LJM Capital Preservation and Growth Fund The fund is managed by LJM Partners, an investment firm. The fund is no longer actively traded and its price has dropped. However, the U.S. News & World Report says that the investment “seeks capital appreciation and capital preservation with low correlation to the broader U.S. equity market. Investors are filing lawsuits for losses.
Haselkorn & Thibaut (InvestmentFraudLawyers.com) has opened a fraud investigation into the selling of LJM Capital Preservation and Growth Fund Call them on to learn more about the fund. 1-800-856-3352 For a free consultation regarding the recovery of loss.
The fund’s primary investment is in bought (aka “long’) and sold (aka “short’) call and put options on Standard & Poor’s 500 Futures Index (“S&P’). The fund seeks to achieve its investment objectives by capturing gains on options sold on S&P futures contracts that can be purchased (“”(‘closed’) can be sold at a future date for less than the original price.”
Chronology leading up to the LJM Fund’s price drop
- The LJM Preservation and Growth Fund launched in 2013 three different classes of shares (ticker symbol LJMAX LJMCX LJMIX).
- The prospectus of LJM Fund stated its objective. “capital appreciation and capital preservation with low correlation to the broader U.S. equity market”.
- As of October 31, 2017, the LJM Fund had net assets of $768.
- The fund, it is believed, has used complex options strategies to place large bets, which, in order to earn returns, depend on the markets’ not experiencing volatility throughout the investment period.
- The stated objectives of a fund may not be met by these investment strategies.
- The Fund lost 80% on the 5th and 6th February 2018. investors poorer by approximately $600 million.
Analyse of the events of LJM Preservation and Growth Fund
LJM Preservation and Growth Funds (LJMAX, LJMCX, LJMIX ) were initially high-risk alternatives mutual funds. However, they suffered a major blow when volatility index (VIX ) spiked. In a single-day, the share price dropped from $9.67 per share to $4.27. That’s a 50% drop. The fact that the decline in share price was not announced by the fund until the next day compounded the problem.
The worst was yet to come. The next day, on the 6th, the slide continued unabated, with the price dropping to an unbelievable $1.94. That was another 50% drop in one single day.
Gretchen Rupp is a Morningstar analyst who covers the fund. “It may be the biggest two-day drop for a mutual fund ever.”
We understand that, in many cases, investments were made to the LJM Preservation and Growth Fund on the advice of investment advisors.
Many FAs, it is also understood, employed the ‘sleeves’ strategy for third-party tactical mutual fund allocation. The idea was conceived by Horter Investment Management (HIM), the ‘sleeves’ strategy had been marketed to more than 250 representatives and investment advisors. HIM is an SEC Registered Investment Advisor (RIA), based in Cincinnati. The organization was founded in 1991, with the stated purpose of educating investors. “risk mitigation, capital preservation and minimizing drawdowns so that people don’t get hurt with severe corrections or a bear market.” It has presented itself as an adviser to other investment advisors.
Financial advisors must get to understand their clients, their goals and investment objectives as well as their willingness to accept risk. Brokers who make unsuitable recommendations about securities are guilty of serious crimes. Unsuitable securities recommendations is considered a dishonest and unethical business practice. If such a recommendation was made, the customer could recover any financial losses.
By law, securities brokers must only recommend securities that they believe are suitable for the customer. Brokers are required to inform their clients of their belief if they make a reasonable enquiry about the customer’s investment goals and financial situation.
One of the most common reasons for an unsuitable broker is a broker who recommends speculative investments to a client with conservative investment goals and objectives. A retired person is an example of conservative investing. They need income to pay their living costs and can’t recover from trading losses.
The client’s investment goals, time horizon and risk tolerance are three of the main criteria used to determine whether an asset is suitable. Brokers usually make these selections. “check-the-box” Format, which is supposed to be based on information provided by the customer. Brokers are responsible for collecting information that will help them understand the investor’s level of risk tolerance, their tax situation, past experience, and appetite for risk. Brokers are responsible for making appropriate and appropriate suggestions to their clients. If a broker violates his duties and makes unsuitable recommendations to a customer, he may be held liable.
Legal recourse available to affected investors
You have been sold the LJM Preservation Growth FundIf you have lost money on a high-risk investment, such as, you might be able recover it from the brokerage that sold you that investment. It is important to act quickly, as securities cases have a short statute of limitations.
Haselkorn & Thibaut has a history of taking up the cause on behalf of elderly investors as well as other conservative investment groups. It is particularly important when investors have lost their money due to high-risk investments. LJM Preservation Growth Fund.
Investors who place their money in LJM Preservation Growth Fund Brokers and their companies are likely to have sold the product in an unprincipled manner, if not outright fraud. Many have lost a significant portion of their retirement fund.
Please be aware that there are no fees for an initial case evaluation. You do not have to pay for legal fees until there is a recovery. Moreover, you remain the owner and beneficiary of the investments on which you are seeking to recover losses.
Haselkorn & Thibaut (InvestmentFraudLawyers.com( has launched a fraud probe into the sale LJM Capital Preservation and Growth Fund Call them on to learn more about the fund. 1-800-856-3352 Please contact us for a no-obligation consultation on recovering losses.