Schooner Fund Description
The Fund implements an actively managed single name covered call strategy against a diversified large cap equity portfolio. The Fund also selectively purchases convertible securities and index puts and spreads in an attempt to help reduce risk. The Fund seeks to capture a substantial portion of the long term total return potential of equities, while aiming to limit portfolio volatility and downside risk.
- Ticker (A Share Class): SCNAX
- Ticker (Institutional Share Class): SCNIX
- Style: Hedged Equity, Long Biased
- Market Cap Focus: Large-Cap
- Geographic Focus: U.S.
- Inception Date: 8/29/2008
- AUM: $33mm
- Expense Ratio SCNAX: 1.88%
- Expense Ratio SCNIX: 1.63%
- Min. Investment: $5,000
- Trust: Trust for Professional Managers, serviced by U.S. Bancorp Fund Services
Reasons to Invest
- Access to Alternative Investment Strategies: The Fund delivers an actively managed hedged equity strategy in a mutual fund vehicle.
- Portfolio Diversification: Potential diversifier for almost any portfolio due to its historically attractive risk/return profile and low beta relative to the S&P 500.
- Efficacy: Historically has demonstrated favorable upside/downside capture ratios while seeking to generate equity-like returns with lower volatility.
Fit in Overall Asset Allocation
The Fund is suitable as a substitute for equity allocations as a defensive equity/conservative equity allocation. Many advisors are also using the Fund as part of their “alternatives allocation sleeve” as it attempts to provide more upside capture than lower volatility funds while also striving for downside protection and strong risk adjusted return.
The Fund’s investment objective is long-term capital appreciation with the generation of moderate current income.
The Schooner Fund seeks to:
- Maintain an appropriate balance between risk and reward over the course of market cycles and volatility regimes by strategically investing across a combination of stocks, convertible securities, and single name stock call options (buy-writes).
- Create significant equity participation while targeting greater downside protection than a stock-only portfolio.
- Obtain multiple and recurring income sources.
- Diversify across a variety of industries, market sectors, market capitalization, and credit quality tiers.
Many investors believe that an allocation to growth stocks is essential to achieve long-term capital appreciation in an investment portfolio. How to pursue growth in a portfolio is often a debate. Many investors chase the next “hot stock” or fund, while others track a “growth” benchmark. There is another class of investors who significantly underweight growth in their portfolios simply because they fear the volatility often associated with growth stock investing, or they lack the knowledge to choose the appropriate investment vehicle to achieve success.
At Schooner, we believe that quality growth investing must be a disciplined and balanced approach. True growth comes when both steady and meaningful income generation is coupled with prudent stock selection. Our years of experience in convertible and option markets assist us in our efforts to dynamically position the portfolio in varying market environments in an attempt to make volatility work for you.
The S&P 500 Index is a broad based unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general. It is not possible to invest directly in an index. Beta is a measure of the systematic risk of a portfolio in comparison to the market as a whole. It is defined as the correlation between the excess returns of the portfolio and the excess returns of the market benchmark index multiplied by the annualized volatility of the portfolio divided by the annualized volatility of the benchmark index.
Click here for Schooner Fund Summary Prospectus.
Mutual Fund investing involves risk; principal loss is possible. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. The fund may also use options and futures contracts, which have the risks of unlimited losses of the underlying holdings due to unanticipated market movements and failure to correctly predict the direction of securities prices, interest rates and currency exchange rates. The investment in options is not suitable for all investors. The fund may hold restricted securities purchased through private placements. Such securities can be difficult to sell without experiencing delays or additional costs.
Diversification does not assure a profit nor protect against loss in a declining market.
The Schooner Fund is distributed by Quasar Distributors, LLC.