July, 2014 - In This Issue:


Independence Day?


From the Desk of Alan Salzbank
Alan Salzbank, Fund Manager, Riverpark Gargoyle Hedged Value Fund
Alan Salzbank, Portfolio Manager
Each July brings with it the celebration of the American colonies' July 4, 1776 Declaration of Independence from Britain. A day full of parades and carnivals culminates in ubiquitous displays of fireworks as we remember this event that changed the course of history.


This July, many investors are anticipating another form of Independence Day - Independence from the Fed.  The current bull market in equities has been spurred in large part by the historically loose monetary policies of the Federal Reserve. Investors are now considering what sort of fireworks might ensue when the Fed finally ends the monthly injections of liquidity cumulatively known as Quantitative Easing, and allows the market a degree of independence it has not known since the financial crisis of 2008.



Looking at the returns of the S&P 500 since January of 2008, it is not hard to see why investors have become increasingly complacent regarding risk. Beginning with the introduction of QE1 in November 2008, for more than five years the Fed has stood ready to intervene whenever the markets have shown signs of weakness in the aftermath of the financial crisis. The brief downturn that followed the end of QE1 in June 2010 was followed by the introduction of QE2 in November of 2010. When QE2 stopped having its desired effect, the Fed added "Operation Twist" in September 2011, setting the stage for another advance. The introduction of QE3 in September 2012 provided the impetus for a further sustained strong move higher in the markets that has continued through the second quarter of 2014.


The Fed has recently begun to "taper" its bond purchases, signaling that QE3 may soon come to an end. Federal Reserve Chair Janet Yellen has even gone so far as to recently declare that valuations in some parts of the market (particularly social media and biotech) appear to be "substantially stretched," even after a "notable downturn in equity prices for such firms early in the year." One has to wonder if this may be Yellen's "Greenspan Moment" (Recall, former Federal Reserve Chairman Alan Greenspan declared the market was exhibiting signs of "irrational exuberance" as early as December of 1996 - the Dow subsequently rose another 81 percent before the tech bubble finally burst.)


For the time being, the market seems content to ignore the increasingly hawkish tone of the Fed and continue its relentless advance. It may well be that the Fed has something of a credibility problem. After more than five years of offering the market support at every turn, and making it very clear that the "Bernanke (now Yellen) Put" was firmly in place, it has become difficult for the Fed to convince investors that it would stand idly by in the event of a market decline.  The market's continued advance would suggest that investors still do not believe the Fed will actually let such a decline happen, which is a disconcerting sentiment in and of itself.  In theory, markets are supposed to be the ultimate mechanism for true price discovery. However, if market participants believe that an outside force will not "let" prices decline, that process becomes skewed strongly in favor of continually rising prices. This brings with it substantial incentive towards imprudent risk taking, and renews the specter of "moral hazard" in the marketplace.


Most of us still remember well the crisis of 2008, and would generally agree that the Fed acted prudently in staving off the complete catastrophe that seemed very possible in March 2009. Nevertheless, for investors to feel truly confident in the recovery of both the economy and the markets, at some point the markets need to be able to stand on their own, and declare their own "Independence Day."  While one of the key lessons of the experience of the 1930s may be that tightening too soon is a critical mistake, the lessons of 1929, 2000 and 2008 suggest that letting excessive risk-taking continue unabated can be every bit as dangerous.

 Annualized performance since inception of the Mutual Fund (4/30/12) was 21.03% for RGHIX and 20.77% for RGHVX.

*Total returns presented for periods less than one year are cumulative, returns for periods one year and greater are annualized. Inception date was December 31, 1999.

**Morningstar L/S Equity Category Returns sourced from Morningstar Principia.

The performance quoted herein represents past performance. Past performance does not guarantee future results. High short-term performance of the Fund is unusual and investors should not expect such performance to be repeated. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost, and current performance may be higher or lower than the performance quoted. For performance data current to the most recent month end, please call 888.564.4517.

The performance data quoted for periods prior to April 30, 2012 is that of the Predecessor Fund. The Fund will be managed in a materially equivalent manner to its predecessor. The Predecessor Fund was not a registered mutual fund and was not subject to the same investment and tax restrictions as the Fund. If the annual returns for the predecessor partnership were charged the same fees and expenses as the Fund, the annual returns for the predecessor partnership would have been higher.

*** RiverPark Advisors, LLC, the Fund's investment adviser, has agreed contractually to waive its fees and to reimburse expenses of the Fund to the extent necessary to ensure that operating expenses do not exceed, on an annual basis, 1.25% for the Institutional Class Shares and 1.50% for the Retail Class Shares of the Fund's average net assets. Gross Fund expenses are1.16%for the Institutional Class and 1.44%for the Retail Class. This agreement is in effect until at least January 31, 2015, and subject to annual approval by the Board of Trustees of RiverPark Funds Trust. The expense ratios stated are as of the most recent prospectus, dated January 28, 2014.


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At Gargoyle Investment Advisor L.L.C., we understand the need for investors and portfolio managers to keep pace with the demands of today's ever changing marketplace. For the last 25 years, from our beginnings on the floor of the American Stock Exchange to the establishment of our Investment Advisory and Institutional Option Overlay Service, we have weathered the storms that have shaken the markets and found ways for our clients to prosper in the long term. We will approach the next 25 years with the same commitment to value, performance and service that has been the cornerstone of our success.
Alan Salzbank

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The material provided herein is for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any interests in any Gargoyle fund, notwithstanding that any such interests may be currently being offered to others. Offers of such funds may be made only by prospectus. Please carefully consider any fund's investment objectives, risks, charges and expenses before investing. Past performance is not indicative of future returns, which may vary. Future returns are not guaranteed, and a loss of principal may occur.