Market Neutral Income Fund (WMNIX)

Investment Strategy

  • Utilizes a market-neutral approach to accomplish the fund’s objectives by investing in long and short positions to limit exposure to interest rates and other macroeconomic factors
  • Incorporates a combination of a shorter‐term, yield‐oriented convertibles strategy and arbitrage strategies seeking to capitalize on mispriced convertibles
  • Enhances portfolio construction and reduces volatility risk through the active use of macro hedging strategies
  • Manages risk by utilizing a sophisticated convertible analytics system and conducts a formal review, on a monthly basis, with an independent risk management team responsible for monitoring overall portfolio risks using a state-of-the-art system

Potential Investor Benefits

Absolute Return Focus

Targets an absolute return (net of fees) and may serve as an alternative income source to investors focused on achieving their return goals while maintaining a low risk profile.

Low Volatility

Seeks to achieve a low volatility profile for investors who require an emphasis on loss limitation regardless of the market environment.

Uncorrelated Returns

Potential for uncorrelated returns and attractive diversification benefits with traditional equity and fixed income allocations.

Low Equity Beta

Has the ability to neutralize systematic equity risk with the potential to generate positive results regardless of market direction.

Objective

The investment objective of the Westwood Market Neutral Income Fund is to seek to generate positive total returns in all market conditions through a combination of current income and capital appreciation.

Fund Facts

Ticker Symbol WMNIX
Fund Inception May 1, 2015
Total Holdings (as of 12/31/2016) 66
Expense Ratio (net) * 1.31%
Expense Ratio (gross) 3.27%
Benchmark Citigroup 1 Month Treasury
CUSIP 00769G238
Distribution Frequency Quarterly

* The Advisor has contractually agreed to waive fees and reimburse expenses until February 28, 2018. In the absence of current fee waivers, total return and yield would be reduced.

Read more on Westwood's Investment Process

A Liquid Alternative Income Solution

Conservative income investors face a challenging market environment with interest rates near all-time lows and global volatility on the rise. The need to complement traditional fixed income investments while maintaining a low level of risk is important to achieving positive client outcomes over the long term. The Westwood Market Neutral Income Fund is designed to help income-oriented clients, who require a low risk profile, bridge the return gap in a low interest rate environment. The Fund's diversified sources of return, which combine a short-dated yield-oriented convertibles strategy, convertible arbitrage strategies and a macro hedge overlay, have the potential to deliver uncorrelated returns with an emphasis on loss limitation.

Key Differentiators

Dedicated Global Convertibles Team

Our team has over 60 years of combined experience in convertible bonds, options, equity and credit analysis. The team is dedicated to the asset class and has developed expertise within their field.

Experienced Team with a Long Track Record of Managing Global, Absolute Return Convertible Bonds

David Clott, CFA, and Shawn Mato, CFA, portfolio managers of the Strategic Global Convertibles strategy, who lead the team, have worked together for over 14 years.

Synergies from Broad-Based Approach to Managing Convertibles

We achieve significant synergies from managing both long‐only and convertible arbitrage strategies, which not only provides us with valuable insights into the global convertible market but also ensures that our investment team considers the pricing influences of both long‐only investors and arbitrage funds.

Global Coverage

Our process allows us to invest globally and allocate funds to the most attractive opportunities. A global approach to asset allocation can add significant value; it allows assets to be allocated to the most attractive markets.

World-Class Investment Research Support

Our team is supported by investment research generated by Westwood’s U.S. Value and Global and Emerging Markets equity teams, which provides additional, in-depth analysis on securities held or considered for purchase. In addition, we have an investment analyst dedicated to further analyzing specific global convertible securities.

Fund Performance (as of 4/28/2017)

  Inception date YTD 2016
WMNIX 5/1/2015 1.53% 5.23%

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted.

Click here to view the performance of this fund.

Additional Disclosures: Diversification does not ensure a profit or guarantee against a loss. The value of a convertible security in which the Fund invests is influenced by changes in interest rates, the credit standing of the issuer and the price of the underlying common stock. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging Markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. The fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund's gains or losses.

Beta is the measure of risk in relation to the market or benchmark. R-Squared is the measure of how closely a portfolio’s performance correlates with the performance of a benchmark.

PORTFOLIO TEAM

We manage the Fund using a team-based system. Ultimately, the entire Portfolio Team is responsible for all aspects of the portfolio.

David B. Clott, CFA

David B. Clott, CFA

Senior Vice President
Portfolio Manager

Shawn J. Mato, CFA

Shawn J. Mato, CFA

Senior Vice President
Portfolio Manager

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