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Tuesday, September 27, 2016 Shifting to Subadvised-Only, This NoCal Fundster Is Open to Adopting, Too A Northern California fundster is shifting his mutual fund family towards being all-subadvised. He also plans to add to his team, and he's keeping an eye out for adoption targets.
Cavalier offers both mutual funds and separately managed accounts and has nearly $250 million in AUM. Rutherford leads a team of five (including new chief investment officer Scott Wetherington), with support from third-party markets and compliance folks. "We'll probably grow that to seven or eight or nine within the next six to 12 months," Rutherford says. "We'll add additional analysts, an executive-type person to help us construct our portfolio management product ... [and] after that probably another internal sales person." Earlier this month Rutherford confirmed the appointment of nine interim subadvisors for seven Cavalier Funds. Pending approval by the funds' shareholders, the interim subadvisors will drop the "interim" label and become permanent subadvisors to the funds. "The plan was to ultimately go to 100-percent subadvised," Rutherford says, and they're on their way. Here are Cavalier's nine interim subadvisors. "Some of them were providing signals in the past," Rutherford says. "We were using their structure or their model but we were executing trades as the investment advisor. We wanted to make them subadvisors so that they would be responsible for the execution."
"That was the initial fund. Back in the day we were using kind of a pricing methodology," Rutherford says. "It made sense to take that modeling and then create that first 40 Act fund. We used that methodology to really price funds and ETFs and build the model that way." Looking ahead, watch for Cavalier to transform its eighth fund, the Cavalier Dividend Income Fund, into the Cavalier Nebraska Index Fund. The fund will be powered by an index from Nebraska Index LLC. "I'm hoping to have that change made hopefully by sometime in October," Rutherford says. Cavalier spent about 18 years as an FA, before selling his book to his partners at Omaha, Nebraska-based Tagge Rutherford Financial Group. "It was really hard for me to own a fund and stay as a financial advisor," Rutherford says. Rutherford co-founded Portland, Oregon-based FolioMetrix. Then last year FolioMetrix merged with another subadvised mutual fund shop, American Independence Financial Services, and the combined firm took the RiskX Investments brand from FolioMetrix's line of RiskX Mutual Funds. "When we started to look at a merger, I decided to go a different direction," Rutherford says. Enter Cavalier, the dba for holding company Canter Compass Investments, which started last August. Then Cavalier adopted funds from FolioMetrix. "All the funds [now called the Cavalier Funds] stayed in the trust," Rutherford says. "The investment advisor to those funds changed from Foliometrix to Cavalier." Printed from: MFWire.com/story.asp?s=54879 Copyright 2016, InvestmentWires, Inc. All Rights Reserved |