FAQ's

Frequently Asked Questions​

ATACX

PROCESS

The ATAC Funds use a proprietary approach to position more defensively or offensively in a portfolio. The process is consistent and repeatable. 

ATAC positions into Treasury ETFs when our indicators are giving a defensive signal and into equity ETFs when they are giving an offensive signal.

While the ATAC Funds share the focus of rotating risk-on into equities and risk-off into Treasuries, the way the two achieve their objectives are different.

The ATAC Rotation Fund (ATACX) is a mutual fund that uses the short-term behavior of Utilities and Treasuries to determine whether to be risk-on in equities, or risk-off in Treasuries. When risk-on, ATACX can rotate across large-caps, small-caps, and emerging markets. When risk-off, ATACX can rotate across long duration Treasuries and short duration Treasuries.

The ATAC US Rotation ETF (RORO) is an exchange traded fund uses a different risk-on, risk-off approach by tracking the short-term behavior of Lumber relative to Gold. When risk-on, RORO can rotate into a combination of small-caps and cyclical large-cap ETFs. When risk-off, RORO rotates into long duration Treasuries.

Both the timing of the indicators, and the opportunity sets, are different between ATACX and RORO which can result in very different week to week results, all while seeking to achieve the longer term objective of being tactical risk rotation strategies.

The mutual fund ATACX and exchange traded fund RORO position defensively when odds favor rising volatility and offensively when odds favor a falling volatility environment.

ATAC Funds use broad equity and bond exchange traded funds (ETFs).

The indicators are evaluated on a weekly basis for potential rotations in both the mutual fund ATACX and the ETF RORO, but the holdings and signals can differ between the two. Changes are made only when our proprietary signals suggest a directional change from offense to defense or defense to offense is warranted, and/or when relative momentum has changed.

CONSTRUCTION

The ATAC Funds use a proprietary approach to position more defensively or offensively in a portfolio. The process is consistent and repeatable. 

ATAC positions into Treasury ETFs when our indicators are giving a defensive signal and into equity ETFs when they are giving an offensive signal.

We manage risks by using diversified ETFs and employing strategies that seek to decrease the beta in our portfolios ahead of periods of market stress. It is important to note that while the Funds can get defensive ahead of high volatility periods, this does not mean that volatility in the Funds will not be higher at times than the stock market’s. Rather, fund volatility characteristics tend to be different than a simple buy and hold passive index.

In our research, using bonds as the lower beta option is superior to cash and short positions over a full market cycle. The Funds are built to perform during a full market cycle which includes bull and bear market environments. Using cash and short positions can lead to significant underperformance during bull market periods.

Yes. The Funds may have up to 133% exposure when in offensive mode.

The Funds are intended to be an active risk management vehicle. As such, they are expected to have a high portfolio turnover which could exceed 1,000% on an annual basis, depending on market conditions.

Contact us at ATAC Funds.

EXPENSES & TERMS

The ATAC Rotation Fund is a mutual fund with an investor class/A share class (Ticker: ATACX) and a institutional share class (Ticker: ATCIX).

The ATAC US Rotation ETF is an exchange traded fund, with the ticker of RORO.

The ATAC Rotation Fund:

ATACX (Investor) – Gross expense ratio: 2.14%. Net expense ratio: 1.95%. Note this includes the acquired Fund fees on the ETFs in the portfolio.

ATCIX (Institutional) – Gross expense ratio: 1.89%. Net expense ratio: 1.70%. Note this includes the acquired Fund fees on the ETFs in the portfolio.

The Advisor has contractually agreed to waive a portion or all of its management fees and reimburse Fund expenses, in order to ensure that Total Annual Fund Operating Expenses (excluding AFFE, leverage/borrowing interest, interest expense, taxes, brokerage commissions and extraordinary expenses) do not exceed 1.74% of the average daily net assets of the Fund’s Investor Class shares and do not exceed 1.49% of the average daily net assets of the Fund’s Institutional Class shares.The Operating Expenses Limitation Agreement is indefinite, but cannot be terminated through at least May 1, 2022.

The ATAC US Rotation ETF “

RORO –  Gross expense ratio: 1.40%. Net expense ratio: 1.13%.

The Fund’s investment adviser has contractually agreed to reduce its unitary management fee to 0.98% of the Fund’s average daily net assets through at least December 31, 2021. This agreement may be terminated only by, or with the consent of, the Fund’s Board of Trustees, on behalf of the Fund, upon sixty
(60) days’ written notice to the Adviser.

ATACX is available on most major brokerage platforms, including, but not limited to, Fidelity, Vanguard, Schwab, TD Ameritrade, Securities America, Scottrade, E*trade, UBS and Folio.

RORO is an ETF available on most platforms.

The ATAC Rotation Fund: The minimum initial investment is $2,500 for the investor class (Ticker: ATACX) and $25,000 for the institutional class (Ticker: ATCIX).

The ATAC US Rotation ETF: There is no minimum investment for RORO.

For ATACX, investors will receive a Form 1099 from their broker on an annual basis.

The Funds pays dividends annually in December based on accumulated dividends throughout the year from holdings. There may also be a capital gains distribution based on trading gains and losses. 

OBJECTIVES & POSITIONING

The ATAC Funds seek to achieve absolute returns over time.

Our goal is to educate our investors so that they can choose the offering or offerings that best suit their investment objectives. ATAC Funds fit into the alternative or tactical allocation bucket. It tends to act as a non-correlated alternative and can add significant diversification benefits over the course of a full market cycle.

Both Funds, while highly tactical, use different opportunity sets, and different indicators for their rotations. The two fit within the satellite and alternative portions of a portfolio, and can both be used as diverisifers focused on the same objectives, but getting there in different ways.

If there were an investment strategy that worked all of the time, everyone would follow it and it would stop working. The Funds are designed specifically to take advantage of the anomaly that you can position ahead of stock market volatility. Anomalies themselves have cycles, which can be either favorable or unfavorable for the types of risk rotations employed in the Funds. There will be months, quarters, or even longer that our strategies will underperform one benchmark or another, but this is true of any strategy that is successful over time. Furthermore, the potential to be defensive ahead of higher volatility regimes in equities makes the magnitude of potential outperformance during such periods significantly greater than might otherwise be obvious when looking at past performance in a lower volatility cycle.

We are dedicated to following a disciplined process with the core belief that over the course of a full market cycle, adhering to our process will reward our investors. Our broad philosophy is that true long-term outperformance does not come from being up more, but rather down less.

RORO

PROCESS

The ATAC US Rotation ETF approach attempts to evaluate conditions which favor higher or lower stock market volatility using the short-term movements of Lumber relative to Gold as a risk trigger. When Lumber is outperforming Gold, RORO positions offensively in US equities, and when Gold outperforms Lumber, RORO positions defensively into Treasuries. Because Lumber is tied to housing and reflation, it’s movement relative to Gold has historically provided clues on potential future risk-on, and risk-off conditions.

The RORO ETF use a proprietary approach to position more defensively or offensively in a portfolio. The process is quantitively and rules based driven.

RORO uses broad equity and bond exchange traded funds (ETFs).

The indicators are evaluated on a weekly basis for potential rotations in RORO. Changes are made only when our proprietary signals suggest a directional change from offense to defense or defense to offense is warranted.

While the ATAC Funds share the focus of rotating risk-on into equities and risk-off into Treasuries, the way the two achieve their objectives are different.

The ATAC Rotation Fund (ATACX) is a mutual fund that uses the short-term behavior of Utilities and Treasuries to determine whether to be risk-on in equities, or risk-off in Treasuries. When risk-on, ATACX can rotate across large-caps, small-caps, and emerging markets. When risk-off, ATACX can rotate across long duration Treasuries and short duration Treasuries.

The ATAC US Rotation ETF (RORO) is an exchange traded fund uses a different risk-on, risk-off approach by tracking the short-term behavior of Lumber relative to Gold. When risk-on, RORO can rotate into a combination of small-caps and large-cap growth ETFs. When risk-off, RORO rotates into long duration Treasuries.

Both the timing of the indicators, and the opportunity sets, are different between ATACX and RORO which can result in very different week to week results, all while seeking to achieve the longer term objective of being tactical risk rotation strategies.

CONSTRUCTION

In offensive mode, RORO can invest in a combination of small-cap and large cap growth ETFs. In defensive mode, RORO can invest in long duration Treasuries.

We manage risks by using diversified ETFs and employing strategies that seek to decrease the beta in our portfolios ahead of periods of market stress. It is important to note that while the ETF can get defensive ahead of high volatility periods, this does not mean that volatility in the Fund will not be higher at times than the stock market’s. Rather, fund volatility characteristics tend to be different than a simple buy and hold passive index.

In our research, using bonds as the lower beta option is superior to cash and short positions over a full market cycle. RORO is built to perform during a full market cycle which includes bull and bear market environments. Using cash and short positions can lead to significant underperformance during bull market periods.

Yes. The ETF may have up to 133% exposure when in offensive mode.

The ETF is intended to be an active risk management vehicle. As such, it is expected to have a high portfolio turnover which could exceed 1,000% on an annual basis, depending on market conditions. 

Contact us at ATAC Funds.

EXPENSES & TERMS

The ATAC Rotation Fund is a mutual fund with an investor class/A share class (Ticker: ATACX) and a institutional share class (Ticker: ATCIX).

The ATAC US Rotation ETF is an exchange traded fund, with the ticker of RORO.

Gross expense ratio: 1.40%. Net expense ratio: 1.13%. The Fund’s investment adviser has contractually agreed to reduce its unitary management fee to 0.98% of the Fund’s average daily net assets through at least December 31, 2021. This agreement may be terminated only by, or with the consent of, the Fund’s Board of Trustees, on behalf of the Fund, upon sixty (60) days’ written notice to the Adviser.

You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in this explanation.

RORO is an ETF available on most online discount brokers (Schwab, TD, Fidelity, Etrade, interactive brokers, etc) and other broker/dealer platforms.

There is no minimum investment for RORO.

For RORO, investors will receive a tax statement from the brokerage platform selected to hold the shares. Fund distributions are generally taxable as ordinary income, qualified dividend income, or capital gains (or a combination), unless your investment is in an individual retirement account (“IRA”) or other tax-advantaged account. Distributions on investments made through tax-deferred arrangements may be taxed later upon withdrawal of assets from those accounts.

The ETF pays dividends annually in December based on accumulated dividends throughout the year from holdings. There may also be a capital gains distribution based on trading gains and losses.

OBJECTIVES & POSITIONING

RORO seeks to achieve absolute returns over time.

Our goal is to educate our investors so that they can choose the offering or offerings that best suit their investment objectives. RORO fits into the alternative or tactical allocation bucket. It tends to act as a non-correlated alternative and can add significant diversification benefits over the course of a full market cycle.

If there were an investment strategy that worked all of the time, everyone would follow it and it would stop working. The ETF is designed specifically to take advantage of the anomaly that you can position ahead of stock market volatility. Anomalies themselves have cycles, which can be either favorable or unfavorable for the types of risk rotations employed in the ETF. There will be months, quarters, or even longer that our strategies will underperform one benchmark or another, but this is true of any strategy that is successful over time. Furthermore, the potential to be defensive ahead of higher volatility regimes in equities makes the magnitude of potential outperformance during such periods significantly greater than might otherwise be obvious when looking at past performance in a lower volatility cycle.

We are dedicated to following a disciplined process with the core belief that over the course of a full market cycle, adhering to our process will reward our investors. Our broad philosophy is that true long-term outperformance does not come from being up more, but rather down less.

Both Funds, while highly tactical, use different opportunity sets, and different indicators for their rotations. The two fit within the satellite and alternative portions of a portfolio, and can both be used as diversifiers focused on the same objectives, but getting there in different ways.

Disclosures

Diversification does not assure a profit nor protect against a loss in a declining market.

Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.

While the fund is no-load, management and other expenses still apply.

The Fund is only offered to United States residents, and information on this site is intended only for such persons. Nothing on this web site should be considered a solicitation to buy or an offer to sell shares of our Fund in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction.

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ATACX

ATAC ROTATION FUND

ATACX had an Overall Morningstar Rating of 5 Stars out of 224 Tactical Allocation Funds as of 9/30/2020 based on risk adjusted returns.

The Morningstar Rating™ for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating™ for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating™ metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

In each Morningstar Category, the 10% of funds with the lowest measured risk are described as Low Risk, the next 22.5% Below Average, the middle 35% Average, the next 22.5% Above Average, and the top 10% High. Morningstar Risk is measured for up to three time periods (three, five, and 10 years). These separate measures are then weighted and averaged to produce an overall measure for the fund. Funds with less than three years of performance history are not rated.

The ATAC Rotation Investor (ATACX) received 5 stars for the 3- and 5-year time periods among 224 and 185 Tactical Allocation funds for the period ending 9/30/20. Ratings for other share classes may differ.

©2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.