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Commentary iMGP RBA Responsible Global ETF Fourth Quarter 2023 Commentary

The iMGP RBA Responsible Global Allocation ETF underperformed its benchmark in the fourth quarter, posting a return of 9.05% compared to a 9.57% return for its style index (65% MSCI ACWI, 35% Bloomberg U.S. Aggregate Bond Index).

Performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Short term performance is not a good indication of the fund’s future performance and should not be the sole basis for investing in the fund. Performance data current to the most recent month end may be obtained by visiting

Equity Positioning

The Strategy was slightly overweight equity over the period, holding an average weight of 65.6% (0.6 percentage point overweight) in the fourth quarter. The equity sleeve underperformed the MSCI ACWI Index. This underperformance was driven primarily by decisions within the U.S., namely underweight exposure to information technology companies and overweight exposure to consumer staples companies, as well as an overweight exposure to emerging-markets consumer discretionary and industrial companies. On the positive side, overweight exposure within certain European sectors was the main driver.

Fixed Income Positioning

The Strategy was underweight fixed income over the period, holding an average weight of 33.8% (1.2 percentage point underweight) in the fourth quarter. The fixed income sleeve’s performance neither helped nor hurt the strategy’s overall performance. An overweight exposure to mortgages and underweight exposure to Treasuries effectively canceled each other out. The equity sleeve was the main driver of returns.

Outlook and Positioning

Our “4 for ‘24” theme is largely based on a potential replay of the 2000’s Lost Decade. We envision an extended period during which the Magnificent 7 significantly underperform, but other sectors, industries, countries, and investment themes that are currently being ignored could present excellent opportunities.

With this backdrop, our portfolios enter 2024 with four embedded themes: (1) U.S. Small Caps, (2) U.S. Cyclicals, (3) Non-U.S. and emerging markets, (4) Industrials as a play on deglobalization.

The profits cycle has begun to recover and seems poised to accelerate until at least mid-2024. If profits are accelerating or decelerating, it is typically attributable to cyclical companies’ earnings because stable companies’ earnings are simply too stable to cause a cycle.

Smaller capitalization stocks are more cyclical than are larger capitalization stocks and tend to outperform when profits accelerate. More important, the range of small cap outperformance is skewed positively when profits accelerate.

We are also overweight traditional cyclical sectors such as energy, materials, and industrials. In contrast, according to the latest Bank of America Global Fund Manager Survey, fund managers are underweight these sectors relative to their “normal” portfolio weights.

When the U.S. bull market began in 2009, investors were enamored with non-U.S., particularly emerging market, stocks. Fourteen years later, the opposite is true and investors strongly favor U.S. stocks. Fundamentals and sentiment though increasingly favor non-U.S. stocks, and we have roughly our lowest U.S. equity allocation in the history of our firm.

Lastly, it may be critical for the U.S. economy to rebuild its productive infrastructure as globalization continues to contract. Energy infrastructure, utility infrastructure, private sector manufacturing infrastructure, and related real estate, ports, roadways, and rail are as important to the future of the U.S. economy as artificial intelligence (AI) might be. However, when compared to AI, few investors are paying as much attention to this theme, which suggests greater opportunity.

RBA’s portfolios have typically been diversifiers within an overall portfolio. That role today seems a very good one to play. The speculative rally in the equity markets in 2023 is giving rise to what we think will be a once-in-a-generation investment opportunity in 2024. Like the opportunities after the Technology Bubble, there seem to be plenty of attractive investments. They just aren’t in the seven stocks that are investors’ favorites.

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The Funds’ investment objectives, risks, charges, and expenses must be considered carefully before investing. The statutory and summary prospectuses contain this and other important information about the investment company, and it may be obtained by calling 1-800-960-0188, or visiting Read it carefully before investing.

Investing involves risk. Principal loss is possible  The Fund is considered a “fund of funds” that seeks to achieve its investment objective by primarily investing in Underlying ETFs.  The risks of investing in securities of ETFS, ETPs and Investment companies typically reflect the risks of the types of instruments in which the underlying ETFS, ETS or investment company invests.  In additions, with such investments, the Fund bears its proportionate share of the fees and expenses of the underlying entity.  As a result, the Fund’s operating expenses may be higher and performance may be lower.  Through its investments in investment companies, the Fund may be indirectly exposed to derivatives and leverage .  Any use of leverage by Underlying Vehicles I speculative and could magnify losses.  Because ETS are unsecured, unsubordinated debt securities, an investment in an ETN exposes the Fund to the risk that an ETN issuer may be unable to pay.  In addition, with investments in ETS, the Fund bears its proportionate share of the fees and expenses of the ETN, which may cause the Fund’s operating expenses to be higher and performance to be lower.

Investing in securities that meet ESG criteria may result in the fund forgoing otherwise attractive opportunities, which may result in underperformance when compared to funds that do not consider ESG factors. 

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The Bloomberg  U.S. Aggregate Bond Index is a market capitalization-weighted index, meaning the securities in the index are weighted according to the market size of each bond type. Most U.S. traded investment grade bonds are represented. The index includes US Treasury Securities (non TIPS), Government agency bonds, Mortgage backed bonds, Corporate bonds, and a small amount of foreign bonds traded in U.S.

The MSCI All Country World Free Index captures large and mid-cap representation across 23 Developed Markets and 23 Emerging Markets countries. With 2,491 constituents, the index covers approximately 85% of the global investable equity opportunity set.

The MSCI ACWI ESG Leaders Index is a capitalization weighted index that provides exposure to companies with high Environmental, Social and Governance (ESG) performance relative to their sector peers. MSCI ACWI ESG Leaders Index consists of large and mid cap companies across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries.

Index performance is not illustrative of fund performance.  An investment cannot be made directly in an index. 

iM Global Partner Fund Management, LLC  has ultimate responsibility for the performance of the IMGP Funds due to its responsibility to oversee the funds’ investment managers and recommend their hiring, termination, and replacement.

The iMGP Funds are Distributed by ALPS Distributors, Inc., LGE000281 Exp. 12/31/2024