Huntington, NY – October 1, 2015 - Catalyst Funds, an alternative-focused mutual fund company, today announced the launch of two new mutual funds. The first, the Catalyst IPOx Allocation Fund (OIPAX), primarily invests in the common stocks of newly listed initial public offerings (IPOs) of U.S. companies. The second is the Catalyst Hedged Commodity Strategy Fund (CFHAX), which focuses on investments in call and put options on physical commodity futures contracts.
“The addition of OIPAX and CFHAX to Catalyst’s diverse portfolio of mutual funds is part of our continued expansion to offer investors ‘intelligent alternative’ investment products,” commented Jerry Szilagyi, CEO of Catalyst Funds. “We believe these investment strategies offer investors a distinct approach with a strong upside, particularly in the current market where traditional investments are clouded with uncertainty.”
Both mutual funds offer a distinct alternative investment strategy:
Catalyst IPOx Allocation Fund (OIPAX)
OIPAX will purchase stocks both at the time of the offering and in post-IPO trading, in companies across market capitalizations. The Fund’s portfolio has two components: the Core Long Component and the Dynamic Component. Each utilize a distinct investment strategy:
The Core Long Component will replicate the IPOX U.S. 100 Index (Index), which is a value-weighted price index measuring the performance of the top 100 companies ranked quarterly by market capitalization in the IPOX U.S. Composite Index. Investment positions in this component will seek to replicate the Index by investing in the IPOs in approximately the same proportion as its weighting in the Index.
The Fund’s second component, the Dynamic Component, will invest in 30 to 70 IPOs that are not included in the Index. This component will focus on securities believed to be valued attractively relative to their price to sales multiple.
Catalyst Hedged Commodity Strategy Fund (CFHAX)
CFHAX typically invests in call and put options on physical commodity futures contracts, including high- quality short-term (2 years or less) fixed income securities such as U.S. Treasury securities. Positions may be long or short in these options, and investments will be diversified across various commodity sectors including, but not limited to: agricultural products, energy and metals. Positions will typically be held for under one year and will include cash and cash equivalents.
In general, the strategy does not depend on a prediction of commodity market direction and is designed with the goal of producing returns that are not correlated with global equity or commodity market returns. CFHAX’s sector allocations are based on option volatility pricing, seasonal dynamics and technical indicators.
CFHAX will be managed by the same investment team and implement a similar strategy to the successful Catalyst Hedged Futures Strategy Fund (HFXAX).
To learn more about Catalyst Funds and its various products, please visit: www.catalystmf.com.
About Catalyst Funds
Catalyst Funds currently offers 27 distinctive funds that provide various strategies with the goal of producing income- and equity-oriented returns while seeking to control risk and volatility. Catalyst offers these exclusive strategies through a team of in-house portfolio managers and boutique institutional investment management partners. The firm strives to provide innovative strategies to support financial advisors and their clients in meeting the investment challenges of an ever changing global market environment.
There is no assurance that any Fund will achieve its investment objective. Mutual Funds involve risk including the possible loss of principal.
Please consider the Fund's investment objectives, risks, and charges carefully before investing. This and other important information about the Catalyst Funds can be found in the Fund's current prospectus, which may be obtained by calling your Financial Advisor or shareholder services at 866-447-4228. Please read the prospectus carefully before investing. The Catalyst Funds are distributed by Northern Lights Distributors, LLC, member FINRA/SIPC.
The Fund is a new or relatively new mutual fund and has a limited history of operations for investors to evaluate. The portfolio manager’s judgments about the attractiveness, value and potential appreciation of particular securities in which the Fund invests may prove to be incorrect and there is no guarantee that the portfolio manager’s judgment will produce the desired results. Changes in the laws or regulations of the United States or other countries, including any changes to applicable tax laws and regulations, could impair the ability of the Fund to achieve its investment objective and could increase the operating expenses of the Fund.
Overall stock market risks may also affect the value of the Fund. Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence in and perceptions of their issuers change.
The Fund invests in IPOs at the time of the initial offering and in post-IPO trading. The stocks of such companies are unseasoned equities lacking a trading history, a track record of reporting to investors and widely available research coverage. The earnings and prospects of these companies are more volatile than larger companies. Small and mid-sized companies normally have a lower trading volume than larger companies, which may tend to make their market price fall more disproportionately than larger companies in response to selling pressures.
Because a relatively high percentage of a non-diversified Fund’s assets may be invested in the securities of a limited number of companies that could be in the same or related economic sectors, the Fund’s portfolio may be more susceptible to any single economic, technological or regulatory occurrence than the portfolio of a diversified fund. The value of the Fund may decrease in response to the activities and financial prospects of an individual security in the Fund’s portfolio. Derivatives are also subject to credit risk and liquidity risk.
When a substantial portion of a portfolio is held in cash or cash equivalents, there is the risk that the value of the cash account, including interest, will not keep pace with inflation. Investing in the commodities markets may subject the Fund to greater volatility than investments in traditional securities. By investing in commodities indirectly through the Subsidiary, the Fund will obtain exposure to the commodities markets within the federal tax requirements that apply to the Fund. The income received from its investments will be passed through to the Fund as ordinary income, which may be taxed at less favorable rates than capital gains. When the Fund invests in fixed income securities, the value of your investment in the Fund will fluctuate with changes in interest rates. Securities issued or guaranteed by federal agencies and U.S. government sponsored entities may or may not be backed by the full faith and credit of the U.S. government.
As the seller (writer) of a covered call option, the Fund assumes the risk of a decline in the market price of the underlying security below the purchase price. As the buyer of a put or call option, the Fund risks losing the entire premium invested in the option if the Fund does not exercise the option. As a seller (writer) of a put option, the Fund will lose money if the value of the security falls below the strike price. Even a small investment in derivatives (which include options, futures and other transactions) may give rise to leverage risk (which can increase volatility and magnify the Fund’s potential for loss), and can have a significant impact on the Fund's performance. Using derivatives like commodity futures and options to increase the Fund’s combined long and short exposure creates leverage, which can magnify the Fund’s potential for gain or loss and, therefore, amplify the effects of market volatility on the Fund’s share price.
Call Option: An agreement that gives the right, but not the obligation, to buy a security at a specified price within a specified time period.
Put Option: An agreement that gives the right, but not the obligation, to sell a security at a specified price within a specified time period.
Long: The buying of a security with the expectation that the security will rise in value.
Short Selling: The selling of a security that the seller does not own, or any sale that is completed by the delivery of the security borrowed by the seller, with the expectation that the security will decline in value.