Alternative Income Fund

INCOME INVESTING KWINX No Load Class

Overview

THE FUND
  • A two-part investment strategy focused on generating income and capital gains in excess of traditional short duration, investment grade fixed income indexes.
  • The strategy primarily invests in a diversified portfolio of short-term, investment grade bonds with an emphasis on liquidity, diversification, and lower interest rate or duration risk (1-3 years).
  • A conservative equity option strategy supplements bond portfolio income via the collection of option premiums. Option exposures are allocated broadly across quality companies and/or exchange traded funds offering similar exposures. The investment adviser seeks to mitigate incremental risks by selecting option strike prices that are significantly below their underlying stock prices (deep out-of-the-money) and by limiting option notional exposures.
  • The Alternative Income Fund No Load Class inception date is 6/29/2007; however, the Fund began pursuing its current investment objective through a new investment strategy as of 12/31/2012.

Alternative Income Fund Commentary

Read more about the Alternative Income Fund in this commentary.

Alternative Income Fund Fact Sheet

Learn more about the Alternative Income Fund in this fact sheet.

Performance Overview

GROWTH OF $10,000 SINCE INCEPTION

The Alternative Income Fund No Load Class inception date is 6/29/2007; however, the Fund began pursuing its current investment objective through a new investment strategy as of 12/31/2012.

Portfolio Characteristics

As of September 30, 2014

Portfolio Managers


Murray Stahl

Chairman, Chief Investment Officer, Co-Founder

Murray is Chairman of the Board of Horizon Kinetics and was a co-founder of the Firm. He has over thirty years of investing experience and is responsi...

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Derek Devens, CFA®

Portfolio Manager, Research Analyst

Derek joined the firm in 2010 and has responsibilities in both Research and Portfolio Management for the firm. Derek is a member of the Investment Com...

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Daily Performance

As of October 21, 2014
Benchmark Daily NAV One Day Return (%) Month to Date Quarter to Date Year to Date
KWINX $89.17 0.55% -0.78% -0.78% 1.62%
Barclays 1-3 yr U.S. Credit Bond Index $1,498.04 0.00% 0.49% 0.49% 1.49%
Barclays U.S. Aggregate Bond Index $1,909.34 -0.07% 1.50% 1.50% 5.66%

The Alternative Income Fund No Load Class inception date is 6/29/2007; however, the Fund began pursuing its current investment objective through a new investment strategy as of 12/31/2012.

Total Return (Annualized)

As of September 30, 2014
Benchmark 1YR 3YR 5YR Since Inception
KWINX 4.09% 8.55% 2.06% -0.54%
Barclays 1-3 yr U.S. Credit Bond Index 1.48% 2.16% 2.67% 3.75%
Barclays U.S. Aggregate Bond Index 3.96% 2.43% 4.12% 5.18%

The Alternative Income Fund No Load Class inception date is 6/29/2007; however, the Fund began pursuing its current investment objective through a new investment strategy as of 12/31/2012.

Historical Total Return

2013
KWINX 5.22%
Barclays 1-3 yr U.S. Credit Bond Index 1.45%
Barclays U.S. Aggregate Bond Index -2.02%

The Alternative Income Fund No Load Class inception date is 6/29/2007; however, the Fund began pursuing its current investment objective through a new investment strategy as of 12/31/2012.

Class Information

 
Class Ticker CUSIP 12b-1 Fee Net Expense Ratio Gross Expense Ratio
No Load Class KWINX 494613722 - 0.99% 2.27%
Advisor A KWIAX 494613714 0.25% 1.24% 2.52%
Advisor C KWICX 494613698 1.00% 1.74% 3.02%
Institutional KWIIX 494613680 - 0.79% 2.22%

Fund Statistics

As of September 30, 2014
KWINX Barclays U.S. Aggregate Bond Index
Beta 0.03 1.00
Standard Deviation 1.96 3.02
Up Market Capture Ratio 0.05 -
Down Market Capture Ratio -0.19 -
Sharpe Ratio 3.91 0.63

Equity Option Overview

As of September 30, 2014
Option Statistics
Notional % of Portfolio with Put Options 94.0%
Average Life of Options (days) 373
Avg Option % Moneyness 27% OTM
Average Option Delta 0.21

Option Portfolio Sectors (% Notional)

As of September 30, 2014
Title Percent
Consumer Discretionary 23.7%
Health Care 15.6%
Energy 12.7%
Financials 11.9%
Information Technology 11.7%
Industrials 10.4%
Consumer Staples 7.5%
Materials 6.2%
Telecommunication Services 0.2%
Diversified 0.1%

Fixed Income Overview

As of September 30, 2014
Fixed Income Statistics
Average Maturity (years) 1.6
Average Duration (years) 1.5
30 Day SEC Yield -0.13%
30 Day SEC Yield w/o waiver -1.06%
Annual Distribution Yield -

Credit Quality (%)

As of September 30, 2014
Rating Percent
Cash & Equiv. 7.6%
AAA 1.5%
AA 20.7%
A 48.3%
BBB 21.5%
BB 0.4%

Disclosure

The Alternative Income Fund No Load Class inception date is 6/29/2007; however, the Fund began pursuing its current investment objective through a new investment strategy as of 12/31/2012.

The Alternative Income Fund is classified as a non-diversified fund. Therefore, the value of its shares may fluctuate more than shares invested in a broader range of industries. You should consult the Fund’s prospectus for a complete list of risks associated with your investment.

You should consider the investment objectives, risks, charges and expenses of the fund carefully before investing.  For a free copy of the fund’s prospectus, which contains this and other information, you may click here or call us at 1-800-930-3828.  You should read the prospectus carefully before you invest.

The Alternative Income Fund No Load Class inception date is 6/29/2007.  Performance prior to 1/1/2013 reflects the Fund’s prior investment objective and restrictions may not be indicative of the Fund’s prospective results. Figures include changes in principal value, reinvested dividends and capital gains distributions.  Performance data quoted represents past performance and does not guarantee future results.  Investment return and principal value will vary, and shares may be worth more or less at redemption than at original purchase.  The most recent month-end performance data is listed above, or you may obtain it by calling us at 1-800-930-3828.  Current performance may be lower or higher than the performance data quoted.  Performance data does not reflect the deduction of the sales load or fee which, if reflected, would reduce the performance quoted.  You will be charged a redemption fee equal to 2.00% of the net amount of the redemption if you redeem or exchange your shares 30 days or less after you purchase them.

The Barclays U.S. Aggregate Bond Index is composed of the Barclays U.S. Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Backed Securities Index, and includes securities that are of investment grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $100 million. The Barclays 1-3 US Credit Bond Index is composed of investment grade United States credit securities with a maturity between one and three years. Both Barclays indices are trademarks of Barclays Bank PLC. An investor cannot invest directly in an index.

Distributions by the Fund are subject to change and may discontinue at any time without notice.

Statistics and performance data that rely on Fund data prior to January 1, 2013 will reflect the Fund’s prior investment objective and restrictions and may not be indicative of the Fund’s current positioning or prospective results.

The Growth of $10,000 chart illustrates the performance of a hypothetical $10,000 investment made in No Load Class shares on 12/31/2012 in commencement with the investment objective change on that date. It assumes reinvestment of capital gains and dividends. This chart is not intended to imply any future performance.

Holdings are expressed as a percentage of total net investments and may vary over time. Equity holdings are subject to change, and may not be indicative of actual market position due to the use of call and put options.

The Top Sectors displayed represent a percentage of the net assets and excludes cash equivalents and other assets in excess of liabilities. For purposes of calculating the top percentage holdings of the fund, the top 10 equity and fixed income holdings are valued at their applicable market value.

Assets represent the total net assets for the specified portfolio, which includes all fund classes.

Gross expense ratio listed for No-Load Class, Advisor Class A, Advisor Class C and Institutional Class are referenced in the April 30, 2014 respective prospectus.

The Fund’s adviser, Kinetics Asset Management LLC, has voluntarily agreed to waive management fees and reimburse fund expenses so that net annual fund operating expenses of the No Load Class do not exceed certain levels through May 1, 2015 and may be discontinued at any time by the Fund’s adviser after May 1, 2015.