SOURCE: Arrow Funds

Arrow Funds

August 16, 2011 09:00 ET

Arrow DWA Balanced Fund Grows as Investors Seek a Dynamic Substitute to Traditional Asset Allocation Funds

Arrow's Flagship Fund, Which Turns Five Years Old This Month, Has Experienced 50% Growth During the Past Year

OLNEY, MD--(Marketwire - Aug 16, 2011) - Arrow Funds, a boutique asset manager specializing in alternative investments and tactical portfolio solutions, today announced that its flagship fund continues to gain traction among financial advisors seeking an alternative to traditional target-date and strategic asset allocation funds. The Arrow DWA Balanced Fund (NASDAQ: DWAFX) (A-Shares) has garnered more than $350 million in assets since its inception five years ago, with much of its growth occurring during the past 12 months. Unlike traditional asset allocation funds that rely on a static investor profile to determine their equity and fixed income allocations, the Arrow DWA Balanced Fund takes a more dynamic approach to investing.

"The financial crisis of 2008 revealed inherent flaws with the 'set it and forget it' investment philosophy of many strategic asset allocation mutual funds," says Arrow Funds CEO Joseph Barrato. "In addition to a lack of diversification beyond stocks and bonds, we saw an over-reliance on fixed allocations regardless of an asset class's underlying technical indicators or general attractiveness. The Arrow DWA Balanced Fund seeks to remedy these common shortcomings, and is one way that we have responded to client demand for sophisticated investment solutions that are adaptive to changing market conditions."

A fund of funds that invests primarily in ETFs, the Arrow DWA Balanced Fund seeks to achieve an appropriate balance between long-term capital appreciation and capital preservation by providing diversification beyond equities and fixed income to include alternative assets, such as commodities and real estate, which have the potential to enhance returns while mitigating risk. Based on Dorsey Wright & Associates' (DWA) proprietary tactical asset allocation model, the fund relies on relative strength momentum to employ five distinct rotation strategies: sector, style, international, fixed income and alternative. Those strategies that exhibit positive relative strength receive an overweight ranking, while those exhibiting less strength are underweighted within the portfolio.

"Arrow Funds has shown innovation by offering a balanced fund that provides broad diversification through exposure to multiple rotation strategies and non-correlated asset classes," says Michael Jones, managing director, investment services at Argent Advisors, Inc. "As long-time advocates of Dorsey Wright's technical analysis expertise, we also appreciate that the Arrow DWA Balanced Fund features a strict buy/sell discipline based on DWA's relative strength tactical asset allocation model."

Since its inception in August 2006, the Arrow DWA Balanced Fund has an annualized five-year return of 4.31% (A-Shares), outperforming the S&P 500's annualized return of 0.89% for the same time period.

"We have seen that strategic advisors are increasingly looking for tactical investment solutions to complement the more traditional aspects of their clients' portfolios," says Barrato. "Past performance is never an indicator of future returns, but the Arrow DWA Balanced Fund has proven to be an attractive option for long-term investors as it has performed well during the five very volatile years since its inception."

In addition to the Arrow DWA Balanced Fund, Arrow partners with Dorsey Wright & Associates to offer a dynamic global macro strategy. Similarly to the firm's flagship fund, the Arrow DWA Tactical Fund (NASDAQ: DWTFX) (A-Shares) relies on Dorsey Wright's systematic relative strength-based technical analysis to offer exposure across multiple assets. The Arrow DWA Tactical Fund, however, employs an unrestricted, "go-anywhere" approach to take advantage of global opportunities while hedging market risk. Together, the Arrow DWA Balanced Fund and the Arrow DWA Tactical Fund have garnered more than $600 million in assets.

Arrow DWA Balanced Fund (Annualized Performance as of 6/30/2011)

Ticker YTD* 1 year 3-year 5-year Inception (8/7/06)
DWAFX (A-Shares) 3.28% 20.92% 1.77% N/A 5.77%
DWATX (C-Shares) 2.91% 20.06% 1.01% N/A 4.97%
S&P 500 Index 6.02% 30.69% 3.34% N/A 2.88%

Past performance does not guarantee future results. *For periods less than one year, performance is not annualized. The performance data quoted represents past performance at net asset value and current returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. To obtain performance information current to the most recent month end, please call 1-877-277-6933. Standard deviation and correlation are calculated since the fund's inception. The maximum sales charge for A-Shares is 5.75% and may be eligible for a reduction in sales charges. The fund charges a fee of 1.00% on redemptions of shares held less than 30 days. Total fund expenses are 1.95% for A-Shares and 2.70% for C-Shares. The annual operating expenses are 1.58% for A-Shares and 2.33% for C-Shares, plus acquired fund fees of 0.37%.

About Arrow Investment Advisors
Arrow Investment Advisors, LLC, the advisor to Arrow Funds, is an investment management firm dedicated to providing investment solutions, education and research to financial intermediaries. Arrow Funds identifies and develops investment products that seek to enhance returns and mitigate risk. The firm is committed to delivering superior performance while providing the highest level of customer service. To learn more, visit www.ArrowFunds.com.

About Dorsey Wright & Associates
Dorsey Wright & Associates (DWA), subadvisor to the Arrow DWA Funds, is an independent and privately owned registered investment advisory firm whose business includes two areas: professional asset management and investment research services for numerous broker/dealers and large institutions around the world. The cornerstone of their investment strategy is technical analysis. The firm has provided technical research for more than 20 years. To learn more about DWA, please visit www.dorseywright.com.

Argent Advisors, Inc. is not an affiliated entity with Arrow Investment Advisors, LLC or Dorsey Wright & Associates.

An investor should consider the fund's investment objective, risks, charges and expenses carefully before investing or sending money. This and other information about Arrow Funds is contained in the funds' prospectus, which can be obtained by calling 1-877-277-6933. Please read the prospectus carefully before investing. Arrow Investment Advisors serves as investment advisor to Arrow Funds, distributed through Northern Lights Distributors, LLC (member FINRA). Northern Lights Distributors, LLC and Arrow Investment Advisors are not affiliated entities.

The Arrow DWA Balanced Fund and the Arrow DWA Tactical Fund may invest in commodity related securities which may be subject to greater volatility than investments in traditional securities. The funds may invest in international and emerging market securities which may be subject to special risks including fluctuations in currency, government regulation, differences in accounting standards and liquidity. The funds may invest in small-cap securities which may have special risks associated including wider variations in earnings and business prospects than larger, more established companies. The funds may invest in real estate related securities which may be subject to mortgage-related risks and real estate market fluctuations. The funds may invest in fixed income securities which are subject to risks including interest rate, credit and inflation risk. The funds are non-diversified as there are a limited number of underlying funds available, and each holding has the potential for a greater impact on the return. However, the underlying funds have access to a large number of investments, providing additional diversification benefits. The Arrow DWA Tactical Fund's use of short selling involves increased risks and additional costs. 1728-NLD-8/11/2011