|
|
Attempting to identify the best performers each year is a difficult task. However, by creating a portfolio that includes asset classes that have proven over time to be profitable and positively sloped, short-term swings can be limited. Proper diversification can help achieve greater returns with less volatility and fewer drawdowns than the overall market. Astor's approach places a strong emphasis on correlation analysis, with a focus toward creating a portfolio of non-correlating assets.
Astor invests in ETFs representing multiple asset classes including equities, fixed income, commodities, currencies, and other hard assets. The desired result of Astor's approach is less volatile long-term capital appreciation and lower drawdown, thereby attempting to generate a more stable risk-return curve than our benchmark. Astor focuses on the correlations between assets within a single portfolio in an attempt to mitigate stock market declines.
The chart style below is often used to illustrate the need for investors to diversify their portfolio among various asset classes beyond equities and fixed income. The chart ranks each asset class annually from best to worst performers. As evidenced in the chart, attempting to identify the best performers each year is a difficult task. However, as each of these asset classes have proven over time to be profitable and positively sloped, by creating a portfolio that includes these asset classes you can limit short term swings.
Mutual funds involve risk including possible loss of principal. The Astor funds attempt to achieve their investment objective by primarily investing in exchange-traded funds (ETFs). An ETF is a type of investment company whose investment objective is to achieve the same return as a particular market index. An ETF will invest in either all of the securities or a representative sample of the securities included in the index. ETFs and underlying funds are subject to investment advisory and other expenses, which will be indirectly paid by the Astor funds. As a result, your cost of investing in the Astor funds will be higher than the cost of investing directly in ETFs and underlying funds and may be higher than other mutual funds that invest directly in stocks and bonds. The Astor funds may engage in hedging activities by investing in inverse ETFs. Inverse ETFs may employ leverage, which magnifies the changes in the underlying stock index upon which they are based. Any strategy that includes inverse securities could cause the Astor funds to suffer significant losses. The Astor funds may purchase ETFs and underlying funds that invest in "alternative asset" or "specialty" market segments. The risks and volatility of these investments are linked to narrow segments of the economy such as commodities, foreign currencies, or real estate, and may include leverage, which magnifies the changes in the value of the ETF or underlying fund. You cannot invest directly in an index.
|
