Probabilities Fund Management LLC, a San Diego-based registered investment advisor established in 2007 serves as manager of the Probabilities Fund (PROTX), a liquid alternative mutual fund.
The fund strategy and overall investment philosophy was developed by Joseph Childrey, the firm’s Founder & Chief Investment Officer, and incorporates the principles of behavioural finance and trend following.
Other key executives within the firm include: Jonathan Chatfield CFA, Chief Portfolio Manager; Jeffrey Hirsch, Chief Market Strategist; Christopher Mistal, Director of Research, Mary Gray, Chief Operating Officer, Allie Davari, Director of Training and Development, Robert Ausdal, CFA, Partner and Allen Shepard, PhD, Partner.
With respect to the Probabilities Fund, its mandate is to seek capital appreciation by systematically investing to gain long, short or leveraged exposure, primarily to the S&P 500, through Index ETFs. This is to obtain dynamic exposure to the US stock market.
Broadly speaking, the Fund takes a long position in the market approximately 45 per cent of the time; it holds cash approximately 30 per cent of the time; it uses leverage approximately 20 per cent of the time, and it takes a short position approximately 5 per cent of the time.
The strategy employs a systematic approach utilising seasonal trends and patterns, many of which are discussed in depth in the Stock Trader’s Almanac, that have historically had a statistically significant impact on stock market returns.
The strategy’s historically low correlation and low beta may provide diversification benefits to traditional portfolio allocations. Formerly a hedge fund available only to accredited investors, founded January 1, 2008, the Fund converted to an open-ended mutual fund at the end of 2013.
The Fund aims to stay out of the market during periods when there is a high probability of downside risk, and to be in the market during periods when there is a high probability of upside reward. Visit www.probabiltiesfund.com for performance.
Commenting on the market environment in 2017, Childrey remarks: “As the market climbs the wall of worry, there will always be rank and file “this time is different” events to consider. We strive to provide non-correlated alpha over the long run, based on historical trends and patterns that have stood the test of time. We think this rules-based approach is the way to go to complement a well thought out long only portfolio”
On winning this year’s award for Best Liquid Alternatives ’40 Act Fund, he concludes: “We are pleased to have won this award and believe it is indicative of our people, philosophy, process and audited performance over the last ten years. We thank everyone involved with our firm for the opportunity to serve our shareholders”.
