Stadion Tactical Defensive Strategy

The Stadion Tactical Defensive Strategy is a conservative equity strategy seeking to participate in expanding market cycles, with the ability to become 100% defensive as conditions deteriorate.

Tactical Allocation: Two Components at Work

The Stadion Tactical Defensive Strategy brings together two complementary components to diversify equity allocations and attempt to reduce volatility over changing market cycles. The Tactical Defensive Strategy is designed to react to changing market conditions, not predict them.

Component 1: Cyclical Trends

Objective: Designed to be fully invested during longer term growth cycles while becoming defensive during periods of decline

  • Technical analysis focused on intermediate and long-term measures
  • Construct portfolio of approximately 3 - 6 holdings
  • Adjust allocation consistent with market cycle. Can hold defensive ETFs when market conditions change 


Component 2: Shorter-Term Trends

Objective: Seeks short-term equity appreciation with a secondary emphasis on capital preservation during shorter term pullbacks 

  • Daily, technical measures determine equity risk levels
  • Construct portfolio of approximately 4 - 7 ETFs
  • Portfolio level dynamic sell criteria 
  • Unconstrained, can hold all cash


The Long Term Risk Level and Short Term Risk Level graphs above do not include Stadion’s performance. They set forth the “risk levels” in the S&P 500 Index, as determined by Stadion’s investment models, for those periods. 

Sample Portfolio Allocation Ranges

Max: 100% Equity
Min: 100% Cash/Defensive ETFs


Illustrative purposes only. Titles not reflective of specific allocation ranges. 

Markets Move in Cycles

The chart below shows cyclical market returns over time. Stadion recognizes that there are both opportunities and risks within a market cycle, and the Stadion Tactical Defensive Strategy attempts to prepare investors for both. 


Diversification Can Break Down Cyclical Declines

Many investors think that diversification alone is the key to creating a resilient portfolio. However, history indicates otherwise: In 2002 and 2008, times of heightened market risk, diversification provided little shelter from gyrating markets. 

Instead of depending on diversification, Stadion makes data-driven investment decisions. Our continuous risk/return analysis helps us identify and choose ETFs with the most present-day potential and lowest risk—regardless of asset classes.



1The current bull cycle has not been completed. Performance noted is through 6/30/16.

The S&P 500 Index is the Standard & Poor’s Composite Index of 500 stocks and is a widely recognized, unmanaged index of common stock prices. It is not possible to invest directly in an index (like the S&P 500) which is unmanaged and does not incur fees or charges. Source: Stadion. 

Emerging Markets: The MSCI Emerging Markets Index is an unmanaged free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. International: The MSCI EAFE Index (Europe, Australasia, Far East) is an unmanaged free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. Large Cap Growth: S&P 500 Growth Index is a market-capitalization-weighted index developed by Standard and Poor’s consisting of those stocks within the S&P 500 Index that exhibit strong growth characteristics. Large Cap Value: S&P 500 Value Index is a market-capitalization-weighted index developed by Standard and Poor’s consisting of those stocks within the S&P 500 Index that exhibit strong value characteristics. The S&P 500 Index is the Standard & Poor’s Composite Index of 500 stocks and is widely recognized, unmanaged index of common stock prices. Small Cap: The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index. Small Cap Growth:  The Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. Small Cap Value: The Russell 2000 Value Index measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. It is not possible to invest directly in indexes (like the S&P 500) which are unmanaged and do not incur fees and charges.

Prior to 3/28/14, the Stadion Tactical Defensive Strategy was named the Stadion Core Advantage Strategy. 

Performance as of 3/31/17 (%)

Drag to see table
3 Mo.YTD1 YR3 YR5 YR10 YRSince Inception
Gross4.964.9614.235.086.695.156.13
Net4.764.7613.444.165.754.175.11
S&P 500 Index6.076.0717.1710.3713.307.518.21

Performance as of 3/31/17 (%)

Calendar Year Returns (%)

Drag to see table
200520062007200820092010201120122013201420152016
Gross7.8413.899.59-21.4617.3516.55-6.1210.3218.306.21-7.9612.29
Net7.1012.538.41-22.2916.4015.61-7.239.3117.255.21-8.8811.49
S&P 500 Index7.2115.795.49-37.0026.4615.062.1116.0032.3913.691.3811.96

Calendar Year Returns (%)

Performance data shown for 2005 represents a partial year, from the strategy’s inception (3/31/05) through 12/31/05.

Please review the Stadion Tactical Defensive Strategy Compliant Presentation for disclosures that are integral to your investment decisions. Past performance does not guarantee future results. This performance report should not be construed as a recommendation to purchase or sell any particular securities held in composite accounts. Investments are subject to risk and any of Stadion’s strategies could lose value. The S&P 500 Index is the Standard & Poor’s Composite Index of 500 stocks and is a widely recognized, unmanaged index of common stock prices. One cannot invest directly in an index which is unmanaged and does not incur fees or expenses.

Risk Statistics as of 3/31/17

Drag to see table
Strategy: NetS&P 500 Index
Beta vs S&P 5000.601.00
Downside Risk7.01%10.89%
Maximum Drawdown-32.80%-50.95%
Standard Deviation9.68%14.19%
Sharpe Ratio0.400.49
Correlation0.881.00
Sortino Ratio0.620.71

Risk Statistics as of 3/31/17

Standard Deviation measures the average deviations of a return series from its mean, and is often used as a measure of risk. Downside Risk is calculated in the same manner as Standard Deviation, but only those observations below the mean are used in the calculation. Beta is a measure of systematic risk, or the sensitivity of a manager to movements in the benchmark. A beta of 1 implies that you can expect the movement of a manager’s return series to match that of the benchmark used to measure beta. Maximum Drawdown measures the largest percentage decline from a peak to a trough. The Sharpe ratio measures the excess return per unit of deviation, or risk. Correlation is a measure of how investments move in relation to one another. A correlation of 1 means the two asset classes move exactly in line with each other, while a correlation of -1 means they move in the exact opposite direction. Up market capture is a measure of a portfolio’s performance relative to an index in up markets. Down market capture is a measure of a portfolio’s performance relative to an index in down markets. The Sortino Ratio, a variation of the Sharpe ratio, differentiates harmful volatility from volatility in general by using downside deviation instead of standard deviation in the denominator of the formula. The index shown is defined as follows. The S&P 500 Index is the Standard & Poor’s Composite Index of 500 stocks and is a widely recognized, unmanaged index of common stock prices. One cannot invest directly in an index which is unmanaged and does not incur fees or expenses. All Benchmarks composite data supplied by third party vendors, assumes re-investment of all dividends.

Stadion Tactical Defensive Strategy

Photo of Brad Thompson, CFA

Brad Thompson, CFA,

Chief Investment Officer, Investment Committee member

  • 21 years as a Portfolio Manager
  • 30 years trading experience

Brad Thompson joined Stadion in 2006, bringing 20+ years of financial analysis, investment management, and fund management experience with him to Stadion, where he manages the Stadion Portfolio Management team. Prior to joining Stadion, Brad served as the Chief Investment Officer and Chief Financial Analyst for Global Capital Advisors. Brad has a Bachelor of Business Administration Degree in Finance from the University of Georgia, and also holds the Chartered Financial Analyst designation. Brad is a member of the CFA Institute and the Bermuda Society of Financial Analysts and also holds the Chartered Retirement Plan Specialist Designation. Brad has served on the board of the Executive Leadership Council for the American Cancer Society and on the Board of Trustees for the University of Georgia Terry College of Business Student Managed Investment Fund. Brad enjoys watching UGA football and spending time with his family.

Photo of Will McGough, CFA

Will McGough, CFA,

Senior Vice President, Portfolio Manager

  • 6 years as a Portfolio Manager
  • 14 years as a Portfolio Analyst

Will McGough joined Stadion Money Management in 2003. He leads the implementation of model-driven investment decisions and investment/market analysis to fulfill Stadion's investment products’ mandates. Will also helps guide the development of systems and processes critical to achieving scalable growth. A key interface with Stadion's institutional partners, Will is responsible for Stadion's best execution efforts and has played a pivotal role in managing Stadion's operational on-boarding of new products and the Portfolio Management team's launch or integration of them. Will received his BBA in Finance from the University of Georgia and also holds the Chartered Financial Analyst designation. Will is a member of the CFA Institute, the CFA Society of Atlanta, the American Association of Professional Technical Analysts, National Association of Active Investment Managers, the UGA Alumni Association and National Eagle Scout Association. Outside of the office, Will and his wife Casey lead an active community life and stay busy keeping up with their two young daughters and a houseful of dogs.

Photo of Clayton Fresk, CFA

Clayton Fresk, CFA,

Portfolio Manager

  • 4 years as a Portfolio Manager
  • 11 years trading experience

Clayton is a portfolio manager on several of Stadion’s portfolios, including the Alternative Income portfolio. He is responsible for managing the fixed income and cash allocations across Stadion’s suite of products. He conducts in-depth model, market, product, and performance analysis and is a key liaison between the department and Sales and Marketing. He is also a regular contributor to etf.com and was named an "ETF Rockstar" in 2013 by ETF Report. Clayton joined Stadion in 2009, before which he was most recently a Sr. Business Analyst at RiverSource Investments, LLC in Minneapolis, MN. Clayton holds the Chartered Financial Analyst designation and is a member of the CFA Institute and the CFA Society of Minnesota. He also received an MBA degree and a Bachelor's degree in Finance & Marketing from the University of Minnesota. Outside of work, Clayton enjoys traveling, golfing, and playing & watching sports.

Short Term Risk Level As of 05/23/2017

The Short Term Risk Level* is designed to measure the overall risk levels in the U.S. market. “Green” is the most favorable reading, indicating that risk levels are relatively low. Generally, when the level is “Green” the portion of the portfolio that is governed by this measure will be positioned to participate in the market. “Red” means the measure has assessed the market conditions as unfavorable, meaning that risk levels are relatively high. When the level is “Red” the portion of the portfolio that is governed by this measure will generally be positioned more defensively.

*The Short Term Risk Level is also known as the Domestic Equity Risk Level. 

Long Term Risk Level As of 05/19/2017

The Long Term Risk Level is designed to identify cyclical bull and bear market environments in the U.S. Generally, when the level is “Green”, the portion of the portfolio that is governed by this measure will be positioned to participate in the market. When the level is “Red”, the portion of the portfolio that is governed by this measure will generally be positioned more defensively.

Please review the Stadion Tactical Defensive Strategy Compliant Presentation for disclosures that are integral to your investment decisions. There is no guarantee that this investment strategy will succeed, and investment results may vary. The investment strategy presented is not appropriate for every investor and you should review with your financial advisor(s) the terms and conditions and risk involved with specific products or services.