Donoghue Forlines Momentum VIT Fund
Fund Goal
The Donoghue Forlines Momentum VIT Fund’s investment objective is capital growth with a secondary objective of generating income.
Potential Benefits
- Risk-Adjusted Momentum
- Sector Diversification
- Equal Weighting
- Quarterly Rebalancing
- Quarterly Reconstitution
- Tactical Overlays
There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses.
Index Selection Process
Universe of 1000 Large to Mid-Cap Stocks
High Risk Adjusted Momentum Stocks with
Sector Neutral Exposure
Quality Oriented Screens
50 Stocks Equal Weighted
50% Shorter Term Exponential Moving Average Crossover
50% Longer Term Exponential Moving Average Crossover
100% Stocks or 50%
100% Defensive Position
Performance as of 9/30/2024
| Fund Name | Momentum VIT (Class 1 Shares) |
Russell 1000 |
|---|---|---|
| YTD | 21.76% | 21.18% |
| 1Y | 35.18% | 35.68% |
| 3Y | 6.40% | 10.83% |
| 5Y | 8.21% | 15.64% |
| 10Y | 7.11% | 13.10% |
| Since Inception (05/01/2007) |
6.38% | 10.18% |
The performance data quoted here represents past performance. Current performance may be lower or higher than the performance data quoted above. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that investor’s shares, when redeemed, may be worth more or less than their original cost. For performance information current to the most recent month-end, please call toll-free 877-779-7462.
The fund is an investment vehicle for variable annuity contracts and may be subject to fees or expenses that are typically charged by these contracts. Please review the insurance contract prospectus for further description of these fees and expenses. This product is available as a sub-account investment to a variable life insurance policy only and is not offered directly to the general public. The below table describes the annual operating expenses that you pay indirectly if you invest in the Fund through your retirement plan or if you allocate your insurance contract premiums or payments to the Fund. However, each insurance contract and separate account involves fees and expenses that are not described here. If the fees and expenses of your insurance contract or separate account were included in this table, your overall expenses would be higher. You should review the insurance contract prospectus for a complete description of fees and expenses.
Annual Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
| Expense | Class 1 Shares |
|---|---|
| Management Fees | 1.00% |
| Distribution & Shareholder Service (12b-1) Fees | 0.25% |
| Other Expenses | 0.31% |
| Acquired Fund Fees & Expenses | 0.04% |
| Total Annual Fund Operating Expenses | 1.56% |
Index Selection Process Details
The adviser seeks to achieve the Fund’s objectives by seeking to track the FCF Risk Managed Sector Neutral Momentum Index (“Momentum Index”) that provides a formulaic methodology for allocating investments between securities of issuers who demonstrate higher free cash flow and positive momentum and short-term treasuries (maturity of 1 to 3 years).
The methodology of the Momentum Index is designed to convey the benefits of high free cash flow and momentum, sector diversification and equal weighting. In seeking to track the Momentum Index, the adviser buys equity securities in the Fund as described below when the index’s indicators are positive and sells them when its indicators are significantly negative. As described above, the Fund will invest in as many as 50 equity securities. The Momentum Index is reconstituted and rebalanced quarterly during March, June, September, and December.
The Momentum index establishes an equity portfolio consisting of up to 50 equity securities based on a combined profitability rank (measured by free cash flow over total equity) and momentum rank (measured by total return over standard deviation of weekly total return) from the constituents of the Russell 1000 Index and a U.S. Treasury portfolio consisting of short-term treasury ETFs. Free cash flow is the amount of cash a company produces after paying for operating and capital expenses. Only companies with positive free cash flow and meeting an average daily traded volume minimum over the previous six months are eligible for inclusion in the Momentum Index. Upon selection each security will receive an equal weighting with sector weightings based on the current FactSet RBICS sector weights of the Russell 1000 Index. If there are not enough eligible securities within a sector, inclusion will be stopped for that sector at the number of eligible securities. The Momentum Index then applies the Adviser’s defensive tactical overlays as described above.
Investment Committee
John A. Forlines, III • Jeffrey R. Thompson • Richard E. Molari • Nick Lobley
Investment Advisor to the Fund
Donoghue Forlines LLC is a tactical investment firm that has specialized in risk-managed portfolios since 1986. Our tactical strategies are based upon rigorous analysis of decades of historical data. The Donoghue Forlines Funds utilize technical indicators to recognize shifts in market momentum and uses proprietary tactical signals to help mitigate losses in down trending markets and potentially offer strong client-centric riskadjusted returns over a full market cycle.
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Regarding the Morningstar Rating:
© 2021 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar RatingTM for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. Morningstar Rating is for the I share class only; other classes may have different performance characteristics.
As of 12/31/21, the Fund received a 3 year rating of 2 stars out of 247 funds, a 5 year rating of 4 stars out of 210 funds, and a 10 year rating of 5 stars out of 108 funds in the US Fund Tactical Allocation category.