Guerite Advisors has launched a no-load mutual fund that aims to provide many of the benefits of a hedge fund. The new vehicle, The Guerite Absolute Return Fund, began offering shares on Dec. 26.
“The Guerite Absolute Return Fund’s strategy uses several components that are unique, or that would not be easily replicable by investors on their own," said Hugh Moore, partner of Guerite Advisors and co-portfolio manager of the fund. "Moreover, this fund is designed to provide the kind of performance enhancements and protective hedging techniques that many hedge funds utilize, but without the higher fees hedge funds command."
The new fund adheres to an absolute return strategy under which it strives to earn a positive investment return each year, regardless of stock market conditions, by investing in a combination of exchange traded funds and individual domestic value-oriented equity securities. The fund may invest across all market capitalizations and industry groups.
The Guerite Absolute Return Fund’s managers decide the degree of exposure to the domestic equity market based upon the firm’s proprietary Guerite Indicator, a quantitative investment model that utilizes a combination of six economic indicators and six market indicators that, taken together as a composite, is designed to identify longer range normal and high-risk market conditions.
“Right now, the Guerite Indicator has indicated that we are in the throes of a high-risk economic environment that may lead to a recession. At the least, the current period is part of a multi-year sideways movement in the market that will continue for several more years and include rotations between bear and bull markets. That will make investing a very tricky proposition,” Moore said.