Loading...

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.

Week Ending 4/7/2017

Summary

  • Stocks around the world moved marginally lower
  • The March employment report indicated far fewer jobs created than economists expected
  • Consumer Discretionary stocks were lower in a sign of concern about consumer spending

Notable Market Headlines

Large U.S. stocks closed the week down -0.3%. This small loss masks some volatility that occurred including a gain by the Dow Jones Industrials on Wednesday of nearly 200 points that was entirely wiped away. The afternoon selloff followed news that the Federal Reserve may begin addressing their $4.5 trillion balance sheet sooner than had been anticipated.

Small U.S. stocks suffered more selling pressure resulting in a loss of -1.4% for the week. This loss leaves them higher by on 0.5% year-to-date. General consensus had been that the Trump presidency would be good for smaller companies. Small stocks surged immediately following the election in November but have done little since.

International stocks also ended lower for the week with developed country stocks down -0.8% and emerging markets of just a fraction. International emerging markets remain the clear winner so far in 2017 with a year-to-date gain of +12.5%.

Hard assets, all consider to be inflation hedges, posted gains this week. Commodities, including the price of oil, continued to recover some losses earlier in the year with a gain of +1.4% on the week. Gold also notched a gain of +0.6% to a price of $1,253.90 per ounce. Real estate gained +1.0% and is now nearly flat for the year wiping away earlier losses.

For a second week in a row there was very little movement in the price of U.S. bonds.

Investor Trivia Question

Ford Motor company was founded in 1903. The stock today sells for $11.23 and is off a high in the mid-$30’s set in 1999! That’s certain tough for investors. At today’s price the company is valued at approximately $44 billion. It was widely reported that car manufacture Tesla’s stock value exceeded that of Ford’s for the time this week.

Ford sells about 2.5 million cars per year with total revenue of $151.8 billion. How many cars is Tesla expected to sell in 2017?

Market Leaders

There were two repeats at the top of the winners list this week:

  • FMC Corp (FMC), a diversified chemical company, made an acquisition the prior week that pushed spurred a jump in price by +13.8%. The stock continued to gain this week adding another +8.1%. The stock is higher year-to-date by +33% but remains just shy of its all-time high just below $80 set about 3 years ago.
  • Vertex Pharmaceuticals (VRTX), a biotech company, surged on positive news the prior week by +21.5% and gained another +6.0% this week.

Staples (SPLS), the office supplies retailer, is rumored to be in talks to sell the company. The stock gained +11.2% on the news but this has been one that has suffered greatly the past decade. The stock peaked about 10 years ago and remains 65% below that all-time high. The accompanying graph shows the unfortunate steady decline in total revenue from its peak in 2011 at $25 billion to just over $18 billion now. This is a common challenge for multiple retailers.

Market Laggards

Acuity Brands (AYI), a provider of lighting solutions for commercial and residential use, reported quarterly earnings below expectations. The stock dropped -15.1% for the week in reaction to this surprise. Multiple Wall Street analysts then downgraded their rating on the stock. Longer-term this stock has done extremely well with gains at today’s price of about 200% during the past 5 years in spite of being about 35% off its 2016 all-time high.

Nvidia (NVDA), a computer chipmaker, stock dropped -7.9% for the week. This is another hot stock that has recently lost some steam. In 2016 the stock gained +223% and continued higher into 2017 with a peak in early February. The stock is down about -20% from its high two months ago. This week’s selling pressure came as the result of an analyst downgrade and concerns the company may not be able to continue growing at the same pace it has.

Consumer Discretionary stocks suffered this week making up have of the 50 worst performing stocks. The stocks with notable losses included many retailers and those in the automobile industry.

Economic Indicator - Reported

It was a very disappointing headline number for the March employment report with only 98,000 jobs added. Economists had been expecting 178,000 with the lowest estimate from the many economists being 125,000 (proving such numbers are impossible to predict). Poor weather was blamed for the low number.

One bright spot regarding employment was the falling unemployment rate to 4.5% from 4.7%. It is now at the same level as it was during the strong 2007 economy.

All other economic indicators for the week were overshadowed by the employment report.

Economic Indicators – Upcoming

We will get two reads on inflation in the coming week with both the Producer Price Index and the Consumer Price Index being reported for March. Concerns about rising inflation have not materialized and the consensus for the current month is a 0% change due to lower energy prices.

March retail sales are expected to have been flat. Consumers are clearly showing signs of slowing and the March number was further impacted by poor weather in parts of the country.

Investor Trivia ANSWER

Tesla is expected to sell approximately 100,000 cars in 2017! Again this compares to 2.5 million for Ford. Tesla’s total revenue in 2016 was $7 billion as compared to $151.8 billion for Ford and both companies today have a similar market value. Clearly investors believe Tesla will continue to grow rapidly and will generate great profits.

Contact Mark A. Patton :

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.

Investing involves risk including loss of principal.

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.

International investments involve additional risks, which include differences in financial accounting standards, currency fluctuations, geopolitical risk, foreign taxes and regulations, and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.

Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed-income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications and other factors. Lower-rated securities are subject to greater credit risk, default risk, and liquidity risk.

Patton Fund Management, Inc. is a Registered Investment Advisor (RIA) with the U.S. Securities and Exchange Commission (SEC).

Download our Form ADV here.

IMPORTANT NOTICE: INFORMATION ABOUT PAST PERFORMANCE

Not indicative of future returns. Past performance is not indicative of future returns, which may vary. Accordingly, future returns are not guaranteed and there can be no assurance that any Patton Fund, Strategy, or Portfolio (“Patton Investments”) will achieve comparable investment results or its investment objective. You may lose money on your investment in a Patton Investment.

Strategy Developed based on Back-testing. The investment strategies used by Patton were developed, in part, by back-testing its investment program against past market and economic conditions.  In other words, the strategies were designed to succeed based on knowledge of events that occurred in the past.  One limitation of such a strategy is that it is inherently focused on the past, and cannot necessarily take account of market and economic conditions that may arise in the future.  If future market and economic conditions are different from past market and economic conditions, and if investors behave differently from past investors, Patton’s investment strategies may not work as anticipated and the Strategy, Fund, or any Patton Investments, may lose money.

Fees and Distributions. The performance information shown reflects the deduction of actual expenses of the applicable Patton Investment for periods during which the Patton Investment has been in operation (see below). The performance figures shown reflect the reinvestment of all dividends, interest and other income, and assume that the applicable Patton Investment has not made any distributions to investors.  Estimated fees and expenses including brokerage commissions, borrowing costs, and advisory fees, have been deducted from all back-tested performance.

Portfolio Characteristics. Portfolio characteristics, including specific holdings, contributors to performance, and country, sector and industry exposure, are shown as of the date indicated only, and are subject to change without notice. Portfolio characteristics are designed to illustrate the application of the Patton Investments’ investment style only, and should not be considered a recommendation.

Third Party Information. Information contained herein is based on data obtained from statistical services, company reports or communications, or other sources. Patton Fund Management believes these sources to be reliable. However, we have not verified this information, and we make no representations whatsoever as to its accuracy or completeness.

IMPORTANT NOTICE: INFORMATION ABOUT BACK-TESTED PAST PERFORMANCE

Performance results may be presented that pre-dates the commencement of operations of a Patton Investment Strategy. Because the Patton Investment Strategy was not in operation during certain periods shown, the performance information prior to the date the Patton Investment Strategy commenced operations is back-tested performance (sometimes referred to as hypothetical performance).

Patton Investment Strategies Inception Dates (first full month)

  • Patton 45: April 2001 (not open to new investors)
  • Patton Edge Strategy: February 2010
  • Patton Flex Strategy: February 2010
  • Audacity Strategy: April 2020

There are several important factors to consider when reviewing back-tested, or hypothetical, performance information:

Back-tested Performance is Hypothetical. The performance information shown for the Patton Investment Strategy you select includes performance information that is hypothetical, and is not real nor based on an actual portfolio managed by Patton. As such, the back-tested portion of the performance presentation does not represent the investment performance or the actual Patton Investment Strategy or any investors in the Patton Investment Strategy. The securities in these hypothetical portfolios were selected with the full benefit of hindsight, after their performance over the period shown was known. It is not likely that similar results could be achieved in the future.  The back-tested results may not reflect the impact that any material market or economic factors might have had on the results if the Strategy had been used during the period to actually manage client assets.  Furthermore, back-testing does not reflect how Patton actually might have reacted when managing client investments to economic and market events. The hypothetical portfolios presented here are purely illustrative, and representative only of a small sample of possible future scenarios.

Back-testing is Subject to Limitations. While it is believed that back-tested performance information presented is relevant to evaluating an investment in the Patton Investment Strategy, no representation is or could be made that the information presents what the performance results would have been in the past or are likely to be in the future. There are frequently sharp differences between hypothetical performance results and actual performance results subsequently achieved. One limitation of hypothetical performance is that it is generally prepared with the benefit of hindsight. In addition, no hypothetical track record can completely account for the impact of financial risk in actual trading. For example, back-factors that affect markets in general, the impact of fees and expenses, market liquidity and other factors may all have affected actual performance.

Actual Investor Experience Varies. The back-tested results are not indicative of the skill of Patton. For example, each Patton Investment Strategy began trading on the date indicated above. Back-tested performance shown for each Patton Investment Strategy reflects hypothetical performance determined using the current investment strategy of the applicable Patton Investment Strategy. However, Patton has been managing money using quantitative strategies since 2001.  During this period Patton has experienced periods of poor performance and Patton has closed other Patton Investment Strategies that it has managed as a result of poor performance.  Investors in some of Patton’s closed Strategies (and funds) have lost money.

Back-testing Period.  During the back-tested period, Patton was either not providing investment advice or was not providing investment advice according to the Strategy used to calculate the back-tested results.

Indices. The historical performance of various indices, such as the S&P 500 Index, may be included. An index is an unmanaged, broad-based market index and investing in any Patton Investment Strategy is not similar to investing in an index. An index is not available for direct investment, and the securities in an index will not match the Strategy's holdings. In addition, unlike an index, the Strategy's performance will be affected by fees and expenses.

Forward-looking Statements. Any forward-looking statements represent the subjective views of Patton and their validity may be affected by events and conditions not now contemplated and by other factors, many of which may be beyond Patton's control. Actual results may vary and such variations may be material, and no representation or warranty is made regarding any forward-looking information contained herein.

Patton Strategy Composites

Patton Edge Strategy Actual Results. Performance results for February 2010 forward represents a dollar-weighted average of all accounts utilizing this strategy.  The net return is the gross return reduced by 1/12 of 2.0% monthly.  NOTE - an enhancement was made to the Strategy in March 2021 that is expected to have a meaningful impact on the performance of the Strategy in the future during the early months of a bull market.

Patton Edge Performance Statistics:

StartEndComposite ReturnPortfolio CountPortfolio Count (End Period)End Capital
12/31/201012/31/2011 9.53 3 8 1,692,849
12/31/201112/31/2012 11.26 5 8 1,683,360
12/31/201212/31/2013 27.11 6 11 2,236,018
12/31/201312/31/2014 11.93 8 14 1,188,751
12/31/201405/31/2015 0.00 14 17 1,697,507
12/31/201412/31/2015 5.29 13 19 1,656,694
12/31/201512/31/2016 -5.88 15 28 2,558,860
12/31/201612/31/2017 18.60 23 31 2,675,077
12/31/201712/31/2018 -4.54 14 18 994,749
12/31/201812/31/2019 15.06 14 14 841,753
12/31/201912/31/2020 -0.41 12 12 573,401
12/31/202012/31/2021 10.79 10 10 597,863
12/31/202112/31/2022 1.94 8 8 441,354
12/31/202212/31/2023 4.22 6 6 360,066

Patton Flex Strategy Actual Results. Performance results for February 2010 forward represents a dollar-weighted average of all accounts utilizing this strategy.  The net return is the gross return reduced by 1/12 of 1.5% monthly.  A performance-based fee structure is charged to some investors utilizing the Patton Flex Strategy that could result in higher fees than 1/12 of 1.5% annually.  NOTE - an enhancement was made to the Strategy in March 2021 that is expected to have a meaningful impact on the performance of the Strategy in the future during the early months of a bull market.

Patton Flex Performance Statistics:

StartEndComposite ReturnPortfolio CountPortfolio Count (End Period)End Capital
01/31/201012/31/2010 13.85 1 1 1,142,400
12/31/201012/31/2011 22.48 1 1 1,739,954
12/31/201112/31/2012 34.24 1 1 3,114,146
12/31/201212/31/2013 68.92 1 1 5,074,023
12/31/201312/31/2014 22.43 1 1 11,795,197
12/31/201412/31/2015 25.79 1 1 24,493,849
12/31/201512/31/2016 -7.66 1 6 31,760,856
12/31/201612/31/2017 40.16 4 16 54,716,935
12/31/201712/31/2018-13.95 15 42 61,359,349
12/31/201812/31/2019 17.73 29 45 79,211,768
12/31/201912/31/2020 -2.69 36 47 74,874,709
12/31/202012/31/2021 29.15 34 47 92,471,626
12/31/202112/31/2022 -2.55 41 49 88,897,349
07/31/202212/31/2022 -5.97 45 50 88,900,320
12/31/202212/31/2023 2.62 42 52 91,036,035

Audacity Performance Actual Results. Performance results for April 2020 forward represents a dollar-weighted average of all accounts utilizing this strategy. The net return is the gross return reduced by 1/12 of 4.0% monthly. A performance-based fee structure is charged to some investors utilizing the Audacity Strategy that could result in higher fees than the monthly management fee deducted from this data.  NOTE - an enhancement was made to the Strategy in March 2021 that is expected to have a meaningful impact on the performance of the Strategy in the future during the early months of a bull market.

Audacity Performance Statistics:

StartEndComposite ReturnPortfolio CountPortfolio Count (End Period)End Capital
03/31/202012/31/2020 8.96 2 2 7,437,680
12/31/202012/31/2021 49.97 2 2 9,652,268
12/31/202112/31/2022 -7.29 2 2 11,523,894
12/31/202212/31/2023 -3.24 2 2 11,373,001

Notes about Composites:

  • "n/a" - Not statistically meaningful due to insufficient number of months.
  • Dispersion: Performance dispersion is calculated annually.  Portfolios are only included that were in the strategy for the full year.  Dispersion is calculated by subtracting the lowest portfolio return from the highest portfolio return.
  • Benchmark Description: The benchmark is the HFRX Equity Hedge index obtained from www.HedgeFundResearch.com.  This is an investable index of long/short U.S. equity hedge funds.  Its composition of securities and risk profile could be meaningfully different than the Patton Investment Strategy.
  • The above composite performance presentation for the Patton Edge Strategy and the underlying methodology used was independently verified by Ashland Partners only for the period through 12/31/2014.  The above composite performance presentation for both the Patton Flex Strategy and Audacity Strategy and the underlying methodology used are identical to that of the Patton Edge Strategy.
  • Leverage: the Patton Edge Strategy can have up to two times gross exposure; the Patton Flex Strategy can have up to five times gross exposure; the Audacity Strategy can have up to eight times gross exposure.
  • The Patton Flex Fund, L.P., utilizing the Patton Flex Strategy, has a 0% management fee, 12% net annual hurdle, and a 50% incentive fee above the annual hurdle.  See the Fund's Private Placement Memorandum for details.  This fee structure can result in a meaningfully different net performance for investors.
  • The Audacity Fund, L.P., utilizing the Audacity Strategy, has a 2.0% management fee, 0% net annual hurdle, and a 20% incentive fee above the annual hurdle.  See the Fund's Private Placement Memorandum for details.  This fee structure can result in a meaningfully different net performance for investors.
  • Audacity Strategy Back-tested Performance: all performance is shown net of a 4.0% annual management fee.  The Strategy is also offered with a 2.0% annual management fee and a 20% annual performance fee on all gains above 0%.  Based upon research the 4.0% management fee structure is expected to be the lesser costly of the two fee structures.
  • Accounts are generally added to a Composite for the first full month invested and removed after the last full month invested.
  • The Strategy is sometimes carved out of accounts that contain other assets.

Super-Diversification Flex Growth Strategy

This is the actual NET performance of our clients utilizing our Super-Diversification Flex Growth Strategy totaling approximately $133,440,555 of assets.  Our Strategy and process has remained consistent over the entire period. Not all Patton Clients with the same strategy experienced the same performance due primarly to minor differences in allocations and differences in fees. A very limited number of Patton Clients pay fees from money outside of their portfolio resulting in a higher return.  Some clients are Qualified Clients and Accredited Investors as defined by the SEC and may pay a performance-based fee which can meaningfully impact performance.

Use of leverage on a portion of the portfolios represented by this composite return has had a material impact on the performance figures displayed.

Performance includes the reinvestment of dividends and other earnings. Investors may lose money, and are expected to lose money, during significant market declines and other market conditions, in this strategy.

The asset allocation of the strategy has been different than the ARC Private Client Index, resulting in differing performance, although the risk profiles of both have been generally similar. During the period being reported the market has been in an upward trend that has been stronger than historic averages. There is no assurance that this type of trend will persist or how we would perform if it did.

All other representations of Super-Diversification performance throughout our website is back-tested simulated results unless otherwise noted.

ARC Private Client Index

The ARC Private Client Index is an index created by and maintained by the ARC Group. These indexes consist of more than 350,000+ actual investor portfolio returns that are managed by 149 investment managers (as of December 2024) including some of the largest in the world. These 149 managers only represent a sample of the 10,000's of investment managers and other such service providers (financial planners, traditional brokers, etc.).

There are 4 Private Client Indexes each with a different risk profile. We have selected the ARC Private Client Index with the most comparable risk profile, Steady Growth (allocation approximately 49.48% equities, 20.44% Fixed Income, 8.45% Cash, and 21.63% Other as of December 2024), to our Patton Clients performance.

For more information about these indexes, visit the ARC Group's website here.

Industry benchmarks presented for comparison to Super-Diversified Portfolios are believed to be comparable risk portfolios although the holdings are very likely significantly different.  Simulated portfolio benchmarks, such as a "Traditional Portfolio", does have a similar risk profile but is allocated only to traditional asset classes of stocks, bonds, and cash.

IMPORTANT NOTICE: INFORMATION ABOUT MODEL PORTFOLIO PERFORMANCE

Unless otherwise noted, the performance of all portfolios ("Model Portfolios") are simulations of various combinations of asset classes used to simulate the performance of various types of portfolios with various risk profiles. All Model Portfolios for all time periods are back-tested hypothetical simulated results.

Model Portfolios have been developed based on historical performance of the described indexes for the relevant time period using our proprietary process and do not represent the results of actual trading of investor assets. Model performance has inherent limitations.  Since these are simulated portfolios (hypothetical) and do not reflect any investor's actual experience with owning, trading or managing an actual investment account, there can be no assurance that an investor would have achieved similar rates of return over the time frame.  Thus, the performance shown does not reflect the impact that material economic and market factors had or might have had on decision making if actual investor money had been managed. In addition, since the time period in question is a historical one, there can be no assurance that future results achieved by investors will in any way resemble those represented by the Model Portfolios. Model Portfolios are rebalanced monthly. All performance data is total returns which includes interest and dividends. The calculations are net of the estimated management and/or performance fees, trading costs, and fund expense ratios (see below table for estimated expense ratios by Asset Class) if applicable.  Performance does not reflect the deduction of other fees or expenses, including but not limited to brokerage account fees, custodial fees, and fees and expenses charged by mutual funds, exchange traded funds, and other investment companies that may be in addition to the expense ratio (these additional expenses tend to be extremely low).

The following describes how a model portfolio monthly return is calculated:

  • Portfolio Allocation: 50% U.S. Large-Cap, 50% U.S. Aggregate Bonds
  • Portfolio Fees: 1.2% annually or 0.1% per month
  • Month's Performance: U.S. Large-Cap = +3.0%, U.S. Aggregate Bonds = +1.0%
  • Portfolio Performance: (50% x 3.0%) + (50% x 1.0%) = +2.0% less 0.1% (fees) = +1.9%

Model Portfolios presented on our website are portfolios blended from various indexes.  The blended asset allocation of every Model Portfolio is readily available within the website.  The benchmark index(es) used to represent each asset class is disclosed elsewhere in this disclosure.  We do adjust the performance of the benchmark indexes for fees of an applicable fund available to invest in that index or asset class.

When a Model Portfolio's performance is compared to a single benchmark index, such as the S&P 500, the index has not been selected to represent an appropriate benchmark to compare an investor's performance, but rather are disclosed to allow for comparison of the investor's performance, for the convenience of the investor, to that of certain well-known and widely recognized indices.  Indices are typically not available for direct investment, are unmanaged, and do not incur fees or expenses.

The goal of a portfolio is not to outperform and single index.  The objective of a portfolio is total return.  All portfolios are subject to the risk of loss.  Patton was not necessarily managing portfolios similar to any given model portfolio.  Model Portfolios are not indicative of the skill of Patton nor the performance of portfolios managed by Patton.

The performance calculations of all Model Portfolios have not been audited by any third party.  Actual performance of client portfolios may differ materially due to the timing related to additional client deposits or withdrawals and the actual deployment and investment of a client portfolio, the length of time various positions are held, the client’s objectives and restrictions, and fees and expenses incurred by any specific individual portfolio.

Any presentation of two portfolios for comparison is intended to have a similar risk profile.  Some Model Portfolios are more diversified than others such as Patton's Super-Diversified Portfolios generally including more asset classes than more traditional portfolios.  Generally the purpose of such presentations is to demonstrate the impact of added diversification.

Although we have done our best to present this information fairly, hypothetical performance is still potentially misleading. Hypothetical data does not represent actual performance and should not be interpreted as an indication of actual performance. This data is based on transactions that were not made. Instead, the trades were simulated, based on knowledge that was available only after the fact and thus with the benefit of hindsight. Results do not include the impact of taxes, if any. Past performance is not indicative of future performance.

General Information

This website content is subject to change without notice and, due to the rapidly changing nature of the security markets, may quickly become outdated. All materials presented are compiled by Patton from sources believed to be reliable and current, but accuracy cannot be guaranteed. This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.  Content is prohibited from being reproduced.

Diversification does not ensure a profit or protect against a loss in a declining market.

Investments involve risk and unless otherwise state, are not guaranteed.  Consider the investment objectives, risks, and expenses carefully before investing.

Readers of the information contained on this website should be aware that any action taken by the viewer/reader based on this information is taken at their own risk. This information does not address individual situations and should not be construed or viewed as any type of individual or group recommendation. Be sure to first consult with a qualified financial adviser, tax professional, and/or legal counsel before implementing any securities, investments, or investment strategies discussed.

Exchange-Traded Funds and Index Mutual Funds (“Index Funds”).  All Index Funds are subject to risk, which may result in the loss of principal. International Index Funds involve additional risks, including currency fluctuations and political uncertainty. Index Fund products that invest in emerging markets are generally more risky than those that invest in developed countries because countries with emerging markets may have relatively unstable and less-established markets and economies. Sector Index Funds are subject to sector risks and non-diversification risks, which may result in performance fluctuations that are more extreme than fluctuations in the overall stock market. In addition, sector Index Funds that sample their target indexes to comply with tax diversification rules may experience a greater degree of tracking error than other Index Funds. Prices of mid- and small-cap stocks often fluctuate more than those of large-company stocks.

Source Data for Analysis

Any analysis reflecting daily performance for any Patton Investment Strategy is an actual data for the periods available and back-tested data for prior periods.  Daily data for diversified portfolios uses an applicable index fund (see the Asset Classes table in this Disclosure "Index Fund" column) performance less the applicable fees.

Mutual fund performance and performance statistics come from Steele Mutual Fund Expert (https://steelesystems.com/).

Client Performance Reporting

Client performance reporting, illustrated as the "Family", in the password protected areas of our webiste, including our Super-Diversified Portfolio Statements section, does represent the actual performance of an individual client's portfolio.  Returns are shown net of fees, deposits, and withdrawals.  These returns are calculated consistent with industry standards (returns are linked for periods upon a deposit or withdrawal).

Every effort is made to insure correct calculations.  Please notify Patton if you believe your returns do not appear correct.

For clients with an investment in a Patton hedge fund / L.P., all current date valuations and daily returns for hedge fund investments are an estimate. These estimates are based on your most recent actual month-end balance, if applicable, and incremented by the estimated daily percent change. Month-end market valuations are actual once the hedge fund statement has been posted to the website.

Performance for specific asset classes does NOT represent the actual performance for the client; this performance is for the asset class based on the assumptions and descriptions made in our Asset Classes Descriptions in our full disclosure.

Any reference to the "Benchmark" portfolio is a simulated portfolio.  This does not represent actual returns.  It is used as a simulated benchmark to compare to the client's actual performance.  See the "Benchmark Portfolio" report in the Dashboard reports for details about the asset allocation and more of the Benchmark Portfolio.

Portfolio Performance Composites

We have multiple portfolio performance composites. Each portfolio performance composite represents a different portfolio strategy and a different risk profile. Generally all Patton client portfolios that meet the minimum value, typically $100,000, are included in one of the portfolio performance composites.  Portfolios may be excluded for various reasons and periods of time when it is deemed their performance is not representative of the Composite (example: use of margin).  Portfolios are generally added to a Composite for the first full month it is invested and removed after the last full month it is invested.  The result is multiple performance composites consisting of all like-type (strategy and risk profile) Patton client portfolios.

Following are the strategies for the portfolio performance composites:

  • Super-Diversified with Flex: diversified portfolios including an allocation to the Patton Flex Strategy or Patton Flex Fund, L.P.
  • Super-Diversified with Audacity: diversified portfolios including an allocation to the Audacity Strategy or Audacity Fund, L.P.
  • Better-Diversified: diversified portfolios without an allocation to any Patton strategy

The three diversified portfolio performance composites are further separated by the following risk profiles: Conservative, Moderate, and Growth.

All references to "Patton Clients" on our website represents the Super-Diversified with Flex performance composite for the Growth risk profile.

Use of leverage on a portion of the portfolios represented by this composite return has had a material impact on the performance figures displayed.

Performance is calculated as a dollar-weighted average meaning that larger accounts have a larger impact on the composite average.

Performance is shown net of client fees.

The following table provides details for each portfolio performance composite:

Portfolio Performance Composite Details

Performance
Date
Composite
Client Count
Client Assets
02/28/20103.76%21,336,988
03/31/20109.42%21,398,989
04/30/20102.84%21,412,357
05/31/2010-5.70%21,333,337
06/30/2010-0.37%21,327,316
07/31/20103.75%31,887,802
08/31/2010-4.05%31,844,964
09/30/201010.88%31,943,774
10/31/20102.24%31,987,389
11/30/2010-0.84%31,973,588
12/31/20103.17%21,509,912
01/31/20110.33%21,514,679
02/28/20113.25%21,563,578
03/31/20110.32%32,111,465
04/30/20113.22%21,881,876
05/31/2011-1.33%32,149,946
06/30/2011-0.60%32,137,255
07/31/2011-0.02%42,755,780
08/31/2011-3.50%42,660,014
09/30/2011-4.81%42,532,186
10/31/20115.95%42,682,175
11/30/20110.70%42,674,875
12/31/20111.35%42,708,428
01/31/20121.45%52,951,565
02/29/20123.04%63,197,958
03/31/20124.48%63,341,436
04/30/20122.31%63,415,476
05/31/2012-3.42%52,036,338
06/30/20122.78%62,190,046
07/31/20123.43%62,259,687
08/31/2012-0.14%62,232,543
09/30/20121.96%62,299,843
10/31/2012-1.50%62,265,752
11/30/20122.11%62,313,906
12/31/20120.64%73,834,232
01/31/20135.11%74,028,607
02/28/20131.81%74,103,577
03/31/20134.13%74,275,319
04/30/20130.71%85,084,877
05/31/20131.21%85,146,004
06/30/2013-1.88%85,057,424
07/31/20132.79%85,247,480
08/31/2013-3.84%85,044,261
09/30/20134.31%85,258,712
10/31/20132.62%85,590,673
11/30/20133.43%85,829,033
12/31/20131.96%85,948,563
01/31/2014-4.47%85,721,319
02/28/20145.23%96,257,514
03/31/20141.05%96,640,859
04/30/2014-0.71%1212,835,826
05/31/20143.23%1213,255,183
06/30/2014-0.74%1213,150,894
07/31/2014-1.57%1212,948,989
08/31/20142.75%1314,002,448
09/30/2014-0.97%1617,103,909
10/31/20142.28%1617,467,978
11/30/20143.87%1820,256,425
12/31/2014-0.38%1820,150,000
01/31/2015-0.98%1819,919,699
02/28/20154.63%1820,958,438
03/31/2015-0.08%1821,051,339
04/30/2015-4.51%1821,070,106
05/31/20152.95%1923,374,830
06/30/2015-0.77%1923,172,243
07/31/20153.69%2124,921,667
08/31/2015-4.21%2023,833,480
09/30/20151.40%1923,255,065
10/31/20153.19%2125,555,163
11/30/2015-0.89%2125,401,577
12/31/2015-0.64%2226,273,643
01/31/2016-4.70%2326,292,503
02/29/20160.02%2426,322,565
03/31/20165.92%2326,656,338
04/30/2016-0.75%2427,360,699
05/31/20161.36%2427,760,024
06/30/20163.81%2428,823,488
07/31/20160.56%2531,841,375
08/31/2016-2.12%2631,474,558
09/30/2016-0.08%2732,661,734
10/31/2016-2.08%2832,518,816
11/30/2016-0.27%2832,557,024
12/31/20160.90%2832,836,347
01/31/20173.02%2933,967,071
02/28/20172.73%2934,809,154
03/31/20171.41%2935,469,732
04/30/20170.34%3137,521,472
05/31/20174.10%3139,050,390
06/30/2017-2.57%3238,570,011
07/31/20174.07%3341,010,004
08/31/20172.61%3443,949,083
09/30/20170.49%3546,273,407
10/31/20173.25%3548,037,515
11/30/20171.25%3749,661,147
12/31/20170.10%3849,960,432
01/31/20186.42%3854,074,394
02/28/2018-4.45%3852,595,638
03/31/2018-0.93%3853,132,253
04/30/2018-1.76%3852,014,899
05/31/20181.51%3953,127,221
06/30/2018-2.36%4152,434,906
07/31/20181.53%4153,263,451
08/31/20182.28%4356,244,631
09/30/20180.51%4557,700,656
10/31/2018-4.59%4454,061,114
11/30/20180.18%4455,027,118
12/31/2018-7.67%4248,568,213
01/31/20194.21%4553,268,156
02/28/20191.66%4755,546,675
03/31/20192.00%4961,523,536
04/30/20191.39%5062,319,726
05/31/2019-0.37%5062,061,702
06/30/20193.41%5063,621,049
07/31/20190.66%5064,462,712
08/31/20193.54%5268,335,254
09/30/2019-3.05%5572,513,707
10/31/20191.73%5673,948,899
11/30/2019-0.79%5672,887,911
12/31/20191.24%5875,044,534
01/31/20200.45%6080,438,741
02/29/2020-7.25%5971,392,760
03/31/2020-6.34%5658,486,722
04/30/20204.71%5866,553,665
05/31/20203.20%5868,031,132
06/30/2020-0.09%5667,985,274
07/31/20206.39%5566,256,347
08/31/20201.90%5567,763,929
09/30/2020-1.09%5770,317,295
10/31/2020-1.86%5668,049,758
11/30/20203.12%5567,683,448
12/31/20203.05%5567,820,797
01/31/2021-1.91%5673,809,619
02/28/20212.09%5474,257,596
03/31/20212.09%5375,241,928
04/30/20213.73%5377,436,189
05/31/20211.26%5681,141,984
06/30/2021-1.24%5790,085,956
07/31/20212.38%5791,670,805
08/31/20211.56%5894,035,534
09/30/2021-2.11%5891,711,934
10/31/20213.87%6297,922,528
11/30/2021-1.12%6094,113,883
12/31/20214.59%5992,294,360
01/31/2022-3.70%5989,400,531
02/28/20220.66%5891,014,738
03/31/20223.50%62110,878,153
04/30/2022-3.08%62115,063,057
05/31/20221.48%61122,189,274
06/30/2022-6.16%59111,335,108
07/31/20224.30%58115,762,839
08/31/2022-3.61%61111,905,476
09/30/2022-7.52%60101,259,635
10/31/20226.67%60108,658,654
11/30/20224.89%59112,322,642
12/31/2022-4.85%60103,358,533
01/31/20233.74%61116,672,231
02/28/2023-5.05%61106,860,922
03/31/20232.63%61108,094,151
04/30/20232.74%64117,387,517
05/31/2023-5.75%65109,357,918
06/30/20236.01%66116,281,515
07/31/2023-0.57%65114,267,894
08/31/2023-0.75%63108,492,084
09/30/2023-6.15%6496,836,330
10/31/2023-1.54%6392,534,502
11/30/20238.91%6299,758,305
12/31/20233.95%62104,078,857
01/31/20245.01%63109,879,571
02/29/20245.70%61112,789,770
03/31/20243.40%62119,190,203
04/30/2024-6.03%62111,282,051
05/31/20244.95%58113,375,822
06/30/20243.42%63120,627,629
07/31/2024-1.21%63116,256,379
08/31/20243.76%64127,447,541
09/30/20240.63%65129,095,132
10/31/2024-1.20%65127,791,786
11/30/20244.92%65133,440,555
12/31/2024-7.48%64123,046,297

Asset Classes

The following table shows the Asset Classes that are available throughout the website, the market index that is used to represent each asset class, and the estimated fee that is deducted from the performance of the index.

Strategy Portal

Our Strategy Portal and its content is intended as a research tool.  Individual client performance, holdings, etc. could differ from the information displayed in this portal.

All daily, month-to-date, year-to-date, and since inceptions returns are estimates.

A disclosure crawl appears at the top of the page indicating periods that are actual returns and those that are simulated.  If the period selected for display and/or analysis includes both simulated and actual performance, these will be combined as one.

An enhancement to the strategy, designed to improve returns during the early months following a sharp market decline and following rally, was implemented in March 2021.  Therefore, performance data is accessible for the strategy both with and without the enhancement.

The strategy is offered with varying fee structures.  Therefore, performance data is accessible for the strategy net the various fee structures.  Furthermore, the strategy's gross return (no deduction for management fees or performance fees) is also accessible.

Portfolio Analysis Portal: Our Portfolio Analysis Portal and its content is intended to be a research tool.  All performance is simulated (it is NOT actual performance of any clients).  The performance is based on the selected portfolio and allocation of that portfolio.  For more details on the simulated portfolios selected, see the "Compare Allocations" report from the Dashboard.

Patton Flex Strategy - the following is a description of the various performance data available:

  • Performance History Types
    • Research Returns: an enhancement to the Strategy was implemented in March 2021.  All performance data for all periods reflects the impact of this Strategy enhancement.  Returns for April 2021 and later are actual returns and all prior to this date are simulated.
    • Real Returns from Inception: all performance data from February 2010, the inception date of the Strategy, are actual returns and all prior to this date are simulated.  The Strategy enhancement implemented in March 2021 is NOT reflected in any of the performance data.
  • Fee Type
    • Management Fee: the Strategy performance is net of a 1.50% management fee.
    • Performance Fee: the Strategy performance is net of a 0.00% management fee and 50% performance fee above 12% annually.
    • None: this is the gross performance of the Strategy with no management fees and no performance fees deducted.

Any combination of "Performance History Type" and "Fee Type" can be selected to access the described performance data.

The Flex Strategy was launched in February 2010.  There is backtested research from July 1963.  All returns prior to February 2010 are backtested.  Furthermore, an enhancement was made to the Strategy implemented March 2021.  The Research Returns allow you to see how the Strategy would have performed had this enhancement been in place since the Strategy inception.

Audacity Strategy - the following is a description of the various performance data available:

  • Performance History Type
    • Research Returns: an enhancement to the Strategy was implemented in March 2021.  All performance data for all periods reflects the impact of this Strategy enhancement.  Returns for April 2021 and later are actual returns and all prior to this date are simulated.
    • Real Returns since Inception: all performance data from April 2020, the inception date of the Strategy, are actual returns and all prior to this date are simulated.  The Strategy enhancement implemented in March 2021 is NOT reflected in any of the performance data.
  • Fee Type
    • Management Fee: the Strategy performance is net of a 4.00% management fee.
    • Performance Fee: the Strategy performance is net of a 2.00% management fee and 20% performance fee above 0% annually.
    • None: this is the gross performance of the Strategy with no management fees and no performance fees deducted.

Any combination of "Performance History Type" and "Fee Type" can be selected to access the described performance data.

The Audacity Strategy was launched in April 2020.  There is backtested research from July 1963.  All returns prior to April 2020 are backtested.  Furthermore, an enhancement was made to the Strategy implemented March 2021.  The Research Returns allow you to see how the Strategy would have performed had this enhancement been in place since the Strategy inception.