Fund aims to perform in all market conditions

The head of a new Phoenixbased mutual fund wants to plug a hole in your investment portfolio.

Cole Wilcox, the 35-year-old chief executive officerof Longboard Asset Management, says the new fund holds a lot of things that most investors don’t own and thus can add an important layer of diversification. Patterned after the typical hedge fund, it aims to make money in all market environments, with the aim of providing higher returns over time with less volatility, even during periods of peak financial turbulence.

“People need strategies that can turn a crisis into an opportunity,” he said.

The name Longboard is a surfing term, and the tickers for the firm’s new mutual fund, Longboard Managed Futures Strategy, are WAVEX and WAVIX. Like a surfer paddling out beyond the breakers to ride the big one, Wilcox aims to identify major trends that can sway prices for stocks, bonds, currencies, commodities and other assets, along with identifying the catalysts that can get

things moving.

He searches for mispriced stocks and other investments that can lead to profit, often taking positions via futures positions. “I’m looking for a high conviction in the marketplace (on an asset) that’s not based on facts,” he said.

As an example, Wilcox accurately predicted in a May 2 interview on Fox Business that Tesla Motors would shoot above $100 a share, when shares in the electric-car maker were trading at half that level. It came at a time when Tesla had attracted a lot of naysayers who were heavily shorting or betting against the stock. The bold prediction showed Wilcox’s willingness to stray from the Wall Street crowd, which he contends is easier to do in Phoenix.

“It’s a great place for independent thinking, for staying away from the noise,” he said.

Wilcox hasn’t taken the normal route to a career as a money manager. Growing up in Phoenix, he dropped out of North High School and became a stockbroker at age 18, eventually earning his high-school diploma but not a college degree. Always fascinated by the financial markets, he detoured into investment research and hedge funds, founding the predecessor to Longboard with Eric Crittenden, a Longboard partner and the firm’s director of research, in 2003.

Longboard currently counts 25 employees, most working from its office at 24th Street and Camelback Road.

The fund hasn’t been a stellar performer so far during its brief life. From Jan. 1 through May 29, it returned a lackluster 2.5 percent, according to researcher Morningstar Inc. That reflects a high cash stake and futures po-

‘‘( Phoenix is) a great place for independent thinking, for staying away from the noise.”

Chief executive officer, Longboard Asset Management sitions designed to gain ground during stock-market turbulence, of which there hasn’t been much so far this year.

The fund counts about $36 million, with most new investments coming through financial advisers seeking to build more diversified portfolios for clients. The fund is sold in a couple of ways, including with a maximum 5.75 percent sales charge for small-dollar investments of $2,500 and up, or on a no-load basis for people with at least $10,000 to invest working through financial advisers.

The fund ( www.longboardmutual funds.com, 855-294-7540 and 800-2908319) aims to attract smaller-dollar investors lacking the wealth to qualify for a traditional hedge fund.

Investor-borne fees are on the high side, around 3 percent annually. “The expense ratio is higher than for most mutual funds but lower than for hedge funds,” Wilcox said.

Managed-futures strategies are widely used by institutions but haven’t been adopted as readily by retail investors. Wilcox believes this type of investment makes sense for 5 percent to 15 percent of the holdings of a moderately aggressive individual.

“Financial advisers in the post-2008 environment recognize that stocks and bonds alone are not all the tools they need,” he said.