Income Fund Overview

Investors are looking for alternative sources of income. Given our decades of experience of investing in income-oriented securities, we believe opportunities for income are present in every market environment. In particular, we seek to identify securities that are under followed or out-of-favor which historically have provided an above-average yield when compared to the alternatives. The Orinda Income Opportunities Fund is for investors seeking an income solution for the long-term.

Investment Objective

The Orinda Income Opportunities Fund seeks to maximize current income with potential for modest growth of capital.

This fund is for investors seeking:

  • current income
  • modest growth of capital
  • a flexible investment approach

Investment Strategy

To identify and invest in income producing securities with the potential to offer above-average yields.

Income Opportunities

The Orinda Income Opportunities Fund seeks to invest in a wide range of securities which have the potential to offer above average yields. The fund’s allocation to various security types and asset classes will vary over time in response to changing market opportunities with the goal of maximizing current income.

Current Opportunity: REIT Preferred Stocks

The the extent the Fund may invest in REIT preferred stocks, high yield bonds and REITs, the income and correlation charts are being shown for comparative purposes.

Source: Bloomberg. As of 9/30/17. For illustrative purposes only. Yields for the various asset class indices have material differences including investment objectives, liquidity, safety, guarantees of insurance, fluctuation of principal or return and tax features. Fixed income yields represented by yield-to-worst, equity yields by current dividend yield. Correlation data for period 1/31/00 (inception of REIT Index) through 9/30/17. Past performance is not an indication of future results. Index performance is not illustrative of fund performance. One cannot invest directly in an index.

A Flexible Investment Approach

The Potential to Navigate Changing Interest Rate Environments

  • has the ability to move between security types such as preferreds, equities and bonds
  • can utilize hedging tools to dampen volatility
  • may hold cash in order to preserve capital under certain market environments

The Potential for Enhancing Portfolio Yield

  • exploit market inefficiencies around ex-dividend dates
  • selective use of covered call writing
  • selective use of leverage when borrowing costs are low relative to investment yields

Fund Facts

 

For a more detailed review of Fund Expenses, please click here to see the statutory prospectus.

A Correlation Coefficient is a measure of the interdependence of two random variables that ranges in value from -1 to +1, indicating perfect negative correlation at -1, absence of correlation at zero, and perfect positive correlation at +1.

INDICES: Bonds – Bloomberg Barclays Capital U.S. Aggregate Bond Index. The Bloomberg Barclays Capital U.S. Aggregate Bond Index is an unmanaged, market capitalization-weighted index, comprised predominately of U.S. traded investment grade bonds with maturities of one year or more. The index includes Treasury securities, Government agency bonds, mortgage-backed bonds, and corporate bonds. The index is representative of intermediate duration US investment grade debt securities. Corporate Bonds – BofA Merrill Lynch U.S. Corporate Index. This data represents the effective yield of the BofA Merrill Lynch US Corporate 7-10 Year Index, a subset of the BofA Merrill Lynch US Corporate Master Index tracking the performance of US dollar denominated investment grade rated corporate debt publicly issued in the US domestic market. This subset includes all securities with a remaining term to maturity of greater than or equal to 7 years and less than 10 years. High Yield Bonds – BofA Merrill Lynch U.S. High Yield Master II Index. The BofA Merrill Lynch US High Yield Index tracks the performance of short-term US dollar denominated below investment grade corporate debt publicly issued in the US domestic market. Qualifying securities must have a below investment grade rating (based on an average of Moody’s, S&P and Fitch), at least 18 months to final maturity at the time of issuance, at least one year remaining term to final maturity as of the rebalancing date, a fixed coupon schedule and a minimum amount outstanding of $100 million. REITs – MSCI U.S REIT Index. The MSCI US REIT Index broadly and fairly represents the equity REIT opportunity set with proper investability screens to ensure that the index is investable and replicable. The index represents approximately 85% of the US REIT universe. REIT Preferred Stock – Wells Fargo Hybrid & Preferred Securities REIT Index. The Wells Fargo® Hybrid and Preferred Securities REIT Index is designed to track the performance of preferred securities issued in the US market by Real Estate Investment Trusts. The index is composed exclusively of preferred shares and depositary shares (collectively, the “Preferred Securities”). The S&P 500 Total Return Index is an unmanaged non-investable index, with no defined investment objective, of common stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The index includes the reinvestment of dividends. 10-yr. U.S. Treasury – The BofA Merrill Lynch Current 10-Year US Treasury Index (GA10). The BofA Merrill Lynch Current 10-Year US Treasury Index is a one-security index comprised of the most recently issued 10-year US Treasury note. The index is rebalanced monthly. In order to qualify for inclusion, a 10-year note must be auctioned on or before the third business day before the last business day of the month. One cannot invest directly in an index.

All investments involve risk. Principal loss is possible. A small portion of the S&P 500 yield may include return of capital; the 10-year Treasury yield does not include return of capital; Corporate Bonds and High Yield Bonds generally do not have return of capital; a portion of the dividend paid by REITs and REIT preferred stock may be deemed a return of capital for tax purposes in the event the company pays a dividend greater than its taxable income. A stock may trade with more or less liquidity than a bond depending on the number of shares and bonds outstanding, the size of the company, and the demand for the securities. The REIT and REIT preferred stock market are smaller than the broader equity and bond markets and often trade with less liquidity than these markets depending upon the size of the individual issue and the demand of the securities. Treasury notes are guaranteed by the U.S. government and thus they are considered to be safer than other asset classes. Tax features of a Treasury Note, Corporate Bond, Stock, High Yield Bond, REITs and REIT preferred stock may vary based on an individual circumstances. Consult a tax professional for additional information.

Mutual fund investing involves risk. Principal loss is possible. The fund can make short sales of securities, which involves the risk that losses in securities may exceed the original amount invested. The fund may use leverage which may exaggerate the effect of any increase or decrease in the value of portfolio securities or the Net Asset Value of the fund, and money borrowed will be subject to interest costs. Investments in smaller and medium companies involve greater risks such as limited liquidity and greater volatility. Investments in foreign securities involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks are greater for emerging markets. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investment by the Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. The Fund may use certain types of investment derivatives such as futures, forwards, and swaps. Derivatives involve risks different from, and in certain cases, greater than the risks presented by more traditional investments. Investments in asset backed and mortgage backed securities include additional risks that investors should be aware of such as credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. To the extent that a Master Limited Partnership’s (MLP’s )interests are all in a particular industry, the MLP will be negatively impacted by economic events adversely impacting that industry. The risks of investing in an MLP are generally those involved in investing in a partnership as opposed to a corporation. Exchange Traded Funds (ETFs)are typically open-end investment companies that are bought and sold on a national securities exchange. When the Fund invests in an ETF, it will bear additional expenses based on it’s pro rata share of the ETF’s operating expenses, including the potential duplication of management fees. The risk of owning an ETF generally reflects the risks of owning the underlying securities it holds. Rule 144A securities carry the risk that the trading market may not continue and the Fund might be unable to dispose of these securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemption requirements. The risk exists that the market value of Initial Public Offering (IPO) shares will fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading, and the small number of shares available for trading and limited information about the issuer. The purchase of IPO shares may involve high transaction costs. IPO shares are subject to market risk and liquidity risk. The Fund is non-diversified, which means that there is no restriction on how much the Fund may invest in the securities of an issuer under the 1940 Act. Some of the risks involved in investing in Real Estate Investment Trusts (REITs) include a general decline in the value of real estate, fluctuations in rental income, changes in interest rates, increases in property taxes, increased operating costs, overbuilding, changes in zoning laws, and changes in consumer demand for real estate.

The Fund is offered only to United States residents, and information on this site is intended only for such persons. Nothing on this web site should be considered a solicitation to buy or an offer to sell shares of any Fund in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction.

The Orinda Funds are distributed by Quasar Distributors, LLC.