The VanEck NDR Managed Allocation Fund (Nasdaq: NDRMX) recently turned three years old, but it’s grown up so fast in such a short time. As investors found out the past weeks as the U.S.-China trade deal drama unfolded, volatility makes for a challenging environment, but tactical allocation could help investors navigate these uncertain times.
NDRMX is a tactical asset allocation fund that has the flexibility to allocate among securities and cash, helping investors with core asset allocation decisions. The fund was developed in partnership with Ned Davis Research (NDR), a leader in independent investment research recognized for its objective market data analysis using fundamental and technical research disciplines.
“The managed allocation fund’s turned three years old now,” said David Schassler, Portfolio Manager for the VanEck NDR Managed Allocation Fund and VanEck Vectors Real Asset Allocation ETF. “There’s a lot that’s happened in the last three years since we’ve launched. We are now ten years into a bull market, most of the time equity markets have gone up, with the exception of 2018. So, since we’ve launched, we’ve been overweight stocks almost all the time. We’ve averaged almost a 70% exposure to stocks since we have launched. So, the fund’s been overweight most of the time. The fund has also been defensive.”
- Allocation to global stocks and U.S. fixed income through exchange-traded products (ETPs) with the ability to raise significant cash to limit drawdowns during extreme market events.
- An objective investment process that removes human emotion and decision making, through its use of the NDR model, and seeks to eliminate behavioral errors that can potentially impact performance.
- Model-driven approach based on the weight-of-the-evidence of NDR’s macroeconomic, fundamental, and technical indicators.
After a rocky end to 2018, investors are picking themselves up in 2019, but rather than deep-diving into the capital markets headfirst, they’re picking their spots and deploying capital more strategically. This is the case for all asset classes, whether it’s equities or fixed income.
One of the challenging aspects advisors face with this more cautious investor is the plethora of options available, especially in the exchange-traded fund (ETF) space. Where are the opportunities in equities and bonds in ETFs given the current market landscape?
The answer might be with funds like NDRMX and exposure to tactical allocation.
“When we talk about what are the keys to tactically allocating well, we think that it comes down to three things,” Schassler added. “The first, you have to have a comprehensive view of risk. When I say comprehensive view of risk, looking at risk a lot of different ways. I often talk about this as looking through the lens of a camera and constantly refocusing that lens, because if you look at risk one way and only one way, you’re going to miss things. So, we’re constantly looking at risk, readjusting that lens to look at risk a lot of different ways. That is the first thing: a comprehensive view.”
For more tactical trends, visit our Tactical Allocation Channel.