Rational Funds Launches Context Insurance Linked Income Fund

Huntington, NY – January 15, 2019 – Rational Funds, a family of funds rooted in the investment philosophy of applying a rational approach to investing, today announced the launch of the Context Insurance Linked Income Fund (ILSIX). The Fund will be sub-advised by Context Insurance Strategies and is designed to bring a traditionally institutional-focused investment approach to all investors.

ILSIX invests primarily in income-producing, insurance-related investments and yield-oriented insurance securities to achieve the objective of total return. The Fund will focus its investments on Cat Bonds and insurance-related investments such as event-linked bonds, event-linked swaps, corporate debt and preferred stock issued by insurance or reinsurance companies. Cat Bond returns are tied to a single or multiple insurance event(s) and are designed to replicate the function of a reinsurance agreement.

“The Context Insurance Linked Income Fund brings the benefits of insurance-linked securities (“ILS”) to the mutual fund market with a strategy offering unlike any currently available to all investors,” said Jerry Szilagyi, CEO of Rational Funds. “The launch of ILSIX is part of our continued commitment at Rational Funds to sponsor rationally-driven, disciplined and systematic investment approaches.”

Under normal circumstances, ILSIX will invest 80% of its assets in insurance-related investments. The investment strategy is designed to invest in a varied group of available risks and geographic regions.

Pete Vloedman and Andrew Sterge, who have a combined 45+ years of reinsurance and ILS experience are the portfolio managers for the Fund.  “Compared to other non-traditional fixed income products, our strategy will aim to provide returns that are minimally correlated to interest rates and bond and equity markets, while providing investors access to an asset class currently dominated by large institutions and hedge funds,” stated Mr. Sterge.

The Fund will trade under the tickers ILSIX, ILSAX and ILSCX. For more information on Rational Funds and its mutual fund products, please visit: www.rationalmf.com.

About Rational Funds

Rational Funds is a family of funds rooted in the investment philosophy of applying a rational approach to investing. The firm currently offers nine mutual fund products, which employ rigorous research backed by sound academic theory and a disciplined and systematic investment approach. The funds strive to deliver superior risk-adjusted returns, at the apex of successful modern portfolio strategies for today’s investor. For more information on Rational Funds and its mutual fund products, please visit: www.rationalmf.com.

About Context Capital Partners 

Context Capital Partners, LP is a leading alternative investment specialist firm headquartered in Bala Cynwyd, PA and the parent company of Context Summits and Context Family Network. Through direct and indirect partnerships, Context provides acceleration capital, marketing, distribution, operations and infrastructure support to top-tier alternative asset managers. Context’s focus is delivering superior investment solutions to institutional investors and family offices by launching and expanding low correlation investment products that deliver clear edge.

Investors should carefully consider the investment objectives, risks, charges and expenses of the Rational Funds. This and other important information about the Fund is contained in the prospectus, which can be obtained by calling (800) 253-0412 or at www.RationalMF.com. The prospectus should be read carefully before investing. The Rational Funds are distributed by Northern Lights Distributors, LLC member FINRA/SIPC.  Rational Advisors, Inc. is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

An investment in the Fund involves a high degree of risk. The insurance-related securities in which the Fund invests are typically considered “high yield” and many insurance-related debt securities may be rated less than investment grade or unrated. It is possible that investing in the Fund may result in a loss of some or all of the amount invested. Before making an investment or allocation decision, investors should (i) consider the suitability of this investment with respect to an investor’s or a client’s investment objectives and individual situation and (ii) consider factors such as an investor’s or a client’s net worth, income, age, and risk tolerance. Investment should be avoided where an investor or client has a short-term investing horizon and/or cannot bear the loss of some or all of the investment. The insurance-related securities in which the Fund invests will be subject to credit risk. Credit risk may be substantial for the Fund. The Fund may invest in derivatives with a limited number of counterparties, and events affecting the creditworthiness of any of those counterparties may have a pronounced effect on the Fund, its value and the valuation of individual securities. The use of derivatives involves risks that are in addition to, and potentially greater than, the risks of investing directly in securities and other more traditional assets. When the Fund invests in fixed income securities, the value of your investment in the Fund will fluctuate with changes in interest rates.  Typically, a rise in interest rates causes a decline in the value of fixed income securities owned by the Fund. A significant percentage of the insurance-related securities in which the Fund invests are expected to be variable rate, or floating-rate, event-linked bonds. Floating-rate instruments and similar investments may be illiquid or less liquid than other investments. The principal risk of an investment in an event-linked bond or swap is that a trigger event(s) (e.g., (i) natural events, such as a hurricane, tornado or earthquake; or (ii) man-made events, such as large aviation disasters, building explosions or cyberattacks) will occur and the Fund will lose all or a significant portion of the principal it has invested in the security and the right to additional interest payments with respect to the security. The Fund may invest in countries with newly organized or less developed securities markets. There are typically greater risks involved in investing in emerging markets securities. There are risks associated with an options hedging strategy. Generally, options may not be an effective hedge because they may have imperfect correlation to the value of the Fund’s portfolio securities. There can be no assurance that the Fund’s hedging strategy will reduce risk or that hedging transactions will be either available or cost effective.


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