Securian AM Equity Stabilization Fund

Seeks to maximize risk-adjusted returns with a portfolio of U.S. and International low-volatility equity investments and hedging techniques.

Investment Objective

The Securian AM Equity Stabilization Fund seeks to maximize risk-adjusted returns while using hedging techniques to target volatility of 10% or less over a full market cycle.

Investment Management

Investment Manager

Liberty Street Advisors

Investment Sub-Advisor

Investment Philosophy

Management’s investment philosophy is that lower volatility tends to result in better returns over time.
Equity markets regularly cycle through periodic episodes of normal or expected levels of volatility. Periods of market volatility tend to be persistent. Higher volatility makes adverse outcomes more likely. High volatility periods also tend to lead to unfavorable performance. By contrast, low volatility periods tend to produce better performance results, even for risky asset classes. Active hedging and custom equity risk management overlays can potentially reduce the severity of downside risk and volatility.

Investment Focus

The Securian AM Equity Stabilization Fund targets an 80% equity exposure and 15% cash, while using S&P 500 futures contracts to manage equity volatility. Management adjusts equity exposure to be as high as 100% in periods of low expected market volatility, and as low as 10% in periods of high volatility. As equity volatility increases, equity exposure is reduced by either selling S&P 500 futures contracts or reducing long positions in them.

Fund Highlights

Dynamic Hedging

The Fund uses futures contracts to actively and efficiently manage equity allocations. When we expect market volatility will increase based on volatility metrics, we reduce stock positions by selling S&P 500 futures contracts or reducing long positions. Management seeks an average annualized long-term volatility in daily total returns of approximately 10%.

e

Rules Based

The Fund’s strategy is disciplined and algorithm-based strategy. Management adjusts the percentage of equities based on market volatility. The target portfolio allocation is 85% equities and 15% cash. The Fund seeks an average annualized volatility of 10% or less over an extended time period.

U

Transparent

Under normal market conditions, the Fund invests at least 80% of its net assets in equity securities of any market capitalization. Equity securities include those that are equity-based, such as exchange-traded funds (“ETFs”) that invest primarily in U.S. and foreign equity securities.

Fund Facts

Inception date

9/28/2015

Morningstar asset category

Long-Short Equity Funds

Benchmark

MSCI ACWI Index

Investment minimum

$100,000

Distributions

Quarterly

Expense Ratios

Gross Expense Ratio

1.39%

Net Expense Ratio*

1.12%

*The Fund’s advisor has contractually agreed to waive its fee and/or pay operating expenses so that total annual fund operating expenses do not exceed 0.95%. The contractual agreement is in effect until December 31, 2023.

Ticker

Institutional Class

VMEIX

Fund Performance

4/20/2021
TickerNAVNAV ChangeDaily Return - Daily
VMEIX11.970.080.67
As of
3/31/2021
QuarterYTDOne
Year
Three
Year
Five
Year
Annualized
ITD
Institutional Class
2.372.377.283.505.165.98
MSCI ACWI
4.574.5754.6012.0713.2113.26
S&P 500 Index
6.176.1756.3516.7816.2916.83
Securian AM Equity Stabilization Benchmark
2.72%2.72%19.63%6.86%7.47%8.78%

Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Fund performance current to the most recent month-end may be lower or higher than the performance quoted and can be obtained by calling 800-207-7108.

The Bloomberg Barclays U.S. 3 Month Treasury Bellwethers Index tracks the market for the on-the-run 3 month Treasure bill issued by the United States government.

The Equity Stabilization Custom Benchmark consists of 60% S&P 500 Low Volatility Index 20% S&P BMI International Developed Low Volatility Index and 20% Bloomberg Barclays U.S. 3 month Treasury Bellwethers.

The S&P BMI International Developed Low Volality Index measures the performance of the 200 least volatile stock sin the S&P Developed Market large/midcap universe. Constituents are weighted relative to the inverse fo their corresponding volatility, wiht the least volatile stocks receiving the highest weights.

The S&P 500® Index consists of 500 large cap common stocks which together represents approximately 80% of the total U.S. stock market. It is a float-adjusted market-weighted index (stock price times float-adjsuted shares outstanding), with each stock affecting the index proportion to it’s market value.

The S&P Low Volatility Index measures performance of the 100 least volatile stocks in the S&P 500.

The MSCI ACWI Index captures large and mid cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries. The Index covers approximately 85% of the global investable opportunity set. The returns are shown net of the foreign dividend withholding taxes.

It is not possible to invest directly in an index.

Schedule of Distributions

Distribution DateVMEIX
Mar 29, 2021$0.0214
Dec 9, 2020$0.0788
Sept 29, 2020$0.0091
Jun 29. 2020$0.0678
Mar 30. 2020$0.1289
Dec 30, 2019$0.1419
Sep 27, 2019$0.0300
Jun 27, 2019$0.1000
Mar 28, 2019$0.0250
Dec 28, 2018$0.0428
Sep 27, 2018$0.0250
Jun 28, 2018$0.0600
Mar 28, 2018$0.0260
Dec 28, 2017$0.0545
Sep 28, 2017$0.0354
Jun 29, 2017$0.0845
Mar 30, 3017$0.0208
Dec 29, 2016$0.1016
Sep 29, 2016$0.0229
Jun 29, 2016$0.0668
Mar 30, 2016$0.0180
Dec 30, 2015$0.0599
h

Top Holdings

As of 3/31/2021% of Net Assets (Excluding Cash)
iShares MSCI USA Min Vol Factor ETF30.97
iShares MSCI EAFE Min Vol Factor ETF23.79
iShares Core High Dividend ETF18.19
iShares MSCI Emerging Markets Min Vol Factor ETF6.65
iShares MSCI Germany ETF4.53
BlackRock Short Maturity Bond ETF4.08
Grand Total88.21

Fund holdings are subject to change and should not be considered a recommendation to buy or sell any security.

Important Risks and Disclosures:

Mutual fund investing involves risk. Principal loss is possible. The Fund’s Sub-Advisor may be unsuccessful in managing volatility and the Fund may experience a high level of volatility in their returns. 

The outbreak of COVID-19 has negatively affected the worldwide economy, individual countries, individual companies and the market in general. The future impact of COVID-19 is currently unknown, and it may exacerbate other risks that apply to the Fund. 

The securities used in the strategy are subject to price volatility, and the strategy may not result in less volatile returns for the Fund relative to the market as a whole, and they could be more volatile. Investments in debt securities typically decrease in value when interest rates rise. The risk is usually greater for longer-term debt securities. Investment by the Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. Derivatives involve special risks including leverage, correlation, counterparty, liquidity, operational, accounting and tax risks. These risks, in certain cases, may be greater than the risks presented to more traditional investments. The Fund may invest in illiquid securities which involve the risk that the securities will not be able to be sold at the time or prices desired by the Fund, particularly during times of market turmoil. In connection with establishing a short position in an instrument, the Fund are subject to the risk that they may not always be able to borrow the instrument, or to close out a short position at a particular time or at an acceptable price. The market price of an ETF fluctuates based on changes in the ETF’s net asset value as well as changes in the supply and demand of its shares in the secondary market. It is also possible that an active secondary market of an ETF’s shares may not develop and market trading in the shares of the ETF may be halted under certain circumstances. ETNs are unsecured debt obligations and are subject to the credit risk of their issuers and will lose value if the issuer goes bankrupt. ETN returns are linked to the performance of designated indices which fluctuate due to market changes as well as economic, legal, political and geographic events. The market price of ETNs fluctuates as their returns fluctuate and as the level/of supply and demand for the ETNs change. 

The Securian AM Equity Stabilization Fund is distributed by Foreside Distributors, LLC.

Please read and consider the prospectus carefully before investing. To obtain a hardcopy of the prospectus, please call 800-207-7108.