New York, NY – January 29, 2020 – Rational Funds, a family of funds rooted in the investment philosophy of applying a rational approach to investing, today announced the launch of the Rational/Pier 88 Convertible Securities Fund (PBXIX). The Fund is a converted hedge fund, which employs the same management team and investment strategy as its fund predecessor.
This is Rational Funds’ fourth hedge fund conversion and its first fund that focuses on convertible securities. These “hybrid” securities possess both fixed income and equity characteristics, with investment opportunities in bonds, preferred stocks or other securities that may be converted into a prescribed amount of common stock at a pre-stated price. PBXIX’s objective is to seek total return consisting of capital appreciation and income.
The management team at Pier 88, which serves as the subadvisor to the fund, has over two decades of relevant investment experience and has invested in convertible securities for over 10 years, with a strong track record of managing such a strategy in both rising rate and equity downturn environments. As an asset class, convertible securities may trade at a discount to its pari-passu fixed income counterparts, and thus the asset class is often overlooked. To combat this reality, PBXIX’s management team employs an equity analysis perspective for investment decisions, establishing a view on the intrinsic value of a business and then examining the overall capital structure of that asset to identify potential mispricing. The team structures the Fund’s portfolio based on their macroeconomic views and will seek to take advantage of perceived secular and cyclical themes across all industry sectors.
“As we expand our portfolio of fund offerings, Rational Funds is interested in identifying unique strategies with solid track records,” said Jerry Szilagyi, CEO of Rational Funds. “The Rational/Pier 88 Convertible Securities Fund offers investors access to a sophisticated, convertible securities-based strategy that provides participation in the upside of equity markets with the limited downside of bonds. We’re happy to have the Pier 88 team and this proven strategy as part of our portfolio offerings.”
This investment approach focuses on a blend of credit-sensitive, equity-sensitive, and balanced convertible securities and does not pursue a distressed securities approach. Over half of the portfolio’s allocation is to convertible bonds, with the remaining majority in convertible preferred stock.
The Rational/Pier 88 Convertible Securities Fund trades under the tickers PBXIX, PBXAX and PBXCX. 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.
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.
Investing in the Fund carries certain risks. The value of the Fund may decrease in response to the activities and financial prospects of an individual security in the Fund’s portfolio. The Fund is a new mutual fund and has a limited history of operations for investors to evaluate. Investors in the Fund bear the risk that the Fund may not be successful in implementing its investment strategies. The Fund is non-diversified and may invest a greater percentage of its assets in a particular issue and may own fewer securities than other mutual funds; the Fund is subject to concentration risk. Investments in convertible securities subject the Fund to the risks associated with both fixed-income securities, including credit risk and interest risk, and common stocks. A portion of the Fund’s convertible securities may be rated below investment grade. Exchangeable and synthetic convertible securities may be more volatile and less liquid than traditional convertible securities. In general, stock and other equity security values fluctuate, and sometimes widely fluctuate, in response to activities specific to the company as well as general market, economic and political conditions. Lower rated fixed-income securities are subject to greater risk of loss of income and principal than higher-rated securities. The prices of lower rated bonds are likely to be more sensitive to adverse economic changes or individual corporate developments. All fixed-income securities are subject to two types of risk: credit risk and interest rate risk. Interest rate risk is the risk that bond prices overall, including the prices of securities held by the Fund, will decline over short or even long periods of time due to rising interest rates. Bonds with longer maturities tend to be more sensitive to interest rates than bonds with shorter maturities. Lower-quality bonds, known as “high yield” or “junk” bonds, present greater risk than bonds of higher quality, including an increased risk of default. Credit risk is the risk that the issuer of a security will not be able to make principal and interest payments when due. These factors may affect the value of your investment.