ATAC has a low correlation to both stocks and bonds. As a result, the addition of ATAC to an investor’s existing portfolio may provide diversification benefits over time.
ATAC has the ability to rotate fully into Treasury bond ETFs ahead of periods of equity market stress. Treasury bonds have historically exhibited positive returns on average during down equity markets, allowing ATAC to mitigate risk during difficult periods.
The ATAC strategy is not dependent on a specific direction of the equity market. It has the ability to capture upside in favorable environments by rotating fully into equity ETFs and the ability to generate positive returns in down environments by rotating fully into Treasury ETFs.
Many fixed income investors are concerned about the risk of rising interest rates. ATAC has historically exhibited a low correlation to bonds, generating a positive return on average during months in which the 10-Year Treasury yield has risen.
ATAC uses a systematic and objective process to position the portfolio into either equities or Treasuries. The process is consistent and repeatable, attempting to evaluate conditions which favor higher or lower stock market volatility. The strategy positions defensively in Treasury ETFs when the odds favor rising volatility and offensively in equity ETFs when the odds favor falling volatility.