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By DailyAlts Staff Mutual funds are closed for a variety of reasons, but the most common is probably a lack of sufficient investor interest, normally as the result of poor performance. On the opposite end of the spectrum, funds that become too popular and command too much investor interest must close themselves to new investors to avoid exceeding the maximum capacity of their strategies. This latter type of fund closing is known as a “soft closing,” and two alternative funds – the Catalyst Hedged Futures Strategy Fund (MUTF: HFXAX ) and the 361 Managed Futures Strategy Fund (MUTF: AMFZX ) – recently joined the ranks of funds that have gotten too popular to continue taking investors’ money. Catalyst Hedged Futures Strategy Fund The $1.6 billion Catalyst Hedge Futures Strategy Fund debuted as a private fund way back in 2005 and was subsequently converted to a mutual fund by Catalyst in August 2013. As of August 31, the fund’s year-to-date returns of 7.61% ranked in the top 10% of funds in the Morningstar Managed Futures category, and the fund has shone particularly bright over the past six months, generating gains while most of its peers were in the red. Undoubtedly, this stellar performance contributed to increased interest in the fund, which Catalyst says is “rapidly approaching capacity.” As a result, the Catalyst Hedged Futures Fund will be closed to new investors starting October 31, 2015. Closing the fund will help Catalyst “maintain the integrity of the strategy” and not sacrifice performance, according to a statement. The fund’s existing shareholders – and possibly advisors – will be “grandfathered in” and allowed to add more money to the fund, while prospective new shareholders will have to wait for a “Part 2” version of the fund, set to be ready “in the coming weeks.” The “Part 2” fund will pursue a very similar strategy to the original fund, which distinguished itself from other managed futures funds by being 100% options-based. The new fund will be of interest to investors concerned about a repeat of the 2008 financial crisis, as the original Catalyst Hedged Futures Fund gained nearly 50% during that period, thanks to its virtually nonexistent correlation to stocks and bonds. For more information, visit catalystmutualfunds.com . 361 Managed Futures Strategy Fund Investors interested in gaining exposure to managed futures via the 361 Managed Futures Strategy Fund , which returned 7.87% in the first eight months of 2015 and ranked in the top 8% of funds in its Morningstar category, have until September 30 to jump on board – after that date, the fund will cease taking money from new investors. “Since our founding in 2001, we’ve endeavored to be excellent stewards of our clients’ capital,” said 361 Captial CEO Tom Florence, in a recent announcement. “With that in mind, we’ve put forth great effort into measuring the capacity of our strategies, in order to ensure that asset growth doesn’t degrade return potential.” Like the Catalyst Hedged Futures Strategy Fund, the 361 Managed Futures Strategy Fund will remain open to existing investors. The fund had just over $1 billion in assets under management as of September 8, and the 361 investment team feels that a “soft close” allows capacity for existing clients, but keeping the fund open for new investors would risk hampering performance. One of the features that makes the 361 Managed Futures Strategy Fund so attractive is the low correlation it has exhibited to major asset classes. According to 361 Capital, the fund has had negative correlations to foreign (-0.07) and domestic equities (-0.15), and very low correlations to bonds (0.22), real assets (0.05), and even other managed futures strategies (0.10), from its December 2011 inception through June 30, 2015. For more information, visit the fund page at 361 Capital . Past performance is not necessarily indicative of future performance. Scalper1 News
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