Morningstar calls the fund “a standout choice” in the Multialternative category
WALNUT CREEK, Calif. — October 2016 — Litman Gregory Masters Alternative Strategies Fund (MASFX) reached the five-year mark, and received a five-star Overall Morningstar Rating among 253 Multialternative funds based on risk-adjusted return for the period ending 9/30/17.*
Over five years ago, we saw a need for liquid alternatives for our client portfolios but were underwhelmed by what we found when we researched our options. So we built the Litman Gregory Masters Alternative Strategies Fund, a multi-strategy, multi-managed alternatives fund. Now, after reaching the five-year mark, we are proud to be a five-star fund in the Morningstar Multialternative category, with the highest risk-adjusted return, based on Sharpe ratio.
“At a conceptual level, we sought to build a fund that would deliver relatively low volatility, low beta, and relatively low correlation to stocks and bonds but would still be able to deliver solid returns,” said Jeremy DeGroot, Litman Gregory CIO and Principal. “So far we’ve been extremely pleased with the results.”
The key to the construction and ultimate success of the fund was finding highly skilled, proven managers running distinctive strategies with very strong risk-management skills and strong long-term returns.
“We wanted risk-averse managers who are patient and unwilling to reach for return when the risks are too high,” said DeGroot. “But we didn’t want managers who are just going to put their head in the sand. They also had to have a mindset enabling them to invest more aggressively when they see truly compelling investment opportunities.”
Litman Gregory seeks to take advantage of the diversification afforded by the multi-strategy structure by allowing individual managers to be more flexible and opportunistic relative to the single-strategy options they may run elsewhere—this creates a highly distinctive fund that that cannot be replicated. Jeffrey Gundlach and the DoubleLine team run the Opportunistic Income strategy; Steven Romick and the FPA team run the Contrarian Opportunity strategy; Matt Eagan and the Loomis Sayles team run the Absolute-Return Fixed-Income strategy; John Burbank and the Passport Capital team run the Long/Short Equity strategy; and John Orrico and the Water Island team run an Arbitrage and Event-Driven strategy.
About the Fund Family
The Litman Gregory Masters Funds are multi-manager mutual funds comprised of three equity funds and one alternative strategies fund. The fund family was created in 1996 based on the premise that skilled stock pickers have the ability to beat a passive index, and that portfolios comprised of skilled managers’ highest-conviction ideas historically, on average, perform better than their broader portfolios. The Alternative Strategies Fund combines managers who are highly risk-aware but also opportunistic, running distinct separate account strategies with relatively low correlations to one another and to the broader equity and high quality fixed-income markets.
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