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Fund Watch

This Low-Minimum, No-Load Managed Futures Fund Is Crushing the Market

A stronger dollar is among the trends helping Altegris Futures Evolution Strategy N.

With the markets in turmoil, alternative mutual funds are getting a chance to strut their stuff. One category worth a look is managed futures funds. Managers of these funds typically follow trends, betting that asset classes that are performing well will continue to gain and that those in decline will keep sinking. They do so by trading futures contracts (agreements to buy or sell a commodity or financial asset for a set price at a future date).

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Altegris Futures Evolution Strategy N (symbol EVONX) is one of the few no-load futures funds with a low minimum ($2,500). It shined over the past year, beating Standard & Poor’s 500-stock index by 16 percentage points. “Trends that run and persist, such as the strengthening dollar, weakening euro and yen, and declining crude oil prices, have been great opportunities,” says Matt Osborne, co-president of Altegris Advisors.

Two firms that specialize in futures manage up to one-fourth of the fund’s assets. Because securing a futures contract usually requires less cash than the contract’s face value, Altegris can invest the bulk of its assets in bonds. DoubleLine, which runs Kiplinger 25 member DoubleLine Total Return (DLTNX), manages the fund’s bond portfolio to produce extra return beyond the gains (or losses) from the futures trading.

Like other managed futures funds, Evolution Strategy isn’t cheap. The fund’s expense ratio is 1.94%, though that’s slightly lower than the category average of 2.12%.

@Rankings exclude share classes of this fund with different fee structures or higher minimum initial investments. sFront-end sales charge; redemption fee may apply. rMaximum redemption fee. Sources: Morningstar Inc., Vanguard.

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