1st Quarter 2011 Commentary - ASTON/New Century Absolute Return ETF Fund
1st Quarter 2011 Commentary
Although equity markets exhibited mostly positive momentum throughout of the first quarter of 2011, there was another story being told in the underlying indicators. With the previous quarter closing out on new highs, though with low volume, our indicators showed that market strength could continue. As indicators showed a slowing in momentum in late December and early January and the potential for consolidation, our quantitative strategy sent signals to sell certain ETFs to capture profits. A mixed picture began to develop as the market walked a tight-rope between strength and weakness.
The portfolio ended the quarter with a different make up than it began. Most notable was the reintroduction of international ETFs. After the big March selloff, international issues reestablished leadership. We added ETFs representing Germany, India, China, Sweden, Emerging Markets, and the BRIC countries (Brazil, Russia, India, China) to the portfolio. Energy made a large contribution to returns, with exposure to oil, coal, and particularly natural gas. An investment in gold, both actual gold and the gold miners, was another commodity that made a contribution to returns.
Elsewhere, the Fund ended the quarter with a small cash position—poised for a continued uptrend. We began to increase the portfolio's weighting in small-caps, as large-caps had comprised a larger weighting in the portfolio than it has historically. The portfolio also sought out strength among growth styles and was positioned more in the "core-growth" part of the style box to end the quarter.
New Century Capital Management
11 April 2011
Note: The Fund invests in exchange-traded funds (ETFs) which are securities of other investment companies. An ETF seeks to track the performance of an index by holding all or a sampling of the securities on that index. An ETF may not be able to replicate an index exactly since returns may be reduced by transaction costs, expenses and other factors while the index has none. The Fund invests in many different areas of the market, each of which may involve its own element of risk. Use of aggressive ETF investment techniques such as futures contracts, options on futures contracts and forward contracts may expose an underlying fund to potentially dramatic changes (losses) in the value of its portfolio. In selling covered call options the Fund continues to bear the risk of a decline in the value of the underlying stock, an illiquid market, and no control over the exercise of the call options.
Before investing, carefully consider the fund’s investment objectives, risks, charges and expenses. Contact 800 992-8151 for a prospectus containing this and other information. Read it carefully. Aston Funds are distributed by BNY Mellon Distributors Inc.