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ARMR Outperformed the S&P 500 During May 2020

June 9, 2020

During May 2020, the 8.90% price return of the Armor US Equity Index ETF (ARMR) outperformed the 4.53% return of the S&P 500 by 4.37%.[1]

Performance to the most recent month-end can be found by clicking here. Performance data quoted represents past performance and is no guarantee of future results.

Performance Drivers During May
Helping performance during the month of May was the fund’s allocation to the Consumer Discretionary sector which outperformed the S&P 500 by 2.75% during the month. Optimism surrounding the gradual reopening of the US economy has fueled hopes of a turnaround for some of the sector’s hardest-hit names. A gradual lifting of lockdowns in some states has stirred hopes for a bounce-back for the retailers that make up much of the sector.

The fund was also helped by its allocation to the Information Technology and Communication Services sectors as these sectors outperformed the S&P 500 by 3.34% and 2.39%, respectively, during the month of May. Many stocks in these sectors were perceived as beneficiaries of the country’s lockdown. Companies in these sectors helped to facilitate remote workplace and education solutions as well as offered entertainment options. Additionally, such companies have the potential to continue to benefit even after the lockdowns are lifted as trends toward remote work, which were already in motion before the pandemic, may accelerate.

The fund’s allocation to the healthcare sector was a modest drag on performance during May as the sector underperformed the S&P 500 by -0.18%. The sector had performed strongly coming off of the March lows, so it is not surprising that there was some moderation in its performance relative to the S&P 500. Additionally, healthcare stocks are often viewed as defensive. With growing optimism, the market began to favor sectors and stocks with more direct exposure to the US economy.

Sector Positioning for June The index which underlies the ARMR ETF uses a proprietary Market Performance Indicator (MPI) to estimate which sectors may offer strong, long-term performance potential with lower expected downside risk. The MPI uses a sector’s moving average price as a basis for this factor. When a sector is trading above (below) its moving average, it is included (excluded) in the index.

For June, we will be maintaining our allocation to the four sectors currently in the portfolio, namely, Communication Services, Consumer Discretionary, Healthcare, and Information Technology.

In addition, we will be adding allocations to the Materials and Consumer Staples sectors. Materials stocks tend to be cyclical in nature, e.g., they have historically performed well when the economy is improving. The recent lockdown has altered consumer spending patterns, favoring food and cleaning items and the retailers that sell them – the very stocks in the Consumer Staples sector. It is likely that many of these patterns may persist even after the lockdown is lifted.

Summary The fund outperformed the S&P 500 by 4.37% during the month of May. Given recent performance, coupled with the addition of the Materials and Consumer Staples sectors, we believe that the fund is attractively positioned to benefit from current market conditions and economic trends.

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. Short-term performance may often reflect conditions that are likely not sustainable, and thus such performance may not be repeated in the future.


[1] Source: Yahoo Finance

Carefully consider the Fund’s investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund’s prospectus and Summary Prospectus, which may be obtained by visiting https://armoretfs.com/documents. Read the prospectus and Summary Prospectus carefully before investing.

Foreside Fund Services, LLC, distributor.

Investing involves risk, including possible loss of principal. The Fund’s return may not match or achieve a high degree of correlation with the return of the Index. To the extent the Fund’s investments are concentrated in or have significant exposure to a particular issuer, industry or group of industries, or asset class, the Fund may be more vulnerable to adverse events affecting such issuer, industry or group of industries, or asset class than if the Fund’s investments were more broadly diversified. Issuer-specific events, including changes in the financial condition of an issuer, can have a negative impact on the value of the Fund.

A new or smaller fund is subject to the risk that its performance may not represent how the fund is expected to or may perform in the long term. In addition, new funds have limited operating histories for investors to evaluate and new and smaller funds may not attract sufficient assets to achieve investment and trading efficiencies.

Shares are bought and sold at market price (closing price) not net asset value (NAV) and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00pm Eastern Time (when NAV is normally determined) and do not represent the return you would receive if you traded at other times.