Dynamic Allocation Fund
Fund Strategy
Astor’s Dynamic Allocation Fund seeks to adjust a portfolio allocation of multiple asset classes throughout economic cycles by utilizing macroeconomic analysis to determine portfolio risk targets. A proprietary model built around the Astor Economic Index® translates macroeconomic data into a quantifiable measure of the overall economic condition and trend. The direction and magnitude of this measure provides a guideline for an appropriate level of portfolio beta in the current environment. In order to achieve the desired beta level, the Fund seeks to invest in an optimal mix of asset classes. When trends are stable or rising, the Fund attempts to allocate to risk assets with favorable forecasts for price appreciation such as equities. When conditions weaken, the Fund seeks to reduce equity exposure and allocate to defensive positions such as cash, fixed income, and inverse equity. The Fund uses exchange-traded funds (“ETFs”) for portfolio construction.
Resources
Discussion
The Fund seeks to achieve its objectives by investing in in Exchange-Traded Funds (“ETFs”). An ETF is a type of Investment Company which attempts to achieve a return similar to a set benchmark or index. The value of an ETF is dependent on the value of the underlying assets held. ETFs are subject to investment advisory and other expenses which results in a layering of fees for clients. As a result, your cost of investing in the fund will be higher than the cost of investing directly in ETFs and may be higher than other mutual funds with similar investment objectives. ETFs may trade for less than their net asset value. Although ETFs are exchanged traded, a lack of demand can prevent daily pricing and liquidity from being available.
The Fund can purchase ETFs with exposure to equities, fixed income, commodities, currencies, developed/emerging international markets, real estate, and specific sectors. The underlying investments of these ETFs will have different risks. Equity prices can fluctuate for a variety of reasons including market sentiment and economic conditions. The prices of small and mid-cap companies tend to be more volatile than those of larger, more established companies. It is important to note that bond prices move inversely with interest rates and fixed income ETFs can experience negative performance in a period of rising interest rates. High yield bonds are subject to higher risk of principal loss due to an increased chance of default. Commodity ETFs generally gain exposure through the use of futures which can have a substantial risk of loss due to leverage. Currencies can fluctuate with changing monetary policies, economic conditions, and other factors. International markets have risks due to currency valuations and political or economic events. Emerging markets typically have more risk than developed markets. Real estate investments can experience losses due to lower property prices, changes in interest rates, economic conditions, and other factors. Investments in specific sectors can experience greater levels of volatility than broad-based investments due to their more narrow focus.
The Fund can also purchase unleveraged, inverse fixed income and equity ETFs. Inverse ETFs attempt to profit from the decline of an asset or asset class by seeking to track the opposite performance of the underlying benchmark or index. Inverse products attempt to achieve their stated objectives on a daily basis and can face additional risks due to this fact. The effect of compounding over a long period can cause a large dispersion between the ETF and the underlying benchmark or index. Inverse ETFs may lose money even when the benchmark or index performs as desired. Inverse ETFs have potential for significant loss and may not be suitable for all investors
Disclosure
All information contained herein is for informational purposes only. This is not a solicitation to offer investment advice or services in any state where to do so would be unlawful. Analysis and research are provided for informational purposes only, not for trading or investing purposes. All opinions expressed are as of the date of publication and subject to change. Astor and its affiliates are not liable for the accuracy, usefulness or availability of any such information or liable for any trading or investing based on such information.
Mutual funds involve risk including the possible loss of principal. The funds may invest in alternative assets and specialty market segments. The risks and volatility of these products are linked to investments in equities, derivatives, commodities, futures, real estate or currency exchange rates and may include leverage, which magnifies the changes in the value of the ETF and are subject to leverage, credit risk and counterparty risks. Foreign investing, including emerging markets, involves risks not typically associated with U.S. Investments, including fluctuations in currency values, political, social and economic developments, liquidity, volatility, less efficient markets, and differing legal standards.
The adviser’s dependence on its proprietary economic analysis and judgements about the attractiveness, value and potential appreciation of asset classes may prove to be incorrect and ay not produce the desired results. ETF’s are subject to investment advisory fees and other expenses, which will be indirectly paid by the Fund. As a result, your cost of investing in the Fund will be higher than the cost of investing directly in the ETF’s and may be higher than other mutual funds. The net asset value of the Fund will fluctuate based on changes in the value of the equity securities in which in invests through ETF’s.
When investing in fixed-income, the value of your investment if the Fund will fluctuate with changes in interest rates. Lower quality (high yield or junk) bond are considered speculative and preset greater risk than bonds of higher quality. Debt issuers, including sovereign debt, may not make interest or principal payments resulting in losses to the Fund. Securities of small and medium capitalization companies may be subject to more abrupt or erratic market movements than those of larger more established companies.
An investor should consider the Astor funds’ investment objectives, risks, charges, and expenses carefully before investing. This and other information about the Astor funds are contained in the funds’ prospectus, which can be obtained by calling (877) 738-0333. Please read the prospectus carefully before investing. The funds are distributed by Northern Lights Distributors, LLC a FINRA/SIPC member. Astor Investment Management is not affiliated with Northern Lights Distributors, LLC. 3525-NLD-7/20/2017 2017-126.