Rational Funds Converts Second Hedge Fund

Mar 20 2018 | 10:31am ET

Rational Funds today announced the launch of the Rational/NuWave Enhanced Market Opportunity Fund (NUXIX). The fund is the firm’s second hedge fund conversion and offers the same strategy as its predecessor.

The fund’s investment strategy is comprised of two distinct components. The first is an actively managed U.S. equity strategy, investing primarily in S&P 500 large-cap equities. The second is a broadly diversified managed futures strategy, providing both long and short exposure across a wide variety of global financial and commodities markets. The blended portfolio seeks to deliver superior risk-adjusted returns compared to a long-only, non-leveraged equity portfolio.

The equity component of NUXIX employs a quantitative and systematic strategy to identify repetitive patterns of price behavior in U.S. equities that are indicative of prevailing market sentiment. Individual stocks that are identified as expected outperformers of the benchmark index are included in the portfolio’s position, while those identified as expected underperformers are either liquidated or excluded.

The managed futures component of the fund employs a multi-model, systematic strategy that allocates across more than 50 markets worldwide. The strategy seeks to identify price trends through the application of hundreds of individual trading models, which collectively provide diversified exposure to futures markets. Exposure includes both financial futures (stock indices, fixed income and currencies) and commodity futures (energies, metals, grains, softs and meats), as well as international stock indices, bonds and currencies.

“With the Rational/NuWave Enhanced Market Opportunity Fund, investors get U.S. equity exposure in combination with a macro-focused long/short component that seeks to provide uncorrelated returns. In times of extended market downturn, this approach has the potential to neutralize the declines,” Jerry Szilagyi, CEO of Rational Funds, said in a statement.

NUXIX is sub-advised by NuWave Investment Management, LLC. The fund trades under the tickers NUXIX, NUXAX and NUXCX.

NuWave Investment Management, LLC manages approximately $170 million and is registered as a commodity trading advisor and commodity pool operator with the U.S. Commodity Futures Trading Commission.


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