The new Hercules Fund will help investors tackle market volatility and rising inflation.

Hercules Investments, a Registered Investment Adviser and asset manager, is harnessing the potential of a liquid alternative strategy to shield investors from the vagaries of a highly volatile stock market resulting from the pandemic. Furthermore, down the line, massive stimulus measures and deficit financing bring up the specter of rising inflation. (Wealth Adviser)

In these circumstances, the traditional [60:40] stock/bond portfolio may disappoint investors by delivering lower returns with higher volatility risk.

The Hercules Fund (NFLHX)

The new Hercules Fund (NFLHX) will employ strategies to benefit from the large swings in the stock market. Typically, it will use short-term long and short positions in call and put options on the main US stock indexes. It will use index options because they provide better risk protection compared to individual stock options.

James McDonald, the CEO and Chief Investment Officer of Hercules Investments, will manage the new alternatives fund. He has directly traded over $10 billion in US equity index options volume over his career of 25 years.

Meanwhile, WealthManagement.com named Hercules Investments the Alternative Asset Manager of the Year 2020.

The importance of liquid alternatives

“These are incredibly uncertain times for the stock market and for investors,” says McDonald. “The tragic Covid-19 pandemic has shed light on the deficiencies of traditional 60/40 portfolios and the importance of a sophisticated liquid alternatives asset allocation strategy. The strategies we use for clients at Hercules Investments will now be offered to investors and financial advisors through the Hercules Fund. I believe it is prudent for investors and financial advisors to consider liquid alternatives during these unprecedented times in the stock market.”

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Image credit: Hercules Investments