Week ending April 23, 2021
The pundits offered a plethora of excuses to explain a stock market that continues searching for new leadership. Has the economy peaked? Are the big increases in corporate earnings already priced into stocks? Will the Fed be forced to raise rates sooner rather than later? As a result, the markets were twisted and turned into a mish mash of results. What was seemingly ignored was more evidence of increasing strength in the economy aided by the continued success in vaccinations with the resultant decrease in economic restrictions. Manufacturing seems to be accelerating with several indicators posting new records. Housing is still surging with March New Home Sales up 20% for the month while the supply of new and existing homes for sale are at historical lows. As might be expected in this environment, job numbers continue to surprise with their strength. Overseas, China and the UK are accelerating with their success in managing the virus, while Europe is stuttering from its slow rollout of the vaccine, although their manufacturing indicators are signaling the ongoing global growth resurgence.
Emerging Market Equities outperformed the US which outperformed Foreign Developed while globally Small Caps outperformed Large. Growth and Value were mixed in their results.
Bond yields inched down a notch on comments from the Fed that it is committed to not raising rates through next year as it sees inflationary pressure as “transitory”. As a result, bond performance was very mixed between Interest and Credit.
Commodities were also mixed with Oil negative, yet, Industrial Metals positive.
All three core strategies outperformed their proxies due to allocations in Emerging Market and US Small Cap Equities and Credit and Blend Bonds.
Tactical Income’s positive return was driven by its overweight to Credit.
Tactical Equity’s fractional loss was in line with its proxies and reflected the mixed and incongruous results among different equity classes.
Tactical US Equity’s fractional loss was greater than its proxies from overweight allocations in Utilities and Energy. Tactical US Equity FT’s fractional positive return was aided by its Small/Mid Cap bias.
Tactical Global Balanced outperformed its proxies due to allocations in Emerging Market Equities and its US Equity Small/Mid Cap bias.
Important Disclosures:
Risk Paradigm Group, LLC (RPg Asset Management or RPg) is a registered investment advisor with the U.S. Securities and Exchange Commission (SEC). Tactical Allocation Group (TAG) joined Risk Paradigm Group, LLC and became a division of the firm on July 22, 2016. Additional information regarding Risk Paradigm Group, LLC can be found on our website at www.rpgassetmanagement.com. RPg does not provide tax or legal advice. Please consult an independent tax advisor for additional guidance.
This material has been prepared solely for informational purposes and is not to be considered investment advice or a solicitation for investment. Performance provided is past performance. Past performance is not indicative of future results. Investments may increase or decrease in value and are subject to a risk of loss. As with any investment strategy, there is potential for profit as well as the possibility of loss. No representation or warranty is made that any returns indicated will be achieved. Investors should consult their financial advisor before investing.
Any projections, market outlooks, estimates or expectations of future financial or economic performance of the markets in general are forward-looking statements and are based upon certain assumptions and should not be construed as indicative of actual events that will occur. Actual results or events may differ materially from those projected, estimated, assumed or anticipated in any such forward-looking statements. Information contained herein is as of the period indicated and is subject to change. Any views expressed herein are those of the author(s) at the time of writing and are subject to change without notice.
The information contained herein includes information obtained from sources believed to be reliable, but we do not warrant or guarantee the timeliness or accuracy of the information as it has not been independently verified. It is made available on an “as is” basis without warranty.
This material is proprietary and may not be reproduced, transferred or distributed in any form without prior written permission from RPg. RPg reserves the right at any time, and without notice, to change, amend, or cease publication of the information contained herein. RPg may change any exposures and compositions reflected herein at any time and in any manner in response to market conditions or other factors without prior notice.
References to Indexes: The S&P 500 Index is an unmanaged index of 500 stocks that is generally representative of the equity performance of larger companies in the U.S. Please note that an investor cannot invest directly into an index.
Risk Disclosures: Concentration, volatility, and other risk characteristics of a client’s account also may differ from the information shown herein. There is no guarantee that any client will achieve performance similar to, or better than, the strategy mentioned herein.
Sources: Bloomberg.
For more information, including risks of investing in our strategies, visit our website at www.rpgassetmanagement.com.