Wells Fargo Funds Management, LLC, is pleased to announce the
one-year anniversary of its multi-strategy Wells Fargo Advantage
Alternative Strategies Fund. This milestone celebrates the
successful collaboration between Wells Fargo Asset Management and
The Rock Creek Group, LP, in creating a compelling offering in the
liquid alternative mutual fund space.
Jeff Whitmoyer, head of Asset Allocation
and Alternative Investments for Wells Fargo Funds Management
(Photo: Business Wire)
The fund was designed to provide a truly diversified portfolio
by complementing traditional asset classes with investments that
offer the potential for different outcomes when responding to
changes in the investment climate. The fund gives investors access
to a broad range of hedge fund–like strategies designed with the
goal of providing consistent returns and lower volatility in a
variety of market environments. As the overlay subadvisor, Rock
Creek employs a multi-strategy, multi-manager approach that
provides access to experienced institutional hedge fund managers
within the structure of an Investment Company Act of 1940 mutual
fund.
“Over the course of the past year, investors experienced a
shifting macroeconomic landscape that was additionally influenced
by consistently low interest rates,” explains Jeff Whitmoyer, head
of Asset Allocation and Alternative Investments for Wells Fargo
Funds Management. “Oil prices fell by 50%; the European Central
Bank commenced its bond-buying program; the U.S. dollar saw
significant appreciation relative to most foreign currencies; and
while U.S. equities avoided a correction, results were mixed.”
Whitmoyer continues, “With these events as a backdrop, as of
April 30, 2015, the fund’s one-year return for the Institutional
Class was 8.1% with a standard deviation of 3.1%, which is
approximately midway between the returns of the broad stock and
bond markets, as measured by the S&P 500 Index and the Barclays
U.S. Aggregate Bond Index. It ranked in the eighth percentile in
Morningstar’s multialternative category. While acknowledging that a
year is a short period in which to evaluate a fund’s results, we
believe that the fund’s performance provides a strong data point
that helps validate our investment approach.”
Rock Creek’s management team structures portfolios to pursue a
specific outcome for investors, first by forming qualitative
judgments to take advantage of market trends and then by using
quantitative analysis to monitor and validate assessments.
They strategically select hedge fund strategies and managers to
play a specific complementary role in the fund’s overall portfolio.
Rock Creek’s manager selection criteria include a customized,
proprietary due diligence process that assesses the operations,
performance, manager structure, portfolio construction, and risk of
underlying investment managers.
The fund invests in four alternative investment strategies:
- The equity hedged strategy takes
both long and short positions in equities or related instruments
believed to be under- and overvalued.
- The global macro strategy
analyzes economic variables in an attempt to forecast future
movements in equity, fixed-income, currency, and commodity
markets.
- The relative value strategy
seeks to identify and capitalize on valuation discrepancies between
related financial instruments rather than on the direction of the
general market.
- The event driven strategy seeks
to capitalize on the movements in security prices of companies
currently or prospectively involved in a wide variety of corporate
transactions.
Why alternatives? A range of resources for advisors.
Wells Fargo Funds Management is providing an increasing number
of resources for investment professionals and their clients who
want to deepen their understanding of the role alternatives may
play in a broader portfolio. These include educational materials,
thought leadership pieces, blog articles, videos, and Wells Fargo
product information. The most recently launched resource is the
research paper “Investing With 5-D Vision in Liquid Alternatives,”
written by members of Rock Creek’s management team.
To access the paper and obtain additional information,
investment professionals may visit
wellsfargoadvantagefunds.com/alts.
About Wells Fargo Funds Management
Wells Fargo Funds Management, LLC, a wholly owned subsidiary of
Wells Fargo & Company, provides investment advisory and
administrative services for Wells Fargo Advantage Funds. Other
affiliates of Wells Fargo & Company provide subadvisory and
other services for the funds. The funds are distributed by Wells
Fargo Funds Distributor, LLC, Member FINRA/SIPC, an affiliate
of Wells Fargo & Company.
The fund does not invest directly in hedge funds but pursues
similar strategies to those typically used by hedge funds. The fund
invests using alternative investment strategies such as equity
hedged, event driven, global macro, and relative value, which are
speculative and entail a high degree of risk. Stock values
fluctuate in response to the activities of individual companies and
general market and economic conditions. Bond values fluctuate in
response to the financial condition of individual issuers, general
market and economic conditions, and changes in interest rates.
Changes in market conditions and government policies may lead to
periods of heightened volatility in the bond market and reduced
liquidity for certain bonds held by the fund. In general, when
interest rates rise, bond values fall and investors may lose
principal value. Interest-rate changes and their impact on the fund
and its share price can be sudden and unpredictable. Foreign
investments are especially volatile and can rise or fall
dramatically due to differences in the political and economic
conditions of the host country. These risks are generally
intensified in emerging markets. The use of derivatives may reduce
returns and/or increase volatility. Borrowing money to purchase
securities or cover short positions magnifies losses and incurs
expenses. Short selling is generally considered speculative, has
the potential for unlimited loss, and may involve leverage. Certain
investment strategies tend to increase the total risk of an
investment (relative to the broader market). This fund is exposed
to high-yield securities risk, mortgage- and asset-backed
securities risk, convertible securities risk, loan risk, and
smaller-company securities risk. Consult a fund’s prospectus for
additional information on these and other risks.
Figures quoted represent past performance, which is no
guarantee of future results. Investment return and principal
value of an investment will fluctuate so that an investor’s shares,
when redeemed, may be worth more or less than their original cost.
Performance shown without sales charges would be lower if sales
charges were reflected. Current performance may be lower or higher
than the performance data quoted and assumes the reinvestment of
dividends and capital gains.
Standard deviation of return measures the average deviations of
a return series from its mean and is often used as a measure of
risk. [Standard deviation is based on historical performance and
does not represent future results.]
Wells Fargo Asset Management (WFAM) is a trade name used by the
asset management businesses of Wells Fargo & Company. Wells
Fargo Funds Management, LLC, a wholly owned subsidiary of Wells
Fargo & Company, provides investment advisory and
administrative services for Wells Fargo Advantage Funds®. Other
affiliates of Wells Fargo & Company provide subadvisory and
other services for the funds. This material is being prepared by
Wells Fargo Funds Distributor, LLC, Member FINRA/SIPC, an
affiliate of Wells Fargo & Company. 233812 05-14
Some of the information contained herein may include
forward-looking statements about the expected investment activities
of the funds. These statements provide no assurance as to the
funds’ actual investment activities or results. The reader must
make his/her own assessment of the information contained herein and
consider such other factors as he/she may deem relevant to his/her
individual circumstances.
NOT FDIC INSURED • NO BANK GUARANTEE • MAY
LOSE VALUE
Photos/Multimedia Gallery Available:
http://www.businesswire.com/multimedia/home/20150504005429/en/
Wells Fargo Funds Management, LLCJohn Roehm,
415-222-5338john.o.roehm@wellsfargo.com
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