| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.11% | -2.08% | -2.08% |
The 1290 SmartBeta Equity Fund posted a -2.08% return in Q1 2026, outperforming the MSCI World Index's -3.57% decline during a volatile quarter marked by the outbreak of war in Iran. The conflict closed the Strait of Hormuz, spiking oil prices and creating energy crisis fears that drove market corrections globally. The Fund's quantitative approach delivered positive sector allocation effects through underweights in Information Technology, Consumer Discretionary, Communication Services, and Health Care, while overweighting defensive sectors like Consumer Staples, Utilities, and Industrials. Stock selection also contributed positively across multiple sectors including Financials and Real Estate. However, the Fund's factor exposure to Low-Volatility and Quality detracted from returns, and its underweight to Energy hurt performance as that sector benefited from rising oil prices. An AI sell-off and concerns about private credit market stability following the collapse of UK lender Market Financial Solutions added to market volatility. The quarter ended with a sharp rally on hopes for conflict resolution.
The 1290 SmartBeta Equity Fund employs a quantitative approach focused on sector allocation and factor exposure, maintaining defensive positioning through underweights in volatile technology sectors and overweights in stable consumer staples and utilities during a period of geopolitical uncertainty and market volatility.
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| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 25 2026 | 2026 Q1 | - | defense, energy, Iran Conflict, Sector Allocation, technology, volatility | - | The 1290 SmartBeta Equity Fund's quantitative approach delivered relative outperformance during Q1 2026's volatile period marked by Iran war and energy crisis. Defensive sector positioning through underweights in technology and overweights in staples helped navigate market turbulence, though underweight Energy positioning hurt as oil prices spiked from Strait of Hormuz closure. |
| Jan 30 2026 | 2025 Q4 | FTSE | AI, equities, financials, global, healthcare, industrials, technology | - | The fund delivered solid Q4 performance driven by technology sector selection and AI gains, with financials and communication services contributing positively. However, poor stock selection in industrials and healthcare detracted from relative performance despite favorable sector positioning. Global equity rotation benefited international exposure while technology leadership continued. |
| Nov 5 2025 | 2025 Q3 | ISRG, NFLX, PM, TSLA | AI, Factor Investing, healthcare, low volatility, Quality, quantitative, SmartBeta, technology | - | The 1290 SmartBeta Equity Fund's quantitative approach focusing on low-volatility, high-quality stocks faced headwinds in 3Q25 despite strong global markets. While avoiding underperformers like Philip Morris and Netflix helped, the fund's factor exposure and lack of Tesla position detracted. The strategy maintains its systematic approach despite temporary factor underperformance. |
| Jul 27 2025 | 2025 Q2 | ABBV, AVGO, CVX, LLY, MCD, NFLX, NVDA, PEP, TT, XOM | Factor, global, Quality, SmartBeta, technology, Trade Policy, volatility | - | The 1290 SmartBeta Equity Fund's factor-based approach faced headwinds in Q2 2025 as low volatility and quality biases that helped during initial Trump tariff turbulence became performance drags during the subsequent risk-on recovery. Technology underweights and poor stock selection in key sectors offset benefits from avoiding energy exposure. |
| Mar 31 2025 | 2025 Q1 | NFLX, PLTR | Europe, Factor Investing, financials, low volatility, Quality, SmartBeta, technology | - | The 1290 SmartBeta Equity Fund's quantitative low volatility and quality factor approach provided defensive benefits during Q1 2025's volatile markets. Strong stock selection and favorable sector allocation drove performance, though the strategy faced headwinds from outperforming high volatility stocks. European strength from ECB cuts and German stimulus contrasted with US technology weakness from AI competition and trade policy uncertainty. |
| Dec 31 2024 | 2024 Q4 | NFLX, PLTR | Esg, Factor Investing, Quality, quantitative, Smart Beta, volatility | - | The 1290 SmartBeta Equity Fund uses quantitative screening to target higher quality, lower volatility stocks for long-term capital appreciation. Q4 performance was challenged by market preference for higher volatility names and underweight Technology exposure, though underweights to Materials and Healthcare provided some benefit as these sectors underperformed significantly. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
DefenseDefense companies reached record market highs in January driven by the escalating conflict in the Middle East. The war in Iran and broader regional tensions have benefited aerospace and defense companies as investors seek exposure to defense spending themes. |
Defense Aerospace Military Conflict Spending |
EnergyEnergy companies have seen gains following the war in Iran and rising oil and gas prices due to the closure of the Strait of Hormuz. However, the Fund's underweight positioning to the Energy sector has been a headwind to performance during this period. |
Energy Oil Gas Strait of Hormuz Prices | |
AIThere was an artificial intelligence sell-off during the quarter as worries grew that AI was disrupting an ever-growing list of sectors as well as the broader economy. This contributed to market volatility and negative performance. |
AI Technology Disruption Sell-off Volatility | |
| 2025 Q4 |
AIAI continued as a major market theme with over 300 S&P 500 companies mentioning artificial intelligence on earnings calls. However, scrutiny increased around AI-related revenue circularity, massive capital spending scale, and durability of longer-term returns on investment. Oracle faced concerns about OpenAI backlog concentration risk and significant debt required for datacenter commitments. |
Artificial Intelligence Data Centers Capital Spending Revenue Circularity Infrastructure |
Trade PolicyTrade relations between the U.S. and China remained a key market focus with tensions flaring over tariff escalations and export controls. China dramatically expanded export controls on rare earth minerals while the U.S. threatened 100% tariffs in retaliation. A one-year trade truce was ultimately reached between Presidents Trump and Xi Jinping. |
Tariffs China Export Controls Rare Earth Minerals Trade Relations | |
CryptoThe fund added Coinbase Global as a new position, viewing it as the dominant player in the U.S. cryptocurrency market with over 65% trading volume share. Recent passage of the GENIUS Act and anticipated CLARITY Act are expected to provide regulatory clarity, boosting institutional adoption and trading volumes. |
Cryptocurrency Regulatory Clarity Trading Volumes Institutional Adoption Market Share | |
| 2025 Q3 |
AIArtificial intelligence stocks provided a further burst during the quarter, contributing to the strong performance of global markets and helping to buoy investor sentiment alongside other positive factors. |
AI Technology Growth |
QualityThe fund's strategy focuses on low-volatility, high-quality stocks, though this factor exposure underperformed during the quarter. The fund maintains its bias toward high-quality earnings as part of its core investment approach. |
Quality Low Volatility Earnings | |
| 2025 Q2 |
Trade PolicyTrump's tariff policies dominated market movements throughout the quarter, with Liberation Day tariffs causing initial sell-offs followed by recovery as trade deals were negotiated with the UK and China. The fund navigated the initial Trump Tariff Turbulence well due to its low volatility exposure. |
Tariffs Trade Negotiations China UK |
QualityThe fund's quality factor exposure provided mixed results during the quarter. While quality helped during the initial tariff turbulence, only high-volatility, high-quality technology stocks outperformed during the subsequent risk-on recovery phase. |
Quality Factor Technology Volatility Performance | |
VolatilityLow volatility stocks underperformed during the strong risk-on recovery that followed the initial tariff concerns. The fund's inherent low volatility bias hurt performance as markets favored higher volatility names in the rebound. |
Low Volatility Risk-on Recovery Underperformance Factor | |
| 2025 Q1 |
AIThe emergence of China's DeepSeek AI intensified competition concerns, particularly impacting semiconductor firms and leading to underperformance among Magnificent Seven stocks. This contributed to a broadening of market performance and fueled rotation out of previously dominant US technology stocks. |
DeepSeek Competition Semiconductors Technology |
Defense SpendingGermany announced a substantial stimulus package focusing on defense and infrastructure spending, which markedly boosted investor confidence across the European continent and contributed to Europe's strong performance during the quarter. |
Germany Stimulus Infrastructure European | |
Trade PolicyDonald Trump's return to the White House injected uncertainty around US trade policy and global growth. Japanese stocks faced pressure from specific US tariff fears targeting the auto industry, which pushed the Nikkei lower. |
Trump Tariffs Auto Industry Japan | |
| 2024 Q4 |
QualityThe fund maintains a strategic focus on higher quality companies as part of its quantitative screening process. High quality names underperformed marginally during the quarter, which weighed on the fund's performance given its emphasis on quality metrics in stock selection. |
Quality Earnings Fundamentals |
VolatilityThe fund has a strategic allocation toward low volatility stocks as part of its smart beta approach. However, stocks with higher volatility significantly outperformed those with lower volatility during the quarter, working against this positioning and hurting performance. |
Volatility Risk Low Volatility |
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