AlphaCentric launches Municipal Opportunities Fund
AlphaCentric Funds has launched the AlphaCentric Municipal Opportunities Fund (MUNIX), the first fund in its portfolio to focus on the federally tax-free municipal bond market.
The fund integrates the expertise of two management teams to offer complimentary active strategies.
MUNIX is designed specifically with the benefit of flexibility to help capitalise on the inefficiencies of the municipal bond market. Managed by two independent managers with separate and complementary mandates, MUNIX’s investment objective is to provide federally tax-exempt income and, secondarily, capital appreciation in periods including those with historically low rates and extreme volatility.
The Fund’s integrated dual strategy seeks to reduce market-value erosion when rates rise and generate alpha when rates fall, all while providing federally tax-exempt income. The core portfolio relies on broad flexibility to invest in a wide variety of federally tax-exempt bonds and other federally tax-free structured products. This approach aims to potentially provide a higher than average federally tax-exempt income stream. The Fund also uses a time-tested, trend following quant overlay designed to take advantage of changes in interest rates and credit spreads.
“Our decision to launch the AlphaCentric Municipal Opportunities Fund is rooted in the lack of diverse strategies available to investors for this particular market,” says Mark Kamies, co-founder of AlphaCentric. “New issuance of municipal bonds are on the decline while demand from investors remains strong, forcing managers in this space to invest large cash positions with limited flexibility. MUNIX is designed specifically to provide flexibility in investing in municipal bonds, and when combined with the quant overlay, provides investors the opportunity to maximise returns and limit exposure during periods of changing interest rates and credit cycles.”
MUNIX is AlphaCentric’s first mutual fund focused on the municipal bond market. The core portfolio strategy, which focuses on this asset class, will be sub-advised by R&C Investment Advisors. The quant overlay strategy will be sub-advised by Mount Lucas Management. The AlphaCentric Municipal Opportunities Fund will trade under the tickers MUNIX, MUNAX and MUNCX.