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Rating:Former Rydex Team Carves Out New Niche Not Rated 3.9 Email Routing List Email & Route  Print Print
Monday, April 23, 2007

Former Rydex Team Carves Out New Niche

Reported by Erin Kello

The crew at Arrow Funds have done nothing but shoot straight up since leaving Rydex Investments in January of 2006. Arrow's story is especially timely as they are one of a number of startups that will soon be focusing on ETFs.

Arrow is a mosaic of former members of the Rydex product development team. Noah Hamman; president, Jake Griffith; executive vice president of sales, Joseph Barrato; executive vice president of investment strategies, and Bill Flaig; chief investment officer, make up the core of the company.

While part of the Rydex team, Hamman, Griffith, Barrato, and Flaig, created Rydex' first buy and hold vehicles and helped build what is now the core of its business -- ETFs. The team does not compete in the same space as Rydex, as Arrow does not deal in leverage and inverse products.

Located down the freeway from Rydex in Olney, Maryland, Arrow currently has $71 million AUM. They launched their first fund on August 8 of last year. Dorsey Wright and Associates subadvises the DWA Balanced Fund; hence, the DWA.

The Balanced Fund uses a tactical asset allocation approach, designed to respond to market changes with the the technical expertise of DWA. The strategy provides diversification across four market segments: U.S and international equities, fixed income and alternative strategies. The fund has gone up about 14.5 percent since its launch.

Since the fund firm's founding, the guys at Arrow have done quite well with their distribution channels. A number of brokerage firms now carry the fund, including Wachovia, LPL, RPC, Morgan Keegan, Fidelity, and Schwab. Additionally, 350 registered reps have used the fund with their clients.

Arrow also uses their website to drive sales, it is designed for ease of use by retail advisors to create portfolio solutions for clients.

So what's next for Arrow? Barrato let the MFWire know that they are looking to get into the ETF market by the end of the year. They also have an alternative strategies fund in the pipeline. Flaig will manage that new fund using long/short hedge fund replication techniques which include, hedged equity, fixed income arbitrage, and managed futures. 

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