Cognios Capital, LLCtoday announced the launch of the Cognios Market Neutral Large Cap Fund (COGMX & COGIX) – the firm’sinaugural mutual fund with a goal to provide individuals and institutions with an investment product previously reserved for hedge fund clients. The investment strategy of the Fund aims to outperform the S&P 500 Index1 over time by purchasing and selling short large capitalization U.S. equities through its proprietary ROTA/ROMETM valuation method.
“In times of unpredictable and volatile markets, investors are seeking long-term performance regardless of market conditions and a management team they can trust,” said John Brandmeyer, chief executive officer of Cognios Capital. “The goal of this new mutual fund is to give retail investors access to a proprietary long/short equity strategy. Strategies of this type have generally only been available to institutions and wealthy individuals through hedge funds.”
The Fund differs from traditional long-only mutual funds by employing risk management techniques, such as the use of hedging through short sales. This hedging strategy has the potential to limit the downside risk of the portfolio, as well as the potential to generate alpha2 for the Fund. Additionally, the Fund is uniquely indexed to the S&P 500, whereas most market neutral funds are indexed to treasury bills.
“There is increasing demand from retail investors for expertise in alternative investment management, particularly for investment options that are liquid and less correlated to broader equity markets,” said Jon Angrist, chief investment officer of Cognios Capital. “Our new long/short mutual fund approach responds well to these demands and offers a new strategy for retail investors to diversify their portfolios.”
The no-load Fund offers two classes of shares – an Investor Class (COGMX) and an Institutional Class (COGIX). The minimum investment is $1,000 for the Investor Class and $100,000 for the Institutional Class. Investors generally may meet the minimum investment amount for the Institutional Class by aggregating multiple accounts within the Fund, if desired. There is no subsequent investment minimum. The Fund launched with an initial $10m of seed capital from management.
A Unique Mindset in Investment Management
Founded in 2008 as an independent alternative investment management firm, Cognios Capital strives to change the way people think about the investment industry by providing investor-friendly services and investment strategies that aim to perform well, independent of broad market conditions.
In early 2012, this unique positioning attracted James E. Stowers III, the former chairman and chief executive officer of American Century Investments, who now serves as a Cognios Capital advisory board member.
“Cognios Capital was born out of a client-centric mentality, based on the premise that investors should receive long-term investment performance, transparency and liquidity,” said Stowers. “I have always believed in the Golden Rule, and at Cognios, we align our interests with that of our clients in order to provide unbiased counsel and responsive service.”
Cognios Capital’s proprietary ROTA/ROMETM strategy is a fundamental quantitative stock selection approach that focuses on a company’s Return on Tangible Assets (“ROTA”) and Return on Market Value of Equity (“ROME”). This strategy seeks to determine a company’s intrinsic value and compare that value to the current market price of its stock.
"Our ROTA/ROME™ methodology uses time-tested metrics to buy great companies at what we believe are great prices," said Brian Machtley, executive vice president, head of research and portfolio management, and co-founder of Cognios Capital. “In general, this approach can be considered a value-based investment strategy, but it also incorporates the premise that growth is an important component of assessing a stock’s intrinsic value.”
Prior to founding Cognios Capital, Machtley was a senior analyst at Helzberg Angrist Capital, LLC, an associate portfolio manager at the Discovery Group, a hedge fund, and an analyst at Houlihan Lokey.
Co-manager of the Fund and chief investment officer of Cognios Capital, Jonathan Angrist, previously held portfolio management positions at Helzberg Angrist Capital, LLC and Buffalo Funds, and was a Principal with Harvest Partners Inc., a private equity and leveraged buyout firm.
For more information on mutual fund offerings, please contact Cognios Funds at 1-855-254-6467 or [email protected]
For media inquiries, contact Azure Postell at 913-214-5003 or [email protected]
About Cognios Capital
Cognios Capital (www.cognios.com) is a private independent investment management firm headquartered in Leawood, KS. As an investment adviser to institutional clients and individuals, Cognios Capital is committed to proprietary, independent research based on risk-adjusted performance. Cognios Capital pursues investment excellence by providing significant market risk mitigation and valuable research expertise. As of November 30, 2012, Cognios Capital had $132.9 million assets under management.
The Cognios Market Neutral Large Cap Fund is distributed by ALPS Distributors, Inc.
1S&P 500 Index - The S&P 500 Index is a market value weighted index. The Index includes 500 of the leading companies in the leading industries of the U.S. economy, capturing 75% coverage of the U.S. equities.
2alpha - The risk-adjusted (i.e., Beta-adjusted) outperformance or underperformance of the portfolio relative to the stock market. Since the Fund has generally attempted to hedge out all of the overall market’s returns on a Beta-adjusted basis through its short positions, all of the Fund’s net return is expected to be solely the Alpha generated by the portfolio managers, less all of the Fund’s fees and expenses.
As with any mutual fund, there are risks to investing. The value of the Fund’s assets will fluctuate as the equity market fluctuates, although the Beta-adjusted market neutral focus of the Fund should reduce the effect of general market fluctuations on the valuation of the Fund as a whole. Utilization of leverage, such as borrowings and shorting positions, involves certain risks to the Fund’s shareholders, including potential for higher volatility of the net asset value (“NAV”) of the Fund’s shares and the relatively greater effect of portfolio holdings on the NAV of the shares. The Fund may not always be able to close out a short position on favorable terms. Short sales involve the risk that the Fund will incur a loss by subsequently buying a security at a higher price than the price at which it sold the security short.
An investor should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing.To obtain a prospectus containing this and other information, please call 1-855-254-6467. Read the prospectus carefully before you invest.