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Holbrook
Income Fund

A bond fund designed to potentially preserve capital in a rising rate environment.

OVERVIEW

The Holbrook Income Fund seeks attractive risk-adjusted opportunities in fixed income that offer the potential for both income and capital preservation in a rising rate environment.  A top-down macro approach is employed to identify opportunities across all facets of the bond market and then a rigorous a bottom-up credit selection process to select individual issues. The managers will invest opportunistically across a wide range of credits and issuer types based on relative value within fixed income.

OBJECTIVE

The Fund seeks to provide current income, with a secondary objective of capital preservation in a rising rate environment.

The Fund seeks to meet these objectives by investing primarily in:

  • Treasury Inflation Protected Securities

  • Investment Grade Corporates

  • Structured Credit

    • Residential Mortgage-Backed Securities ("RMBS")

    • Commercial Mortgage-Backed Securities ("CMBS")

    • Collateralized Loan Obligations ("CLO")

    • Asset Backed Securities ("ABS")

  • High Yield Corporates

  • Preferreds

PERFORMANCE

As of 3/31/2024

Holbrook Income Fund

1 YEAR

6.87%

3 YEARS

2.42%

5 YEARS

4.48%

INCEPTION*

4.36%

BofAML US Corp & Govt, 1-3 Yrs TR

3.60%

0.27%

1.38%

1.32%

ANNUAL RETURNS

*Fund Inception is July 6th, 2016

 

The performance data quoted represents past performance. Current performance may be lower or higher than the performance data quoted above. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that investor's shares, when redeemed, may be worth more or less than their original cost. For performance information current to the most recent month-end, please call toll-free 1-877-345-8646.

DISTRIBUTIONS

Record Date
Income
Short-Term Capital Gain
Long-Term Capital Gain
Reinvestment Price
07/29/2016
0.00000
10.03
08/31/2016
0.01341
10.07
09/30/2016
0.02498
10.10
10/31/2016
0.02789
10.06
11/30/2016
0.02742
10.03
12/30/2016
0.05152
10.08
01/31/2017
0.01599
10.16
02/28/2017
0.02057
10.17
03/31/2017
0.04746
10.15
04/28/2017
0.01906
10.15
05/31/2017
0.02535
10.15
06/30/2017
0.06261
10.10
07/31/2017
0.01717
10.12
08/31/2017
0.00425
10.07
09/29/2017
0.03031
10.19
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PORTFOLIO

As of 3/31/2024

Fund Characteristics

Total Fund Assets

Number of Securities

Efective Duration

Average Price (Portfolio)

Average Maturity (Portfolio)

Floating Rate (%)

30-Day SEC Yield

$1.48 Billion

192

1.07 years

$93.98

1.93 years

32.70%

7.93%

Fund Information

Ticker

CUSIP

Management Fee

Gross Expense Ratio

HOBIX

90213U230

0.80%

1.13%

Sector Breakdown

Coupon Breakdown

Ratings Breakdown

Capital Structure Breakdown

INVESTMENT TEAM

ScottCarmack.png
Scott Carmack

CEO & Portfolio Manager

  • LinkedIn
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Ethan Lai

Portfolio Manager

  • LinkedIn

The 30-Day Yield represents net investment income earned by the Fund over the 30-day period ending 3/31/2024, expressed as an annual percentage rate based on the Fund's share price at the end of the 30-day period.

Bond Ratings: Bond ratings are assigned by a rating agency such as Standard & Poors, Moodys, Fitch, Egan Jones, KBRA, or DBRS. The ratings breakdown above utilizes ratings from all ratings agencies – depending which rating agency rated the bond deal. In the event that two rating agencies have rated the same bond deal, the higher credit rating is used. A bond rating evaluates the quality and safety of a bond, examining the issuer's financial strength and the likelihood that it will be able to meet scheduled repayments. Ratings range from AAA (best) to D (worst). Bonds receiving a rating of BB or below are not considered investment grade because of the relative potential for issuer default.

Definitions:

 

BofAML US Corporate & Government Index, 1-3 Year Index: The index tracks the performance of US dollar denominated investment grade debt publicly issued in the US domestic market, including US Treasury, US agency, foreign government, supranational and corporate securities, with a remaining term to final maturity less than 3 years.

 

Treasury Inflation Protected Securities: Treasury Inflation-Protected Securities (TIPS) are a type of Treasury security issued by the U.S. government. TIPS are indexed to inflation to protect investors from a decline in the purchasing power of their money. As inflation rises, rather than their yield increasing, TIPS instead adjust in price (principal amount) to maintain their real value. The interest rate on a TIPS investment is fixed at the time of issuance, but the interest payments keep up with inflation because they vary with the adjusted principal amount.

 

Investment Grade Corporates: Bonds that are believed to have a lower risk of default and receive higher ratings by the credit rating agencies, namely bonds rated Baa (by Moody's) or BBB (by S&P and Fitch) or above. These bonds tend to be issued at lower yields than less creditworthy bonds.

 

Preferreds: Preferred securities, also known as “preferreds” or “hybrids,” share the characteristics of both stocks and bonds, and may offer investors higher yields than common stock or corporate bonds. Understanding preferreds is an important first step in determining if they are an appropriate investment. Traditional preferred securities (“preferreds”) are fixed-income investments with equity-like features mainly issued by large banks and insurance companies. These securities are perpetual and callable, typically pay dividends instead of coupons, offer multiple rate structures, often have investment grade ratings, and are subordinated in the capital structure.

Collateralized Loan Obligations ("CLOs"): A collateralized loan obligation (CLO) is a single security backed by a pool of debt. The process of pooling assets into a marketable security is called securitization. Collateralized loan obligations (CLO) are often backed by corporate loans with low credit ratings or loans taken out by private equity firms to conduct leveraged buyouts. A collateralized loan obligation is similar to a collateralized mortgage obligation (CMO), except that the underlying debt is of a different type and character—a company loan instead of a mortgage.

 

Residential Mortgage-Backed Securities ("RMBS"): Residential mortgage-backed securities (RMBS) are debt-based assets backed by the interest paid on residential loans. Mortgages and home-equity loans have a comparatively low rate of default and a high rate of interest since there is a high demand for the ownership of a personal or family residence. Investor risk is mitigated by pooling many of these loans to minimize the risk of default.

Commercial Mortgage-Backed Securities ("CMBS"): CMBS are securities which are backed by underlying collateral consisting of commercial mortgage loans on items such as retail properties, office properties, industrial properties, multi-family housing and hotels. The properties are income producing and operate for economic profit. Commercial real estate loans used as collateral in these types of transactions are often ten-year, fixed-rate loans. The loans are often no more than 80% of the value of the property and the borrowers are required to maintain minimum cash balances to cover interest payments. Unlike residential mortgage loans, commercial mortgage loans often have strong protections (“lock out periods”) against prepayments for up to ten years. CMBS are structured similarly to residential mortgage-backed securities with the principal and interest payments by the borrower from underlying loans being passed through to the holders of each tranche of the CMBS. Each tranche will have some layer of protection against failure of principal and interest payment. This is often achieved through absorption of loan losses from the pool of mortgage loans initially by the lowest tranche (typically the equity or non-investment grade tranche) of the CMBS pool and eventually working up toward the highest tranche.

Asset Backed Securities ("ABS"): An asset-backed security (ABS) is a type of financial investment that is collateralized by an underlying pool of assets—usually ones that generate a cash flow from debt, such as loans, leases, credit card balances, or receivables. It takes the form of a bond or note, paying income at a fixed rate for a set amount of time, until maturity.

Floating Rate: A floating interest rate is an interest rate that changes periodically. The rate of interest moves up and down, or "floats," reflecting economic or financial market conditions. Often, it moves in tandem with a particular index or benchmark, or with general market conditions. A floating interest rate can also be referred to as an adjustable or variable interest rate because it can vary over the term of a debt obligation.

 

Capital Structure: The particular combination of debt and equity used by a company to finance its overall operations and growth.

30-Day SEC Yield: SEC Yield is computed in accordance with SEC standards measuring the net investment income per share over a specified 30-day period expressed as a percentage of the maximum offering price of the Fund’s shares at the end of the period.

Record Date: The record date is the cutoff established by a company to determine the shareholders eligible to receive a dividend or distribution. This pivots from the ex-dividend date, when the stock started trading without the value of its next dividend payment.

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