Tag Archives: brian-haskin

American Beacon Launches Multi-Manager Long/Short Fund

By DailyAlts Staff Multi-manager alternative mutual funds often give retail investors access to managers that were previously exclusive to institutions and high-net-worth individuals. The recently launched American Beacon Grosvenor Long/Short Fund (MUTF: GSVAX ) is one such fund, as it pursues a long/short global equities strategy under the guidance of GCM Grosvenor, one of the largest and most diversified independent alternative asset management firms in the world. “Providing our clients access to alternative sources of diversification has been a focus for American Beacon as we’ve looked to evolve our product line,” said American Beacon CEO Gene L. Needles, Jr., in a recent statement. “Our collaboration with GCM Grosvenor, one of the world’s most experienced and well respected hedge fund investors, on this new fund is another example of that strategy at work.” The new fund’s objective is to provide investors with long-term capital appreciation with a “balanced risk profile” intended to complement traditional long-only equity investments. The fund’s flexible mandate and multi-manager structure are intended to increase performance consistency and to dampen portfolio volatility. Grosvenor’s Director of Investments David Richter, Head of Portfolio Management Bradley Meyers, and Vice President Keith Friedman are the fund’s portfolio managers. Richter, Meyers, and Friedman have been in the industry since 1994, 1999, and 2002, respectively, and they will allocate the fund’s investments across the following underlying sub-advisors: Basswood Capital Management Impala Asset Management Incline Global Management Passport Capital Pine River Capital Management River Canyon Fund Management Tremblant Capital Group “Our specialized investment team is among the largest and most experienced in the industry, and this fund’s underlying hedge fund managers have strong capabilities in long/short investing,” said GCM Grosvenor CEO Michael Sacks. “This is a tremendous opportunity to deliver an exciting investment solution to the marketplace.” Shares of the fund are available in A ( GSVAX ), C (MUTF: GVRCX ), Y (MUTF: GVRYX ), institutional (MUTF: GVRIX ), and investor (MUTF: GVRPX ) classes. The investment management fee across all share classes is 1.55%, while A, C, and Y shares have respective net-expense ratios of 2.97%, 3.72%, and 2.67%; and institutional and investor class shares have respective fees of 2.57% and 2.97%. A and investor-class shares have an initial minimum investment of $2,500. The initial minimums for C and Y shares are $1,000 and $100,000, respectively, while the minimum for institutional shares is $250,000. For more information, download a pdf copy of the fund’s prospectus .

Guggenheim Launches Equal-Weight Real Estate ETF

By DailyAlts Staff S&P Dow Jones Indices divides the U.S. stock market into ten sectors: Consumer-discretionary, consumer-staples, energy, financials, health care, industrials, materials, technology, telecommunications, and utilities. Real estate investment trusts (“REITs”) and other real estate-related stocks are currently included within the financial sector, but that will change next year , when S&P Dow Jones will break real estate out into an eleventh sub-sector of the S&P 500. Guggenheim Investments, which already has 14 equal-weight “smart beta” ETFs, is staking its claim on the new sector well in advance of its September 2016 debut with the launch of the Guggenheim S&P 500 Equal Weight Real Estate ETF (NYSEARCA: EWRE ). There are currently at least 33 real estate index funds on the market, but most – like the market-leading Vanguard REIT ETF (NYSEARCA: VNQ ) – are market cap-weighted. As a result, Simon Property Group (NYSE: SPG ), by far the U.S.’s largest REIT, dominates many of these other products. But within the Guggenheim S&P 500 Equal Weight Real Estate ETF, the nearly $60 billion SPG makes up just 1/25 of the fund’s holdings, which include the 25 S&P 500 stocks currently classified in the GICS real estate group, excluding mortgage REITs. The danger of market cap-weighted indexes and funds is that overvalued components are overweighted, and undervalued components are underweighted. The Guggenheim S&P 500 Equal Weight Real Estate ETF, by contrast, practices disciplined, systematic rebalancing to reallocate from outperforming to underperforming stocks, thereby potentially capitalizing on the mean-reverting characteristic of securities and ensuring that no single stock dominates the fund’s performance. This difference in weighting does result in both risk and return differences, and equal weighted funds end up having more exposure to stocks with small capitalizations, thus resulting in a small cap bias. How does this play out in performance terms? The following chart from the S&P Dow Jones website compares the equal and cap weighted REIT indices from S&P Dow Jones (see their website for additional disclosures): As of Aug. 31, 2015. All information for an index prior to its Launch Date is back-tested, based on the methodology that was in effect on the Launch Date. While the above comparison is not a pure apples to apples comparison (the S&P United States REIT Index is cap weighted, but includes REITS from all cap ranges, while the Equal Weight Index includes only REITS in the S&P 500 Index), the performance of the indices do bear out some differences over time. “The time-tested equal weight strategy can help long-term performance by reducing the bias towards the largest individual companies within a particular cap-weighted strategy,” said William Belden, Guggenheim’s Managing Director of Product Development, in a recent statement. “An equal-weight approach also may enhance portfolio diversification by reducing concentration risk often found in cap-weighted indices and provide a more balanced exposure across market capitalizations.” For more information, visit the fund’s webpage . Past performance is not necessarily indicative of future performance

Fund Watch: New Long/Short Fund, Liquidation Of Risk Parity Fund

In this abbreviated edition of Fund Watch, we look at one new fund in registration: the Brown Advisory Equity Long Short Fund; and a fund in liquidation: the Parametric Balanced Risk Fund. New Long/Short Fund in Registration Brown Advisory Funds filed paperwork with the SEC on August 14 announcing its plan to launch the Brown Advisory Equity Long Short Fund. The fund, which is expected to debut 75 days after the filing date (roughly October 28), will be managed by the Brown Advisory equity research team, led by the firm’s head of investments Paul J. Chew. The Brown Advisory Equity Long Short Fund’s objective will be to provide long-term capital appreciation. Its investment strategy involves buying stocks the advisory team deems undervalued, and short-selling stocks the team thinks are overvalued. Under normal circumstances, the fund’s net-long exposure is expected to range from 30% to 80%. Its “flexible equity” strategy will invest across market capitalizations, sectors, and geographic markets. Shares of the new fund will be available in investor-, institutional-, and advisor-class shares, with respective net-expense ratios of 2.09%, 2.24%, and 2.49%. The minimum initial investment will be $5,000 for investor-class shares, $1 million for institutional shares, and $2,000 for advisor-class shares. Liquidation of Balanced Risk (“Risk Parity”) Fund According to paperwork filed with the SEC on August 11, the Board of Trustees of the Eaton Vance Growth Trust voted to liquidate the Parametric Balanced Risk Fund (MUTF: EAPBX ) at an August 10 meeting. The fund will cease taking investments from new shareholders on August 21 and is expected to be fully liquidated by August 28. The Parametric Balanced Risk Fund, which debuted less than two years ago, generated one-year returns of -8.74% through July 31, ranking in the bottom 3% of funds in its Morningstar category. From its September 25, 2013 inception through the August 11, 2015 board meeting that sealed its fate, the fund lost about 4% of its value, with a $10,000 investment at its inception falling to a value of $9,601.23, according to Morningstar.