WBI Investments Inc. of Little Silver, N.J., announced Thursday it launched two absolute return funds for individual and institutional investors.
The WBI Absolute Return Balanced Fund and the WBI Absolute Return Dividend Growth Fund began trading on Dec. 29.
Don Schreiber Jr., the chief executive officer and founder of WBI, said the funds’ strategies previously were only available to high-net-worth investors through separately managed accounts. He said by introducing them as mutual funds they will be more broadly available to investors.
The balance fund’s investment objectives are to seek current income and long-term capital appreciation, while also seeking to protect principal during unfavorable market conditions. Under normal market conditions, the fund will invest at least 40% of its net assets in the equity securities of domestic and foreign dividend paying companies of any size market capitalization with the capacity to increase dividends over time, and at least 40% of its net assets in domestic and foreign fixed income securities. The types of equity securities in which the fund will generally invest include common stocks, preferred stocks, rights, warrants, convertibles and master limited partnerships.
The types of fixed income securities in which the fund will generally invest include corporate debt securities, U.S. Government securities, debt securities of foreign and issuers, sovereign fixed income securities, U.S. Government agency securities, high yield bonds (also known as “junk bonds”), exchange-traded notes, mortgage-backed securities and variable and floating rate securities.
The dividend growth fund’s investment objectives are to seek long-term capital appreciation and current income. Under normal market conditions, the fund will invest at least 80% of its net assets (including any borrowings for investment purpose) in dividend-paying equity securities of foreign and domestic companies and up to 10% of its net assets in domestic and foreign fixed income securities.
Each fund uses quantitative computer screening of fundamental stock information to evaluate domestic and foreign securities in an attempt to find the best value and dividend opportunities worldwide. Once securities are identified, an overlay of technical analysis confirms timeliness of security purchases. A buy discipline systematically adds qualifying securities within the fund’s target allocations. A strict sell discipline with a dynamic stop loss and goal setting process attempts to control the effects of the volatility of each invested position on the Fund’s value. This results in a responsive process that actively adjusts the fund’s allocation by causing it to become more fully invested or by raising cash to protect capital, and is an example of what WBI means by a risk-managed investment approach.
Schreiber will serve as co-portfolio manger of the funds along with Gary E. Stroik, who is a vice president and portfolio manager for WBI. Schreiber and Stroik co-authored the book All About Dividends. Schreiber founded the firm in 1984 and Stroik has been the portfolio manager for the firm for the last 20 years.