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Rekenthaler Report

When Hedge Funds Convert to Mutual Funds

It’s best to ignore their preconversion histories.

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Fortune Telling
There goes my chance to join Paul the Octopus, Carnac the Magnificent, and Jim Cramer on the list of the world’s great forecasters. In early January, I started to write a column on how some mutual fund track records might be other than they appear, citing as an example Catalyst/Millburn Hedge Strategy Fund (MBXIX). But vacation approached, the topic needed more work, and I set the topic aside.  

Boom! Last week, the fund’s sibling, Catalyst Hedge Futures Strategy Fund (HFXAX), dropped 15% in five trading days. Opportunity squandered.

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John Rekenthaler does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.