DURANGO, Colo.--(BUSINESS WIRE)--Swan Global Investments (“Swan”), a leading provider of hedged equity solutions and mutual fund products for more than two decades, today announced it has launched the Swan Defined Risk Growth Fund (the “Fund”) (Institutional Class: SDAIX; A Class: SDAAX) to meet growing investor demand for strategies that offer the potential for enhanced returns and steady income generation along with downside risk management. This Fund, which is Swan’s fifth open-end mutual fund, further expands the firm’s proprietary Defined Risk Strategy (“DRS”) offering.
Swan’s flagship DRS solution, which launched in July 1997, is anchored by large cap U.S. equity exposure. The DRS has also been available in other asset classes like small cap equity, developed international equity and emerging market equity.
The new Swan Defined Risk Growth Fund focuses on upside capture and growth while still being hedged and seeking to avoid large losses from extended bear markets.
“This Defined Risk Growth Fund follows our proven DRS approach and process, but with a heightened investment emphasis on capturing upside growth,” said Randy Swan, Founder and Lead Portfolio Manager. “As markets continue to gyrate, advisors and their clients are looking for innovative mutual fund products that manage downside risk along with returns that are less correlated to traditional asset classes. We structured this new fund to provide them with another viable option in the form of a growth-oriented, hedged equity strategy.”
The Swan Defined Risk Growth Fund’s composition reflects Swan's view that market timing and individual stock selection are not only extremely difficult, but they are more likely to produce volatile returns with higher risk profiles. Using the DRS, the new Fund seeks to "define risk" against large losses thanks to hedging equity ETFs through investments with long-term S&P 500 Index put options.
Additionally, the Swan Defined Risk Growth Fund seeks to increase returns by buying and selling call and put options on several indices using various strategies. The Growth version of the DRS targets investing less in defensive options and investing more into long market exposure. This generally means targeting a slightly higher capture in upward-moving markets.
Founded in 1997, Swan Global Investments is a leading asset management firm that offers proven investment solutions built to produce consistent returns over time, by protecting irreplaceable capital from catastrophic loss.
Important Risk Information
Mutual Funds involve risk, including possible loss of principal. ETFs are subject to investment advisory and other expenses, which will be indirectly paid by the Fund. As a result, the cost of investing in the Fund will be higher than the cost of investing directly in ETFs and may be higher than other mutual funds that invest directly in stocks. ETFs are subject to specific risks, depending on the nature of the fund. Investments in underlying funds that own small and mid-capitalization companies may be more vulnerable than larger, more established organizations. Investments in foreign securities could subject the Fund to greater risks including, currency fluctuation, economic conditions, and different governmental and accounting standards. The use of leverage, such as that embedded in options, could magnify the Fund’s gains or losses. Written option positions expose the Fund to potential losses many times the option premium received.
The adviser’s dependence on its DRS process and judgments about the attractiveness, value and potential appreciation of particular ETFs and options in which the Fund invests or writes may prove to be incorrect and may not produce the desired results. Purchased put options may expire worthless and may have imperfect correlation to the value of the Fund’s sector ETFs. Written call and put options may limit the Fund’s participation in equity losses in market declines. The Fund’s losses are potentially large in a written put or call transaction. If un-hedged, written calls expose the Fund to potentially unlimited losses.
Investors should carefully consider the investment objective, risks, charges and expenses of the Swan Defined Risk Emerging Markets Fund. This and other information is contained in the prospectus and should be read carefully before investing. For a prospectus please call Swan Defined Risk Fund at (877) 896-2590. The Fund is distributed by Northern Lights Distributors, LLC, member FINRA/SIPC. Northern Lights Distributors, LLC is not affiliated with Swan Capital Management, LLC and Swan Global Investments, LLC.
Approval code: 6048-NLD-01/11/2019