Cognios Market Neutral Large Cap Fund Picks Up 5 Star-Rating

Cognios Market Neutral Large Cap Fund Picks Up 5 Star-RatingThe New Year wasn’t all that Cognios Capital had to celebrate on December 31, 2015 – it was also the three-year anniversary of the firm’s Market Neutral Large Cap Fund, whose institutional shares (COGIX) returned an annualized 5.69% over its first 36 months in operation. Furthermore, Cognios had another cause for celebration less than a fortnight later: COGIX received 5 stars, the highest rating from Morningstar, in recognition of its superior risk-adjusted returns.

Top Decile Performance

“We are thrilled to have received these top ratings from Morningstar,” said Cognios CEO Gary DiCenzo, in a recent statement. “Our three-year performance record and consistent top decile performance reinforces the strength of our fundamentals-based quantitative investment process.”

COGIX ranked 8th out of 110 share classes in Morningstar’s Market Neutral category with at least three years of history. The fund’s investor-class shares (COGMX) ranked in the top 10% with three-year annualized returns of 5.43%, and received a 4-star rating. Both classes handily outperformed the category average of 1.52% annualized returns for the three-year period.

The Cognios Market Neutral Large Cap Fund employs a beta-adjusted market-neutral strategy, which means that its total return is intended to be mostly uncorrelated to the broad stock market. Cognios bills the fund as being for investors seeking portfolio diversification, minimized drawdowns, and the potential for added stability when implemented within the context of a diversified portfolio.

Beta Neutral, No Derivatives

“Investors continue to show interest in alternative investment strategies but want alternative strategies that are truly liquid and that they can understand,” said Cognios CIO Jonathan Angrist, who is also portfolio manager of the fund. “The Cognios Market Neutral Large Cap Fund invests only in S&P 500 companies with no stock options, other types of derivatives or embedded leverage. We believe our proprietary beta neutral portfolio construction methodology is a unique investment option in the market that is not available elsewhere.”

COGIX has a 3.71% net-expense ratio and a $100,000 minimum initial investment, while COGMX has a 3.96% net-expense ratio and a $1,000 minimum investment. Both expense ratios include expenses of 2.01% related to borrowing costs and brokerage expenses on securities sold short.

For more information, download a pdf copy of the fund’s prospectus.

Past performance does not necessarily predict future results.

Jason Seagraves contributed to this article.

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