Tactical Funds

The Balanced Fund is a Strategic Fund that is invested in the Domestic Stock Fund and the Bond Fund. Although the Balanced Fund allows a range of between 30 percent and 70 percent in the Domestic Stock Fund and the Bond Fund, historically, the fund has been invested 60 percent in the Domestic Stock Fund and 40 percent in the Bond Fund and rebalanced on a fixed schedule.

The Tactical Funds may invest in a wider range of Strategic Funds, as indicated above, and which Strategic Funds and how much is invested in those Strategic Funds, within the limits of policy, are at the discretion of the investment adviser of the Tactical Funds. Changes can occur when the adviser deems it important, rather than on a specific schedule, as is true for the Balanced Fund.

The Tactical Funds use a tactical asset allocation model — a dynamic investment strategy that actively adjusts a portfolio's asset allocation, with the goal being to improve the risk-adjusted returns of passive management or strategic investing.

The chart above illustrates that the Tactical Funds are expected to provide additional return over the return provided by the Strategic Funds, which is the sum of the asset class return and the manager return.

The Tactical Funds, once selected, relieve organizations from the duty of managing asset allocation and rebalancing on a meeting-to-meeting basis. The organization’s duty remains in selecting and monitoring the Tactical Funds.

Any investment strategy that diverges from a stated benchmark for the purpose of enhancing performance is taking some measure of investment risk, as it could fail in its attempt. In addition, these funds may invest in certain Strategic Funds that traditionally have not been used by EOI clients. While there is an expectation that inclusion of additional asset classes should lower the long-term risk of the portfolio, the short-term return could vary from historic client benchmarks.

The Tactical Funds may invest in Strategic Funds that may not comply with EOI’s socially responsible investing guidelines; therefore, the Tactical Funds may not comply with EOI’s socially responsible investing guidelines.

The Tactical Funds have an additional level of expense over and above the expenses of the Strategic Funds in which they are invested. The additional fee, which is charged directly to the client account on a quarterly basis, is based on the total EOI client assets invested in any of the Tactical Funds. Following is the fee schedule for assets invested in Tactical Funds —

These comments and information are for reference and benchmarking purposes. Consult the 2022 Information Statement for further description of each offering. Consult a qualified capital market professional for capital market advice. The analysis is based on information which the author believes is reliable, but no warranty, expressed or implied, is granted. The material presented is of a general nature and does not constitute the provision of investment or economic advice to any person, or a recommendation to buy or sell any security or adopt any investment strategy. Opinions and forecasts expressed herein are subject to change without notice. Information is not guaranteed as to its accuracy.