Stock Selection
For the market-neutral portion of the strategy, the Adviser selects the particular stocks on which to go long and short based on quantitative ranking models. The target portfolio typically holds:
- More than 600 individual securities
- Invests in both US and International developed-market stocks
- Targets sector and currency neutrality.
The Fund’s ranking model is based on research of investment anomalies found in peer-reviewed academic journals, and uses machine-learning techniques to most optimally score the universe of input stocks. The Fund seeks to target the best performing, recent, and persistent anomalies. The Fund’s strategy is multi-factor, and seeks to capitalize on many market anomalies at any one time.
An example of such an anomaly would be the Asset Growth, where the literature has shown that companies that are more aggressive with spending their capital (Aggressive Asset Growers) have worse average stock performance than companies that are more conservative in their capital expenditures (Timid Asset Growers). This is evidence that shareholders systematically overestimate the investment decision capabilities of company management.
The figure above represents the total compounded return on $1 invested initially in January of 1995 in a monthly rebalanced even-weighted portfolio without transaction costs of U.S. stocks deciled by asset growth ranks. Asset Growth is defined as the annual percentage change in book value of assets in the prior fiscal year. Timid Asset Growers represents the top 10% of stocks with the lowest asset growth while Aggressive Asset Growers represents the 10% of stocks with highest asset growth.
Static Index Position
For the market exposure portion of the strategy, the Adviser selects a blend of equity index futures, equity index ETFs, and/or equity index swaps based on various factors (liquidity, tracking error, and cost) to achieve exposure to the equity markets with a beta of 0.5.
Portfolio Managers
Fund Tickers and Facts
| Ticker | CPQAX | CPQCX | CPQIX |
|---|---|---|---|
| CUSIP | 66538G130 | 66538G122 | 66538G114 |
| Share Class | Class A | Class C | Institutional |
| Minimum Investment | $5,000 | $5,000 | $100,000 |
| Minimum IRA Investment | $1,000 | $1,000 | $100,000 |
| Management Fee | 1.25% | 1.25% | 1.25% |
| Estimated Other Fund Expenses (Maximum) | 0.47% (0.50%) | 0.47% (0.50%) | 0.47% (0.50%) |
| Estimated Interest/Dividend Expense on Securities Sold Short and Acquired Fund Fees and Expenses | 0.75% | 0.75% | 0.75% |
| 12b-1 Distribution & Marketing | 0.25% | 1.00% | None |
| Total Annual Operating Fees | 2.74% | 3.49% | 2.49% |
| Fund Inception Date | October 4, 2017 | ||
| Fund Overview Sheet |  | ||
| Quarterly Fact Sheet |  | ||
| Prospectus |  |
Performance Since Inception
| As of April 01, 2020 | As of March 31, 2020 | ||||||
|---|---|---|---|---|---|---|---|
| Return Since Fund Inception (Annualized) | Year to Date | 1 Year Return | Standard Deviation (Annualized) | Return Since Fund Inception (Annualized) | Year To Date | 1 Year Return | |
| CPQIX | -6.30% | -13.30% | -11.81% | 13.23% | -5.48% | -11.40% | -9.62% |
| CPQAX Without Sales Load | -6.52% | -13.32% | -12.02% | 13.23% | -5.71% | -11.42% | -9.76% |
| CPQAX With Sales Load (5.75%) | -8.73% | -18.33% | -17.06% | 13.23% | -7.94% | -16.53% | -14.95% |
| CPQCX | -5.85% | -13.64% | -11.37% | 13.23% | -5.01% | -11.70% | -9.06% |
| Blended Index 50% S&P 500 Index and 50% ICE BofA Merrill Lynch 3-Month U.S. Treasury Bill Index | 1.83% | -11.78% | -4.72% | 15.51% | 2.75% | -9.79% | -1.99% |
Fund inception date is October 4, 2017.
The performance data displayed here represents past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. The Fund’s investment adviser has contractually agreed to reduce its fees and/or absorb expenses of the Fund, at least until January 31, 2019 to ensure that the net annual fund operating expenses exclusive of Acquired Fund Fees and Interest/Dividends on Short Sales will not exceed 2.00%, 2.75%, and 1.75% attributable to Class A, Class C, and Class I shares, subject to possible recoupment from the Fund in future years. Without these waivers and expense exclusions, the Fund’s total annual operating expenses would be 2.74%, 3.49%, and 2.49% attributable to Class A, Class C, and Class I shares. Please review the fund’s prospectus for more information regarding the fund’s fees and expenses. A shares (CPQAX) have a Front-End Sales Charge (commission or “load”) of 5.75%, with lower rates for accounts over $25,000, and 12b-1 distribution fee of 0.25% per year.
The S&P 500® provides investors with a benchmark for large companies. The Counterpoint Long-Short Equity Fund Blended index is a composite of 50% S&P 500 Index and 50% of ICE BofA Merrill Lynch 3-Month U.S. Treasury Bill Index, an unmanaged market index of U.S. Treasury securities maturing in 90 days that assumes reinvestment of all income.
Fund Holdings
| Top Ten Holdings - as of March 31, 2020 | |
|---|---|
| TREASURY BILL 07/02/2020 | 10.97% |
| CTLS-JPCPLSUS2 | 8.88% |
| Fidelity Investments Money Market Funds - | 8.5% |
| TREASURY BILL 09/10/2020 | 7.98% |
| CTLS-SPY SWAP | 4.75% |
| SPDR S&P 500 ETF Trust | 3.76% |
| GOLDMAN SACHS FINANCIAL SQUARE FUNDS - TREASURY | 3.66% |
| CTLS GS LONG 2- GSGL | 1.44% |
| RECV CTLS-JPCPLSUS3 | 0.94% |
| CTLS GS LONG 1- GSGL | 0.85% |
Download US & International Basket Swap Holdings as of 12/31/2019
Download US & International Basket Swap Holdings as of 9/30/2019
Download US & International Basket Swap Holdings as of 6/28/2019
Download US & International Basket Swap Holdings as of 3/31/2019
Download US & International Basket Swap Holdings as of 12/31/2018
Download US & International Basket Swap Holdings as of 9/28/2018
Download US & International Basket Swap Holdings as of 6/29/2018
Download US & International Basket Swap Holdings as of 3/29/2018
Download US & International Basket Swap Holdings as of 12/29/2017
Portfolio holdings are subject to change, vary over time and should not be considered a recommendation to buy any individual security.
IMPORTANT RISK INFORMATION
Mutual Funds involve risk including the possible loss of principal. The Fund is a new mutual fund as has a limited history of operations for investors to evaluate. The use of leverage by the Fund or an Underlying Fund, such as borrowing money to purchase securities or the use of derivatives, will indirectly cause the Fund to incur additional expenses and magnify the Fund’s gains or losses. A higher portfolio turnover will result in higher transactional and brokerage costs. Derivative instruments involve risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments.Overall equity and fixed income market risk, including volatility, may affect the value of individual instruments in which the Fund invests. The net asset value of the Fund will fluctuate based on changes in the value of the U.S. and/or foreign equity securities held by the Fund. Fixed income risk factors include credit risk and prepayment risk. When the Fund invests in other investment companies, it will bear additional expenses based on its pro rata share of the other investment company’s operating expenses, including the potential duplication of management fees.
The fund may invest in options which hold an underlying risk greater than securities. The Fund’s losses are potentially large in a written put transaction and potentially unlimited in an unhedged written call transaction. The earnings and prospects of small and medium sized companies are more volatile than larger companies and may experience higher failure rates than larger companies. The Fund may use swaps to enhance returns and manage risk, which involves risks possibly greater than, the risks associated with investing directly in securities and other traditional investments.
The Adviser’s reliance on its strategy and its judgments about the value and potential appreciation securities in which the Fund invests may prove to be incorrect, including the Adviser’s tactical allocation of the Fund’s portfolio among its investments. The adviser’s investment model carries a risk that the mathematical model used might be based on one or more incorrect assumptions.
Long positions entail purchasing securities with the intention of holding them in anticipation of a price increase. Short positions entail borrowing securities with the intention of holding them in anticipation of a price decrease.