Investment Objective & Strategy
The Fund seeks current income and realized gains by investing in common stocks and writing options. Generating capital appreciation is a secondary objective for the fund.
The Fund invests in large market capitalization, dividend-paying equity securities of domestic and foreign companies. The Fund plans to sell options on these securities in order to generate option-premium income in addition to traditional dividend income. In severe market declines, the Fund may also purchase put options on an equity index to attempt to protect the Fund's principal.
The Fund expects to hold approximately 30-60 equity securities at any one time. The Advisor will select the securities for the Fund based on fundamental data analysis employed by a team-driven investment discipline. The Advisor analyzes dividend payout ratios and cash flows of individual companies to determine the most attractive investment opportunities.
The Adviser also uses proprietary economic research and analysis to gauge current economic and business cycle conditions, and then based on this analysis, targets industries and sectors that the Advisor believes are well positioned to grow. The individual companies in which the Fund invests will rank highest in the Adviser's estimation based on fundamental analysis to include financial health, cash flow, business market position and quality of management. It is expected that the Fund's strategy will result in high portfolio turnover.
There is no assurance the fund will achieve its investment objective.
One Month 25 Covered Call Graph
The strategy of owning a stock and writing a covered call can potentially outperform the ownership of the stock alone. This occurs as long as the price of the underlying stock rises slightly, remains the same or decreases by a small amount. By consistently writing covered calls, over the long term, a portfolio will potentially show less volatility than owning the stock alone. The Covered Bridge Fund employs this strategy but writes calls on only half of each equity investment. While this approach reduces the option-premium income generated by the fund, it also allows the principal of the portfolio to potentially grow with rising underlying stock prices. The above chart is for hypothetical purposes only. This illustrates how the Covered Bridge Fund can potentially allow for the participation in the stock beyond the option exercise price of 25. This is due to continued partial ownership of the stock.
Stonebridge Capital Advisors, LLC serves as investment adviser to the Fund. Subject to the authority of the Board of Trustees, the Adviser is responsible for management of the Fund's investment portfolio. Stonebridge Capital Advisors is an SEC-registered investment advisor formed in 1997 to provide portfolio management services to high net worth individuals, insurance companies, endowments, and foundations. Click Here to View Stone Bridge Cap »