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Rating:A New Fund Applies Long/Short Approach to ETFs Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, April 24, 2009

A New Fund Applies Long/Short Approach to ETFs

Reported by Neil Anderson, Managing Editor

Sherwood Forest Capital Management just put a little twist on the long/short fever sweeping the mutual fund industry. On Friday the Charlottesville, Virginia-based money manager unveiled the no-load Sherwood Forest Long/Short Fund, a long/short mutual fund that invests in U.S. and foreign ETFs.

Portfolio manager Douglas Stewart said the ETF commences with "some $10 million in assets, which we managed previously as separate accounts for our Firm's clients."

"Now, with this new mutual fund structure, we have made our 'proprietary methodologies' for investing in ETFs more widely available to investors," stated Stewart. "Without a directional bias, we are focused strictly on managing the risk of the portfolio.

In an interview with MFWire, marketing director Steven O'Leary confirmed that Sherwood had managed the same "hedge-fund-like" strategy in separate accounts from April 2007 through January 2009, but they wanted the transparency and distribution power available via an open-ended mutual fund.

"We really wanted to be able to reach more people," O'Leary told MFWire.

The fund offers I shares for 165 basis points and P shares for 190 bps.


Company Press Release

CHARLOTTESVILLE, Va., April 24 /PRNewswire/ -- Sherwood Forest Capital Management announced today that effective February 11, 2009, it has launched no-load, Sherwood Forest Long/Short Fund (SFCMX), investing in exchange-traded funds ("ETFs"), both U.S. and overseas.

In making the announcement, Douglas Stewart, Portfolio Manager, said, "This unique ETF fund commences with some $10 million in assets, which we managed previously as separate accounts for our Firm's clients." The previous composite returns (net of fees) were +32.03% for the year ending 12/31/08; and, +41.09% since inception in 04/01/07.

"Now, with this new mutual fund structure," Mr. Stewart said, "We have made our 'proprietary methodologies' for investing in ETFs more widely available to investors."

In describing the Fund's strategy, Mr. Stewart said, "SFCMX uses proprietary technical analysis to determine investments viable for the fund. We scan many sectors and indices looking for investment opportunities, finding long opportunities are treated with the same priority as the opportunities to short. Without a directional bias, we are focused strictly on managing the risk of the portfolio."

"The combination of a realistic perspective of cause and effect, an unattached and unemotional distance from any one belief, and a disciplined application of risk management techniques to portfolio management," Mr. Stewart explained, "are the keys to the success we experience at Sherwood Forest Capital Management."

The Sherwood Forest Long/Short Fund seeks to achieve long-term capital appreciation. To achieve its investment objective, the Fund applies proprietary, trend-following methodologies to invest in exchange-traded funds ("ETFs") which represent general asset classes, including: both U.S. and overseas equity markets; U.S. fixed income markets; broad commodity indices; and the U.S. Dollar. The fund's portfolio may include ETFs which invest in both developed and emerging markets in Europe, the Far East, the Middle East, Africa, Australia, Latin America and North America. The Adviser's top-down strategies and methodologies are designed to profit from market trends in both directions in these classes, with little regard for fundamental research and/or analysis of individual equity or debt securities. The individual components/ETFs work together to lower fund volatility through diversification of asset classes, while the trend-following methodologies provide returns which are typically uncorrelated to traditional managers and investment "styles."

For more information and/or a copy of our 1st Quarter Report/2009, call: Steven O'Leary, Client Relations - at 800-718-0556; Email: soleary@sfcmva.com and/or visit our website: www.sfcmva.com. 

Correction: A previous version of this story incorrectly stated the expense ratio for the Sherwood Forest Long/Short Fund.

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