MAI Managed Volatility Fund


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MAI Managed Volatility Fund


Institutional Class: MAIPX

Inception: September 23, 2010


Investor Class: DIVPX
Inception: December 2, 2010


Fund Objective

Income & long term capital appreciation

Fund Philosophy

In seeking to achieve the Fund’s Investment Objective, we look to deliver a consistent return stream for investors who are focused on reducing the impact of major market events while still seeking absolute returns over multiple market cycles.

Fund Highlights

  1. Multiple sources of potential return: option premium income, dividend income, interest and stock appreciation
  2. The Fund does not use leverage and has no embedded interest rate bets

Investment Process

  1. Invest in a diversified basket of stocks with a dividend growth focus
  2. Strategically sell fully collateralized call and put options averaging ≤9 weeks in duration

Designed For

  1. Investors looking for an alternative strategy with low beta to equity markets
  2. Investors seeking to reduce portfolio volatility
  3. Investors looking to diversify portfolio and enhance their risk adjusted return potential by introducing differentiated return stream opportunities

Important Disclosures

An investor should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. The prospectus contains this and other information about the Fund. The prospectus should be read carefully before investing.

Option risks include, but are not limited to, the possibility of an imperfect correlation between the movement in the options’ prices and that of the securities/indices hedged (or used for cover), which may render a given hedge unable to achieve its objective; possible loss of the premium paid for options; and potential inability to benefit from the appreciation of an underlying security above the exercise price.

An investment in the Fund is subject to risk, including the possible loss of principal amount invested. The Fund may invest in securities issued by smaller and medium-sized companies, which typically involves greater risk than investing in larger, more established companies. Selling Call Options risk occurs if the Fund is required to sell an underlying security and forego gains if the price exceeds the exercise price before expiration date. Selling Put Options risk is that the Fund will incur a loss from the sale of the option and the security’s current market value if selling put options of an underlying security at a market price below the exercise price. Investing in hedging instruments, such as options, may result in losses that are much greater than their original cost. ADRs (American Depositary Receipt) may be subject to international trade, currency, political, regulatory and diplomatic risks. The Fund is also subject to other risks, such as Fixed-Income Securities risk, which are detailed in the Fund’s prospectus.

Call is an option contract giving the owner the right (but not the obligation) to buy a specified amount of an underlying security at a specified price within a specified time. Covered Call is an options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset in an effort to potentially generate increased income from the asset. Put is an option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time. Cash Secured Put is a put for which the writer deposits an amount of cash equal to the option’s exercise price. Beta is a measure of a fund’s sensitivity to market movements. A portfolio with a beta greater than 1 is more volatile than the market, and a portfolio with a beta less than 1 is less volatile than the market.

The MAI Managed Volatility Fund is distributed by Foreside Fund Services, LLC.

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