Hatteras Alpha Hedged Strategies Fund

 FACT SHEET   PRINT-FRIENDLY VERSION
All performance, except where indicated, is as of July 31, 2010

Standardized Returns

Fund Name YTD 1Y 3Y 5Y Since incept 9/23/2002
Hatteras Alpha Hedged Strategies Fund -1.40% 5.38% -6.46% -0.93% 1.86%
HFRI FOF Composite Index1 -0.47% 3.87% -3.85% 2.13% 4.19%
S&P 500 Total Return Index2 -0.11% 13.84% -6.78% -0.17% 5.69%

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Total Annual Fund Operating Expenses are 5.17%. Net Fund Operating Expenses are capped at 3.99% excluding dividends on short positions and interest on borrowing. Performance data quoted represents past performance; past performance does not guarantee future results. The 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. Current performance of the Funds may be lower or higher than the performance quoted.



Monthly Performance for ALPHX

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
2010 0.10% 0.40% 1.49% 0.78% -3.69% -1.31% 0.92%           -1.40%
2009 0.00% -3.69% 1.74% 4.68% 5.23% -0.10% 3.22% 1.81% 4.64% -0.94% -0.57% 1.86% 18.95%
2008 -4.59% 0.55% -1.49% 1.83% 1.56% -1.62% -2.50% -2.01% -8.52% -12.35% -6.54% -0.69% -31.63%
2007 1.55% 0.61% 1.37% 1.20% 2.08% 0.15% -1.02% -0.07% 2.42% 2.08% -2.18% -0.13% 8.25%
2006 4.29% 0.39% 1.81% 1.70% -1.06% -0.31% -0.77% 0.62% -0.77% 1.09% 0.69% 1.38% 9.32%
2005 -0.25% 0.25% -0.17% -1.44% 1.72% 0.59% 1.51% -0.83% 1.67% -0.98% 0.74% 0.01% 2.80%
2004 0.99% 0.10% 1.47% -0.87% 1.07% 5.01% -1.56% 2.52% 0.82% 0.72% 5.37% 0.60% 17.23%
2003 2.04% 0.00% 0.60% -0.20% -0.40% -0.40% -1.41% -0.41% 1.02% 2.23% 0.10% 0.04% 3.21%
2002                   -0.90% -1.31% 0.10% -2.10%


Growth of $10,000 Since Inception of ALPHX (09/23/2002)

Historical Data (since inception) ALPHX HFRI FOF1 S&P 5002
Standard Deviation3 8.71% 5.75% 15.31%
Largest Drawdown4 -35.67% -22.20% -50.95%
Drawdown - # of months5 16 14 16
Recovery - # of months6 N.A. N.A. N.A.
Risk Statistics ALPHX HFRI FOF1 S&P 5002
Sharpe Ratio7 -0.06 0.31 0.23
Sortino Ratio8 -0.07 0.39 0.31
Downside Deviation9 6.73% 4.25% 10.97%
ALPHX Benchmark Statistics   HFRI FOF1 S&P 5002
Annualized Alpha10   -3.10% -0.54%
Beta11   1.25 0.39
Correlation12   0.82 0.69

Important Disclosures and Risk Factors

The Fund´s investment objectives, risks, charges and expenses must be considered carefully before investing. The summary prospectus and prospectus contain this and other important information about the investment company, and may be obtained by calling 1.877.569.2382 or clicking here. Read it carefully before investing.

Certain hedging techniques and leverage employed in the management of the Fund may accelerate the velocity of possible losses. Short selling involves the risk of potentially unlimited increase in the market value of the security sold short, which could result in potentially unlimited loss for the Fund. Derivatives involve investment exposure that may exceed the original cost and a small investment in derivatives could have a large potential impact on the performance of the Fund. Options held in the Fund may be illiquid and the fund manager may have difficulty closing out a position. The Fund may also invest in:

  • smaller capitalized companies - subject to more abrupt or erratic market movements than larger, more established companies;
  • foreign securities, which involve currency risk, different accounting standards and are subject to political instability;
  • securities limited to resale to qualified institutional investors, which can affect their degree of liquidity;
  • shares of other investment companies that invest in securities and styles similar to the Fund, resulting in a generally higher investment cost than from investing directly in the underlying shares of these funds.

The Fund intends to utilize these individual securities and hedging techniques in matched combinations that are designed to neutralize or offset the individual risks of employing these techniques separately. Some of these matched strategies include merger arbitrage, long/short equity, convertible bond arbitrage and fixed-income arbitrage. There is no assurance that these strategies will protect against losses. The Fund is non-diversified and therefore may invest in the securities of fewer issuers than diversified funds at any one time; as a result, the gains and losses of a single security may have a greater impact on the Fund´s share price.

Because the Funds is a fund-of-funds, your cost of investing in the Fund will generally be higher than the cost of investing directly in the shares of the mutual funds in which it invests. By investing in the Fund, you will indirectly bear your share of any fees and expenses charged by the underlying funds, in addition to indirectly bearing the principal risks of the funds. Please refer to the summary prospectus or prospectus for more information about the Fund, including risks, fees and expenses.

While the Fund is a no-load fund, management fees and other expenses still apply. Mutual fund investing involves risk; loss of principal is possible. Please consult an investment professional for advice regarding your particular circumstances. An investment in the Fund may not be suitable for all investors.

The Fund is offered only to United States residents, and information on this site is intended only for such persons. Nothing on this site should be considered a solicitation to buy or an offer to sell shares of the Fund in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction.

The Fund is distributed by Hatteras Capital Distributors, LLC, an affiliate of Hatteras Alternative Mutual Funds by virtue of common control or ownership.

Footnotes

  1. HFRI Fund of Funds Composite Index - Funds included in the Index invest with multiple managers through funds or managed accounts. The strategy designs a diversified portfolio of managers with the objective of significantly lowering the risk (volatility) of investing with an individual manager. The fund of funds manager has discretion in choosing which strategies to invest in for the portfolio. A manager may allocate funds to numerous managers within a single strategy, or with numerous managers in multiple strategies. The minimum investment in a fund of funds may be lower than an investment in an individual hedge fund or managed account. The investor has the advantage of diversification among managers and styles with significantly less capital than investing with separate managers. You cannot invest directly in an index. Benchmark performance should not be considered reflective of Fund performance. The HFRI are updated three times a month: Flash Update (5th business day of the month), Mid Update (15th of the month), and End Update (1st business day of the following month). The current month and the prior three months are left as estimates and are subject to change. All performance prior to that is locked and is no longer subject to change. For the purposes of this report, the Flash Update is used.
  2. Standard & Poor´s (S&P) 500 Total Return Index - The Index consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index, with each stock´s weight in the index proportionate to its market value. You cannot invest directly in an index. Benchmark performance should not be considered reflective of Fund performance.
  3. Standard deviation: measurement of the investment´s volatility.
  4. Largest drawdown: the peak to trough decline of an investment.
  5. Drawdown: number of months of a peak to trough decline of an investment.
  6. Recovery: number of months to recover from a drawdown.
  7. Sharpe ratio: measures the risk-adjusted performance. Calculated by subtracting the risk-free rate (90 day U.S. T-bill yield as of the previous year-end) from the rate of return and dividing the result by the standard deviation of returns.
  8. Sortino ratio: differentiates between good and bad volatility in the Sharpe ratio. Differs from the Sharpe ratio by dividing by downside deviation instead of standard deviation.
  9. Downside deviation: potential loss that may arise from risk.
  10. Alpha: measures excess return relative to the market; often referred to as a measurement of "manager skill".
  11. Beta: measure of a fund´s risk relative to the benchmark.
  12. Correlation: statistical measure of how two securities move in relation to each other.

Securities offered through Hatteras Capital Distributors, LLC, member of FINRA / SIPC. Hatteras Capital Distributors, LLC is affiliated with Hatteras Alternative Mutual Funds, LLC by virtue of common control/ownership.