The Global Tactical Asset Allocation Fund posted a total return of 1.33% for the quarter, compared with 1.45% for the Funds blended static benchmark. We modestly reduced the Funds risk exposure during the quarter by trimming our emerging markets exposure to an underweight position and using the proceeds to move our global infrastructure position to a neutral weighting.
The most noteworthy financial market development during the quarter was the strong relative performance in the U.S. fixed income market. Defying expectations for higher rates stemming from the Feds tapered bond buying, yields on government bonds fell during the quarter, leading to strong returns for long-maturity Treasuries. Meanwhile, high-yield bonds outperformed the investment-grade bond market average but lagged long-maturity Treasuries. Among equities, the U.S. market outstripped non-U.S. developed and emerging markets. Falling interest rates aided global real estate investment trusts (REITs) which posted decent gains. Global infrastructure and natural resources each posted modest gains. The quarters string of unanticipated developments stoked investor interest in gold, which advanced strongly.
The Funds current asset composition anticipates a gradually improving global economy underpinned by low inflation, generous but less-predictable monetary support.
For those long-term investors looking to diversify your investment among various asset classes (stocks, bonds, commodities, and other) both domestic and foreign, then this Fund may be right for you.
- Diversify among various asset classes (stocks, bonds, commodities, and other) both domestic and foreign. The allocation will be based on an asset allocation framework developed by the Investment Policy Committee of The Northern Trust Company (TNTC) and Northern Trust Investments, Inc (NTI).
- Invest significantly in funds that invest in companies that are located outside of the U.S. as represented in either the MSCI EAFE® Index, MSCI Emerging Markets Index or other diversified foreign indices.
- Monitor the current asset allocation framework regularly to ensure the allocation is aligned with evolving investment views amid changing market and economic conditions.