New Mutual Fund Product launched Utilizing Hedge
Fund Strategies
A new Mutual Fund product has been launched by Thomas Kirchner, with the
aim of utilizing event driven strategies for its trading decisions. The
new fund, Pennsylvania Event Driven Fund, although a mutual fund by classification,
would employ hedge fund trading strategies of event driven, merger arbitrage
and capital structure arbitrage to accomplish the funds investment objectives.
Difference between other Hedge funds & the
new Mutual fund
According to the founder, Mr. Kirchner, the launching of the new mutual
fund was necessitated by the realization that event driven strategies
could be adopted in a mutual fund format. Kirchner commented, “I
found these strategies very reliable and efficient”. He explained
further that hedge funds charge performance fees, but the new mutual fund
portfolio would not charge such fees.
Because such fees are not required, Kirchner noted that managers trading
this portfolio would not be pressured to pile on leverage or risk. Kirchner
added that the new event driven mutual fund has other advantages. Mutual
funds are regulated by the Securities and Exchange Commission; such scenario
means that the new mutual fund would offer full transparency to investors.
Kirchner added that the new event driven mutual fund can borrow and leverage
collateralized assets; fees would be in the 1.75% range. Pennsylvania
Advisers would market the new mutual fund and also act as the transfer
agent and administrator.
New trend of using hedge fund strategies in mutual
funds
With this new trend of employing hedge fund strategies in mutual funds,
the demarcation line between mutual funds and hedge funds seem to be narrowing,
there is also the issue of the pending regulatory oversight of hedge funds
by the US Congress. Many hedge fund industry organizations and groups
oppose additional Congressional regulatory laws for hedge funds.
While many hedge fund companies continue to search for ways to increase
transparency to their investors, it should be noted that transparency
of hedge funds have drastically improved since the collapse of Long Term
Capital Management in 1998. Today, one can log onto Internet hedge fund
information portals such as Hedgeco.net and instantly gain access to the
most recent data on the hedge funds listed.
Paul Oranika
Editor-in-Chief
Hedgeco.net
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