RELATED: The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEARCA:SPY), iShares Core S&P 500 ETF (NYSEARCA:IVV) and Vanguard 500 Index (NYSEARCA:VOO), were relatively unchanged Thursday.

The Gain portfolios’ exposure to both growth and emerging markets was beneficial, while our positions in small-cap stocks (which underperformed last week) dragged on performance. Meanwhile, corporate credits were strong again in fixed income markets, as rising oil prices helped boost high-yield bond prices. In contrast, preferred stocks were flat for the week and dampened the portfolios’ performance.

PROTECT: Risk Assist

Global stocks continued to push higher last week, while volatility expectations fell sharply following Fed Chairwoman Janet Yellen’s statement to Congress that interest rates do not need to rise significantly to get to “a neutral policy stance.”

The Risk Assist portfolios remain unhedged, and have benefited from overall rising equity prices since the election last November. That said, our allocations to small-caps have acted as a slight drag on overall performance as small-cap stocks have generally lagged their large-cap peers.

Although our volatility forecasts are pointing to continued historically subdued volatility, we are not ruling out higher volatility levels during the third quarter.

SPEND: Real Spend

Equity markets posted strong gains again last week. Many major equity indices are now up double-digits year-to-date, while major bond indices are up in the low single-digits.

Inflation remains low, although Fed Chairwoman Yellen reiterated the Fed’s 2% inflation target during her testimony to Congress last week. Low inflation allows the Fed to take a measured approach to raising the federal funds rate, a key short-term interest rate. If inflation picks up, however, the Fed may need to raise more quickly.

This article was contributed by Horizon Investments, a participant in the ETF Strategist Channel.