AlphaCentric Converts Hedge Fund to Mutual Fund

Dec 20 2016 | 6:42pm ET

Liquid alternative provider AlphaCentric has announced the conversion of an options-focused hedge fund managed by Theta Capital Partners managing director Russell Kellites to a mutual fund format. 

The new fund, named the AlphaCentric Hedged Market Opportunity Fund, trades under the symbol HMXIX and utilizes the same option strategy as its hedge fund predecessor.

It employs a systematic, rules-based options strategy that includes premium collection, volatility trading and trend following to make long and short investments in call and put options on instruments that reflect the S&P 500 and its volatility.

The fund’s approach is based on using an algorithm developed via artificial intelligence programs to analyze market data, the company said. The investment strategy seeks to mitigate risk by staggering position maturity dates and utilizing exchange-traded options guaranteed for settlement.

The new fund retains Kellites as portfolio manager, as its hedge fund predecessor.

“The AlphaCentric Hedged Market Opportunity Fund gives investors access to a proven equities-based options strategy with low volatility and low market correlation,” said Jerry Szilagyi, CEO of AlphaCentric. “HMXIX's strong track record is a perfect complement to the AlphaCentric family, having generated a 12.32% annualized return since 2011.”

Founded in 2014, AlphaCentric offers five hedge-fund-like strategies in a mutual fund format, providing investors transparency and daily liquidity with lower fees and minimums than many hedge funds. 

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Barron’s ran an intriguing feature in an August issue titled: “Options Funds for a Nowhere Market.”