Black Diamond Asset Management has launched the Black Diamond Fund family of five index-oriented, principal-protected mutual funds aimed at offering institutional asset management strategies to retail investors.
"When you buy a listed option, think of it as buying one stock that owns all the stocks in the index," said Larry Schweiger, chairman of the Black Diamond funds. He said this is a way to have a better chance of capturing upside on the market because it doesnt have stock-selection risk. The fund familys objective is to offer the investor all of the upside of the markets without the downside, for unlike other principle-protection funds, these do not give up any of the upside in return for protection because of the instruments it uses, Schweiger said. Listed options, which can either be puts or calls, are traded on the open exchanges, the chief one being the Chicago Board Options Exchange, which lists options on 1,500 stocks and American Depository Receipts (ADRs) and 40 indexes.
All of the Funds offer 100% principal protection, including all sales loads, at maturity through the purchase of U.S. Zero Coupon Treasuries, a periodic profit-protection feature and daily liquidity at NAV with no surrender charges, according to the firm.
Broadmark Asset Management, a registered investment advisor, will act as sub-advisor, while the funds will be distributed nationally by ALPS Distributors during an offering period ending May 23.
The five funds in the family are: the Black Diamond Principal Protected 500 Series, based on the S&P 500 Index; the Black Diamond Principal Protected 100 Series, based on the Nasdaq 100 Index; the Black Diamond Principal Protected 2000 Series, based on the Russell 2000 Index; the Black Diamond Principal Protected 400 Series, based on the S&P Mid-Cap 400 Index; and the Black Diamond Principal Protected LS Series, based on the CSFB Tremont Hedge Fund Long/Short Equity Index.