About the Fund
World Class Research
We are a research-intensive firm that goes beyond accepting consensus view. By leveraging our relationships with institutional asset managers such as Alliance Bernstein, Barclays Capital and Goldman Sachs, we believe we are able to provide investors with a "best of breed" approach to investing.
The GMG Defensive Beta Fund employs investment strategies that combine traditional (stocks & bonds) and alternative (commodities & currencies) investments with the intent of giving investors access to a portfolio that has historically only been available to institutions or through hedge funds.
The portfolio management team of the GMG Defensive Beta Fund believe they have developed an investment methodology that may be the best way for individual investors to achieve long-term positive returns, while reducing short-term market volatility.
Invests defensively while focusing on capital appreciation
The GMG Defensive Beta Fund is very flexible in its investment approach. Our ability to invest in stocks, bonds and commodities to varying degrees, depending on our view of the market, allows GMG Defensive Beta Fund to be more defensive in its investment strategy than the "typical" mutual fund. Additionally, we are also able to take on defensive short positions, which benefit share holders when the market declines, as well as protect gains through certain option writing strategies.
Seeks to mitigate potential portfolio volatility without hampering the potential for long-term investment returns
The GMG Defensive Beta Fund is designed to lower overall portfolio volatility without hampering the potential for long-term investment returns. By providing investors with a fund that incorporates stocks, bonds, commodities and conservative options and strategies into a single portfolio, the portfolio managers believe they have developed an investment methodology that may be the best way for investors to achieve long-term positive returns, while reducing short-term market volatility.
Blends academic research with modern investment techniques
The portfolio management team of GMG Defensive Beta Fund is a research intensive group that goes beyond accepting consensus view. By leveraging our relationships with institutional asset managers such as Alliance Bernstein, Goldman Sachs, Black Rock and Barclays Capital, we believe we are able to provide investors with a "best of breed" approach to investing. Our research shows that by blending investment strategies that have historically only been available to institutions or through hedge funds, coupled with a conservative approach of investing in stocks and bonds, has the potential to provide superior risk-adjusted returns.
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Equity Based Strategy
- The portfolio managers will take a diversified approach to investing in equities that will include exposure to various market sectors, and capitalization, both domestically and internationally.
- In an effort to extract additional performance from the stock market, the portfolio managers will also employ a covered call writing strategy, as well as utilize various hedging techniques – including assuming “short” positions in the fund.
Commodity Based Strategy
- This strategy aims to protect the value of money by investing in the very assets which contribute a substantial proportion of inflation risk exposure. Investing in inflation bonds could be a viable solution – however the expected return of these bonds at best only covers overall CPI inflation.
- This strategy aims to outperform overall CPI inflation.
- This strategy may provide a relative safe haven in periods of financial market shocks.
Fixed Income Strategy
- This portion of the strategy is designed to balance out the volatility that is often associated with equity and commodity investment strategies.
- The portfolio managers of the fund will use a strategic approach to selecting various bonds and fixed income exposure. Dependent on the teams’ outlook and thematic view, this portion of the portfolio may focus on either or both capital appreciation opportunities as well as yield maximization strategies.
Currency Hedging Strategy
- Over the long run, equities outperform other asset classes. However, due to the increasing complexities and inter-dependence of the world's economies, the portfolio managers believe that currency risks could substantially increase overall portfolio volatility and risks. This strategy is designed to neutralize the negative impact that a declining currency may have on a portfolio. At times, this strategy may attempt to extract extra US Dollar denominated performance from international markets.
- This strategy aims to balance out the portfolio in a manner that will provide investors with a more stable absolute positive return in different market conditions.
Holdings and investment allocations within the fund are subject to change without notice to the investor. Although this Fund will normally invest its assets in a diversified manner, it may at the portfolio managers discretion be concentrated in a few securities, which could greatly increase the risk of the fund. The fund is likely to be invested in non-U.S. securities, which may entail greater risk due to foreign economic and political developments. The Fund will normally invest part of its assets into alternative investment strategies which may have greater risks than traditional assets such as U.S. Stocks and Bonds. Use of these instruments may involve certain costs and risks such as liquidity risk, interest rate risk, market risk, credit risk, management risk, and the risk that the fund may not be able to close out a position at a time when it may be most advantageous to do so. Portfolios that invest in derivative instruments could lose more than the principal amount invested in these instruments.
Mutual Funds involve risk including possible loss of principal
Beta- is a measure of the volatility, or systematic risk of a security or a portfolio in comparison to the market as a whole.
ETF Risk- an investor will indirectly bear the fees and expenses charged by the underlying ETFs; and an ETF generally carries the same investment risk as the portfolio of securities within the ETF.
Hedging/ Derivative Risk- the fund may execute an investment strategy or hedge by entering into derivative contracts such as futures, options or futures, swaps which can be riskier than traditional investments because they involve leverage, may be illiquid, may suffer counterparty default and may limit gains.
Foreign Risk- investing in foreign securities presents risk not associated with domestic investments, such as currency fluctuations, political and economic changes and market risks.
Leveraging Risk- The use of leverage, such as borrowing money to purchase securities will magnify the Fund’s gains or losses.