6.26.2025  Gary Black discusses the rationale for why he and David Kalis, both managing partners, founded The Future Fund LLC in 2021 in this video interview with J. Philip Clark, who serves on the firm's Advisory Board. 

Why The Future Fund?

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Why at this point start up anew; and talk a little bit at the high level about what you're trying to do with The Future Fund?

I'd say it was about 2021. One of the gentlemen I had hired at Calamos to run the small and mid-cap growth portfolios was a fellow by the name of David Kalis. Dave was a very good portfolio manager, very disciplined about growth. I started a conversation with him probably in early ‘21, about maybe joining forces. He was running his own hedge fund at the time, and we decided that we would start The Future Fund. I'd say the vision of the Future Fund was high conviction, so very limited number of names where we had done a lot of great research, fundamental research, look for investment controversy, seek out investment controversy, and then really try to identify the one or two drivers. It would move the stock. Same thing I learned in at this point, 20 years of investing.

The other important point is we wanted to do it in the ETF wrapper. ETFs are just like mutual funds. The only difference is the NAV is struck, the net asset value is struck every single day, and it's like a mutual fund, but it's much more transparent. You have to post your positions every single day and the tax benefits are better because unlike a mutual fund where when you invest in mutual fund, you inherit the tax position of the fund with an ETF, whatever you pay for the ETF on that daily struck NAV becomes your basis. So it's a much better tax situation. And so we felt that that was the future of the industry.

Mutual funds are shrinking and still are. Aagain, for all the reasons we know, ETFs are the future and we're not Beta ETFs, which when you hear about the explosion in ETFs, they're mostly passive ETFs that mimic an index.

We wanted to be an active ETF shop and we wanted to have high conviction, embrace controversy, pick the one or two drivers that make the stock work or not work. So we started in about February of 21. We formed The Future Fund as a pure active ETF shop. By August of 21 we launched FFND. It's traded on a New York Stock Exchange ticker FFND (Future Fund.) It was exactly what we wanted it to be, which was fundamental based, high conviction, disciplined about valuation, but a growth portfolio. It had names that embraced controversy at the time. We bought a lot of stuff where there was a fight about what was happening with the stock. At the core of The Future Fund was this embrace of what we call megatrends, big secular trends that don't change much over time. That really governed our investment process.

In June of ‘23, we launched FFLS, which is Future Fund long short ETF, also on a New York exchange because we wanted to take advantage of a lot of the research we were doing where we would identify a megatrend and find companies that were going to be able to exploit those megatrends. But we wanted to be able to use the research to find out companies that were going to get hurt by those megatrends as well and be disrupted by them. So we decided to have a concentrated long/short portfolio and alongside the same names as FFND, but add 20 to 25 names on the short side, which could also add Alpha, actively managed, all actively managed.

That's an important point because a lot of long short products you see out there are long names that are actively managed. And then they short Beta, we're actually trying to find short names that can add Alpha but our longs might be about a hundred percent of the NAV. The shorts can be anywhere between 20 and 60% of that NAV. So we wind up with a net long position, generally about 40 to 60%. And our returns have been good and we've added, most importantly, we've added money on the short side.

IMPORTANT INFORMATION

Investing involves risk, including loss of principal.

Investors should consider the investment objectives, risks, and charges and expenses of the Funds before investing. The prospectuses contain this and other information about the Funds and should be read carefully before investing. The prospectuses may also be obtained by calling 877.466.7090.

The Future Fund ETFs are distributed by Northern Lights Distributors, LLC, member FINRA/SIPC. The Future Fund LLC is the investment advisor to the Funds, and is not affiliated with Northern Lights Distributors, LLC.

Opinions expressed are attributable to the speakers and are as of the date of this interview in February 2025. The Future Fund LLC is an SEC-registered investment advisor and advisor to The Future Fund ETFs. 

FFND prospectus        FFLS prospectus