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How are the Tactical Firms Handling the Volatility?

Most tactical firms will tell you that volatility brings opportunity. Whether they believe markets to be under or overvalued, their more active periods are linked to more active Market Movement. We thought that it would be a good time to look at some of the industry’s more popular tactical firms and see how the last several months of volatility have impacted their returns. We recognize that many of the tactical moves that they are making today will impact their returns over the next full market cycle, but it is always interesting to try and monitor more recent trends.

We are using return data provided by Morningstar and are looking at the lowest cost share class of the fund that reflects the firm’s tactical views. We realize that many of these firms run SMA portfolios and Fund of Fund models as well as other types of tactical strategies, but we are looking for general trends and feel that the traded fund should provide a proxy for review.

Performance as of 11/20/2015 (Firms are listed in alphabetical order):


  Year to Date Return

Cougar Rx Tactical Growth-2.07
FPA Crescent
Good Harbor US CORE-5.07
Innealta Country Rot-5.56
Innealta Sector Rot-2.58
Janus Balanced+1.87
JP Morgan Inv. G&+1.01
Meeder Muirfield-3.56
Swan Def Risk-3.88
Toews Hedged Growth-4.83
Wm Blair Macro-2.70

For Comparison


                 Vanguard Total Stock                                                +2.55

             Morningstar Mod Target Risk                                          -.28

While all of these strategies are compared by Morningstar to the Moderate Target Risk Category, each management team has their own internal benchmark. The one commonality that they share is that they proclaim themselves to be less benchmark oriented and concerned with the management of downside risk.

It is very interesting to see the wide variation in this difficult year for both stocks and bonds. We will continue to monitor the progress of tactical firms and be very interested to see how the moves they are currently making play out over the coming year or two as Market Movement sorts itself out.


The information, analysis, and opinions expressed herein are for general and educational purposes only. Nothing contained in this commentary is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. All investments carry a certain risk, and there is no assurance that an investment will provide positive performance over any period of time. An investor may experience loss of principal. Investment decisions should always be made based on the investor’s specific financial needs and objectives, goals, time horizon, and risk tolerance. The asset classes and/or investment strategies described may not be suitable for all investors and investors should consult with an investment advisor to determine the appropriate investment strategy. FTJ FundChoice does not guarantee any minimum level of investment performance or success of any index portfolio or investment strategy. Past performance is not indicative of future results. Indices are unmanaged and their returns assume reinvestment of dividends and do not reflect any fees or expenses. It is not possible to invest directly in an index. Information obtained from third party sources are believed to be reliable but not guaranteed. FTJ FundChoice makes no representation regarding the accuracy or completeness of information provided herein. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice.