Catalyst Funds, an alternative-focused fund company, has launched the Catalyst/Teza Algorithmic Allocation Income Fund (TEZIX), which utilises an algorithmic machine learning technology designed by sub-advisor Teza Investments, to invest in globally diversified multi-assets with a target risk exposure of 9 per cent to 12 per cent portfolio volatility.TEZIX provides diversified exposure, with investments across up to 39 major global asset classes, including equity indexes, government bond interest rates and commodities such as energy, precious metals, base metals, agriculture and grains. The actively managed Fund uses a trading strategy based on a proprietary algorithm and rebalances positions and risk exposure, generally daily, in response to certain market conditions such as strong positive correlation between stocks and bonds or changes in that correlation. TEZIX’s strategy, which seeks long-term capital appreciation and current income, is designed to improve upon static risk models, which are rebalanced less frequently and, as a result, may deliver less consistent levels of risk exposure.
“As markets move into uncharted territory, with uncertainty abounding, multi-asset exposure is more important than ever,” says Jerry Szilagyi, CEO of Catalyst Funds. “The Catalyst/Teza Algorithmic Allocation Income Fund leverages the deep expertise of the Teza Investment team, along with a proven, sophisticated quantitative strategy to provide actively managed diversification across a wide span of assets. This diversified exposure, with the added benefit of machine learning insight, broadens a portfolio’s allocation, thus minimising the risk associated to any one asset class.”
TEZIX uses proprietary risk-scaling tools to dynamically reduce exposure to either long positions in equity index or government bond interest rate futures based on market conditions. The commodities portion of the strategy invests in long or short positions in commodities futures contracts.
Dr Mikhail Malyshev, PhD, former managing director and global head of high frequency trading at Citadel Investment Group, and D. Reinhold Gebert, PhD, serve as the portfolio managers of this Fund. The Catalyst/Teza Algorithmic Allocation Income Fund trades under the tickers TEZIX, TEZAX and TEZCX.
