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Presented by Jerry C. Wagner President & Founder Flexible Plan Investments, Ltd. August 15, 2013. Direxion Evolution Funds – Sub-Advised by FPI. History . Went public April, 2004 Originally 2 funds All-Cap Equity ( PEVEX ) Managed Bond ( PEMVX ) In 2006, expanded to 5 funds
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Presented by Jerry C. Wagner President & Founder Flexible Plan Investments, Ltd. August 15, 2013
Direxion Evolution Funds – Sub-Advised by FPI History • Went public April, 2004 • Originally 2 funds • All-Cap Equity (PEVEX) • Managed Bond (PEMVX) • In 2006, expanded to 5 funds • Reorganized in 4Q of 2008: • Eliminated a large cap fund and • Transformed two funds creating; • Market Leaders Fund (PEVSX) • Alternative Investment Fund (PETRX)
Introducing The Quantified Funds On Monday, August 12, 2013, four new funds were offered by Advisors Preferred, a subsidiary of Ceros Financial Services, Inc. These funds will be part of the newly created Quantified family of funds and will be the new home of the four Direxion Evolution funds sub-advised by Flexible Plan Investments, Ltd. Over the next two weeks the assets currently in the Evolution Funds will migrate to the new Quantified Funds (soft close August 16, 2013). On August 21, 2013, the migration will be completed and the Direxion Evolution Funds will close on August 26, 2013.
What does not change? • Still Actively Managed • Still follow the same management styles • Still use ETFs and Futures with a few closed- and open-ended funds • Stock Baskets are still Utilized on the All-Cap Fund • Still sub-advised by Flexible Plan Investments, Ltd. • Still Qualify for Fund Credits Against Managed Account Fees
Why are we doing this? • Opportunity to create a larger family of niche funds • Elimination of restrictive maximum holding percentages on ETFs • Lower costs of operations for the fund
Benefits of the Quantified Funds Quantified Funds • Advantages: • No fund relation Issues • No trading restrictions • Trading does not affect existing or remaining shareholders • Reduces platform & TPA costs • Buy and hold • Trading is all contained within the funds themselves • Funds are not designed as a “Fund of Funds” but open-ended funds can be used to fill asset class gaps • Invest instead in: • Stock baskets • Closed-end funds • ETFs
Evolution vs. Quantified Funds New fund symbols
All-Cap Equity Fund • Uses Price Momentum to choose among over 30 Stock Baskets • Market Maven Baskets • Fundamental Baskets • Baskets include large, mid and small caps, domestic, ADRs and international, as well as growth oriented and value oriented stocks • Broad array of ETFs • Uses inverse futures and cash for defensive purposes
Alternative Investment Fund • Chooses from over 21 separate classes of Alternative Investments • ETFs, Futures, Alternative, Open-ended Funds • Multi-level risk management • Resampled Allocation Percentages set • Momentum choice of funds and ETFs from chosen allocation sectors • Targeted volatility position sizing of individual holdings • Inverse Futures and cash used for defensive purposes
Managed Bond Fund • Long and short, actively managed bond portfolio • 50% Core holdings – rotate among broad bond and high yield ETFs • 50% Momentum choices from large universe of bond ETF • Inverse bond ETFs and cash for defensive purposes
Market Leaders Fund • Employs the same two-level strategy as our Market Leaders Managed accounts • Picks the top asset classes from small, mid, large, developed and emerging markets • Drills down to pick the top performing funds in each of the top asset classes • Uses sector ETFs when market is especially bullish • Can turn to bond ETFs and cash for defensive purposes with MEI indicator
Direxion Fund Performance VFINX = 19.51%; VBMFX = -2.35% YTD Source: Direxion Funds, Morningstar YTD data; all data as of 7/31/2013
Lower average expense ratios Evolution vs. Quantified Funds
Annual fund expense ratio Less acquired fund costs
Fund Credit Calculation* for FPI Managed Accounts At Trust Company of America (100% Use) A FPI Mgmt Fee B Solicitor/Admin Fee C Avail. Fund Fee Credit D Platform Charge* E Net Fund Fee Credit (C-D) Net Client FEE A+B-E 100 bp 0-100 bp 90 bp 25 bp 65 bp 35-135 bp At Schwab (100% Use) A FPI Mgmt Fee B Solicitor/Admin Fee C Avail. Fund Fee Credit D Platform Charge* E Net Fund Fee Credit (C-D) Net Client FEE A+B-E 100 bp 0-100 bp 90 bp 40 bp 50 bp 50-150 bp *Approximate estimates
Platforms where the Evolution Funds are currently utilized Retirement Plans • ASPire • ePlan • Matrix Trust • Nationwide/RIA Services • Schwab PCRA • Trust Company of America • Lincoln Trust • General Pension Plan Non-Retirement • Schwab Institutional • Trust Company of America
Managed account strategies currently using our sub-advised funds • Dynamic Fund Profiles • Lifetime Evolution • MAPS • SAS • Market Leaders • Next Generation • Evolution II • Select Alternatives EMF • Managed Income EMF • Managed Income (50% of the Bond fund) • Sterling Wealth Strategies • GPS • DIVB
Transitioning from Direxion to Quantified Funds • 8/9/13 dividend and short-term capital gains • Delay getting funds on some platforms • Schwab is the only one we are aware of, it is expected by end of September. $15.22 -$13.79 $1.43
The Gold Bullion Strategy Fund (QGLDX) The Gold Bullion Strategy Fund is the first and only no-load gold bullion fund available to non-ETF, mutual fund investors. All previous “gold” funds have been composed primarily of gold mining stocks. The fund's goal is to be appropriate for long-term investors looking for participation in the movement of gold bullion prices. Coming soon FPI strategies: • Hedged Gold Bullion • All-Weather • Dynamic All-Weather • Tactical Gold • TVA Gold
Disclosures An investor should consider the investment objectives, risks, charges and expenses of Quantified Funds before investing. This and other information can be found in the Funds' prospectus, which can be obtained by calling 1-888-572-8868. The prospectus should be read carefully prior to investing in The Quantified Funds. There is no guarantee that The Quantified Funds will achieve their investment objectives. Advisors Preferred LLC ("AP"). Pursuant to a contract with AP, Flexible Plan Investments, acting in the capacity of a sub-adviser, provides investment advisory services for select equity, income, derivative and ETF Investments which Flexible Plan also may use in selected strategies regardless of the Investments described as being utilized elsewhere in this Brochure. If these Investments are used in Client's portfolio, since Adviser would receive a fee for its sub-adviser activities, Clients will receive a pro-rata credit on their billing. AP is a federally registered investment adviser and is the adviser of the Gold Bullion Strategy Fund, Gold Bullion Strategy Portfolio and the Quantified family of funds. Flexible Plan Investments, Ltd. serves as investment sub-adviser to The Gold Bullion Strategy Fund and the Quantified Funds, distributed by Ceros Financial Services, Inc. (member FINRA). AP is the Funds' investment adviser and is a wholly-owned subsidiary of Ceros Financial Services, Inc. AP is compensated by the funds in its role as investment adviser to the funds on the basis of assets under management in the funds. You may obtain a Prospectus by calling Advisors Preferred LLC at (888) 572-8868 or writing Advisors Preferred, LLC 1445 Research Boulevard, Ste. 530, Rockville, MD 20850 or download the PDF from: www.goldbullionstrategyfund.com. The principal risks of investing in The Quantified Funds are Risks of the Sub-advisor's Investment Strategy, Risks of Aggressive Investment Techniques, Active and Frequent Trading Risk, High Portfolio Turnover and Taxation Risk; Shorting Risk, Counterparty Risk, Risks of Investing in Derivatives, Futures, and Swaps; Risks of Investing in Other Investment Companies, including Exchange Traded Funds; Small to Mid-Capitalization Companies Risk, Non-diversification risk, Interest Rate Risk, Equity and Foreign Securities Risk, Depository Receipt Risk, Holding Cash Risk, Credit risk, Lower Quality Debt-Securities Risk and Limited History of Operations Risk.
Disclosures Rafferty Asset Management, LLC serves as the Direxion Funds' Investment Adviser and Flexible Plan Investments, Ltd. serves as the Funds' sub-adviser. Read the Direxion Funds Prospectus and Flexible Plan Investments' Brochure Form ADV Part 2A carefully before investing. In deciding whether to invest in the Funds described, you should carefully consider the investment objectives, risks and the charges and expenses of the investment company before investing. Read the prospectus carefully before investing. The Prospectus and Funds' SAI contain information regarding the above considerations and more. You may obtain a Prospectus and SAI by calling Direxion Funds at (800) 851-0511 or writing Evolution Managed Funds, P.O. Box 1993, Milwaukee, WI 53201-1993 or download the PDF from http://landing.direxionfunds.com/evolution. This is provided for information purposes only and should not be used or construed as an indicator of future performance, an offer to sell, a solicitation of an offer to buy, or a recommendation for any security. Flexible Plan Investments, Ltd. cannot guarantee the suitability or potential value of any particular investment. Fund Performance can be found at http://landing.direxionfunds.com/evolution?performance. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Inherent in any investment is the potential for loss as well as the potential for gain. A list of all recommendations made within the immediately preceding year is available upon written request. Please refer to Flexible Plan's ADV brochure for a complete description of fees and expenses applicable to managed accounts.