Bishop Asset Management has launched the Bishop Volatility Flex Fund (VFF), which is designed to be a non-correlating compliment to any investment portfolio that seeks to perform in both rising and falling market volatility environments.
VFF is the first in a series of volatility-monetizing funds that the firm intends to bring to market.
Unlike most other volatility tracking investment products that are directional in nature, performing when market volatility is on the rise, the VFF seeks to capture both increasing and decreasing volatility trends. They believe this agnostic approach to the direction of market volatility makes the Fund a more appropriate choice for a long-term holding, serving as a diversifier in all market cycles rather than just a hedge against rising volatility.
"At Bishop Asset Management, we view volatility almost as its own unique asset class, in that the Fund monetizes volatility when positioned alongside more traditional investments," says Rob Steele, Co-Founder and President of Bishop Asset Management. "So many investors fear volatility, moving to cash in times of increasing market fluctuations. The VFF strategy can potentially serve as a supplement to cash, providing a portfolio shock absorber."
The fund is designed to capture performance through all market cycles by employing a long-short strategy — constantly holding both put and call options on the SPX. The strategy consists of forward-looking technical indicators as well as a historical statistical analysis of the trading range of the S&P 500. The model combines an exponentially weighted historical average with a tactical overlay. In short, the Fund’s managers are actively managing a time-tested, quantitative strategy.
While the mutual fund product was recently launched, the Volatility Flex Strategy was successfully managed, for three years, as a hedge fund by portfolio manager, Kevin Nugent.
Founded in 2010, Bishop Asset Management is the Advisor to the Bishop Volatility Flex Fund. The firm’s three Founders, long-time friends and colleagues, collectively have more than 75 years of professional investment experience, including product development, portfolio management, trading and sales and marketing.
Rob Steele has a long history of creating cutting-edge investment products. As a founding Executive of Rydex Investments, he was instrumental in the onset of a true paradigm shift in the financial industry through the development of a number of innovative, first to market mutual fund, ETF and hedge fund products.
"We believe that what we’ve been able to create is a low-risk, single-CUSIP solution that gives investors an alternative to turning to cash when markets fluctuate, and provides a true, long-term core holding that actually thrives upon market noise," says Nugent, Co-Founder and Chief Investment Officer at Bishop Asset Management. "Our goal for the firm is the same — to continue to provide our investors with education, resources and investment strategies that will help them to not only better understand market volatility as a concept and an investment strategy, but to also embrace it."