New M.D. Sass Equity Income Plus Fund Aims To Address Investor Needs In Today's Increasingly Volatile Market Environment

NEW YORK, July 12, 2013 /PRNewswire/ -- M.D. Sass, a leading name in investment management for more than 40 years, is pleased to announce the launch of the M.D. Sass Equity Income Plus Fund (Institutional Class: MDEIX; Retail Class: MDEPX), which uses an option-oriented, diversified equity strategy that seeks to capture attractive returns with limited downside risk. With the EIP Fund, even if the markets are flat, investors still have the potential to generate attractive dividend yield and call option sale cash flow. 

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The new fund uses M.D. Sass' proprietary high-yield, hedged, equity strategy that the firm has managed for institutional investors for more than four years. It seeks to generate high dividend income from a rigorously researched portfolio of stocks plus the cash flow from the sale of covered call options on each stock position. In addition to driving the fund's returns, this income and cash flow aims to provide some downside protection. In order to further hedge against sharp market declines, M.D. Sass will buy put options on equity security indices.

The EIP Fund's diversified portfolio of dividend paying common stocks, the cash flow from the sale of covered call options, and the additional hedging from the purchase of index put options seek to generate positive absolute returns over time with less downside risk than stocks and without the interest rate downside sensitivity of longer term bonds when and as interest rates rise.

M.D. Sass offers this fund as a value-added complement to investors' traditional equity and fixed income holdings. It is a potential source of diversification for investors seeking an actively managed portfolio with potentially less volatility than the equity markets and a possible high income alternative with less exposure than bonds to potentially higher interest rates. 

Martin D. Sass, the firm's founder and CEO, leads the fund's Equity Portfolio Management Team, bringing to bear more than 40 years of equity investing. As an indication of their strong conviction behind the strategy, the principals of the firm are investing a significant portion of their personal assets in the fund.

"The beauty of this fund is that even if the underlying stocks in the strategy remain the same, it still has the potential to capture returns from dividends and option premiums, potentially exceeding the yield offered from high yield bonds today. That happens without the risk they have from rising interest rates," said Mr. Sass. "The fund makes a great complement to equities and bonds in a diversified portfolio."

M.D. Sass specializes in equities, fixed income and alternative investment management, blending value-added strategies to build diversified portfolios tailored to clients' needs. The firm finds intrinsic value in market inefficiencies, believing the most attractive opportunities are discovered by questioning conventional wisdom.

M.D. Sass used its cumulative knowledge from decades of investment management experience to launch the EIP Fund, paying particular attention to the needs of investors. The heightened market volatility and declining bond prices make the current environment ideal for this strategy. Investors gravitating away from bonds and toward equities for income and yield have a new source of potential positive cash flow generation through high quality dividends, options and hedging techniques.

"We have reached a rare inflection point with today's interest rate environment and our risk/return profile is something every investor should consider," said Hugh Lamle, president, M.D. Sass. "This strategy also serves as a complement to hedge fund investments. For those who have been disappointed by the results of long-short hedge funds in recent years, we believe this is a great way to seek better returns over time with the potential for better downside protection, significantly lower fees and daily liquidity."

For more information on the M.D. Sass Equity Income Plus Fund, please visit www.mdsassfunds.com, call 212-710-5010 or e-mail [email protected].

About M.D. Sass

M.D. Sass is an independent, privately-owned, New York-based investment management firm that manages a broad spectrum of investment strategies for some of the world's largest institutions, most prominent corporations and wealthiest individuals. Our Equity Income Plus mutual fund uses a distinct options strategy in an attempt to optimize returns and reduce volatility for individual and institutional investors. Our fund uses a strategy of selling "out-of-the-money" covered calls against undervalued, high quality, dividend paying stocks. Our strategy provides the potential for additional downside protection with the purchase of equity index puts that serve as a hedge for the underlying portfolio in the event of a steep market decline. We seek attractive absolute returns over full market cycles, but with potentially less downside risk than equities and less exposure than bonds to rising interest rates.

The Fund's investment objectives, risks, charges and expenses must be considered carefully before investing.  The statutory and summary prospectuses contain this and other important information about the investment company, and it may be obtained by calling 855-637-3863, or visiting www.mdsassfunds.com.  Read carefully before investing.

The Fund invests in a limited number of companies. Therefore, changes in the value of a single security may have a more significant effect on the value of the Fund's portfolio than for other funds that invest in a greater number of companies. The Fund invests in mid-cap companies, which involves additional risks such as limited liquidity and greater volatility than large capitalization companies. The Fund invests in options, which may be more volatile than investments directly in the underlying securities, involve additional costs and may involve a small initial investment relative to the risk assumed. When the Fund writes a call option, its ability to participate in the capital appreciation of the underlying obligation is limited. There is no assurance that a closing transaction on a call option can be effected at a favorable price. During the option period, the covered call writer has, in return for the premium received, given up the opportunity for capital appreciation above the exercise price should the market price of the underlying security increase, but has retained the risk of loss should the price of the underlying security decline. If the Fund has purchased an index option and exercises it before the closing index value for that day is available, it runs the risk that the level of the underlying index may subsequently change. If such a change causes the exercised option to fall out-of-the-money, the Fund will be required to pay the difference between the closing index value and the exercise price of the option (times the applicable multiplier) to the assigned writer. If an index put option purchased by the Fund were permitted to expire without being exercised, its premium would represent a loss realized by the Fund. When the Fund invests in other investment companies, including ETFs, it will bear additional expenses based on its pro rata share of the other investment company's or ETF's operating expenses, including the potential duplication of management fees. The risk of owning an ETF generally reflects the risks of owning the underlying investments the ETF holds. Mutual fund investing involves risk.  Principal loss is possible.  Diversification does not ensure a profit, nor does it protect against a loss in a declining market.

Cash Flow: The premium received by writers (sellers) of call options.

The MD Sass Equity Income Plus Fund is distributed by Quasar Distributors, LLC.

James Doyle
Jennifer Connelly Public Relations
973-850-7308
[email protected]

SOURCE M.D. Sass