The persistent downtrend that the 10-yr yield has been locked in since March may finally have run its course. As seen in the chart below, bond yields entered the month of August on a weak note, but quickly bottomed. The early August lows were a retest of the July lows, leaving behind what technicians fondly refer to as a “doublebottoms” pattern. This is a bullish formation, and should lend itself to higher yields going forward.
Bond yields made an initial spurt higher after bouncing off the July support levels, then began to consolidate those gains in a sideways fashion around mid-month. That is often a healthy pattern that frequently resolves itself to the upside (the direction yields were heading before the consolidation unfolded).
The catalysts for higher yields were likely the continued elevated inflation readings as well as chatter that the Fed is getting closer to announcing a taper for its asset purchases (QE). CPI for July came in at 5.4%, which is the highest reading since August 2008. There were other elevated inflation data also, as well as numerous companies that spoke on their quarterly conference calls about rising materials costs, wage pressures, and supply chain constraints.
The latter is something that looked poised to get better, but is seeing lingering impediments due to the spreading of the Delta variant and the resulting lockdowns, etc. This is happening mostly in factories and manufacturing facilities in Asia, but can also be seen here at home. The ports of LA and Long Beach have a record number of freighters docked offshore waiting to come into port and have their goods unloaded sent to their final destinations.
The ACM Tactical Income Fund (TINIX) returned +0.33% in August, while the Barclays AGG returned -0.19%. For the YTD period, TINIX has returned +2.66% vs. the AGG index which is still negative at -0.69%. TINIX is now ahead of both of its closest benchmarks since inception as well (see fact sheet).
Positive contributors to performance came from BDCs, emerging market bonds, and closed-end funds. Negative contributors were munis (taxable and high-yield) and mortgage REITs.
We want to thank all of you for your continued support.
Jordan L. Kahn, CFA
Chief Investment Officer
Sources: Standard & Poor’s, Stockcharts.com, Briefing.com
Investors are not able to invest directly in the indices referenced and unmanaged index returns do not reflect any fees, expenses or sales charges. For current performance information, please visit our performance page: http://acm-funds.com/tactical-income-performance/
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses.
ETF’s are subject to specific risks, depending on the nature of the underlying strategy of the fund. These risks could include liquidity risk, sector risk, as well as risks associated with fixed income securities, real estate investments, and commodities, to name a few. Investments in foreign securities could subject the Fund to greater risks including, currency fluctuation, economic conditions, and different governmental and accounting standards.
Investors should carefully consider the investment objectives, risks, charges and expenses of the ACM Tactical Income Fund. This and other important information about the Fund is contained in the prospectus, which can be obtained by calling 1-844-798-3833. The prospectus should be read carefully before investing. The ACM Tactical Income Fund is distributed by Northern Lights Distributors, LLC, member.”http://www.finra.org/” FINRA. “http://www.sipc.org/” SIPC. Northern Lights Distributors, LLC and Ascendant Capital Management, LLC are not affiliated.
August 2021 Fact Sheet
The ACM Tactical Income Fund is designed as a core investment for investorsseeking income generation, while also focusing on capital preservation. The fund employs a tactical strategy which aims to capture attractive income opportunities and mitigate downside risk when markets experience downturns.
We strive to help our investors participate in the gains available from financial markets, while mitigating the downside risk
|PERFORMANCE||As of 7/31/2021|
|1-mth||3-mth||YTD||1 Yr*||Since Inception*|
|Barclays US Agg Bond||-0.19%||1.63%||-0.69%||0.33%||5.76%|
|Morningstar NT Bond||0.28%||0.63%||2.17%||7.92%||4.56%|
*As of 6/30/21
Investments in mutual funds involve risks. Performance is historic and does not guarantee future results. Investment principal value will fluctuate with changing market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month end performance information or the Fund’s prospectus please call the fund at 1-844-798-3833. You can also obtain a prospectus at www.ACM-funds.com.
The fund’s maximum sales charges for Class “A” shares is 5.75%. Actual Total Annual Fund Operating Expenses are 2.36% for Class A and 2.11% for Class I shares. The adviser has contractually agreed to reduce its fees and reimburse expenses of the Fund, at least until April 30, 2022, to ensure that the net annual fund operating expenses will not exceed 2.25% for Class A shares and 2.00% for Class I shares, subject to possible recoupment from the Fund in future years.
Please review the fund’s prospectus for more information regarding the fund’s fees and expenses. For performance information current to the most recent month-end, please call tollfree 1-844-798-3833
As of 8/31/2021
There is no assurance that the Fund will achieve its investment objectives.
Investors should carefully consider the investment objectives, risks, charges and expenses of the ACM Tactical Income Fund. This and other important information about the Fund is contained in the prospectus, which can be obtained by calling 1844 798 3833 . The prospectus should be read carefully be fore investing. The Tactical Income Fund is distributed by Northern Lights Distributors, LLC , member FINRA/SIPC. Norther Lights Distributors, LLC and ACM Funds, LLC are no t affiliated.
Mutual funds involve risk including possible loss of principal. Adverse changes in currency exchange rates may erode or reverse any potential gains from t he Fund s Investments. ETF s are subject to specific risks, depending on the nature of the underlying strategy of the fund. These risks include liquidity risk, sec to r risk, as well as risks associated with fixed income securities, real estate investments, and commodities, to name a few. Investments in underlying funds that own s mall and mid capitalization companies may be more vulnerable than larger, more established organizations. Derivative instruments involve risks different from, or possibly great er than, the risks associated with investing directly in securities and other traditional investments. Investments in foreign securities could subject the Fund to greater risks incl u ding, currency fluctuation, economic conditions, and different governmental and accounting standards. In addition to the risks generally associated with investing in securities of foreign companies, countries with emerging markets also may have relatively unstable governments, social and legal systems that do no t protect share holders, economies based on only a few industries, and securities markets that trade a small number of issues.
Investors bear the risk that the Fund may not be able to implement its investments strategies or attract sufficient assets. Purchased put options may decline in value or expire worthless and may have imperfect correlati0on to the value of the Fund’s portfolio securities. Written call and put options may limit the Funds paticipation in equity market gain s and may amplify losses in market de declines. The Fund’s losses are potentially large in a written put or call transaction. If unhedged, written calls expose the Fund to potentially unlimited losses. The Fund w ill incur a loss as a result of a short position if price of the short position instrument increases in value between the date of the short position sale and the date on which an off setting position is purchase. Short positions may be considered speculative transactions and involve special risks, including greater reliance on the ability to accurately anticipate the future value of a security of instrument. The Fund s losses are potentially large in a short position transaction.
Investors are not able to invest directly in the indices referenced in this illustration and unmanaged index returns do not reflect any fees, expenses or sales charges.