He notes that some parts of the portfolio could benefit from rising rates because such an increase signals an economic expansion, which often bodes well for gold and commodity prices. And the trough for commodities could bottom out if demand for energy and industrial commodities accelerates.

The prospect for rising rates and economic growth came into clearer focus soon after the U.S. presidential election as Treasury yields rose and the possibility of an expansive new fiscal policy rekindled inflation expectations. There’s also the question of who will replace Fed Chair Janet Yellen when her term expires in February 2018. Given Trump’s harsh criticism of Fed policy during her tenure, he might appoint someone who is more likely to raise interest rates.

No matter what happens with a new administration, interest rates or the stock market, the fund will no doubt bypass all of it by hewing to its target allocations. Twenty percent of its assets are earmarked for gold, and another 5% is in silver. Cuggino sees the allocation as an insurance policy to anchor more traditional stock and bond assets and as a way to provide inflation protection. The fund holds both metals physically in bullion and coins rather than in ETFs, even though a number of ETFs closely track their prices. “We’re institutional investors, so we don’t need to have a middleman of an ETF involved,” he explains.

Another 10% is earmarked toward Swiss franc assets, including demand deposits of Swiss francs at Swiss and non-Swiss banks, as well as highly rated bonds and other securities issued by the Swiss government. This part of the portfolio serves as an offsetting hedge against a decline in the U.S. dollar and provides a balance against dollar-denominated assets. While the dollar, euro and many other global currencies are subject to political and devaluation pressures, he says, the Swiss franc is less susceptible to such manipulation and the Swiss National Bank has a history of protecting its value.

Fifteen percent of the fund goes toward U.S. and foreign real estate and natural resource stocks. The group includes real estate investment trusts (REITs), as well as companies involved in the mining and exploration of natural resources and metals. Fifteen percent is in aggressive growth stocks, and 35% is targeted toward U.S. Treasury securities and high-quality bonds of flexibly managed duration. The latter group provides protection during periods of recession or deflation, when bond prices tend to go up and yields fall.

Because investment prices are constantly changing, the portfolio’s holdings may not match exactly the target percentages. When the deviation exceeds more than one-quarter of the target percentage, the fund will buy or sell investments to correct the discrepancy within 90 days unless changing market prices bring allocations back in line with targets. The bond portion of the portfolio has strayed furthest from its target lately, accounting for 25% of assets as of September 30, while its target is 35%. Cuggino made the decision to underweight because of his concerns about rich fixed-income valuations and rising interest rates. Those concerns also led him to trim the duration of the bond portion of the portfolio, which consists of Treasury securities and short-term investment-grade corporate bonds, to about four years.

Cuggino won’t predict whether the economic and market uncertainty that has historically helped his fund look better than the competition will return in 2017 and beyond. But he observes that investors concerned about the aging bull market in stocks and bonds appear to be more open to multi-class investing than they were a few years ago. Some former investors in the fund have already come back, and he anticipates word about it will spread to new ones.

“The market seems to be cycling back to an environment more conducive to multi-class investing,” he says. “I think investors are starting to recognize that.”

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