The Best And Worst Of February: Multi-Alternative Funds
Multi-alternative mutual funds and ETFs endured another tough month in February, losing 0.49% in the aggregate versus a one-month return of 0.48% for the Morningstar Moderate Target Risk Index. Although the category was down 6.12% for the year ending February 29 (slightly better than the Index return of -6.47%), macroeconomic and market forecasts have kept investor interest strong, with category-wide inflows of more than $18 billion for the year ending February 29. The biggest recipient of investor inflows was the John Hancock Global Absolute Return Strategy Fund (MUTF: JHAIX ), which saw its asset base grow by a whopping $3.58 billion for the year ending on Leap Day. On the flip side, the multi-alternative fund that suffered the biggest outflows was the Goldman Sachs Absolute Return Tracker Fund (MUTF: GARTX ), which saw its asset base fall by more than $966 million. Surprisingly, the differential between the annual return of the two funds, for the period ending February 29, was small: -4.77% for JHAIX and -5.20% for GARTX. For the month of February, the funds posted respective returns of -1.56% and -0.12%, which failed to make the top three – but also kept the two funds out of the category’s doldrums. Best Performers in February The three best-performing multi-alternative funds in February were: Grant Park Multi Alternative Strategies Fund (MUTF: GPAAX ) KCM Macro Trends Fund (MUTF: KCMTX ) Astor Macro Alternative Fund (MUTF: GBLMX ) Grant Park’s fund took the top spot among multi-alternatives in February, returning +3.65%. Its one-year returns of -0.47% still ranked in the top decile of the category, and that’s one of the reasons it was able to garner more than $93 million in investor inflows for the year ending February 29. The KCM and Astor Macro funds posted respective one-month gains of 3.13% and 2.83% in February. Since the Astor fund only launched on April 1, 2015, only the KCM fund had a one-year track record: Its annual return through February 29 stood at -8.45%, ranking in the bottom 30% of its category. This, along with its higher than average annual volatility of 12.16%, can help explain why investors withdrew $2.89 million from the fund for the year. Worst Performers in February The three worst-performing multi-alternative funds in February were: Granite Harbor Alternative Fund (MUTF: GHAFX ) Granite Harbor Tactical Fund (MUTF: GHTFX ) Palmer Square Absolute Return Fund (MUTF: PSQAX ) February was a tough month for Granite Harbor, as two of its alternative funds were the period’s worst performers. GHAFX fell a stunning 17.50%, and GHTFX dropped a nearly-as-bad 16.78%. For the year ending February 29, the pair of one-star rated funds were down 22.74% and 23.37%, respectively, each ranking in the bottom 1% of the category. The Palmer Square Absolute Return Fund looks a lot better by comparison, despite ranking as the third-worst multi-alternative fund in February. It lost 7.50% for the month and was down 19.24% for the year – both bad numbers, but considerably less so than Granite Harbor’s funds. Nevertheless, its outflows of more than $84 million were far steeper than either of the Granite Harbor funds, whose comparatively small sizes ($14.7 million and $12.5 million, compared to PSQAX’s $160.2 million) lead to smaller absolute outflows of $21.3 million and $16.6 million for the year ending February 29. Past performance does not necessarily predict future results. Jason Seagraves contributed to this article.