Salient Completes Launch Of Salient Risk Parity Fund Mutual Fund Seeks to Provide Efficient Diversification by Spreading Risk Equally Across a Broad Set of Asset Classes and Targeting a Specific Level of Volatility
HOUSTON, Jan. 22, 2013 /PRNewswire/ -- Salient Partners L.P. (Salient), a $17.4 billion asset management firm, has completed the launch of the Salient Risk Parity Fund (Class A Ticker: SRPAX, Class C Ticker: SRPCX, Class I Ticker: SRPFX).
The Fund seeks to generate long-term capital appreciation by utilizing risk parity, a global allocation and risk management strategy whereby risk is distributed equally across a broad set of asset classes within a portfolio while targeting a specific level of volatility, allowing dollar levels to adjust accordingly. Under the risk parity framework, the Fund seeks to keep volatility levels constant throughout all market conditions. In addition, asset classes are linked to major market drivers (growth, sentiment, inflation and deflation) while maintaining low correlations to each other.
"The erratic performance of the equity markets in recent years has brought home to investors the need to find an alternative to traditional asset allocation strategies," said Lee Partridge, CFA, Salient Chief Investment Officer, who serves as the Fund's Portfolio Manager along with Roberto M. Croce, Ph.D., Salient Director of Quantitative Research. "The Salient Risk Parity Fund seeks to allow investors to create a truly efficient portfolio by more accurately reflecting the levels of volatility and correlation among asset classes, and in particular by reducing the dominance of equities within the investing portfolio."
The Fund primarily invests in futures contracts and other financial instruments with exposure to global equity markets, global interest rates markets (related to government bond markets of developed nations) and global commodities markets. It targets a 15-percent volatility level spread equally across equities, commodities, interest rates and momentum (the continuation of recent price trends).
"By offering the risk parity strategy in a mutual fund, Salient is giving a greater number of investors the opportunity to potentially achieve efficient diversification without overly relying on factors such as equity risk or emotional weights," said Mr. Partridge. "This innovative strategy seeks to eliminate the inefficiencies of more traditional asset allocations, giving investors more control over their risk level and providing an allocation alternative to equity concentration."
The Fund's investment advisor (the "Advisor") is Salient Advisors, L.P., a wholly-owned subsidiary of Salient Partners, L.P.
The Fund is a newly organized open-end investment company and has limited operating history, including limited historical performance record, as such the Fund is subject to all of the business risks and uncertainties associated with any new business. The Advisor relies heavily on quantitative models (both proprietary models and those supplied by third party vendors) and information and data supplied by third party vendors. Any decisions made in reliance on incorrect or incomplete models and data expose the Fund to potential risks. The Advisor's momentum strategy will have the effect of amplifying the Fund's exposure to assets whose prices have been rising and lessening the Fund's exposure to assets whose prices have been declining, which may result in more volatility than investments in broader cross-section of securities.
Actual and realized volatility can and will differ from the anticipated and target volatility described. There is no assurance that the Fund's use of investment instrument providing exposure will enable the Fund to achieve its investment objective.
Investing in derivative instruments (such as options, futures, forwards or swaps) and commodity-linked investments can be riskier than traditional investments, and may be more volatile than investments in traditional securities. The value of commodity-linked investments may be affected by financial factors, political developments and natural disasters.
The primary risks of futures contracts are the possible lack of a liquid secondary market, losses caused by unanticipated market movements, the Advisor's inability to predict correctly the direction of securities prices, interest rates, currency exchange rates and other economic factors, and counterparty default.
In addition, if the Fund has insufficient cash, it may be required to sell portfolio securities to meet margin requirements. Trying to enhance investment returns by borrowing money or using other leverage tools magnifies both gains and losses, resulting in greater volatility. Investments in foreign securities involve special risks not present in U.S. investments, such as currency fluctuations, lack of regulatory oversight and political developments. Investments in emerging markets are riskier than investment in more developed markets and are subject to risks related to currency, liquidity and volatility. These investments may be considered speculative. Investments in fixed-income securities generally are subject to an issuer's credit risk and risks resulting from changes in the general level of interest rates.
Changes in tax laws or regulations, or interpretations thereof in the future, could adversely affect the Fund. Legislation could also negatively impact the amount and tax characterization of distributions received by the Fund's shareholders.
No fund is a complete investment program and you may lose money investing in a fund. The Fund may engage in other investment practices that may involve additional risks and you should review the Fund's prospectus for a complete description.
You 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 and is available, along with information on other Salient funds, by calling 866-667-9228 or from your financial professional. The prospectus should be read carefully before investing.
About Salient Partners L.P.
Salient Partners L.P. is a $17.4 billion investment management firm based in Houston, Texas. The firm is a recognized innovator in the development, management and delivery of sophisticated, non-traditional investment solutions for both institutional and retail investors. Through its comprehensive investment approach, Salient identifies and develops leading strategies that help eliminate unrewarded risk, reduce investing costs and focus on the fundamental drivers of returns to deliver the full potential of all markets to investors. For more information about Salient and its professionals, visit www.salientpartners.com.
The Salient Risk Parity Fund is distributed by Foreside Fund Services, LLC.
Fund shares are not FDIC insured, not bank guaranteed and may lose value.
SOURCE Salient Partners L.P.