Investment Managers Series Trust
05/03/2021 | Press release | Distributed by Public on 05/03/2021 04:07
Filing by Investment Company (SEC Filing - 497K)
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Braddock Multi-Strategy Income Fund Class A Shares (BDKAX) Class C Shares (BDKCX) Class T Shares (BDKDX) Institutional Class Shares (BDKNX) |
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| Summary Prospectus | May 1, 2021 |
Before you invest, you may want to review the Fund's prospectus, which contains more information about the Fund and its risks. You can find the Fund's Prospectus and Statement of Additional Information ('SAI') and other information about the Fund online at www.libertystreetfunds.com/mutual-funds/braddock-multi-strategy-income-fund. You may also obtain this information at no cost by calling (800) 207-7108 or by sending an e-mail request to [email protected]. The Fund's Prospectus and Statement of Additional Information, both dated May 1, 2021, as each may be amended or supplemented, are incorporated by reference into this Summary Prospectus.
Investment Objective
The investment objective of the Braddock Multi-Strategy Income Fund (the 'Fund') is to seek total return with an emphasis on providing current income.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the table and example below. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Class A Shares of the Fund or if you invest $250,000 or more in Class T shares in a single transaction. More information about these fees and other discounts is available from your financial professional and in the section titled 'Choosing a Share Class' on page 36 of the Statutory Prospectus and in 'APPENDIX A - Waivers and Discounts Available from Intermediaries and Conversion Policies' of the Statutory Prospectus.
| Class A Shares | Class C Shares | Class T Shares |
Institutional Class Shares |
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Shareholder Fees (fees paid directly from your investment) |
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| Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 4.25%(1) | None | 2.50% | None | ||||||||||||
| Maximum deferred sales charge (load) (as a percentage of the lesser of the value redeemed or the amount invested) | 1.00%(2) | 1.00%(2) | None | None | ||||||||||||
| Wire fee | $20 | $20 | $20 | $20 | ||||||||||||
| Overnight check delivery fee | $25 | $25 | $25 | $25 | ||||||||||||
| Retirement account fees (annual maintenance fee) | $15 | $15 | $15 | $15 | ||||||||||||
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Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) |
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| Management fees | 1.25% | 1.25% | 1.25% | 1.25% | ||||||||||||
| Distribution and service (Rule 12b-1) fees | 0.25% | 1.00% | 0.25% | None | ||||||||||||
| Other expenses (3) | 0.24% | 0.24% | 0.24% | 0.24% | ||||||||||||
| Shareholder service fee | 0.06% | 0.06% | 0.06% | 0.06% | ||||||||||||
| Dividends on short sales and interest expense | 0.02% | 0.02% | 0.02% | 0.02% | ||||||||||||
| All other expenses | 0.16% | 0.16% | 0.16% | 0.16% | ||||||||||||
| Recoupment of fees waived and/or expenses reimbursed(4) | 0.03% | 0.03% | 0.03% | 0.03% | ||||||||||||
| Acquired fund fees and expenses | 0.01% | 0.01% | 0.01% | 0.01% | ||||||||||||
| Total annual fund operating expenses (5) | 1.78% | 2.53% | 1.78% | 1.53% | ||||||||||||
| 1 | No initial sales charge is applied to purchases of $1 million or more. |
| 2 | A contingent deferred sales charge ('CDSC') of 1.00% will be charged on certain Class A Share purchases of $1 million or more that are redeemed in whole or in part within 12 months of the date of purchase. A CDSC of 1.00% will be charged on Class C Share purchases that are redeemed in whole or in part within 12 months of the date of purchase. |
| 3 | Other expenses for Class T shares are estimated for the current fiscal year, based on current expenses for the existing share classes. |
| 4 | The Fund's advisor has contractually agreed to waive its fees and/or pay for operating expenses of the Fund to ensure that total annual fund operating expenses (excluding, as applicable, taxes, leverage interest, brokerage commissions, acquired fund fees and expenses (as determined in accordance with Form N-1A), expenses incurred in connection with any merger or reorganization and extraordinary expenses such as litigation expenses) do not exceed 1.75%, 2.50%, 1.75% and 1.50% of the average daily net assets of the Class A Shares, Class C Shares, Class T Shares and Institutional Class Shares, respectively. Class T Shares were not offered prior to May 1, 2021. This agreement is in effect until April 30, 2022, and may be terminated before that date only by the Trust's Board of Trustees. The Fund's advisor is permitted to seek reimbursement from the Fund for a period ending three full fiscal years after the date of the waiver or payment. This reimbursement may be requested from the Fund if the reimbursement will not cause the Fund's annual expense ratio to exceed the lesser of (a) the expense limitation in effect at the time such fees were waived or payments made, or (b) the expense limitation in effect at the time of the reimbursement. |
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| 5 | The total annual fund operating expenses and total annual fund operating expenses after fee waiver and/or expense reimbursements do not correlate to the ratio of expense to average net assets appearing in the financial highlights table, which reflects only the operating expenses of the Fund and does not include acquired fund fees and expenses. |
Example
This example is intended to help you compare the costs of investing in the Fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The example reflects the Fund's contractual fee waiver and/or expense reimbursement only for the term of the contractual fee waiver and/or expense reimbursement.
Although your actual costs may be higher or lower, based on these assumptions your costs would be:
| One Year | Three Years | Five Years | Ten Years | |
| Class A Shares | $598 | $961 | $1,348 | $2,431 |
| Class C Shares | $359 | $788 | $1,345 | $2,866 |
| Class T Shares | $426 | $796 | $1,190 | $2,292 |
| Institutional Class Shares | $156 | $483 | $834 | $1,824 |
You would pay the following expenses if you did not redeem your shares:
| One Year | Three Years | Five Years | Ten Years | |
| Class C Shares | $256 | $788 | $1,345 | $2,866 |
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or 'turns over' its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 91% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, the Fund will pursue its investment strategy by investing primarily in asset-backed debt securities. Asset-backed debt securities represent interests in 'pools' of mortgages or other assets, including securities backed by assets such as residential and commercial real estate, corporate debt, credit card and business receivables, student loans, personal and consumer loans and automobile loans. The Fund's allocation of its assets among various asset classes within the asset-backed debt securities market will depend on the views of Braddock Financial LLC ('Braddock' or the 'Sub-Advisor'), the Fund's sub-advisor, as to the best value currently available in the market place. In selecting investments, the Sub-Advisor will consider, among other things, maturity, yield and ratings information and opportunities for price appreciation and interest income.
Although the Fund's allocation may be among various asset classes in the asset-backed debt securities market, the Fund's investments are expected to focus on mortgage-related securities. Mortgage-related securities are backed by or provide exposure to mortgages, including private (i.e., non-agency) and government mortgage-backed (i.e., agency) securities. In particular, under normal market conditions the Fund intends to focus its investment on non-agency, credit sensitive residential mortgage backed securities ('RMBS'). Agency loans have balances that fall within the limits set by the Federal Housing Finance Agency ('FHFA'), are underwritten to standards set by the Government National Mortgage Association ('Ginnie Mae'), the Federal National Mortgage Association ('Fannie Mae') or the Federal Home Loan Mortgage Corporation ('Freddie Mac'), and qualify as collateral for securities that are issued by Ginnie Mae, Fannie Mae and Freddie Mac. Non-agency loans have balances that may or may not fall within the limits set by FHFA and do not qualify as collateral for securities that are issued by Ginnie Mae, Fannie Mae or Freddie Mac. Residential mortgage loans, a type of RMBS collateral, are generally classified into three categories based on the risk profile of the borrower and the property: (i) Prime, (ii) Alternative-A ('Alt-A'), and (iii) Subprime. Prime residential mortgage loans are extended to borrowers who generally represent relatively low risk profiles through strong credit histories. Subprime loans are made to borrowers who generally display poor credit histories and other characteristics that correlate with a higher default risk. Alt-A loans are made to borrowers whose risk profile falls between Prime and Subprime. When selecting RMBS investments for the Fund during normal market conditions, the Sub-Advisor intends to focus on non-agency RMBS that are backed by loans which are subject to post 2014 underwriting standards (associated with the Consumer Financial Protection Bureau's creation of the Qualified Mortgage (QM) rule) in the case of recently issued or new RMBS, or are collateralized by pools of Prime or Alt-A mortgages that are backed by seasoned loans (i.e., have observable payment histories) in the case of previously issued or older RMBS. Additional RMBS products include trusts backed by non-performing or re-performing mortgage loans and loans secured by single family rental properties. Re-performing residential mortgage loans are loans with respect to which the borrower was delinquent in making payments and later resumed making payments on the mortgage. The borrower's mortgage payment terms may or may not have been adjusted during their delinquency. Non-performing and re-performing mortgage loans derive their value from the sale of the underlying residential property and potentially from modified mortgage payments.
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The Fund may also invest up to 15% of its net assets in illiquid securities, which may include certain collateralized loan obligations ('CLOs'). A CLO is a type of asset-backed debt security typically collateralized predominantly by pools of domestic and foreign senior secured corporate loans, including loans that may be rated below investment grade. Unsecured and subordinate securities may be included, but are typically limited to 5% to 15% of the pool. A CLO is an obligation of a trust. The trust creates a series of cash flow bonds, called tranches, which vary in risk and yield. The riskier portion is the residual, or 'equity,' tranche, which bears some or all of the risk of default by the loans in the trust. Typically, CLOs are privately offered and sold, and thus are not registered under the securities laws. As a result, the Fund may in certain circumstances characterize its investments in CLOs as illiquid.
In addition, the Fund may enter into repurchase agreements and reverse repurchase agreements. The Fund may enter into reverse repurchase agreements, which are considered to be borrowings, to seek to enhance returns. The Fund may borrow to the maximum extent permitted by applicable law, which generally means that the Fund may borrow up to one-third of its total assets.
In selecting securities for investment, the Sub-Advisor favors investments that it believes are undervalued and will produce consistent returns in most interest rate environments. The Sub-Advisor selects those securities for investment that it believes offer the best risk/return opportunity based on its analyses of a variety of factors including collateral quality, duration, structure, excess interest, credit support, potential for greater upside and less downside capture, liquidity, and market conditions. The Sub-Advisor attempts to diversify the Fund's investments geographically (i.e., by the location of the underlying mortgage properties) and, with respect to asset backed debt securities, among the loan servicing institutions. While there are no restrictions on the maturity of individual securities, the securities in the Fund's portfolio are expected to have an average effective duration of less than five years. The Fund does not limit its investments to a particular credit quality but expects to invest primarily in securities rated non-investment grade (also referred to as 'junk bonds') by a nationally recognized statistical rating organization ('NRSRO'), or not rated. A NRSRO is a credit rating agency that rates the creditworthiness of a company or a financial product, such as a debt security or money market instrument.
The Sub-Advisor employs a multi-level approach to asset selection and portfolio management. This method applies a set of analytical techniques and criteria, including evaluating each security on an individual basis and as a component of the Fund's overall portfolio. The investment approach is comprised of 1) market analysis, 2) credit selection and 3) risk management. Market analysis concentrates on macro aspects of the RMBS and asset-backed security sectors such as interest rates, liquidity, volatility, and other market metrics. Credit selection concentrates on the underlying loan level attributes of the target investments and how changes in loan level performance may affect each security's cash flows, credit risk, and credit ratings. Risk management is a surveillance program utilizing scenario tests and time horizon analysis at both the portfolio and individual security level.
From time to time, the Sub-Advisor may tactically utilize the following securities or instruments for hedging purposes, to attempt to enhance the portfolio's return or to mitigate against certain risks, principally credit and interest rate risk: U.S. Treasury securities; investment companies, including exchange-traded funds ('ETFs'), that invest in fixed income securities; interest rate, total return, credit default, and synthetic swaps; interest rate and bond futures; and credit spread and interest rate options.
Principal Risks of Investing
Risk is inherent in all investing and you could lose money by investing in the Fund. A summary description of certain principal risks of investing in the Fund is set forth below. Before you decide whether to invest in the Fund, carefully consider these risk factors associated with investing in the Fund, which may cause investors to lose money. There can be no assurance that the Fund will achieve its investment objective.
| • | Covid-19 Related Market Events: An outbreak of a respiratory disease caused by a novel coronavirus (known as COVID-19) has resulted in a global pandemic and has caused major disruptions to economies and markets around the world, including the United States. Financial markets experienced and may continue to experience extreme volatility and severe losses, and trading in many instruments was and may continue to be disrupted as a result. Liquidity for many instruments was and may continue to be greatly reduced for extended periods of time. Some interest rates are very low and in some cases yields are negative. Governments and central banks, including the Federal Reserve in the United States, have taken extraordinary and unprecedented actions to support local and global economies and the financial markets. The impact of these measures, and whether they will be effective to mitigate the economic and market disruption, will not be known for some time. In addition, the outbreak of COVID-19, and measures taken to mitigate its effects, could result in disruptions to the services provided to the Fund by its service providers. Other market events like the COVID-19 outbreak may cause similar disruptions and effects. |
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| • | Market Risk: The market price of a security or instrument may decline, sometimes rapidly or unpredictably, due to general market conditions that are not specifically related to a particular issuer, company, or asset class such as real or perceived adverse economic or political conditions throughout the world, changes in the general outlook for individual consumers and borrowers, credit markets and corporate earnings, changes in interest or currency rates, or adverse investor sentiment generally. In addition, local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, or other events could have a significant impact on a security or instrument. The market value of a security or instrument also may decline because of factors that affect a particular issuer, group(s) of borrowers or industries, such as increased unemployment, declining wages and property values, labor shortages or increased production costs and competitive conditions within an industry. |
| • | Valuation Risk: From time to time, the Fund will need to fair-value portfolio securities at prices that differ from third party pricing inputs in order to more accurately reflect the sales price the Fund could receive in a reasonable period of time for any particular portfolio investment or groups of investments. Investors who purchase or redeem Fund shares on days when the Fund is pricing or holding fair-valued securities may pay a higher or lower price for the shares, or may receive more or less redemption proceeds than they would have received if certain of the Fund's securities had not been fair-valued, or if a different valuation methodology had been used. Such pricing differences can be significant and can occur quickly during times of market volatility, particularly for securities that trade in thin or illiquid markets. |
| • | Fixed Income Securities Risk: The prices of fixed income securities respond to economic developments, particularly interest rate changes, as well as to changes in an issuer's credit rating or market perceptions about the creditworthiness of an issuer. Generally fixed income securities decrease in value if interest rates rise and increase in value if interest rates fall, and longer-term and lower rated securities are more volatile than shorter-term and higher rated securities. |
| • | Liquidity Risk: The Fund may not be able to sell some or all of the investments that it holds due to a lack of demand in the marketplace or other factors such as market turmoil, or if the Fund is forced to sell an illiquid investment to meet redemption requests or other cash needs under these circumstances, it may only be able to sell that investment at a loss. Liquid investments may become illiquid or less liquid after purchase by the Fund, particularly during periods of market turmoil. Illiquid and relatively less liquid investments may be harder to value, especially in changing markets. |
| • | High Yield ('Junk') Bond Risk: High yield bonds are debt securities rated below investment grade (often called 'junk bonds'). Junk bonds are speculative, involve greater risks of default, downgrade, or price declines and are more volatile and tend to be less liquid than investment-grade securities. Companies issuing high yield bonds are less financially strong, are more likely to encounter financial difficulties, and are more vulnerable to adverse market events and negative sentiments than companies with higher credit ratings. |
| • | Mortgage-Backed and Asset-Backed Debt Securities Risk: Mortgage-backed and asset-backed securities represent interests in 'pools' of mortgages or other assets, including consumer loans or receivables held in trust. Mortgage-backed securities are subject to 'prepayment risk' (the risk that borrowers will repay a loan more quickly in periods of falling interest rates) and 'extension risk' (the risk that borrowers will repay a loan more slowly in periods of rising interest rates). If the Fund invests in mortgage-backed or asset-backed securities that are subordinated to other interests in the same pool, the Fund may only receive payments after the pool's obligations to other investors have been satisfied. An unexpectedly high rate of defaults on the assets held by a pool may limit substantially the pool's ability to make payments of principal or interest to the Fund, reducing the values of those securities or in some cases rendering them worthless. The Fund's investments in other asset-backed securities are subject to risks similar to those associated with mortgage-backed securities, as well as additional risks associated with the nature of the assets and the servicing of those assets. |
| • | Interest Rate Risk: Generally fixed income securities decrease in value if interest rates rise and increase in value if interest rates fall, with longer-term securities being more sensitive than shorter-term securities. For example, the price of a security with a three-year duration would be expected to drop by approximately 3% in response to a 1% increase in interest rates. Generally, the longer the maturity and duration of a bond or fixed rate loan, the more sensitive it is to this risk. Falling interest rates also create the potential for a decline in the Fund's income. Changes in governmental policy, rising inflation rates, and general economic developments, among other factors, could cause interest rates to increase and could have a substantial and immediate effect on the values of the Fund's investments. In addition, a potential rise in interest rates may result in periods of volatility and increased redemptions that might require the Fund to liquidate portfolio securities at disadvantageous prices and times. |
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| • | Management and Strategy Risk: The evaluation and selection of the Fund's investments depend on the judgment of the Fund's Sub-Advisor about the quality, relative yield, value or market trends affecting a particular security, issuer, sector or region, which may prove to be incorrect. |
| • | Credit Risk: If an issuer or guarantor of a debt security held by the Fund or a counterparty to a financial contract with the Fund defaults or is downgraded or is perceived to be less creditworthy, or if the value of the assets underlying a security declines, the value of the Fund's portfolio will typically decline. The Fund's securities are generally not guaranteed by any governmental agency. |
| • | Sector Focus Risk: Sector focus risk results from maintaining exposure to the performance of the asset-backed debt securities, including mortgage-related securities, in which the Fund invests. The focus of the Fund's portfolio on a specific sector, such as in mortgage-related securities, may present more risks than if the portfolio were broadly diversified over numerous sectors. At times the performance of the Fund's investments may lag the performance of other sectors or the broader market as a whole. Such underperformance may continue for extended periods of time. |
| • | Real Estate Market Risk: The Fund's investment in mortgage-related securities, including RMBS, will subject the Fund to risks similar to those associated with direct ownership of real estate, including reduction in the value of the real estate serving as loan collateral, losses from casualty or condemnation, and changes in local and general economic, supply and demand factors, interest rates, zoning laws, regulatory limitations on rents, property taxes and operating expenses. |
| • | Non-Diversification Risk: The Fund is classified as 'non-diversified', which means the Fund may invest a larger percentage of its assets in the securities of a smaller number of issuers than a diversified fund. Investment in securities of a limited number of issuers exposes the Fund to greater market risk and potential losses than if its assets were diversified among the securities of a greater number of issuers. |
| • | Collateralized Loan Obligations Risk: The risks of an investment in a CLO largely depend on the type of underlying collateral securities and the tranche in which the Fund invests. While CLOs are subject to the typical risks associated with debt instruments (i.e., interest rate risk and credit risk), the Fund is also subject to asset manager, legal and regulatory, limited recourse, liquidity, redemption, and reinvestment risks as a result of the structure of CLOs in which the Fund may invest. A CLO's performance is linked to the expertise of the CLO manager and its ability to manage the CLO portfolio. Changes in the regulation of CLOs may adversely affect the value of the CLO investments held by the Fund and the ability of the Fund to execute its investment strategy. CLO debt is payable solely from the proceeds of the CLO's underlying assets and, therefore, if the income from the underlying loans is insufficient to make payments on the CLO debt, no other assets will be available for payment. The CLO manager may not find suitable assets in which to invest and the CLO manager's opportunities to invest may be limited. CLO debt securities may be subject to redemption and the timing of redemptions may adversely affect the returns on CLO debt. The redemption periods and terms will depend upon the CLO. Optional redemptions, if decided upon, may be directed by a majority of the holders of the subordinated notes. A redemption may also occur at the written direction of the CLO manager to the issuer and the trustee of the CLO. For example, certain tranches of CLO debt may be redeemed if the CLO manager is unable to identify assets suitable for investment during the period when it has the ability to reinvest the principal proceeds from the sale of assets, scheduled redemptions and prepayment in additional assets. Additionally, holders of subordinated CLO debt may cause the redemption of senior CLO debt. |
| • | Repurchase Agreement Risk: Repurchase agreements may be viewed as loans made by the Fund which are collateralized by the securities subject to repurchase. The Fund's investment in repurchase agreements may be subject to market and credit risk with respect to the collateral securing the repurchase agreements. If the Fund's counterparty should default on its obligations and the Fund is delayed or prevented from recovering the collateral, or if the value of the collateral is insufficient, the Fund may realize a loss. |
| • | Reverse Repurchase Agreements Risk: A reverse repurchase agreement is the sale by the Fund of a debt obligation to a party for a specified price, with the simultaneous agreement by the Fund to repurchase that debt obligation from that party on a future date at an agreed upon price. Similar to borrowing, reverse repurchase agreements provide the Fund with cash for investment purposes, which creates leverage and subjects the Fund to the risks of leverage. Reverse repurchase agreements also involve the risk that the other party may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of collateral held by the Fund, including the value of the investments made with cash collateral, is less than the value of securities. |
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| • | Leveraging Risk: Certain Fund transactions, such as entering into futures contracts, options, short sales or reverse repurchase agreements, will give rise to a form of leverage. The use of leverage may magnify the Fund's gains and losses and make the Fund more volatile. Leverage creates a risk of loss of value on a larger pool of assets than the Fund would otherwise have had, potentially resulting in the loss of all assets. The Fund may also have to sell assets at inopportune times to satisfy its obligations in connection with such transactions. |
| • | LIBOR Risk: Many financial instruments, financings or other transactions to which the Fund may be a party use or may use a floating rate based on the London Interbank Offered Rate ('LIBOR'). In July 2017, the Financial Conduct Authority, the United Kingdom's financial regulatory body, announced that after 2021 it will cease its active encouragement of banks to provide the quotations needed to sustain LIBOR, although it is possible that all or a part of this phase out may be delayed. The unavailability and/or discontinuation of LIBOR could have adverse impacts on newly issued financial instruments and existing financial instruments that reference LIBOR. While some instruments may contemplate a scenario in which LIBOR is no longer available by providing for an alternative rate setting methodology, not all instruments may have such provisions and there is uncertainty regarding the effectiveness of any alternative methodology. In addition, the unavailability or replacement of LIBOR may affect the value, liquidity or return on certain Fund investments and may result in costs incurred in connection with closing out positions and entering into new trades. The potential effect of the transition away from LIBOR on the Fund or the financial instruments in which the Fund invests cannot yet be determined and may adversely affect the Fund's performance or net asset value. |
| • | Derivatives Risk: The Fund may use derivative instruments, which derive their value from the value of an underlying security, currency, or index. Major types of derivatives include futures, options, swaps and forward contracts. Derivative instruments involve risks different from direct investments in the underlying assets, including: imperfect correlation between the value of the derivative instrument and the underlying assets; risks of default by the other party to the derivative instrument; risks that the transactions may result in losses of all or in excess of any gain in the portfolio positions; risks that the transactions may result in income that is not exempt from federal income tax; and risks that the transactions may not be liquid. |
| • | ETF Risk: Investing in an ETF will provide the Fund with exposure to the securities comprising the index on which the ETF is based and will expose the Fund to risks similar to those of investing directly in those securities. Shares of ETFs typically trade on securities exchanges and may at times trade at a premium or discount to their net asset values. In addition, an ETF may not replicate exactly the performance of the benchmark index it seeks to track for a number of reasons, including transaction costs incurred by the ETF, the temporary unavailability of certain index securities in the secondary market or discrepancies between the ETF and the index with respect to the weighting of securities or the number of securities held. Investing in ETFs, which are investment companies, involves duplication of advisory fees and certain other expenses. The Fund will pay brokerage commissions in connection with the purchase and sale of shares of ETFs. |
| • | Futures Risk: Use of futures contracts by the Fund may cause the value of the Fund's shares to be more volatile. The Fund's use of futures contracts (and related options) expose the Fund to leverage and tracking risks because a small investment in futures contracts may produce large losses and futures contracts may not be perfect substitutes for securities. |
| • | Options Risk: Purchasing and writing options are highly specialized activities and entail greater than ordinary investment risks. The Fund may not fully benefit from or may lose money on an option if changes in its value do not correspond as anticipated to changes in the value of the underlying securities. If the Fund is not able to sell an option held in its portfolio, it would have to exercise the option to realize any profit and would incur transaction costs upon the purchase or sale of the underlying securities. Ownership of options involves the payment of premiums, which may adversely affect the Fund's performance. To the extent that the Fund invests in over-the-counter options, the Fund may be exposed to counterparty risk. |
| • | Swaps Risk: The Fund may enter into interest rate, total return, credit default, and synthetic swap agreements, or 'swaps.' Swaps can involve greater risks than direct investment in securities, because swaps may be leveraged, are subject to the risk of that the counterparty may default on the obligation, and may be difficult to value. Swaps may also be considered illiquid. |
Performance
The bar chart and table below provide some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year. The bar chart shows changes in the performance of the Fund's Institutional Class Shares from calendar year to calendar year. The table shows the average annual total returns for each class of the Fund over time and compares these returns to the returns of the Barclays Aggregate Bond Index and the Bank of America Merrill Lynch U.S. Cash Pay U.S. High Yield Index, each a broad-based measure of market performance that has characteristics relevant to the Fund's investment strategies. Class T Shares were not offered during the periods shown and therefore no performance for Class T Shares is provided. Updated performance information is available at the Fund's website, www.libertystreetfunds.com, or by calling the Fund at 1-800-207-7108. The Fund's past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future.
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The Fund commenced investment operations on December 31, 2015, after the conversion of a limited partnership account, Braddock Structured Opportunities Fund Series A, L.P., which commenced operations on July 31, 2009, (the 'Predecessor Account'), into shares of the Fund. Information in the bar chart and the performance table below prior to December 31, 2015 are for the Predecessor Account. The Fund's objectives, policies, guidelines and restrictions are, in all material respects, equivalent to those of the Predecessor Account. The Predecessor Account was not registered under the Investment Company Act of 1940, as amended (the '1940 Act') and therefore was not subject to certain restrictions imposed by the 1940 Act on registered investment companies and by the Internal Revenue Code of 1986 on regulated investment companies. If the Predecessor Account had been registered under the 1940 Act, the Predecessor Account's performance may have been adversely affected. Braddock Financial LLC (formerly, 'Braddock Financial Corporation') was the investment adviser to the Predecessor Account.
Calendar-Year Total Return (before taxes) - Institutional Class Shares
For each calendar year at NAV
| Institutional Class Shares | ||
| Highest Calendar Quarter Return at NAV | 33.84% | Quarter Ended 06/30/2020 |
| Lowest Calendar Quarter Return at NAV | (50.49)% | Quarter Ended 03/31/2020 |
The year-to-date return for the Fund as of March 31, 2021 was 1.98%.
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Average Annual Total Returns (for the Periods Ended December 31, 2020) |
1 Year | 5 Years | 10 Years |
Inception Date/From |
| Institutional Class - Return Before Taxes | (27.93)% | (1.94)% | 3.83% | 7/31/2009 |
| Institutional Class - Return After Taxes on Distributions** | (29.22)% | (3.71)% | 2.88% | 7/31/2009 |
| Institutional Class - Return After Taxes on Distributions and Sale of Fund Shares** | (16.57)% | (2.00)% | 2.71% | 7/31/2009 |
| Class A Shares - Return Before Taxes | (31.10)% | (3.32)% | 2.96% | 12/31/2015* |
| Class C Shares - Return Before Taxes | (29.29)% | (2.91)% | 2.80% | 12/31/2015* |
| Bloomberg Barclays Aggregate Bond Index (reflects no deduction for fees, expenses or taxes) | 7.51% | 4.44% | 3.84% | 7/31/2009 |
| ICE BofA Merrill Lynch U.S. Cash Pay U.S. High Yield Index (reflects no deduction for fees, expenses or taxes) | 6.20% | 8.41% | 6.61% | 7/31/2009 |
| * | The Class A and C Shares commenced operations on December 31, 2015. The performance figures for Class A and Class C Shares include the performance for the Class I for the period prior to December 31, 2015. |
| ** | After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares and after-tax returns for classes other than Institutional Class shares will vary from returns shown for Institutional Class shares. |
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Investment Advisor and the Sub-Advisor
Liberty Street Advisors, Inc. is the Fund's investment advisor (the 'Advisor'). Braddock Financial LLC is the Fund's Sub-Advisor.
Portfolio Managers
Garrett Tripp, CFA and Toby Giordano, CFA are the portfolio managers of the Fund, and have been jointly and primarily responsible for the day-to-day management of the Fund's portfolio since the Fund's inception.
Purchase and Sale of Fund Shares
Currently, Class T Shares are not available for purchase. To purchase shares of the Fund, you must invest at least the minimum amount.
| Minimum Investments |
To Open Your Account |
To Add to Your Account |
| Class A Shares, Class C Shares and Class T Shares | ||
| Standard Accounts | $2,500 | $100 |
| Traditional and Roth IRA Accounts | $2,500 | $100 |
| Accounts with Systematic Investment Plans | $2,500 | $100 |
| Qualified Retirement Plans | $2,500 | $100 |
| Institutional Class Shares | ||
| All Accounts | $1,000,000 | $100,000 |
Fund shares are redeemable on any business day the New York Stock Exchange (the 'NYSE') is open for business by written request or by telephone.
Tax Information
The Fund's distributions are generally taxable, and will ordinarily be taxed as ordinary income, qualified dividend income or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account. Shareholders investing through such tax-deferred arrangements may be taxed later upon withdrawal of monies from those arrangements.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies (including the Advisor) may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary to recommend the Fund over another investment. Ask your financial adviser or visit your financial intermediary's website for more information.
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