The Day Hagan Asset Management group of Sarasota, FL offers transparent validation behind their investment processes for clients, delivering monthly webinars and updates throughout the year. Recently, the group released their first Logix Tactical Dividend Strategy update of the year, which details market progress from last year.
The investment process of Day Hagan Asset Management is centered upon tactical asset management. The group actively manages portfolios with an investing discipline designed to reduce portfolio risk, and they frequently share updates with clients and interested readers from their website, such as the recent official strategy update:
“As we embark upon a new decade, one likely to be far different than the last from a market perspective, we see the Day Hagan Logix portfolio as extremely well-positioned to both generate strong, absolute returns and effectively manage risk. While we currently are within the longest bull market in American history, we will not defy gravity forever. Day Hagan Logix remains a core strategy to navigate the likely difficult periods ahead. With an inception date of 2002, Day Hagan Logix has already been “battle-tested” through the dotcom implosion and the financial crisis.”
Day Hagan reports that in 2019, their Food/Beverage Processing industry grouping performed better than any other portfolio holdings they had for the year. This grouping was led by Tyson Foods, thanks to an industry-leading retail volume growth, the growth of Tyson’s plant-based protein brand, and the impact of African Swine Fever on Chinese hog supply leading to broader protein price inflation. They also report that Tyson is the best example of Day Hagan Logix buying a stock at trough valuations, remaining patient while markets discover value in the name, and reaping the benefits of the invested portfolio.
Looking onto a new year, Day Hagan Asset Management tells us that their largest sector positioning going into 2020 is within Financials, including three industries: Asset Management, Regional & Diversified Banks, and Specialized REITs. Within these groups, Day Hagan reports a total portfolio exposure of about 30% across 13 different equities.
“It’s also worth noting that sectors like energy and financials, while deep-value priced based on our unique valuation methodology, are not necessarily on the side of low volatility,” their update tells. “The value discount versus both the market and momentum is similar to what was seen at the top of the dotcom bubble. But in addition, the correlation of momentum and low volatility is at cycle highs looking back 30+ years. In other words, value and low volatility are currently on opposite ends of the continuum.”
Concluding the update on their Logix Tactical Dividend Strategy with a quote, Day Hagan Asset mentioned a recent piece authored by Real Investment Daily: “What’s more important—matching an index during a bull cycle or protecting capital during a bear cycle?”
They followed with, “We would agree with the point of the article that you can’t have both and that matching an index during a bull cycle is taking on too much risk……in an “all weather” strategy like Day Hagan Logix, we are confident that we are ready, to the benefit of our clients, for whatever comes next.”