Run by a well-regarded Minneapolis hedge fund manager (Andrew Redleaf). Expenses are somewhat high,but not unusual for a fund that can short. Multi-cap.
Fund looks for contrarian plays, can go short either via options or futures, is US only and can use ETFS and closed-end funds. Is currently nearly 30% cash.
"The Adviser has wide latitude to allocate Tactical Opportunities Fund’s assets among common and preferred stocks, warrants,
fixed income securities, convertible securities, indexed securities and derivatives."
The last page of the current fact sheet provides a pretty lengthy and fairly compelling discussion on the fund's philosophies regarding hedging and alternative investing.
I'm not investing yet, but I think it's interesting. Has so far done better than the category.
http://www.whiteboxmutualfunds.com/content/assets/docs/WBTactical_Fund_FactSheet_2012Q2.pdf
Comments
Do you know anything about the manager's hedge fund? Does it follow a similar strategy? Does it have a longer perf. record than the mutual fund? Would be interesting to know if the large cash position is one that fluctuates or remains fairly steady (like PVFIX).
From the fact sheet, this seems to look like a domestic version of PMHIX... long-biased, value oriented domestic go anywhere fund with the ability to short.
BWG
Still, it would appear that he is (roughly) 30% in the S&P, 30% in cash, and 40% in everything else, primarily US investments. Interestingly, that isn't too far off my allocation exposure.
http://quote.morningstar.com/fund/f.aspx?t=WBMRX
It also appears that this fund is NTF at Fidelity with 1000 min for IRA's. Very interesting.
(Note- this was a reply to pB which he evidently subsequently edited. Or possibly a MFO site malfunction, as it was acting a little flaky when I posted this, as evidenced by the large empty space in his post.)
Recent article by manager re: Nat Gas
http://www.forbes.com/sites/steveschaefer/2012/05/31/why-it-might-finally-be-time-for-natural-gas-to-make-a-comeback/
Another recent article re: Small Caps:
http://www.forbes.com/sites/steveschaefer/2012/06/01/why-small-cap-stocks-wont-inherit-the-earth/
Collection of articles and videos: http://www.hedgefundletters.com/category/whitebox-advisors/
Huffpost Articles:
http://www.huffingtonpost.com/andrew-redleaf
The S & P ETF holding may be part of the discussed trade re long large caps and short small caps. However, given that the fund maintains a similar cash % holding in recent time, this may be an error (?) The fund does seem fairly aggressive - from what I've read so far - in terms of attempting to dial up and down exposure, and I think may resemble Marketfield in attempts to dial up and down risk, whereas PMHIX seems geared towards - aside from the risk of its concentrated nature - a smoother ride. This fund also seems fairly heavily intent on what it believes to be contrarian plays.
"Redleaf became a hero to his clients in 2007 when the market for subprime mortgage bonds collapsed. He had warned that would happen in a letter in December 2006. “Sometime in the next 12 to 18 months, there is going to be a panic in credit markets,” Redleaf wrote.
Bearish Bet
Whitebox bought credit-default swaps on mortgage-backed securities, betting on a decline. As a result, its Hedged High Yield Fund had a 33 percent return in 2007, according to investors. This is the same fund that made Whitebox’s ethanol investments.
Redleaf then bought back into credit markets too soon during the crisis of 2008. His six funds fell an average of 40 percent. Whitebox recovered in 2009, with fund returns averaging 80 percent, investors say."
"Redleaf completed undergraduate and master’s degrees in mathematics at Yale University in just three years, graduating in 1978. While there, he says, he developed a model for valuing stock options similar to the Black-Scholes method."
http://www.bloomberg.com/news/2010-06-02/andy-redleaf-math-fails-as-whitebox-hedge-fund-loses-appetite-for-ethanol.html
Link: http://www.whiteboxselectedresearch.com/
The Whitebox Advisor articles on the website are manager Redleaf's newsletter.
The latest one is here: http://www.whiteboxselectedresearch.com/wp-content/uploads/2012/07/WBA-Final-Maybe-This-Time-is-Different.pdf
Again, I don't know if I'm going to invest yet, but a pretty interesting little fund and the kind of thing that David may be interested in profiling in a future update for MFO.
BWG
WBMRX
As for fund tickers, hopefully the fund will not be another NARFX - although Whitebox as a hedge fund seems to have more of a backstory/record.
Happy to help! Some thoughts
1. New fund. A hedge fund may not always translate to a good mutual fund. See NARFX (which was sold and turned into another fund.) Not comparing management of NARFX to this fund or anything, but I suppose it's a belief that a hedge fund strategy does not always carry over to the mutual fund world. However, the Whitebox fund is doing well so far.
2. FPA Crescent (FPACX) may have a couple of issues (structural - it could probably close), but I think it's still an excellent fund with a great manager in Romick (whose views I continue to agree with a great deal.) Personally, I don't know if I'd replace it or if this is an apples-to-apples replacement. The Whitebox fund is a new fund, but I think this is going to be a unique/unusual offering in that part of the stock holdings may be broad, but there may be a sizable portion in contrarian ideas/plays/themes - a further discussion by the manager regarding his nat gas theme is available in this Barrons article (http://www.forbes.com/sites/steveschaefer/2012/05/31/why-it-might-finally-be-time-for-natural-gas-to-make-a-comeback/)
Also note, from the Whitebox quarterly report: "Our fund is not currently “market neutral.” We have a strong “long-bias”. At
other times we may have a strong short bias. Our returns will reflect at least a
portion of day to day, normal market volatility. Our goal is to outperform not by
delivering smooth returns all the time. Our goal is to outperform by doing two
things. (1) Avoiding catastrophic capital losses that can derail an investment
program for years, or forever. (2) Being invested in areas of exceptional
opportunity wherever in securities markets those opportunities arise."
So, the fund definitely has the flexibility to dial up and down risk, to the point where it can have a "strong short bias."
3. Amusing name. Whitebox is a play on the opaque "black box" strategies that hedge funds often have. Their big thing is being transparent with shareholders in communications and otherwise.
4. Again, while the hedge fund may be highly regarded, new mutual fund. However, there is a lot available online about the manager. Their "Whitebox Selected Research" is enjoyable reading, both from the articles from others and the articles from Whitebox. Redleaf wrote a book, "Panic", about the financial crisis, which does not appear to be available new anymore from amazon, but is available used, and got good reviews.
5. One other interesting note: the co-manager of the fund is ROB VOGEL
Rob Vogel joined Whitebox Advisors, LLC in 1999 as a convertible bond trader. From 1995 – 1999, Rob was a convertible bond trader for EBF & Associates of Minneapolis. From 1991 – 1995, Rob was an actuary and ran statistical models to estimate insurance reserves. Rob holds an MBA from the University of Minnesota and a BS in Applied Mathematics and Statistics from the University of Florida.
If you look under the Whitebox Selected Research, there is an article from Hedge Fund Review, awarding "Whitebox Concentrated Convertible Arbitrage" the "Best Non-Directional Hedge Fund Over 10 Years"
So, beyond what's available on Redleaf, this gives you some idea about the background of another manager on the fund:
http://www.whiteboxselectedresearch.com/wp-content/uploads/2012/08/HFR-Article-on-Convertible.pdf
Under that article about the convertible arb hedge fund: "The fund’s investments are
guided by Whitebox’s distinctive
market philosophy. One of the core
themes is to “be more invested at the
bottom than the top”. This reflects
Whitebox’s view that contrary to
conventional investment theories,
markets actually tend to be more
risky when they are less volatile."
“When markets are less volatile,
prices are generally higher, which
probably makes them riskier,” Vogel
explains. “We aim to be less exposed
when markets are tranquil so that,
if the cycle turns and prices get
cheaper, we can add to positions.”
As for the last manager, I think this is awfully interesting: " Prior to joining Whitebox Advisors, LLC in 2002, Jason spent two years working with Nobel Laureate Myron Scholes at Oak Hill Platinum Partners where he developed models for long/short equity strategies. "
http://en.wikipedia.org/wiki/Myron_Scholes
____
Lastly, I don't really want to tell David what to do, but I do agree this is really a fund that would be perfect for a profile. It only has 9.5M under management, but a pretty highly regarded management team.
they do expect the convertible fund to open in a few months