Product Categories: Tactical ETF

Tactical Investment Strategy — August 2024

August 2, 2024 — Tactical Investment Strategy provides an overview of key economic and policy themes and how Sage is tactically positioned in the current market environment.

Key Takeaways

  • The FOMC meeting this week had an expected dovish tone, and markets are locked in on a September start to rate cuts, followed by two more in 2025. These developments keep us optimistic and reinforce our position to extend duration in fixed income and diversify within equities.
  • July fixed income returns bolster our view that “the year of the bond” return scenario has only been delayed, and we see a positive outlook for fixed income over the next several quarters.
  • For equities, Fed cuts and AI remain tailwinds, but economic weakness and consumer fatigue suggest upside may be harder to come by and include broader participation.

Asset Allocation Perspectives 2H Outlook

August 1, 2024 — This presentation provides an overview of our market outlook and key themes, and it illustrates how Sage is positioned in the current environment.

Key Themes

Economic and Fed Outlook

  • The US economy is still on track for a “softish” landing. Inflation appears less sticky, which coupled with weaker growth momentum, gives the Fed latitude to cut rates in September.
  • We see downside risk related to labor market weakness and the nature of government spending as the driver of job growth.

Election Update

  • Market positioning based on a certain election outcome doesn’t have a consistent pattern in historical returns and is not advised.
  • The Fed will not be influenced by election noise given that they have conducted policy normally during past election cycles.

Asset Allocation and Positioning

  • Our two key themes for the back half are the two D’s: duration and diversification.

Tactical Investment Strategy — June 2024

June 25, 2024 — Tactical Investment Strategy provides an overview of key economic and policy themes and how Sage is tactically positioned in the current market environment.

Key Takeaways

  • Heading into the second half we believe investors should be thinking about the two D’s – duration on the fixed income side and diversification on the equity side.
  • Key forward dynamics are very supportive of overall core returns and duration, but positioning within fixed income should be conservative, as overall yields are high, but spreads are tight – so the risk/reward is not favorable to “reach for yield.”
  • Optimism for future cuts is supportive to risk assets but will come with increased recession odds, which will eventually have to be priced back in. Additionally, the ingredients for a risk-off correction are on the table – rising political angst, full valuations, and stretched technicals.

Tactical Investment Strategy — April 2024

April 18, 2024 — Tactical Investment Strategy provides an overview of key economic and policy themes and how Sage is tactically positioned in the current market environment.

Key Takeaways

  • Optimism toward the growth outlook may continue to put upward pressure on rates in the near-term; however, we believe it would be premature to price cuts out of 2024.
  • We prefer to lean into the medium-term outlook for rates (down) rather than try to time a repricing, and thus carry full durations across fixed income strategies into Q2. Our sector allocation in fixed income is geared toward generating income with a bias to MBS, short duration credit, and a small allocation to non-core exposure in the form of high yield and EM debt.
  • To balance an outlook of underlying support with building headwinds, we have increased diversification within our equity allocation, expanded our focus on quality and attractive free cash flow-oriented names, and trimmed our US overweight.