The fund seeks to provide investment results that match the performance of a blended managed futures index benchmark.
An alternative to "long-only" commodity funds
Exposure to a blend of indexed managed futures strategies
Attractive mix of return, risk and low correlation to traditional assets (i.e., stocks and bonds)
Opportunity for positive returns during times of economic and/or market distress
An alternative to illiquid managed futures or CTA funds
Arrow Managed Futures Strategy Fund is a mutual fund that seeks to provide exposure to the global futures market by providing exposure to a blend of two managed futures indexes: Trader Vic Index (TVI) and A.I. Managed Futures Volatility Index (AIMFV). With the ability to go long or short, the fund is designed to capture the economic benefit derived from both rising and declining trends from a diverse cross section of futures markets. As an asset class, managed futures are a compelling choice for investors seeking portfolio diversification, exposure to non-traditional assets (such as commodities and currencies), and seeking access to directional trading strategies. One of the key features of managed futures is their historically low correlation to traditional assets, which make them an attractive and efficient portfolio diversification tool. Additionally, managed futures have the potential to exhibit strong performance during periods of stress in the markets.
Index Exposure: The fund's benchmark consists of an equal blend of two index strategies: Trader Vic Index (TVI) and A.I. Managed Futures Volatility Index (AIMFV).
The Trader Vic Index (TVI) is comprised of 14 sectors across a 50/50 combination of financials and commodities. These sectors are made up of 24 diverse components, which were chosen based on fundamental characteristics of liquidity, economic importance and credit stability. Each month, the TVI's sector exposures are rebalanced and the components are positioned either long or short based on moving average indicators customized for each sector. The only exception is the energy sector, which is either long or neutral (zero allocation) due to the potential for geopolitical risks uniquely associated with assets such as oil and gas. Should the energy sector take a neutral position, its weightings are allocated proportionately to the other sectors.
The A.I. Managed Futures Volatility Index (AIMFV) is a long/short/flat diversified managed futures index. The AIMFV is a systematic and quantitative-based index of numerous components that serve as a proxy for exposures to economic sectors related to financial instruments, commodity markets and volatility futures. This exposure is complimented with innovative overlays that account for seasonality and efficiency at the individual component level. All of the AIMFV components (inlcuding energies) may be positioned as long, short or flat (neutral/cash). If a flat position is determined, the index allocates to cash at the component weighting percentage.