The Catastrophic Stop model deteriorated in March but remains with a fully invested Core and Explore allocation entering April. The Core model overweighted the U.K., Germany, and Switzerland while underweighting Canada and China. The Explore model favored the Philippines, Thailand, Netherlands, New Zealand, Spain, and Mexico. The models combine macro, fundamental, technical, and sentiment indicators to determine opportunities and identify risks in an objective, weight-of-the-evidence approach.

With yields across the board declining in March, fixed-income sectors rallied. Entering April, the fixed income allocation strategy is overweight International Bond, U.S. Long-Term Treasury, TIPS, U.S. Investment Grade, and Floating Rate Notes. The U.S. Corporate, U.S. High Yield, and Emerging Market Bond sectors are underweight.

The sector allocation strategy’s message is mixed with overweights to Value sectors like Energy and Financials, as well as Growth sectors like Technology and Communications Services. Industrials, Consumer Discretionary, and Health Care are at underweight. The sector model uses sector-specific indicators to determine opportunities and identify risks in an objective, weight-of-the-evidence approach.

Strong YTD performance, higher total returns with lower volatility. Market climbs "Wall of Worry" amid recession fears, rising rates, inflation, and geopolitical risks. Value stocks rebound as quality companies regain favor. Portfolio changes include Mosaic and Nutrient acquisitions, Cigna and Aflac sales, and Schwab purchases. Sector weightings and valuation metrics remain favorable.

Year-to-date performance has been strong, outperforming the benchmark w/ lower volatility. Economic data surprises & rising interest rates have impacted market sentiment. Value sectors have underperformed, while tech stocks have shown strength. Overall, the portfolio continues to seek long-term outperformance through quality, profitability, and reasonable valuation.

The NDR Catastrophic Sell Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model improved in March and remained with a fully invested equity allocation recommendation.

With yields across the board rising in February, fixed income sectors suffered. Floating Rate Notes and International Investment Grade improved to overweight, while U.S. Investment Grade Corporate bonds dropped to underweight. Additionally, a rising U.S. dollar led to Emerging Market bond underperformance and an underweight allocation.

The sector allocation strategy continues to be positioned in early-cycle areas of the market. Value sectors like Energy, Materials, and Financials remain overweight, and Consumer Discretionary rose to a slight overweight allocation. Interest-rate sensitive sectors such as Consumer Staples, Real Estate, Communications Services, and Utilities are underweight, along with cyclically oriented Industrials and defensive Health Care. The sector model uses sector-specific indicators to determine opportunities and identify risks in an objective, weight-of-the-evidence approach.

The NDR Catastrophic Sell Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model remains with a fully invested equity allocation recommendation as the composite score improved toward month-end.

The NDR Catastrophic Sell Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model remains with a fully invested equity allocation recommendation, as the composite score improved toward month-end.

The risk management model seeks to reduce exposure to fixed income sectors most sensitive to equity drawdowns. The risk management model improved from last month and entered February recommending full model exposure to areas most sensitive to equity markets: U.S. High Yield, Emerging Markets, U.S. Investment Grade, and Floating Rate Notes.

The DH Smart Value Portfolio continues to invest in companies producing excess returns through positive economic profitability, supported by solid balance sheets (quality), significant cash generation (profitability), and trading with considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future. Using our consistent and differentiated investment approach, the DH Smart Value Portfolio is focused on outperformance, seeking higher total returns with lower volatility.

The NDR Catastrophic Sell Stop model combines time-tested, objective indicators designed to identify high risk periods for the equity market. The model deteriorated in December but remains with a fully invested equity allocation recommendation.

The sector allocation strategy continues to be influenced by the rising rate environment which will likely lead to an economic recession, resulting in more Value and defensive sector leadership. Energy, Materials, Financials, Utilities, and Health Care are overweight, while Communication Services, Consumer Discretionary, Real Estate, and Industrials are underweight.

The risk management model seeks to reduce exposure to fixed income sectors most sensitive to equity drawdowns. While the risk management model deteriorated from last month, it entered January recommending full model exposure to areas most sensitive to equity markets: U.S. High Yield, Emerging Markets, U.S. Investment Grade, and Floating Rate Notes.

We note that 2022 was a year for the record books. For example: 1) U.S. financial markets were buffeted by the most aggressive monetary tightening cycle in 40 years. 2) It was the worst year on record for the Bloomberg Barclays U.S. Aggregate Bond Index (down -13.1%). 3) Long-term U.S. Treasurys declined -29.3%. 4) It was only the sixth time since 1926 that both stocks & bonds declined same year.