Durango, CO-based Swan Capital management making its foray into the mutual fund space with the debut of its maiden fund, dubbed the Swan Defined Risk Fund, according to a Securities and Exchange filing.

The fund is based on the firm’s DRS strategy, which it touts as an absolute return, market-neutral strategy “that does not rely on market timing or stock selection”. Rather, the fund will bet on exchange-traded funds that invest in equity securities of large-cap companies. “Using DRS, the adviser seeks to ‘define risk’ by seeking to protect against large losses by hedging equity ETFs through investments in protective long-term S&P 500 Index put options,” according to the filing.

The strategy was created in 1997 by Randy Swan, president of the firm. The new offering charges a management fee of 100 basis points. Its distributor is Northern Lights Distributors.

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