Connors Investor Services, Inc. is pleased to announce the three-year anniversary of the Connors Hedged Equity Fund (Ticker: CVRDX) and its receipt of a five-star Morningstar rating in the Equity Hedged category.
While the fund is three years old, investing in stocks and options is not new to Connors. The firm has been a registered investment advisor since 1969, and covered call option writing (‘hedged equity’) has been a flagship investment strategy for over five decades.
This fund was created to help long-term investors participate in equity markets for capital appreciation while utilizing call writing and puts/put spreads to reduce volatility, enabling greater equity exposure with lower risk. While this approach helps manage risk, it may also limit upside potential in strong market conditions.
CVRDX is built on Connors' proprietary hedged equity strategy, which involves constructing a stock portfolio and actively selling options on those stocks to generate income. Along with writing covered calls, CVRDX also employs additional risk-mitigation techniques, including the use of protective puts, protective put spreads, and strategically increasing cash holdings.
With the S&P 500® Index hitting 57 new all-time highs in 2024—its second consecutive 20%+ year—a hedged equity strategy may be a complement to investment portfolios. To learn more about Connors and the Connors Hedged Equity Fund, visit connorsinvestor.com and click here to download our latest factsheet to explore how CVRDX’s disciplined risk-mitigation approach can enhance your portfolio and support your long-term investment goals.
Morningstar is a leading investment research firm that provides analysis, ratings, and insights on stocks, mutual funds, and other financial products to help investors make informed decisions. A five-star rating from Morningstar indicates that a fund has demonstrated strong past performance relative to its peers, adjusted for risk, and is considered a top-tier investment within its category.
Investors should carefully consider the investment objectives, risks, charges, and expenses of the fund before investing. The prospectus contains this and other information about the fund, and it should be read carefully before investing. Investors may obtain a copy of the prospectus by calling 833-601-2676 or at https://www.connorsinvestor.com/mutual-fund
Investing involves risk including the possible loss of principal. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when, redeemed, may be worth more or less than their original cost.
IMPORTANT RISK INFORMATION:
As with any mutual fund investment, there is a risk that you could lose money by investing in the Fund. The success of the Fund’s investment strategy depends largely upon the Adviser’s skill in selecting securities for purchase and sale by the Fund and there is no assurance that the Fund will achieve its investment objective. The Fund was formed in 2021 and has no operating history. In addition, although the principals of the Adviser have investment management experience, none have experience managing an open-end mutual fund prior to the Fund.
Investments in options involve risks different from, or possibly greater than, the risks associated with investing directly in the underlying securities.
Large-capitalization companies are generally more mature and may be unable to respond as quickly as smaller companies to new competitive challenges, such as changes in technology and consumer tastes, and may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion.
The S&P 500® Index is a market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market. Unlike mutual funds, the index does not incur expenses. If expenses were deducted, the actual returns of this index would be lower.
Covered call: Selling a call option on an underlying long-held security.
Protective put: Purchase of a put option vs a long underlying equity position or broad index that is not necessarily held.
Put spreads: purchase near strike put while selling another lower strike put. Defined percentage protection against downside participation with market weakness. Usually initiated vs broad market index.
Volatility: A statistical measure of dispersion of returns.
Morningstar's Equity Hedged category is for funds that use options and other derivative instruments to provide hedged equity exposure.
The Morningstar RatingTM for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-end mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods”. CVRDX is rated 5 Stars out of 149 funds for period ending 1/31/2025 in 3 year and overall for period ending 1/31/2025 based on risk adjusted return.
The Connors Hedged Equity Fund is distributed by Ultimus Fund Distributors, LLC. (Member FINRA) Connors Investor Services and Ultimus Fund Distributors, LLC are separate and unaffiliated.
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