Catalyst Funds, an alternative-focused mutual fund company, is converting a fifth hedge fund product – the Catalyst/Millburn Hedge Strategy Fund (MBXIX) – to a mutual fund.
It is the latest alternative offering from Catalyst that brings an investment strategy once only available to accredited investors to the retail marketplace. Since the fund’s inception in 1997, it has generated an 11.36 per cent net annualised return compared to 7.44 per cent for the S&P 500 TR Index.
MBXIX trades a diverse portfolio of global equity, currency and interest rate instruments, as well as futures contracts on commodities in the energy, metal and agricultural sectors. The fund implements a 100 per cent systematic strategy with the potential to invest in over 125 markets. MBXIX is sub-advised by Millburn Ridgefield Corporation and maintains the same investment management team as its hedge fund predecessor.
“Catalyst is committed to bringing unique investment strategies to the retail mutual fund marketplace, and this latest conversion speaks directly to that commitment,” says Jerry Szilagyi, CEO of Catalyst Funds. “MBXIX has achieved consistent performance over the last 19 years with only one down year, including positive returns in 2000, 2001, 2002 and 2008. Now in its mutual fund form, this proven investment strategy is available to investors who would otherwise not have access to it.”
The fund's portfolio is comprised of two distinct components: Active Long/Short Futures & FX and Strategic Equity Exposure. The former yields a portfolio of global liquid instruments and strategies that historically have performed in periods of stress for equities. The active long/short futures and forward positions in currency, fixed income, stock index and commodity instruments are determined by multi-factor, quantitative and systematic trading and investment strategies, which respond to different market conditions.
The Strategic Equity Exposure Component yields a relatively passive portfolio of global and US exchange traded funds (ETFs). The equity positions generally consist of relatively passive buy-and-hold strategies with the goal of maximizing diversification as determined primarily by correlation and risk analysis.
