Patrick Rista

Patrick Rista

Advisory Sales

Patrick Rista

Patrick Rista

Advisory Sales

(646) 292-7984

prista@strategasasset.com

Consider Diversifying Your Portfolio with the Strategas Macro Thematic Opportunities ETF (SAMT)

05/08/2023

Less Concentrated Than the Market

As of April 5th, 2023, 10 stocks accounted for roughly 90% of the S&P 500 rally Year-To-Date. Furthermore, given the even stronger rally in the Nasdaq, it comes as no surprise these are mostly technology centric companies. Just a few of these names make up a significant portion of the S&P 500, leaving investors with a potential concentration issue when using market-cap weighted funds.

As an alternative or complement to owning passive, market-cap weighed index funds, we suggest considering the Strategas Macro Thematic Opportunities ETF (SAMT) as a portfolio diversifier. The fund is actively managed and invests in 3-5 macro themes at any given time, with each theme consisting of U.S.-listed stocks across the market-cap spectrum.[1]

 

                                  Source: Bloomberg LLC and Strategas Securities, As of 4/5/2023

Deteriorating Macro Backdrop Keeps Our Positioning Tilted Towards a Defensive Portfolio

Our thematic positions are derived from macroeconomic trends we deem to provide the greatest positive impact on stock prices over the intermediate time frame. The current themes within the portfolio are Recession Protection, Cash Flow Aristocrats, De-Globalization & Energy Security. In addition, the portfolio also contains an elevated cash position and an allocation to Gold.

For a more comprehensive definition of these themes please visit SAMT Thematic Overview.

Gold Position Warranted

The Fund currently has an allocation to the Sprott Physical Gold Trust (PHYS). The rationale for the allocation in the portfolio is built on more than just providing defensive cover into a recession and the main points can be summed up by Jason Trennert’s (Strategas CEO & CIO) recent thoughts on the precious metal:

  1. The emergence of a multi-polar world has provided the impetus for many countries to diversify and increase their foreign currency holdings.
  2. The persistence of America’s twin deficits is likely to be a structural headwind for the U.S. dollar. The greenback has been weakening relatively steadily since September.
  3. Long-term interest rates are still negative in real terms. As legendary investor Stan Druckenmiller commented about the yellow metal in the presence of “unconventional” monetary policy several years ago – “for the first time in 5,000 years gold has a positive carry.”
  4. Newmont’s interest in purchasing Newcrest Mining has prompted some analysts to predict a long-awaited consolidation of the highly fragmented gold mining sector.
  5. Further support for potential consolidation is the fact that the Philadelphia Gold and Silver Miners Index is trading at relatively cheap levels compared to the price of gold itself.
  6. Reputational concerns surrounding Bitcoin and other cryptocurrencies has likely made it a less attractive alternative to fiat currencies than gold. Greater regulation of cryptocurrencies seems highly likely.

                      Source: International Monetary Fund (IMF) and Strategas Securities as of 4/28/2023

For more information on the portfolio please visit our website Strategas Macro Thematic Opportunities ETF (SAMT) or contact our sales professional (Patrick Rista, prista@strategasasset.com)

 

 


[1] NYSE: SAMT top 10 holdings as of 5/03/2023: Cash, 12.45% / PHYS, 3.1% / LLY, 2.11% / ROL, 2.04% / IRM, 1.94% / MRK, 1.86% / CHD, 1.85% / CTVA, 1.83% / CAH, 1.82% / ORA, 1.81% / CL, 1.8%

This represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the fund or any security in particular. This research is provided for educational purposes only. Strategas claims no responsibility for its accuracy or the reliability of the data provided. This information is not intended to provide legal and/or tax advice. Please consult your financial advisor for further information.

Carefully consider the Fund’s investment objectives, risk, and charges and expenses. This and other information can be found in the Fund’s summary or full prospectus which can be obtained by calling (855) 457-3637 or by visiting strategasetfs.com. Please read the prospectus, carefully before investing.

An investment in the fund involves risk, including possible loss of principal. An investment in the Funds involves risk, including possible loss of principal.

In addition to the normal risks associated with investing, the Strategas Macro Thematic Opportunities ETF (SAMT) is subject to macro-thematic trend investing strategy risk. Therefore, the value of the Fund may decline if, among other reasons, macro-thematic trends believed to be beneficial to the Fund do not develop as anticipated or maintain over time, or the securities selected for inclusion in the Fund’s portfolio do not perform as anticipated.

Strategas Asset Management, LLC serves as the investment advisor of the Fund and Vident Investment Advisory, LLC serves as a sub advisor to the Fund. The Fund is distributed by SEI Investments Distribution Co. (SIDCO), which is not affiliated with Strategas Asset Management, LLC or any of its affiliates.

Carefully consider each of the Funds' investment objectives, risk, and charges and expenses. This and other information can be found in the Funds' summary or full prospectus which can be obtained by calling (855) 273-7227 or by visiting strategasetfs.com. Please read the prospectus, carefully before investing.

Strategas Asset Management, LLC serves as the investment advisor for each Fund and Vident Advisory, LLC serves as a sub advisor to each Fund. The Funds are distributed by SEI Investments Distribution Co. (SIDCO), which is not affiliated with Strategas Asset Management, LLC or any of its affiliates, or Vident Advisory, LLC or any of its affiliates.

Shares of any ETF are generally bought and sold at market price (not NAV) and are not individually redeemed from the fund. Brokerage commissions will reduce returns.

An investment in the Fund involves risk, including possible loss of principal.

In addition to the normal risks associated with investing, the Strategas Global Policy Opportunities ETF (SAGP) is subject to lobbying focused investment risk. The adviser's investment process utilizes lobbying intensity as the primary input when selecting investments for the Fund's portfolio and does not consider an investment's traditional financial metrics. The Fund may underperform other funds that select investments utilizing more traditional investment metrics. The Fund may also focus its investments in a particular country or geographic region outside the U.S. and may be more susceptible to economic, political, regulatory or other events or conditions affecting issuers and countries within that country or geographic regions well as risks of increased volatility and lower trading volume.

In addition to the normal risks associated with investing, the Strategas Macro Thematic Opportunities ETF (SAMT) is subject to macro-thematic trend investing strategy risk. Therefore, the value of the Fund may decline if, among other reasons, macro-thematic trends believed to be beneficial to the Fund do not develop as anticipated or maintain over time, or the securities selected for inclusion in the Fund's portfolio do not perform as anticipated.

In addition to the normal risks associated with investing, the Strategas Macro Momentum ETF (SAMM) may invest in smaller companies, heavily in specific sectors, and also invest in gold, all of which can exhibit high volatility. Securities may be difficult or impossible to sell at the time and the price desired. Investments with exposure to international markets may experience capital loss from unfavorable fluctuation in currency values, differences in generally accepted accounting principles, or from social, economic or political instability in other nations. REITs are subject to changes in economic conditions, interest rates, and credit risk. MLPs involve risks related to limited control and limited rights to vote on matters affecting the MLP. MLP common units and other equity securities can be affected by economic and other factors affecting the stock market in general, expectations of interest rates, investor sentiment towards MLPs or the energy sector, changes in a particular issuer's financial condition, or unfavorable or unanticipated poor performance of a particular issuer. MLP investments in the energy industry entail significant risk and volatility.

The Funds may be more heavily invested in particular sectors and may be especially sensitive to factors and economic risks that specifically affect those sectors.