TACK Portfolio Manager Commentary – December 2025

Core Insights - The Fairlead Tactical Sector ETF (TACK) employs a model-driven approach based on technical analysis to adapt to various market conditions, focusing on long-term trends and major reversals [1] - TACK aims to leverage sector leadership while minimizing risk during market downturns through strategic asset allocation [1] Market Performance - In November, the SPDR® S&P 500 ETF (SPY) experienced a decline of 5.76% from its October high but recovered to finish the month with a total return of 0.20%, while TACK ended nearly unchanged at -0.04% [2] - Significant sector-level shifts were observed, particularly with the Technology Select Sector SPDR® Fund (XLK) declining by 4.81%, indicating a potential transition within the technology sector [3] Risk Management and Strategy Adjustments - Increased market volatility is seen as the beginning of a significant correction, with weakened intermediate-term momentum and deteriorating breadth, prompting a focus on risk management as 2025 approaches [4] - In response to rising risks, TACK adjusted its allocation from the Financial Select Sector SPDR® Fund (XLF) to the more defensive Health Care Select Sector SPDR® Fund (XLV) [5] Sector Performance - The Health Care Select Sector SPDR® Fund (XLV) achieved a total return of 9.30% in November, marking its fourth-strongest month since inception, suggesting a bullish momentum shift for the healthcare sector [6] - The Moving Average Convergence/Divergence Indicator (MACD) recently signaled a 'buy' for XLV, indicating a positive long-term momentum shift and a reversal of the previous downtrend [7] Relative Performance Outlook - XLV's performance in November led to strong outperformance compared to SPY, with expectations for better relative performance for XLV and its underlying healthcare stocks in 2026 [8]