Rational Funds Converts First Hedge Fund to Mutual Fund Format

Dec 13 2016 | 11:26pm ET

Rational Funds has announced the conversion of its first hedge fund to a mutual fund product. 

The Rational Dynamic Momentum Fund, traded under the symbol RDMIX, was converted from Chesapeake Capital Corporation’s flagship managed futures hedge fund, the company said in a statement. Accordingly, the new vehicle offers investors a managed futures strategy with a track record dating back to 1994.

The fund’s strategy 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, Rational said. 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 that seek to systematically identify and profit from long-term price trends regardless of market conditions, Rational added. Portfolio management remains the same as the hedge fund predecessor. 

“We are honored to partner with Jerry Parker and the Chesapeake Capital team to bring such a distinct and proven strategy to the mutual fund market,” said Jerry Szilagyi, CEO of Rational Funds, in the statement. “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.”

“We have chosen to partner with Rational Funds to offer our flagship fund, and its winning investment strategy, to all investors,” said 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.”

Based in Huntington, New York, and founded in 2001, Rational Funds currently offers six mutual fund products, including growth, emerging market, absolute return and dividend capture strategies. 


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