Catalyst Funds
Rational Funds
Strategy Shares
The graph and table above provide return data for major income-oriented asset categories for the month of February 2023 and YTD 2023. Returns for each asset category are based on the returns of the constituent(s) in the Nasdaq HANDLS™ Base Index representing that category. Also included are returns for the Nasdaq 5HANDL™ Index, the Nasdaq 7HANDL™ Index and the Nasdaq 10HANDL™ Index.
Back to Earth
After a strong rally in January, both equity and fixed income markets took it on the chin in February. The Core Large Cap Equity category returned -4.0% as the Federal Reserve’s monetary tightening policy drove concerns about a potential economic slowdown. On the fixed income side, ongoing inflation concerns pushed interest rates higher, dragging the Core Fixed Income category to a -2.8% return.
Every income-oriented category tracked by HANDLS Indexes produced negative returns in February. REITs (-5.8%) and Utilities (-5.7%), which tend to be highly sensitive to changes in interest rates, were the biggest laggards. At the other end of the spectrum, High Yield Bonds delivered the best returns, but still produced a -1.7% return as tightening credit spreads were not enough to offset rising interest rates.
The Nasdaq 5HANDL Index returned -2.8% for the month. The Nasdaq 7 HANDL Index, the 1.3x leveraged version of the index, returned -3.7% in February while the Nasdaq 10 HANDL Index, the 2.0x leveraged version of the index, delivered a -5.9% return.
On a year-to-date basis, Preferreds (8.5%) and MLPs (4.1%) led the pack through the end of February, with the latter continuing its strong performance from 2022. Utilities were down -7.6% through the end of February, as yield-hungry investors increasingly moved assets to cash and money market funds offering yields in excess of 4% with little risk.
The Nasdaq 5HANDL Index was up 1.7% year to date through the end of February, versus returns of 2.0% and 2.5% for the Nasdaq 7 HANDL Index and Nasdaq 10 HANDL Index, respectively.
HANDLS Indexes and Nasdaq have pioneered a novel approach to meeting the very real income needs of investors that combines a systematic discipline, a strict adherence to monthly optimality and a foundation built on everything we know about modern portfolio theory:
- Total Return is what matters.
- Diversification is the only free lunch in investing.
- Yield is just a number.
Important Disclosure. HANDLS Indexes receives compensation in connection with licensing its indices to third parties. Any returns or performance provided within are for illustrative purposes only and do not demonstrate actual performance. Past performance is not a guarantee of future investment results. It is not possible to invest directly in an index. Exposure to an asset class is available through investable instruments based on an index. HANDLS Indexes does not sponsor, endorse, sell, promote or manage any investment fund or other vehicle that is offered by third parties and that seeks to provide an investment return based on the returns of any index. There is no assurance that investment products based on an index will accurately track index performance or provide positive investment returns. HANDLS Indexes is not an investment advisor, and HANDLS Indexes makes no representation regarding the advisability of investing in any such investment fund or other vehicle. A decision to invest in any such investment fund or other vehicle should not be made in reliance on any of the statements set forth in this document. Prospective investors are advised to make an investment in any such fund or other vehicle only after carefully considering the risks associated with investing in such funds, as detailed in an offering memorandum or similar document that is prepared by or on behalf of the issuer of the investment fund or other vehicle. Inclusion of a security within an index is not a recommendation by Indexes to buy, sell, or hold such security, nor is it considered to be investment advice. The information contained herein is intended for personal use only and should not be relied upon as the basis for the execution of a security trade. Investors are advised to consult with their broker or other financial representative to verify pricing information for any securities referenced herein. Neither Indexes nor any of its direct or indirect third-party data suppliers or their affiliates shall have any liability for the accuracy or completeness of the information contained herein, nor for any lost profits, indirect, special or consequential damages. Either Indexes or its direct or indirect third-party data suppliers or their affiliates have exclusive proprietary rights in any information contained herein. The information contained herein may not be used for any unauthorized purpose or redistributed without prior written approval from HANDLS Indexes. Copyright © 2023 by HANDLS Indexes. All rights reserved.
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