Equinox Funds (Equinox), a specialist in alternative investments, has launched the Equinox Ampersand Strategy Fund, which restructures the Equinox EquityHedge US Strategy Fund by combining the current long Equity Strategy with an enhanced Overlay Strategy.
Equinox has agreed to waive its management fee for twelve months if the fund underperforms the S&P 500 Total Return Index (S&P 500) for a given fund-year. The Ampersand Fund will assume the existing ticker symbols of (EEHIX) (Class-I) and (EEHAX) (Class-A).
In 2017, Equinox expanded its institutional offerings by launching Ampersand Portfolio Solutions. Ampersand Portfolio Solutions develops and implements custom overlays that complement, rather than replace, equity exposure with the aim of enhancing portfolio returns while mitigating downside risk.
“We have observed that many investor portfolios are inadequately diversified because of the perceived opportunity cost of selling equities to gain exposure to diversifying alternative assets,” says Robert Enck (pictured), CEO of Equinox Funds. “We believe an overlay strategy collateralised by core holdings offers the potential for superior and meaningful diversification. This concept gave way to Ampersand Portfolio Solutions, and now the Equinox Ampersand Strategy Fund.”
By launching a mutual fund that is based on the institutional Ampersand strategy, Equinox can now offer an institutional overlay and the “power of and” to investors who lack the size and wherewithal required to purchase an overlay solution.
The Equinox Ampersand Strategy Fund seeks to achieve returns and volatility comparable to the S&P 500 while seeking to avoid the full impact of downside risk. The Ampersand Fund will aim to achieve this objective by utilising a dual, complementary approach: An Equity Strategy, and an Overlay Strategy. The Equity Strategy will seek to provide broad equity market returns, and the Overlay Strategy will seek to complement these equity returns with non-correlated and negatively correlated return streams designed to enhance returns and avoid the full impact of the downside risk of the S&P 500 over a full market cycle.
The Ampersand Fund also offers a management fee waiver that Equinox refers to as “WTF?” (Why the Fee?). Implemented over 12-month periods, the Equinox management fee will be subject to a performance-based voluntary waiver. Under the terms offered by the Fund’s prospectus, the performance of share Class-I will be measured against the S&P 500 Total Return Index (“Benchmark”) over each fund-year. In the event the Fund underperforms the Benchmark, the Advisor will waive its Management Fee for the subsequent fund-year. Although the Advisor’s management fee is subject to a performance-based waiver, other fees and expenses do apply to an investment in the Fund.
“We believe in aligning ourselves with our investors. The vast majority of active fund managers underperform their relevant investable index. We think that investors should be asking: “WTF?!” – or, “Why the Fee?!” Simply put, we will waive our fee if the Ampersand Strategy Fund does not outperform the S&P 500,” says Enck.
