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RiverNorth Dynamic Buy-Write Fund (RNBWX) – December 2012
David. Thanks for covering this new fund from RiverNorth in your commentary this month. Like long-short and risk-parity, the covered-call may be an alternative to achieve positive returns with lower volatility than long-only and/or buy-hold equity vehicles. Honestly, don't fully understand yet, but they appeal to me and I'm motivated to learn more.
There haven't been many options strategy funds that have seemed to work all that well (the Allianz Income/Growth fund has a portion dedicated to options), but the Rivernorth fund seems interesting. As Ted noted, Eaton Vance has had options funds (see ETY, for example) for a while.
I participated in the RiverNorth call yesterday. Here is link to presentation entitled Harnessing Volatility.
Bottomline: The fund manager Eric Metz believes that the options market is less efficient than the equity market. RNBWX tries to exploit those inefficiencies, especially during periods of highest volatility, while offering an alternative for those looking to diversify away from bonds into something less volatile than stocks.
Like Scott mentions above, RiverNorth Dynamic Buy-Write is one of few funds focused on an options strategy. Here is link to M* video interview with Mr. Metz:
Below is Morningstar performance plot of this young fund since inception last year, compared against SP500 and GATEX, which currently has preponderance of AUM in this small but expanding field:
Comments
Regards,
Ted
http://online.wsj.com/article/SB122082928760308341.html#printMode
Bottomline: The fund manager Eric Metz believes that the options market is less efficient than the equity market. RNBWX tries to exploit those inefficiencies, especially during periods of highest volatility, while offering an alternative for those looking to diversify away from bonds into something less volatile than stocks.
Like Scott mentions above, RiverNorth Dynamic Buy-Write is one of few funds focused on an options strategy. Here is link to M* video interview with Mr. Metz:
http://www.morningstar.com/cover/videocenter.aspx?id=581438.
Below is Morningstar performance plot of this young fund since inception last year, compared against SP500 and GATEX, which currently has preponderance of AUM in this small but expanding field: