Our Funds - Fund Commentary
Market Commentary as of 3/31/08
Since its mid-January 2008 inception, the Fund has significantly invested in short-term Treasury bonds and cash amid a major downturn in the stocks caused by problems in the mortgage lending industry resulting in a credit crunch. These holdings proved beneficial to performance during a turbulent time for security markets.
Our risk models indicated slightly improving conditions by the end of the quarter, however, and the Fund correspondingly began to reduce its position in 1-3 year Treasuries and cash equivalents to roughly 58% of assets from a high of 73% during the first week of March. Those funds were then reallocated back into foreign markets—notably Canada, Brazil, and Latin America—and US basic materials ETFs, which had been components of the portfolio at inception. In addition, the Fund eliminated exposure to a broader domestic mid-cap growth index during the course of the quarter.
We believe that asset allocation determines the vast majority of variation in quarterly returns, and that we can add value for investors by using a dynamic asset allocation model based on modern mathematical risk analysis to adjust the Fund's portfolio to current market conditions.
Smart Portfolios
Seattle, WA
The views expressed above are for informational purposes only and is not intended as investment advice.
Since the date of the commentary, economic, market conditions and the portfolio manager's views may have changed.
As the fund is actively managed, the securities as presented do not represent the current or future composition of the portfolio.
Past performance does not guarantee future results. Investment return and principal value of mutual funds will vary with market conditions, so that shares, when redeemed, may be worth more or less than their original cost.