As the AEI rose throughout Q3, we gradually and carefully dipped our toes back into the risk-asset waters, slowly adding equity exposure. Our path to reaching our current beta target was deliberate and methodical given the extreme uncertainties around the trajectory of the virus and policy response. As the economy continued to strengthen throughout Q3, we continued to add equity exposure as appropriate. ADA currently has its highest beta target since early 2019.
We believe Astor strategies are well positioned to capitalize on what we see as strong fundamentals in the U.S. Many of the questions around second-order effects from the lockdown period domestically have been answered at least in part, with the U.S. consumer and businesses having weathered the worst of the downturn better than initially expected. At the same time, however, the portfolio currently maintains a beta target below its maximum, reflecting continued uncertainty around the near-term trajectory of the U.S. economy as unemployment remains elevated well above its pre-pandemic low and the virus continues to spread.
The Astor Economic Index® is a proprietary index created by Astor Investment Management LLC. It represents an aggregation of various economic data points: including output and employment indicators. The Astor Economic Index® is designed to track the varying levels of growth within the U.S. economy by analyzing current trends against historical data. The Astor Economic Index® is not an investable product. When investing, there are multiple factors to consider. The Astor Economic Index® should not be used as the sole determining factor for your investment decisions. The Index is based on retroactive data points and may be subject to hindsight bias. There is no guarantee the Index will produce the same results in the future. The Astor Economic Index® is a tool created and used by Astor. All conclusions are those of Astor and are subject to change.
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