FUNDX: Celebrating Ten Years
Dear Fellow Shareholders,
This quarter we look forward to celebrating the 10th anniversary of our first FundX Upgrader Fund, and we have much to be grateful for. While economic growth is weak and markets are as volatile and changeable as we’ve ever seen, we have a proven discipline that has helped thousands of investors navigate the storms.
We’ve been developing our Upgrading investment strategy for years — Burt Berry registered as an investment advisor in 1969 to professionally manage client accounts using noload funds—but it wasn’t until we launched FUNDX in 2001 that all investors could buy an actively Upgraded portfolio in one simple purchase.
Over the past 40 years we’ve seen good markets and bad, and the past ten years have certainly been the most challenging. We launched our first fund soon after the tech bubble burst and stock markets sank. It was relatively smooth sailing from 2003 to 2007 with a long trend of international leadership, then the financial crisis hit and all sectors and regions tanked.
Ten years ago, I was saving for my children’s education. In 2001, my girls were 10 and 11 years old and I opened accounts for both in FUNDX. The Fund enabled me to have a separate, globally diversified and actively managed portfolio for each girl that I could add to with one simple purchase. As they turned 18, my girls became responsible for their own accounts and the Upgrader funds gave them choices to learn to balance their accounts. Now they are 20 and 21, in college and working, so they’ve opened Roth IRAs in the Upgrader funds – globally diversified and actively managed even in the smallest accounts.
I am also a FundX Upgrader Fund shareholder: I own all eight of the Upgrader funds in my personal, IRA and 401k accounts so that I know my portfolios are actively Upgraded each month.
Although in this issue, we look back at the last decade, we also remain focused on the future. We continue to evolve and respond to changing market environments and are committed to offering solutions that will help our clients achieve their goals. As disciplined, opportunistic investors, we know that no trend lasts forever, just as no tree grows to the sky. Many trends last longer than we may expect, and, as trend followers, we face some false starts and occasional whip-saws. That said, we believe that the most fundamental component of a successful long-term investment strategy is the ability to be flexible and adapt to changing markets. Of course, this only matters if you also have the fortitude to follow your strategy in a disciplined way.
While the current economy poses one of the most challenging periods we have witnessed, our experience tells us that this, too, will likely pass.
We’re grateful for your continued support.
Janet M. Brown, President
Diversification does not assure a profit nor protect against loss in a declining market.
Small-and medium-capitalization companies tend to have limited liquidity and greater price volatility than large-capitalization companies.
Investments in foreign securities involve greater volatility and political, economic and currency risks and differences in accounting methods.
Investments in debt securities typically decrease in value when interest rates rise.This risk is usually greater for longer-term debt securities.
ETF Trading Risk – Because the funds invest in ETFs, they are subject to additional risks that do not apply to conventional mutual funds, including the risks that the market price of an ETF’s shares may trade at a discount to its net asset value (“NAV”), an active secondary trading market may not develop or be maintained, or trading may be halted by the exchange in which they trade, which may impact a Fund’s ability to sell its shares.
Additional Risks Associated with the FundX Tactical Upgrader Fund and FundX Tactical Total Return Fund:
Non-Diversification Risk –The Underlying Funds may invest in a limited number of issuers and therefore may be considered non-diversified.
Short Sales Risk –The Underlying Funds may engage in short sales, which could result in such a fund’s investment performance suffering if it is required to close out a short position earlier than it had intended.