOMMENDATIONS OF PATTON WEALTH ADVISORS. ALL GRAPHS, CHARTS, AND TABLES ARE PROVIDED FOR ILLUSTRATION PURPOSES ONLY. EXPRESSIONS OF OPINION ARE ALSO NOT RECOMMENDATIONS AND ARE SUBJECT TO CHANGE WITHOUT NOTICE IN REACTION TO SHIFTING MARKET, ECONOMIC, OR POLITICAL CONDITIONS. IT IS COMMON FOR US TO USE A FUND AS A PROXY FOR AN INDEX OR ASSET CLASS. FOR MORE DETAILS SEE OUR FULL DISCLOSURE HERE.
The following is to provide some insight and perspective on the performance of the Patton Flex Fund for March and more. For more information on the strategy of the Fund, visit our website here.
The Flex Fund is most often recommended as only one component of a Super-Diversified Portfolio. Therefore the information in this blog only pertains to one component of a Super-Diversified portfolio. For more on Super-Diversification, visit our website here.
* Compounded annually net of all fees.
Note: individual investor performance may differ.
The Flex Strategy closed the month of August little changed and is higher year-to-date by +5.7%. As I’ve highlighted in prior blogs, the performance of the Flex continues to be very much disconnected from the performance of the S&P 500 moving in opposite directions during 11 of the 21 trading days during the month. This is less than ideal during a month like August when the S&P 500 produced a strong return but is a great characteristic of the Flex long-term and especially during bear markets.
The accompanying graph shows the performance of our Flex Strategy compared to the S&P 500 year-to-date. As it illustrates, the Flex has traded within a relatively tight range of being up +12% in mid-February and down about the same toward the end of March. At the low for the S&P 500 in March, the S&P was off -31% while the Flex was down just -12.5%.
When the market started its remarkable recover in late March, the Flex also recovered losses but did not climb at the same pace or for as long and the S&P 500 caught up. The first week of June was rough on the Flex when stocks like airlines and cruise line companies surge (the Flex was short such stocks creating losses). It recovered relatively quickly and moved back into positive territory year-to-date and repeated much the same, down then recovering, during the month of August.
As all investors know we have experienced a lot of volatility in both the market and Flex Strategy in 2020. The following graph shows the volatility of Flex during 2020. As the graph shows, it was actually trending lower during the first 6 weeks of the year then spiked higher in March to levels that compare to some of the most volatile periods in history. This volatility continued to inch higher through late May and has since fallen but remains about twice as high as it started the year.
There was less trading in the Flex during the month of August compared to prior months. As the below table shows there were only three long positions that were closed (sold) and three new stocks added. Of note is the sell of Costco (COST), one of the best performing stocks during the March selloff, as our Strategy rotates into some stocks that have recovered the fastest since the March selloff such as Best Buy (BBY) more than doubling from the March lows.
The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. Any specific securities or investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own situation before making any investment decision including whether to retain an investment adviser.
All expressions of opinion are subject to change without notice in reaction to shifting market, economic or political conditions. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed. This content was created as of the specific date indicated and reflects the author’s views as of that date. Supporting documentation for any claims or statistical information is available upon request.
Past performance is no guarantee of future results. Any comments about the performance of securities, markets, or indexes and any opinions presented are not to be viewed as indicators of future performance.
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Indexes are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. For more information on specific indexes please see full disclosure here.
Any charts, tables, forecasts, etc. contained herein are for illustrative purposes only, may be based upon proprietary research, and are developed through analysis of historical public data.
All corporate names shown above are for illustrative purposes only and are NOT recommendations.
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