March 17, 2021 — As Covid-19 cases decline and economies reopen, the anticipation of continued economic growth and a renewed boost in consumption has caused a rapid rise in interest rates and increased volatility in equities. Markets have started to price in the risk of the Fed hiking rates sooner than expected in response to an overheating economy. We believe this repricing is mostly done for the near-term, but rates remain vulnerable to additional shocks from further fiscal spending and upside surprises to inflation. The big picture is rates are rising because fundamentals are strong, which keeps us tilted toward risk assets and overweight equities vs. fixed income. We also favor higher-yielding, less interest rate-sensitive fixed income sectors and value-oriented equities.

February 24, 2021 — This presentation illustrates how rising inflation and inflation expectations affect bonds yields, the Fed’s inflation target, and how Sage is positioned in the current environment.

February 24, 2021 — In this video, Sage Director of Research Rob Williams discusses inflation and its effect on bond yields, the Fed’s recent policies, and how Sage is positioned for rising inflation expectations.

February 19, 2021 — Risk markets rebounded quickly after experiencing some weakness into the end of January, highlighting optimism and a “buy-the-dip” mentality among investors. While we view elevated valuations as a concern because it leaves less room for markets to absorb macro shocks, we also agree with the overall optimism. The consumer is well positioned to spend as economies continue to open, and we expect strong economic growth coupled with policy support to be the driving force for markets in the coming months. As such, we continue to overweight equities vs. fixed income and are positioned toward sectors and regions offering upside in this scenario. In fixed income we are underweight Treasuries and overweight credit and other spread sectors, expecting a combination of a patient Fed and strong economy to keep spreads stable and rates moving only modestly higher.

February 2, 2021 — Director of Research Rob Williams discusses Sage’s outlook for the first quarter and key positioning themes.

While our first half outlook is geared toward further upside, we expect pockets of weaker data related to a Covid-19 surge, a slower-than-expected pace of vaccinations, and the highly charged political environment. This will weigh on sentiment in the near-term. On the positive side, the long-awaited phase 4 fiscal package was passed in late December, and with the Democrats winning a slim majority in the Senate, the probability of further aid has increased. Our broad positioning and outlook remain the same, with an equity overweight, conviction on the value rotation in equities, and favorable return expectations for international markets vs. the U.S. In fixed income, we expect supply pressures on longer rates, but policy should keep a cap on increases, and spreads should remain stable. Given our expectations of increased volatility in the near-term and outsized returns over the last several months, we have made some tweaks across both our fixed income and equity allocations, taking some gains and modestly reducing risk.

This one-page report details what contributed to and detracted from performance for the Sage Income ETF Strategies in the fourth quarter.

This one-page report details what contributed to and detracted from performance for the Sage Tactical ETF Strategies in the fourth quarter.