Tag Archives: sgfax

The long/short “hedged” fund was pioneered in the late 1940s in response to the economic tumult of the prior two decades. The idea behind it was to reduce exposure to the fluctuations of the “market” by partially offsetting long positions with short ones. If the stock picker was good, this meant the fund could outperform during bull and bear markets, and the downside during the latter would be mitigated. Strategic Asset Management’s First Fund Global long/short equity funds take things a step further than Alfred Jones, “hedged” fund originator, was able to take them in 1949, when investors were largely constrained by national borders. Rather than limiting themselves to U.S. equities, global long/short equity funds are open to investments from all over the world, and the Strategic Global Long/Short Fund (MUTF: SGFAX ), just launched on February 23, employs this strategy with a split “value/growth” approach. The new fund is advised by Strategic Asset Management, Ltd., a Cayman Islands corporation, and its portfolio manager is Mauricio Alvarez, Chief Executive Officer of the Adviser. This appears to be the company’s first U.S. mutual fund. The fund’s investment objective is twofold: First, to provide attractive returns through a combination of long-term capital appreciation and current income. Secondarily, to preserve capital in down markets. In pursuit of these objectives, the fund takes long and short positions in U.S. and foreign equities across all capitalization levels, with at least 40% of assets invested in companies generating a majority of their revenue outside the U.S. Global Long/Short Exposure The fund’s long exposure is expected to range from 100% to 140%, with the use of leverage; while its short exposure is expected to range from 0% to 40%. This will leave the fund with a relatively high beta compared to other long/short equity funds. The average beta, relative to the S&P 500 Index, for funds with a track record of 3-years or more is 0.53. On the long side, a “top-down” security selection process is used to identify undervalued equities and/or equities with favorable growth characteristics. On the short side, the fund focuses more keenly on firms with deteriorating growth. Currently, the fund is available in A-class shares only, which have a 1.97% net-expense ratio and a $1,000 initial minimum investment. The prospectus also refers to C-class shares, but doesn’t list a ticker symbol. Their intended net-expense ratio is 2.72%, and they have the same $1,000 initial minimum. For more information, view the fund’s prospectus .