Market insight and a highlight of Cabana’s year-to-date performance.
Cabana’s six portfolios range from “Conservative” to “Aggressive” and include an income strategy portfolio. Performance is as of market close May 8, 2017 and is presented net of advisory fees and commissions.
All our portfolios were up for the week with the exception of the Conservative Portfolio, which was down slightly at -0.12%. The Balanced Portfolio led and was up +0.39%. We continue to see returns tightly bunched regardless of draw-down parameters, which define our portfolio asset allocations. We noticed this previously and I continue to believe that this is a result of an indecisive marketplace. It is well known that many asset classes can become highly correlated in bear markets when investors simultaneously decide to liquidate positions for cash. The same can occur when investors simultaneously become indecisive and refuse to commit to any investment or asset class. US equity markets are stalled just below all-time highs, interest rates have likewise stalled since the presidential election, bonds across the yield curve are treading water at one month lows, energy is getting slammed despite a pullback in the US dollar, US real estate is at one month lows and flat for the past six months and last, but not least, gold has suddenly lost its shine. Yet the VIX is below 10!
It seems to me that we have a real case of indecision across domestic asset classes and inertia has taken over. So how are we continuing to see gains across our portfolios? First, we don’t mind inertia and will simply float along with a diversified top down portfolio until something comes along to change our current path (simple Newtonian Physics). Secondly, we invest in international assets, and those markets do have direction. China is up 20% year to date and the entire emerging market class is up more than 15%. Europe is also up 15%. We have benefited from that diversified exposure, without exception. We remain cautiously bullish.
Year-to-date net-of-fees performance:
ALPHA INCOME +2.65%
Performance is presented net of advisory fees and commissions (Conservative – Aggressive is presented net of 3% fees from January 1, 2017 – February 28, 2017 and 2% beginning March 1, 2017; Alpha Income is presented net of 2% fees)
-G. Chadd Mason, CEO
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All performance returns are presented net-of-fees and include the reinvestment of dividends and capital gains. Benchmark comparisons are presented gross-of-fees.
Past performance may not be indicative of future returns. No current or prospective client should assume that the future performance of any specific investment or strategy will be profitable or equal to past performance levels.
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Historical performance results for investment indexes and/or categories typically do not show the impact of transaction and/or custodial charges or the deduction of an advisory fee, which may decrease historical performance results. There can be no assurances that a strategy will match or exceed its benchmark.
Some performance returns do not represent actual trading using client assets but were achieved through retroactive application of a model designed with the benefit of hindsight. Model returns have inherent limitations. Specifically, these returns do not represent actual trading and may not reflect the impact of material economic and market factors on the adviser’s decision-making if the adviser had actually managed the client’s money during this time frame.
Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark.