If you have heard of the Rock Canyon Top Flight Fund
it may have been for the wrong reason as far as fund manager Jonathan Ferrell is concerned. Ferrell, you see, has yet to market his $9 million fund. But once the fund passes its third year anniversary in December he plans to change that fact, according to InvestmentNews
Those in the fund industry may know of the Pleasant Grove, Utah-based fund for the role it played in the delay of Morningstar's IPO last year. The Chicago-based fund tracker raised the SEC's ire (and received a Wells Notice) after it incorrectly reported information about the fund in its database and then failed to correct the data even after Rock Canyon insisted.
That problem has since been fixed and Morningstar's IPO was ultimately a success. Both the firms appear to have moved on and Ferrell expects the fund to receive its first Morningstar rating in two months when the fund turns three.
Ferrell hinted at his marketing plans for the hedge-fund-like mutual fund at last month's Schwab IMPACT conference in Seattle.
The fund has a unique story to differentiate from competitors and a strong track record to go with that story.
Farrell modeled the funds investment strategy on that of a $13 million hedge fund he also manages for Rock Canyon Advisory Group
where he is the president and founder. Indeed, about the only differences between the mutual fund and the hedge fund are the fees (they are lower in the hedge fund), the investment minimum (again, lower in the mutual fund) and the fact that the mutual fund does not use leverage.
Otherwise, Farrell is using all of his hedge fund models in the mutual fund, including a large short bet. The fund is about 43 percent short and just 47 percent and holds positions in more than 100 stocks.
That story is likely one that planners and advisors do not often see.
So far, those bets are paying off. Earlier this year the fund took a winning short bet in Delphi stock (the auto parts maker declared bankruptcy on Monday).
Since the fund's launch, it has earned an average annual return of 21.98 percent; easily topping the 14.89 percent annualized return for the S&P 500.
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