Catalyst Launches Two New Alternative-Investment Funds

Investors who want to add alternatives to their allocation now have two more ways to accomplish that. The idea behind alternatives is to provide an investment that is not highly correlated to stocks, or even bonds. In a stock-or-bond-market downturn, alternatives such as real estate, gold, or commodities should pick up the slack. Interest in alternatives soared after the equity market downturns of 2000 through 2002 and 2007 through 2009. To help address the demand for alternative investments, Catalyst Funds, a mutual fund company that specializes in alternatives, recently added two new products to its stable of funds. The company now offers a total of 10 alternative funds. The Catalyst Time Value Trading Fund TVTAX writes short-term call and put options on S&P futures. It also invests in cash and cash equivalents, such as U.S. treasuries. securities. The fund may also invest in other futures markets, such as agricultural products, metals, or currencies. It also buys and sells futures contracts themselves, as well as options as hedging vehicles. The fund is managed by Gerald Black and Jeffrey Dean of subadvisor ITB Capital Advisors. Minimum fund investment is $2,500. The second new from Catalyst is the Catalyst/Princeton Hedged Income Fund HIFAX. This fund primarily invests in fixed income securities, including floating rate bank loans, agency-backed and non-agency mortgage-backed securities, asset-backed securities, corporate bonds, government debt from the U.S. and other nations, certificates of deposit and other money market instruments. To manage short-term volatility risk, credit risk and interest-rate risk, this fund will also use shorting, and invest in derivatives such as options and swaps. The subadvisor is Princeton Advisory Group, with the fund managed by Princeton founder Munish Sood. The minimum investment in this fund is also $2,500.