Hercules Investments launches the Hercules Fund
Hercules Investments, a Registered Investment Adviser and alternatives investment manager, has launched the Hercules Fund (NFLHX), a mutual fund aimed at helping investors profit from stock market volatility amid Covid-19 uncertainty and risks of rising inflation.
The Hercules Fund seeks to profit from periods of stock market volatility using liquid alternative assets, which are investments outside of traditional stocks and bonds.
Frothy stock market valuations and the prospect of higher inflation from Covid-19-related fiscal and monetary stimulus may result in lower stock market returns with increased volatility in traditional portfolios that are comprised of 60 per cent stocks and 40 per cent bonds, also known as 60/40 portfolios. A liquid alternatives allocation may help investors generate positive returns from large stock market swings.
James McDonald, CEO and Chief Investment Officer of Hercules Investments, will serve as Portfolio Manager of the Hercules Fund.
The Hercules Fund aims to generate positive returns during times of rising and falling stock markets.
The Fund seeks to implement very short-term long and short positions in call and put options on the main US stock indexes.
Options on broad stock market indexes minimises risk, compared to options on single individual stocks.
“These are incredibly uncertain times for the stock market and for investors,” says McDonald. “The tragic Covid-19 pandemic has shed light on the deficiencies of traditional 60/40 portfolios and the importance of a sophisticated liquid alternatives asset allocation strategy. The strategies we use for clients at Hercules Investments will now be offered to investors and financial advisors through the Hercules Fund. I believe it is prudent for investors and financial advisors to consider liquid alternatives during these unprecedented times in the stock market.”