Rise Oil & Gas, Inc. (RISE)

Overview

The investment fund focuses on leveraging opportunities arising from rising interest rates. By carefully tracking the performance of a portfolio made up primarily of exchange traded futures contracts and options on futures based on U.S. Treasury securities with 2, 5, and 10-year maturities, the fund aims to profit from these economic shifts. The unique strategy involves a targeted negative 10-year average effective portfolio duration, intending to benefit inversely from interest rate movements. The selection and weighting of the Treasury instruments are meticulously planned based on each maturity's contribution to the portfolio's overall duration, aiming to maintain the balance within a predetermined range. This approach allows the fund to adapt to the evolving economic landscape while striving to achieve its investment objectives.

Products and Services

The fund's products and services are focused on providing investors with strategic opportunities to capitalize on interest rate movements through meticulously structured portfolios. Key offerings include:

• Exchange Traded Futures Contracts:

  This product involves contracts that are traded on an exchange, which are based on the anticipated future prices of 2, 5, and 10-year U.S. Treasury securities. By engaging in futures trading, the fund aims to hedge against or benefit from future price changes in these securities, which are influenced by interest rate movements.

• Options on Futures:

  Options on futures contracts provide the fund with the right, but not the obligation, to buy or sell futures contracts at a predetermined price before a specified expiry date. This instrument allows the fund to gain leveraged exposure to the movements in U.S. Treasury securities, offering a strategic tool to manage risk and capitalize on expected interest rate changes.

• Targeted Negative 10 Year Average Effective Portfolio Duration:

  The fund targets a negative 10-year average effective portfolio duration, a strategy aimed at benefiting from rising interest rates. This negative duration position means that the fund is positioned to gain when interest rates go up, a strategy that contrasts with the traditional positive duration approach where bond prices typically fall as interest rates rise.

• Dynamic Weighting of Treasury Instruments:

  The weighting of the Treasury instruments is dynamically adjusted based on the duration contribution of each maturity. This ensures that the portfolio's exposure is precisely managed to align with the fund's interest rate outlook. The strategy aims to maintain a balance in the duration weighted percentage of the 2-year and 5-year maturity Treasury instruments between 30% to 70%, providing flexibility to adjust to market conditions.