Rational Funds, a family of funds rooted in the investment philosophy of applying a rational approach to investing, has converted its first hedge fund to a mutual fund product.
The Rational Dynamic Momentum Fund (RDMIX), which was converted from Chesapeake Capital Corporation’s flagship hedge fund, offers investors a managed futures strategy with a track record dating back to 1994.
The strategy of RDMIX is based on capital appreciation uncorrelated to global equity markets by investing in long and short positions on futures contracts, forward contracts and options on futures contracts. Investments are made across a globally diversified universe of over 200 financial and commodity markets, including stock indices, single stock futures, interest rates, currencies, grains, meats, metals, energies and softs.
The fund takes positions based on multiple proprietary quantitative trading and risk management models which seek to systematically identify and profit from long-term price trends regardless of market conditions.
“We are honoured to partner with Jerry Parker and the Chesapeake Capital team to bring such a distinct and proven strategy to the mutual fund market,” says Jerry Szilagyi (pictured), CEO of Rational Funds. “At Rational Funds, we strive to offer strategies rooted in rational approaches. RDMIX not only fits this standard, but has offered investors an uncorrelated source of returns with reduced impact of drawdowns.”
RDMIX retains the same portfolio management team as its hedge fund predecessor. The investment strategy has generated strong returns during periods of market turmoil, including Q1 and Q4 of 2008, where RDMIX generated 9.47 per cent and 16.20 per cent returns respectively. During Q1 and Q4 of 2008, the S&P 500 TR Index generated -21.96 per cent and -17.28 per cent returns respectively.
“We have chosen to partner with Rational Funds to offer our flagship fund, and its winning investment strategy, to all investors,” says Jerry Parker, founder, chairman and CEO of Chesapeake Capital, and portfolio manager of RDMIX. “By offering our strategy as a mutual fund, we are able to reduce fees for investors and provide greater access to our systematic, uncorrelated approach to investing.”
