GuideStone Funds, a Christian-screened mutual fund family, has launched a strategic alternatives fund for financial advisors and their clients.
The GuideStone Strategic Alternatives Fund (Fund) seeks to provide absolute returns with both lower volatility than and low correlation to traditional equity and fixed-income markets. GuideStone Funds’ move into the alternatives investment space follows its Lipper Award-winning Defensive Market Strategies Fund (Institutional Share Class-best among similar funds honored by Lipper for their consistently strong risk-adjusted performance relative to their peers in the Flexible Portfolio Funds category as of 30 November, 2016 out of 425 funds in the three-year period and out of 322 funds in the five-year period), which seeks to provide long-term capital appreciation with reduced volatility compared to equity markets.
The new Strategic Alternatives Fund aims to offer a low correlation to other asset classes, the opportunity to provide attractive risk-adjusted returns, enhanced diversification, and an overall broader investment universe. By analysing the market to meet specific investor needs using customised strategies, GuideStone has leveraged its experience with the Defensive Market Strategies Fund to address the changing demand of a more volatile investment environment.
“Traditional diversification is not always effective, as we saw in 2008,” says David Spika (pictured), CFA, president of GuideStone Capital Management, the investment advisor to GuideStone Funds. “Alternative investments, however, are a way to provide additional types of exposure to hedge risk more effectively. That is the impetus for the GuideStone Strategic Alternatives Fund which addresses the desire many investors have to potentially lower their risk, with the possibility for more consistently positive returns,” he said.
The GuideStone Strategic Alternatives Fund combines four principal strategies, all of which are less dependent on traditional market factors, and include long/short and event-driven equity, options selling, currency trading and short duration high yield. The Fund is constructed so that each of the four individual strategies strives to provide independent benefits, but together help mitigate the effects of the market volatility accompanied by the desire for increased long-term capital appreciation.