RiverPark Gargoyle Hedged Value conference call, Wednesday, 7:00 Eastern - be there!

David_Snowball

As always, we'd be delighted to have you join in our upcoming call - either by dialing-in (it's free, just a phone call, no web nothing) or by sharing questions for the RGHVX managers.

Why might you want to hear a bit more from the guys?

• Gargoyle Hedged Value launched as a hedge fund at the end of 1999, so this is not a team that requires training wheels. They converted to a mutual fund, importing the same strategies they’d used all along, in April 2012.
  
• The fund’s goal is to outperform the stock market with significantly less risk.
  
• The Fund combines a “relative value” long portfolio with the sale of “expensive” index options, so that it has characteristics similar to traditional buy/write option strategies.
  
• The fund is always hedged and therefore offers investors the ability to stay invested in the market with some downside protection.
  
• The strategy is a top performer within the long/short category of mutual funds since its inception 14 years ago.
  
• In 2013, the fund was up almost 30%, in spite of losing 20% on its hedging strategies; that reflects the costs of hedging into a strong market and the effects of reduced equity exposure.
  
• The fund should benefit from the recent increase in volatility as it will be able to sell options with greater premium than in recent years.
  

So it's Wednesday, February 12, from 7:00 - 8:00 EST. Just click REGISTER. I'm really looking forward to the conversation and hope that you'll join us.

As ever,

David

David_Snowball

Just a reminder that we're talking to the guys tomorrow night. Please do let me know if you've got questions or concerns you'd like to pass along. I'm apt to ask about the decision to convert from a hedge fund, perhaps something on the difference from an investor perspective on a fund that hedges with options versus one that shorts, likely something on how they made 30% last year while losing 20% on the hedges.

Looks like 70 or so people are onboard, many of whom are strangers, so it should be interesting.

As ever,

David

finder

It is indeed a very interesting fund, but unfortunately I will be unable to participate in the call at that time, hope to listen to it later. It is true that the fund outperformed S&P 500 since inception in 1999. $10 invested there at inception would become $34 now, which is very good. However the same $10 invested in OAKBX would give $37, and in FPACX it would yield $42. Volatility of OAKBX and FPACX is much, much smaller than of RGHVX. Is it possible to ask the managers why this fund dropped in 2007-2009 by almost 50% from top to bottom, almost as much as S&P 500? Do they think that they can outperform OAKBX and FPACX, or it is a wrong question to ask since nobody knows how these two funds will perform in the future because they cannot use bonds as efficiently as before?

rjb112

Morningstar shows the portfolio as of 1/31/2013 as 102.67% long stocks and only 2.77% short stocks, with essentially no cash.

What's up with that? That would mean they have more long stock exposure than 99% of long only stock funds, if I am reading this correctly.

Charles

By the numbers in the L/S category...



Strong lifetime performance versus S&P, but hedging did not seem to help much in 2008. Perhaps helpful to explain what went wrong with the strategy during that time, if anything. What was learned. How was the strategy improved. Etc.

The good news is the drawdown was short-lived vs S&P. As can be seen in M* performance plot below:



Thanks David! Looking forward to call.

Charles

Just out of curiosity, when you rank RGHIX in the Large Blend category instead of L/S, it scores much better long term.



Still in 2011, it pretty much followed S&P down and the strategy again did not seem to offer much protection. And this time, S&P recovered more quickly.

Ted

Reply to @Charles: I'm having difficulty getting my arms around this fund. Looking at it's returns plus a expense ratio of 1.50% over time I'll stick with SPY. Please don't tell RGHVX, has better risk adjusted returns.
Regards,
Ted
My Arms Around You

Charles

Reply to @Ted: Well, it certainly does have better risk adjusted returns versus S&P over its lifetime...by every measure, Sharpe, Sortino, Martin. Ditto at the 10 year mark. And 5 year. But over last three years, hard to beat the S&P and RGHIX does not - it's in good company here. Past year, just great, as David notes.

MikeM

Per M*, the up/down capture ratio for RGHIX says it captures 82% of the gains of the S&P500 and only takes 56% of the losses. RGHIX has returned almost exactly the same, 19.9% for RGHIX, 19.4% for the S&P500 over 5 years. I'd say the fund is performing as advertized...

Sounds like better adjusted returns