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 doesn’t have stock-selection risk. The fund family’s 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.

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