LAUREL, Md., Dec. 01, 2017 (GLOBE NEWSWIRE) -- Arrow Funds today announced a fund name change impacting its popular alternative to traditional bond funds.
The firm has changed the name of the Arrow Alternative Solutions Fund to Arrow Dynamic Income Fund (NASDAQ:ASFFX) (NASDAQ:ASFTX) (NASDAQ:ASFNX) to better reflect the current investment strategy, which has been in place since April 2014. The fund’s three share classes will retain their ticker symbols and CUSIP numbers.
“In anticipation of rising interest rates and a persistent demand for competitive yield, we altered the Arrow Dynamic Income Fund’s investment strategy a number of years ago to offer clients a compelling alternative to long-only fixed income funds,” said Joseph Barrato, Arrow CEO and Director of Investment Strategy. “The new fund name underscores its investment approach, which entails exposure to actively managed tactical high yield, dynamic credit default and dynamic government bond strategies.”
Compared to traditional bond funds, which tend to be highly susceptible to interest rate changes, the Arrow Dynamic Income Fund has the potential to generate positive returns whether rates are rising or falling as it can provide long, short and flat exposure to three distinct fixed income strategies. The fund’s quantitative methodology relies on micro and macro trends in the U.S. Treasury, credit and high yield markets to generate trade signals and determine fund holdings. Over time, the Arrow Dynamic Income Fund aims to achieve absolute returns, low volatility and low correlations to fixed income and equity markets, making it an attractive portfolio diversifier.
A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/8c7a9e51-9379-4171-9b3e-385fa6194aa0
Since implementing its current investment methodology nearly four years ago, the Arrow Dynamic Income Fund has been a standout in the nontraditional bond fund category, as well as the fixed income universe in general. From April 2014 through October 2017, the institutional shares of the fund (ASFNX) had an annualized return of 4.67% compared to the Bloomberg Barclays US Aggregate Bond Index’s 2.91%.
Among the fixed income funds available since April 2014, the Arrow Dynamic Income Fund has outperformed 90% of the fixed income universe (totaling 1,602 funds) over the same timeframe. ASFNX also delivered a 12-month yield of 4.71% as of 10/31/17, which is among the top 10% (fixed income universe of 1763) while demonstrating zero correlation to the Aggregate Bond Index.
Although the Arrow Dynamic Income Fund has underperformed in recent months, Barrato attributes the performance dip to a lack of clear, short-term market trends. “As we look to 2018, our in-depth market research continues to suggest rising rates and ongoing challenges for yield-focused investors,” said Barrato. “The fund’s recent pullback presents a unique buying opportunity for investors who wish to offset interest rate risk or for those seeking to diversify their fixed income allocation.”
The newly renamed Arrow Dynamic Income Fund is one of several innovative yield-focused offerings from Arrow; the list also includes the Arrow Dow Jones Global Yield ETF (NYSE American:GYLD), which provides global exposure to traditional and alternative sources of yield; Arrow Reserve Capital Management ETF (NYSE American:ARCM), a conservative ultra-short-term fixed income strategy designed as an alternative to money market and cash positions; and the Arrow QVM Equity Factor ETF (NYSE American:QVM), which provides domestic equity exposure to quality companies and which has delivered above-average yield characteristics. Each of Arrow’s yield solutions provides an additional source of returns in a low yield, low return environment. Each is capable of enhancing returns during periods of rising and falling bond price trends.
About Arrow: Arrow Funds, including the exchange traded product line ArrowShares, is a company that offers targeted portfolio solutions for ever-changing markets. The company’s vision is to be the leading provider of alternative and tactical investment solutions with a focus on education, research and client service as the cornerstones. To learn more, visit www.ArrowFunds.com. At the end of March 2014, there was a change made to the underlying investment strategy for the Arrow Dynamic Income Strategy Fund. The data below is intended to provide information regarding the fund’s performance, including the time period since adopting the new strategy.
| Total Fund Performance | Since Strategy Change | |||||||||||||||
| Data as of 10/31/2017 | Annualized | Annualized | ||||||||||||||
| Share Class | One Year | Three Year | Five Year | Ten Year | Since Inception* | Since 3/31/2014 | Standard Deviation | Correlation (S&P 500) | Correlation (Agg. Bond) | |||||||
| Class A | 1.55% | 4.06% | 2.57% | -0.29% | -0.23% | 4.44% | 4.11% | 0.49 | -0.01 | |||||||
| w/ Load | -4.25% | 2.02% | 1.37% | -0.88% | -0.88% | 2.80% | N/A | N/A | N/A | |||||||
| Class C | 0.79% | 3.28% | 1.77% | -1.03% | -1.03% | 3.63% | 4.06% | 0.48 | -0.01 | |||||||
| Class I | 1.82% | 4.30% | 2.81% | -- | 1.99% | 4.67% | 4.11% | 0.49 | 0.00 | |||||||
| *Inception Date for Class A and Class C is 10/31/07; Class I is 3/21/12 | ||||||||||||||||
| Total Fund Performance | ||||||||||||||||
| Data as of 9/30/2017 | Annualized | |||||||||||||||
| Share Class | One Year | Three Year | Five Year | Since Inception* | ||||||||||||
| Class A | 0.89% | 5.34% | 2.50% | -0.22% | ||||||||||||
| w/ Load | -4.89% | 3.29% | 1.29% | -0.82% | ||||||||||||
| Class C | 0.11% | 4.52% | 1.72% | -0.96% | ||||||||||||
| Class I | 1.05% | 5.57% | 2.74% | 2.14% | ||||||||||||
| *Inception Date for Class A and Class C is 10/31/07; Class I is 3/21/12 | ||||||||||||||||
NOTES: Standard Deviation is a statistical measurement of volatility based on historical returns. Correlation measures how closely two securities’ movements are associated, ranging from 1.0 (highly correlated) to -1.0 (inversely correlated). Agg. Bond is the Bloomberg Barclays US Aggregate Bond Index.
Past performance does not guarantee future results. For periods less than one year, performance is not annualized. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. The maximum sales charge for Class A is 5.75% and may be eligible for a reduction in sales charges. The Arrow Dynamic Income Strategy Fund’s operating expenses are 1.33% for Class A, 2.08% for Class C and 1.08% for Class I. With acquired fund fees and expenses of 0.18%, the fund’s total expenses are 1.51%, 2.26% and 1.26%, respectively.
Index performance assumes reinvestment of dividends, but does not include fees. The index is not available for direct investment.
The Arrow Dynamic Income Fund may not be suitable for all investors. The fund’s use of derivatives such as futures, options and swap agreements may expose the fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. The fund’s use of short selling involves increased risks and additional costs. The fund may invest in fixed income securities, which are subject to risks including interest rate, credit and inflation. Before investing, please read the prospectus and shareholder reports to learn about the investment strategy and potential risks. Investing involves risks, including the potential for loss of principal. An investor should consider the fund’s investment objective, charges, expenses and risks carefully before investing. This and other information about the fund is contained in the fund’s prospectus, which can be obtained by calling 1-877-277-6933. Content reviewed by an affiliate, Archer Distributors, LLC (member FINRA). AD-112917
Media Contact:
Chris Sullivan
Chris@macmillancom.com, 212.473.4442