Strategy PLUS Updates - May 2021

Strategy PLUS Updates - May 2021

June 02, 2021

The economy continues its progression towards a full reopening with growing vaccination rates and a supportive policy environment. The number of states reporting 70% full vaccination rates continues to expand each week. Pent up demand and an improving employment picture should lead to strong growth in 2021. The Federal Reserve has indicated they are looking for significant progress toward full employment before considering raising interest rates. Fiscal policy remains focused on supporting the recovery, with discussions on-going for an infrastructure spending package.

The market has responded with evolving leadership. Value-oriented cyclical sectors, such as Financials, Materials, and Industrials, have taken the lead over growth sectors. This is typical in the early phase of a recovery. Growth and inflation expectations have pushed longer term interest rates higher.

Considering the environment, we have made changes to the Focus PLUS and Target PLUS models.

Summary of strategy changes to the Focus PLUS models:

The Focus PLUS models are designed for investors who seek concentrated exposure to our strategies. The objective within these models is to allocate to strategies that we believe are best positioned given the current market environment. We are seeking to increase exposure to strategies that are tactically managed as we believe they are better positioned to take advantage of the trends in the current market environment.

  • Within the fixed income side of the models, we are increasing exposure to tactically managed fixed income strategies and reducing exposure to a strategic bond strategy. The net effect of this change will be to increase exposure to inflation protected assets via natural resources, real assets, and floating rate bonds.
  • Within the equity side of the models, we are increasing our allocation to tactical strategies, who are shifting exposure to more cyclical areas of the market. Correspondingly, strategic allocations, which tend to lean toward growth stocks, are being reduced.

Summary of changes to the Target PLUS models:

  • Target PLUS models are designed to be an enhanced version of traditional target date investing. Key enhancements include constructing the models with both strategic and tactical managers, with the utilization of both active and passive security selection. Currently, we are looking to further diversify our exposure across tactical strategies.
  • Each tactical strategy offers unique perspective and positioning, and we believe diversifying exposure across the model will provide even greater access to various sectors of the market.

To Download the PDF, click here.

To Download the Full Focus PLUS Model Trade Summary, click here.

To Download the Full Target PLUS Model Trade Summary, click here.

Disclosure: Advisory services provided by The Pacific Financial Group, Inc. (“TPFG”) a Registered Investment Adviser. The information is for informational purposes only and should not be relied on or deemed the provision of tax, legal, accounting or investment advice. Past performance is not a guarantee future results. All investments contain risks to include the total loss of invested principal. Diversification does not protect against the risk of loss. Investors should review all offering documents and disclosures and should consult their tax, legal or financial professional before investing. All information is believed to be accurate but has not been independently verified and TPFG makes no warranties as to the accuracy of the information or any representations made or implied.