Barrato Says Adaptive Strategies Are Critical In Volatile Markets

Correlation Consideration Is Key To Portfolio Diversification

Joe Barrato, CEO, Arrow Funds, sat down with Julie Cooling, Founder & CEO, RIA Channel to discuss two of Arrow’s alternative investment strategies: managed futures and dynamic income. Both are actively managed and highly adaptive strategies aimed at delivering lower-risk performance in any market. Arrow provides non-traditional income and growth solutions for advisors, and manages over $700 million in assets through its mutual funds and ETFs.

The Arrow Funds Managed Futures Fund (ticker MFTNX), is a portfolio income solution via exposure to broad global futures markets through the DUNN Capital World Monetary & Agricultural (WMA) Program. DUNN Capital is a Commodity Trading Advisor (CTA) with a very successful 30 year track record. Arrow’s MFTNX was the first managed futures fund available in a 40-Act mutual fund, thus providing access to sophisticated strategies at lower investment minimums and daily liquidity. Arrow’s Managed Future Fund embraces volatility over time, providing further diversification and lowering correlations while adding to performance.

The Arrow Dynamic Income Fund (ticker ASFNX), offers diversified income via three core portfolio strategies: high yield, credit default, and long–term bonds. Arrow optimizes the exposure to each of the underlying directional strategies based on their proprietary indicators that respond to changing market and interest rate environments. The Fund’s goal is to deliver absolute investment returns with improved risk/return characteristics versus traditional bonds (the U.S. Aggregate Bond Index). Unlike traditional fixed income products, Arrow Dynamic Income Fund is not directly tied to interest rates, and therefore serve as an ideal income alternative in a rising rate environment.

Advisors are increasing their allocations to alternative investments as access and education about utilizing liquid alternatives has become more mainstream. Arrow recently released its Investment Guide which provides portfolio construction insights and research for advisors seeking better risk-adjusted returns for clients.