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As of this writing, DunhamDC - our globally diversified strategy - triggered a SELL signal on April 14, responding to the sharp rebound in markets.

What’s driving the rebound?

• Potential tariff relief on key tech goods lifted investor optimism, boosting major tech names¹.
  
  
• Talk of pausing auto tariffs sparked gains in automakers.
  
  
• Hints of potential Fed rate cuts helped reassure markets amid lingering trade tensions².

Recent DunhamDC Strategic Moves:

• Early March – BUY signal as markets declined, increasing equity exposure at more attractive valuations.
  
  
• Early April – Another BUY signal triggered in response to market fear, followed by a second BUY the next day as the sell-off deepened.
  
  
• Mid-April – First SELL signal of the year, locking in gains as markets rebounded and sentiment shifted to exuberance.

DunhamDC Allocations
As of April 15th, 2025 to present

Figure 1: Dunham 2025

CIO Thoughts: Managing Through Market Chaos

by Ryan J Dykmans, CFA
Chief Investment Officer (CIO), Dunham & Associates Investment Counsel, Inc.

At the beginning of Q2 (April 1), we released our Dunham Quarterly Pulse, providing insights into the global economy, market developments, the Dunham Investment Committee’s outlook, and current portfolio allocations.

Since then, volatility - driven by public policy and market uncertainty - has only increased.

What’s Driving the Current Market Turbulence?

Since President Trump’s return to office, policy shifts and announcements have come fast and hard.

As a result, we have seen turbulence in the markets intensify - not solely because of policy content, but because of uncertainty around the policy timing, implementation, and duration.

Such an environment has driven sharp daily reactions - often more emotional than fundamental.

Markets are now frequently moving not on hard data but on perception and political rhetoric. And with the sheer breadth of policy initiatives and the speed of implementation, we believe volatility will remain a defining feature of the global financial markets.

Positioning for What’s Potentially Ahead

Looking forward, we expect continued volatility in equity markets. That does not mean abandoning risk assets, but it does mean being actively selective while remaining diversified.

Across our models:

• We remain overweight value vs. growth
• Maintain a balanced foreign vs. domestic equity allocation
• Monitor credit and interest rate risk closely within fixed income

On the bond front, Fed Chair Powell’s balancing act - taming inflation while supporting employment - remains a critical variable.

We believe rates may stay elevated longer than the market expects, and the path to lower rates will likely be just as volatile.

Now, for most investors, this level of market whiplash can be deeply frustrating.

But for Dunham DC, it may present an intriguing opportunity.

Why We Built DunhamDC

DunhamDC is built to act when most investors sell out of panic and fear - and to step back during times of market exuberance.

It systematically adjusts equity exposure based on market conditions: increasing exposure when prices fall, and reducing it as markets rise. Importantly, it does this without chasing headlines or making predictions.

This is not a market-timing model. It doesn’t try to call tops or bottoms. Instead, it follows a repeatable, math-driven process grounded in discipline, time, and emotional neutrality.

Each portfolio is tailored to the client's chosen risk tolerance and includes U.S. and global variants, allowing flexibility across a wide range of client goals.

How Dunham DC Responds to Volatility

Unlike models that constantly re-allocate based on headlines or hunches, Dunham DC uses a systematic and unemotional quantitative approach.

Coming into 2025, the strategy maintained a broad underweight to equities as markets had rallied.

• For example, the S&P 500 reached a record high on January 23, 2025. At that point, DunhamDC US (“DC US”) - the U.S.-focused strategy - held just 33% equity exposure, compared to the typical 60% in a standard 60/40 portfolio.
  
  
• This underweight position meant DC US had less exposure at the market peak, helping cushion potential losses as markets pulled back - and provided flexibility to increase equity exposure at more attractive, lower prices.

However, as markets declined and volatility spiked in early March - and again during recent turmoil - our models triggered multiple buy signals, leading to increased equity exposure.

Put simply, when fear takes over, DunhamDC sets emotions aside and opportunistically adjusts to take advantage of market sell offs. And vice versa during exuberant markets.

What to Expect - and What to Watch

The DC strategy is not immune to drawdowns, and it does not guarantee positive results. But it does offer a disciplined, data-driven alternative to emotional decision-making.

As the market continues to react to political noise and policy shifts, we believe Dunham DC is positioned to take advantage of these dislocations - buying into fear, selling into greed, and sidestepping the emotional traps that plague so many investors.

For financial advisors, the message is clear: in an era of heightened volatility, process matters.

And Dunham DC was built for exactly this kind of market.

Want to Learn More?

• Download our DunhamDC Strategy Brochure
  
  
• Read our "Who Is Mr. Market?" One-Pager
  
  
• Connect with our Business Development Team via email or (858) 964-0500 for insights into our latest investment strategies.

Sources:

1. Stock Investors Cheer Tariff Exemptions - WSJ
2. Stock Market Today: Dow Jones Up As Fed Gov. Waller Says This On Rate Cuts; Palantir Surges, Fights For Key Level (Live Coverage) | Investor's Business Daily

Disclosures:

This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax or investment advice or an investment recommendation. Any investment products or services named herein are for illustrative purposes only, and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy or investment product or service. Always consult a qualified professional or your own independent financial professional for personalized advice or investment recommendations tailored to your specific goals, individual situation, and risk tolerance.

Investors should consider the investment objectives, risk factors, charges, and expenses of the Dunham Funds carefully before investing. This and other important information is contained in the Fund's summary prospectus and/or prospectus, which may be obtained by calling (800) 442-4358. Please read prospectus materials carefully before investing or sending money. Investing involves risk, including possible loss of principal.

Past performance may not be indicative of future results. 

No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. There may be economic times where all investments are unfavorable and depreciate in value.

DunhamDC (“DunhamDC”) is a proprietary algorithm of Dunham & Associates Investment Counsel, Inc. (“Dunham”) that seeks to mitigate sequence risk, which poses a threat to an investor's returns due to the timing of withdrawals. The algorithm employs what Dunham considers to be a pragmatic strategy, generally making incremental increases to the equity allocation when global stock market prices decrease and decreasing it when global stock prices increase. This approach is objective, unemotional, and systematic. Rebalancing is initiated based on the investment criteria set forth in the investors application and is further influenced by the DunhamDC algorithm.

Due to the large deviation in equity to fixed income ratio at any given time, investor participating in DunhamDC understands that a large deviation in equity to fixed income ratio can have significant implications for the risk and return profile of the account. Accordingly, during periods of strong market growth the account may underperform accounts that do not have the DunhamDC feature. Conversely, during periods of strong market declines, the account may also be underperforming, as the account continues to decline, due to the higher exposure in equities. Similarly, if the fixed income investments underperform the equity investments, it is possible that the accounts using the DunhamDC feature may underperform accounts that do not have the DunhamDC feature, even though they may have adjusted the exposure to equity investment before a decline. Therefore, the investor must be willing to accept the highest risk tolerance and investment objective the account can range for the selected strategy. Please see the Account Application for the various ranges.

DunhamDC uses an unemotional, objective, systematic approach. The algorithm does not use complex formulas and is designed to create a consistent process with limited assumptions based on historical data.

DunhamDC may make frequent purchases and redemptions at times which may result in a taxable event in the account and may cause undesired tax-related consequences.

Trade signals for DunhamDC are received at the end of each trading day with the implementation of the trades not occurring until the next business day, which means that there is a one-day lag that may result in adverse prices.

DunhamDC operates within predefined parameters and rules, some or all of which may not be available to review. While this approach can reduce emotional biases and enhance consistency, it may limit adaptability to changing market conditions, economic considerations, or unforeseen events. Extreme conditions may require deviations from the program’s prescribed approach, and such adaptability may be challenging to incorporate. The DunhamDC algorithm is programmed based on specific criteria and rules, it may not capture certain qualitative or contextual factors that can impact investment decisions or movement in the markets. Beyond the initial assumptions used to develop the algorithm, it lacks other inputs or considerations that human judgement and discretion may be necessary to evaluate. DunhamDC may utilize historical data, statistical analysis, and predefined rules. It does not make any predictions and may add to certain investments before they perform poorly or may divest from other investments before they perform well. Dunham makes no predictions, representations, or warranties as to the future performance of any account.

Accounts invested in DunhamDC are subject to a quarterly rebalance to its target allocation at the time based on DunhamDC in addition to the signals provided by DunhamDC at any given time.

If the variance between any Dunham Mutual Fund’s target percentage of the total account value compared to the current percentage of the account value is greater than 1.00% at the time of the trigger point, the account in DunhamDC will be updated to the new target allocation.

Accounts invested in DunhamDC may contain non-Dunham Mutual Funds, which may materially impact if the account is being rebalanced at the trigger point.

Dunham makes no representation that the program will meet its intended objective. Market conditions and factors that influence investment outcomes are subject to change, and no program can fully account for all variables and events. The program requires making investment decisions based on factors and conditions that are beyond the Account Owner’s and Dunham’s control.

DunhamDC is NOT A GUARANTEE against market loss or declines in the value of the account or a timing strategy. Investor may lose money.

Asset allocation models are subject to general market risk and risks related to economic conditions.

DunhamDC has a limited track record, with an inception date of November 30, 2022.

DunhamDC has a limited track record, with an inception date of July 31, 2024.

Risk Disclosures. An investment in the strategies and the Dunham Funds involves risks. For the Primary Risks of the Dunham Funds, please see: https://dunham.com/disclosures/dunhamfundsrisks.pdf

As the Distributor/ Adviser of the Dunham Funds, Dunham & Associates Investment Counsel, Inc. receives a separate fee.

Dunham & Associates Investment Counsel, Inc. is an independent investment adviser and broker/dealer registered under the Investment Advisers Act of 1940. Registration does not imply a certain level of skill or training.

Dunham & Associates Investment Counsel, Inc. is a Registered Investment Adviser and Broker/Dealer. Member FINRA/SIPC. Advisory services and securities offered through Dunham & Associates Investment Counsel, Inc.