Transamerica Tactical Allocation. Monthly Dashboard February 2013

Transcription

1 TRANSAMERICA TACTICAL ALLOCATION Transamerica Tactical Allocation Monthly Dashboard February 2013 Class A: TTAAX Class C: TTACX Class I: TTAIX Indicators Actual Allocations Positioning Expectations Risk Portfolio Changes Fund Underlying ETFs Performance Not insured by FDIC or any federal government agency. May lose value. Not a deposit of or guaranteed by any bank, bank affiliate, or credit union.

2 Econometric Model Input Macroeconomic backdrop - The risk of a systematic shock to the financial system has been substantially reduced by the continued monetary easing from central banks globally. The U.S. economy grew at 0.1% in Q4, and the February unemployment rate showed additional improvement. However, global commodities have witnessed a sizeable slump during the month, including crude oil, gold, and major industrial metals. Bullish indicators: GLOBAL - Australian Industry Group Performance of Manufacturing Index. REGIONAL: U.S.- Bloomberg U.S. Weekly Consumer Comfort Index; Citigroup Economic Surprise Index - United States; EUROZONE - Bloomberg UK Homebuilder Index; Germany Manufacturing PMI Markit Survey Ticker; EMERGING MARKETS - CITI QuantIFI Index Emerging Asia Growth. Bearish indicators: GLOBAL - Bloomberg Dry Ships Index; S&P World Commodity Industrial Metals Index. REGIONAL: U.S. - Bloomberg United States Financial Conditions Index Plus; Philadelphia Fed Business Outlook Survey Diffusion Index General Conditions; EUROZONE - The Bloomberg European Financial Index; EMERGING MARKETS - China Manufacturing PMI; India Net Foreign Equity Investment USD. FIXED INCOME - Deutsche Bank Steepener USD Index. Positioning Broad allocations: The allocation to the Income & Growth and Inflation Protection sleeves went from 76.1% to 68.9% (Neutral: 72%) over February. Notable trends: This Fund has a relatively short history to establish any trends. In the last 10 weeks, the volatility hedge and inflation hedge has decreased by -10.4% as the risk of equity volatility and inflation has stabilized. Notable changes in risk: The fund has seen a decrease in duration over the last 2 months Table A1 India Net Foreign Equity Investment USD (Measures all the activities undertaken by FIIs in Indian Securities Market) Table A2 S&P World Commodity Industrial Metals Index (Measures the commodity futures price of S&P WCI industrial metals) 2

3 Table A3 Citigroup Economic Surprise Index - U.S. (Measures yield spreads and indices from U.S. Financial Markets) Table A4 MSCI EM Real Estate USD (Measures the commodity futures price of S&P WCI industrial metals) Table A5 USD SWAP Spread Semi 5 Yr (Measures the distress level of the fixed income market) 3

4 Table A6 Citi Economic Surprise Index - BRIC (Measures economic news in the BRIC countries (positive means results beat consensus) Table A7 Philadelphia Fed Business Outlook Survey Diffusion Index (Measures the direction of change in overall business activity according to Philly Fed survey) Table A8 Bloomberg European Financial Index (Measures market-cap weighted index of the large-cap European financial companies) 4

5 Table A9 Citi Quantifi Index Emerging Asia Growth (Measures the equity-style growth investing payoffs in Emerging Asia countries) Fund Performance (%) Portfolio February Month Since Inception* Transamerica Tactical Allocation A Shares (at NAV) Transamerica Tactical Allocation A Shares (max sales charge) Transamerica Tactical Allocation C Shares (at NAV) Transamerica Tactical Allocation C Shares (max sales charge) Transamerica Tactical Allocation I Shares FTSE All-World Index Blended Benchmark Morningstar World Allocation Source: Transamerica Asset Management (TAM) * Inception of the fund is 10/31/12 The performance data presented represents past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Please see TransamericaInvestments.com for performance data current to the most recent month-end. The investment return and principal value of mutual funds will fluctuate over time so that shares, when redeemed, may be worth more or less than their original cost. Class A Max Sales Charge returns include reinvestment of dividends and capital gains and reflect the maximum sales charge of 5.5%. Net Asset Value returns include reinvestment of dividends and capital gains, but do not reflect any sales charges. Purchases of Class C Shares are subject to a 1% contingent deferred sales charge if redeemed during the first 12 months of purchase. There are no sales charges on Class I Shares. The gross expense ratios for this fund are 1.38%, 2.08%, and 1.12% for Class A, C and I Shares, respectively. The FTSE All-World Index, and Transamerica Tactical Allocation Blended Benchmark (60% FTSE All-World Index and 40% Barclays Global Aggregate Index) are unmanaged indices used as a general measure of market performance. It is not possible to invest directly into an index. Calculations assume dividends and capital gains are reinvested and do not include any managerial expenses. As discussed in previous Dashboard updates, the TTA is designed to attain certain objectives which result in the Fund underperforming its peer group and benchmark in rising equity markets and outperforming in falling equity markets. Portfolio Allocation Update Increasing allocation trends: Investment Grade Bonds (7.3%); Emerging Market Bonds (1.1%) Decreasing allocation trends: All World Min Vol. Equity (-4.9%); U.S. Equity (-3.5%); Emerging Market Equity (-1.3%) Major outperformers: U.S. Equities (USMV: 2.76%, VOO: 1.33%); Global Equities (ACWV: 2.21%; EFAV: 1.23%; VPL: 2.02%); Barcap Aggregate Index Components (BIV: 1.00% ; BLV: 1.80%) Major Underperformers: Commodities (DBO: -6.34%; DBE: -6.23%; DBA: -5.41%; DBC: -4.71%) 5

6 ETF Monitor * Does not include cash and cash equivalents. Due to rounding, totals may not equal 100%. Summary Security Name Ticker Component Asset Class January 2013 Allocations as of (%) * February 2013 Economic climate: Globally, the economy stabilized late in 2012 after numerous central banks stepped-up their easing efforts once again. While not surging, PMI s (production management indices), have turned up globally, with an increasing number of indices now showing year-over-year increases. In the U.S., the economy continues to be quite resilient given an increase in taxes at the beginning of the year, a delay in tax refunds, and the beginning of sequestration on March 1st. However, sequestration will inflict a drag on the economy, especially in the second quarter, but should wane toward the end of the year and thus economic growth should begin to pick-up one again. Overall positioning trends: In February, the Income & Growth sleeve went from 68.2% to 61.0% and the Principal Stability went from 20.7% to 28%, as model indicators pointed towards overall growth concerns. Author: Sridip Mukhopadhyaya, CFA, CPA, CMA, FRM Portfolio Manager February Performance Guggenheim Bulletshares 2016 High Yield Corporate Bond ETF BSJG Income & Growth High Yield Guggenheim Bulletshares 2015 High Yield Corporate Bond ETF BSJF Income & Growth High Yield ishares MSCI Emerging Markets Minimum Volatility Index Fund EEMV Income & Growth Emerging Market Equity ishares JPMorgan USD Emerging Markets Bond Fund EMB Income & Growth Emerging Market Debt ishares MSCI All Country World Minimum Volatility Index Fund ACWV Income & Growth All World ishares MSCI EAFE Minimum Volatility Index Fund EFAV Income & Growth Developed ishares MSCI USA Minimum Volatility Index Fund USMV Income & Growth U.S. Equity Vanguard S&P 500 ETF VOO Income & Growth U.S. Equity Vanguard MSCI Pacific ETF VPL Income & Growth Global Equity Vanguard MSCI European ETF VGK Income & Growth Global Equity SPDR Dow Jones International Real Estate ETF RWX Income & Growth Global Real Estate SPDR Barclays Convertible Securities ETF CWB Income & Growth Convertible Bonds PowerShares DB Commodity Index Tracking Fund DBC Inflation Hedge Commodities PowerShares DB Energy Fund DBE Inflation Hedge Commodities PowerShares DB Precious Metals Fund DBP Inflation Hedge Commodities PowerShares DB Agriculture Fund DBA Inflation Hedge Commodities PowerShares DB Oil Fund DBO Inflation Hedge Commodities ishares Barclays TIPS Bond Fund TIP Principal Stability Inflation Protected Securities ishares Floating Rate Note Fund FLOT Principal Stability Inflation Protected Securities ishares BofA Merrill Lynch Global ex-u.s. Diversified Inflation - Linked Index ITIP Principal Stability Inflation Protected Securities SPDR Nuveen Barclays Muni Bond ETF TFI Principal Stability Municipal Bonds Vanguard Intermediate-Term Bond ETF BIV Principal Stability Investment Grade Fixed Income Vanguard Total Bond Market ETF BND Principal Stability Investment Grade Fixed Income Vanguard Long-Term Bond ETF BLV Principal Stability Investment Grade Fixed Income Vanguard Short-Term Bond ETF BSV Principal Stability Investment Grade Fixed Income ProShares UltraShort 20+ Years Treasury ETF TBT Volatility Smoothing Derivatives ProShares VIX Mid-Term Futures ETF VIXM Volatility Smoothing Derivatives Income & Growth Inflation Hedge Principal Stability Volatility Smoothing

7 Shares of the fund may only be sold by offering the fund s prospectus. Your clients should consider the investment objective, risks, charges, and expenses of the fund carefully before investing. The prospectus contains this and additional important information regarding the fund. To obtain the prospectus and/or a summary prospectus, please contact your wholesaler or go to TransamericaInvestments.com. The prospectus should be read carefully before investing. Mutual funds are subject to market risk, including the loss of principal. The selection of a Tactical Asset Allocation portfolio will not guarantee a profit nor protect against a loss. ETFs generally present the same risks as an investment in a conventional fund that has the same investment objectives, strategies, and policies. The market price of an ETF s shares may be above or below the shares net asset value; and an active trading market for an ETF s share may not develop or be maintained. The ability of the Fund to achieve its objective depends largely on the performance of the underlying ETFs in which it invests. Each underlying ETFs performance, in turn, depends on the particular securities in which it invests. Accordingly, the Fund is subject indirectly to all risks associated with the underlying ETFs, as stated in the Prospectus. The fund s investment exposure to the commodities markets may subject the fund to greater volatility than investments in more traditional securities, such as stocks and bonds. The risks of investing in foreign securities are magnified in emerging markets. These may include risks related to market and currency volatility, adverse social and political developments and the relatively small size and less liquidity of these markets. Fixed income investing is subject to credit risk, inflation risk and interest rate risk. This material contains the current opinions of the manager and such opinions are subject to change without notice. It should not be construed as advertising, investment advice or a recommendation for the purchase or sale of any security. This material contains general information only on investment matters; it should not be considered as a comprehensive statement on any matter and should not be relied upon as such. The information it contains does not take into account any investor s investment objectives, particular needs or financial situation. The value of any investment may fluctuate. Results achieved in the past are no guarantee of future results. This fund is sub-advised by AEGON USA Investment Management, LLC and investment advised by Transamerica Asset Management, Inc. and distributed by Transamerica Capital, Inc. Any opinions, estimates and projections included herein constitute the current judgment of the Sub-Adviser and are subject to change. MTTAMDBDFEB