Multi-Disciplinary Income Fund

INCOME INVESTING KMDNX No Load Class

Overview

THE FUND
  • Multi-strategy investment approach that opportunistically invests in income-oriented securities and utilizes an equity option strategy which seeks to generate income and capital gains in excess of traditional fixed income indexes while assuming less interest rate risk or duration risk.
  • Fixed income investments generally comprise limited duration securities, including investment grade and high yield bonds, and emphasize the avoidance of permanent capital losses.
  • A selective equity option strategy supplements fixed income investments through the monetization of equity market volatility. The investment adviser aims to moderate incremental risks by selecting option strike prices that are below their underlying stock prices and by limiting option notional exposures.

Multi-Disciplinary Income Fund Commentary

Read more about the Multi-Disciplinary Income Fund in this commentary.

Multi-Disciplinary Income Fund Fact Sheet

Learn more about the Multi-Disciplinary Income Fund in this fact sheet.

Performance Overview

GROWTH OF $10,000 SINCE INCEPTION

The Multi-Disciplinary Income Fund No Load Class inception date is 2/11/2008.  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 below, 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.

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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David Kingsley

Senior Portfolio Manager

David joined the firm in 2006 and is responsible for co-managing various private funds, along with the Kinetics Multi-Disciplinary Fund. David is als...

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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 December 17, 2014
Benchmark Daily NAV One Day Return (%) Month to Date Quarter to Date Year to Date
KMDNX $10.80 0.84% -2.88% -1.55% 0.48%
Barclays U.S. Aggregate Bond Index $1,911.28 -0.24% -0.09% 1.60% 5.77%
Barclays U.S. Corp High Yield Index $1,587.35 0.63% -3.49% -3.06% 0.33%

Total Return (Annualized)

As of September 30, 2014
Benchmark 1YR 3YR 5YR Since Inception
KMDNX 2.74% 9.66% 7.95% 5.27%
Barclays U.S. Aggregate Bond Index 3.96% 2.43% 4.12% 4.49%
Barclays U.S. Corp High Yield Index 7.20% 11.09% 10.57% 9.86%

Historical Total Return

2008 2009 2010 2011 2012 2013
KMDNX -17.76% 22.90% 13.04% 0.24% 15.38% 4.28%
Barclays U.S. Aggregate Bond Index 4.08% 5.93% 6.54% 7.84% 4.21% -2.02%
Barclays U.S. Corp High Yield Index -27.02% 58.21% 15.12% 4.98% 15.81% 12.28%

Class Information

 
Class Ticker CUSIP 12b-1 Fee Net Expense Ratio Gross Expense Ratio
No Load Class KMDNX 494613672 - 1.55% 1.88%
Advisor A KMDAX 494613664 0.25% 1.80% 2.13%
Advisor C KMDCX 494613656 1.00% 2.30% 2.63%
Institutional KMDYX 494613649 - 1.35% 1.83%

Fund Statistics

As of September 30, 2014
KMDNX Barclays U.S. Aggregate Bond Index
Beta -0.50 1.00
Standard Deviation 9.12 2.83
Up Market Capture Ratio 0.99 -
Down Market Capture Ratio -0.83 -
Sharpe Ratio 0.86 1.42

Equity Option Overview

As of September 30, 2014
Option Statistics
Notional % of Portfolio with Put Options 24.0%
Average Life of Options (days) 334
Avg Option % Moneyness 14% OTM
Average Option Delta 0.26

Fixed Income Overview

As of September 30, 2014
Fixed Income Statistics
Average Maturity (years) 4.6
Average Duration (years) 4.0
30 Day SEC Yield 3.17%
30 Day SEC Yield w/o waiver 2.87%
Annual Distribution Yield 5.60%

Option Portfolio Sectors (% Notional)

As of September 30, 2014
Title Percent
Consumer 40.9%
Financials 13.6%
Energy 11.3%
Tech & Telecom 10.0%
Diversified 9.2%
Health Care 7.8%
Materials 5.6%
Industrials 1.5%

Top 10 Fixed Income Holdings (%)

As of September 30, 2014
Holdings Percent
Icahn Enterprises/Finance 4.3%
Chesapeake Energy Corporation 4.0%
Owens-Brockway Glass Container 3.8%
Post Holdings, Inc. 3.7%
The Howard Hughes Corporation 3.7%
Royal Gold, Inc. 3.6%
IAC/InterActiveCorp 3.3%
Lennar Corp. 3.2%
Ashland Inc. 3.1%
Dish DBS Corp. 3.0%

Portfolio Allocation

As of September 30, 2014
Description Percent
Bonds 85.9%
Other Investments 9.7%
Cash and Cash Equivalents 6.0%
Put Options Written -1.6%

Recent Fund Distributions

As of September 30, 2014
Distribution Per Share
September 30, 2014 $0.13
June 30, 2014 $0.13
March 31, 2014 $0.02
December 31, 2013 $0.33

Distributions by the Fund are subject to change and may discontinue at any time without notice. To see the full list of fund distributions, click here.

Disclosure

The Multi-Disciplinary Income Fund is classified as a diversified fund. Investing in a diversified fund does not ensure a profit or protect against loss in a declining market.

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 Fund statistics have been calculated for the past five years.

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 U.S Corporate High Yield Bond Index is composed of fixed-rate, publicly issued, non-investment grade debt. 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.

The Growth of $10,000 chart illustrates the performance of a hypothetical $10,000 investment made in No Load Class shares commencement of operations (2/11/08). 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 10 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.

Definitions:

Beta: A statistic that measures the volatility of the fund, as compared to that of the overall market. The market’s beta is set at 1.00; a beta higher than 1.00 is considered to be more volatile than the market, while a beta lower than 1.00 is considered to be less volatile. The Beta has been calculated for the past five years.

Standard Deviation: A statistical measure of portfolio risk used to measure variability of total return around an average, over a specified period of time. The greater the standard deviation over the period, the wider the variability or range of returns and hence, the greater the fund’s volatility. The standard deviation has been calculated for the past 5 years.

Up Market Capture Ratio: A statistical measure of an investment manager’s overall performance in up-markets. The up-market capture ratio is used to evaluate how well an investment manager performed relative to an index during periods when that index has risen. The up-market capture ratio has been calculated for the past five years.

Down Market Capture Ratio: A statistical measure of an investment manager’s overall performance in down-markets. The down-market capture ratio is used to evaluate how well or poorly an investment manager performed relative to an index during periods when that index has dropped. The down-market capture ratio has been calculated for the past five years.

Sharpe Ratio: A statistical measure that uses standard deviation and excess return to determine reward per unit of risk. A higher Sharpe ratio implies a better historical risk-adjusted performance. The Sharpe ratio has been calculated for the past five years using the 3-month treasury bill for the risk-free rate of return.

Turnover Ratio: A measure of how frequently assets within a fund are bought and sold by the managers represented over a one year period.

Allocation Box: The allocation box has been created by Kinetics. The horizontal axis of the box is divided into three investment style classifications: Value, Core (a blend of Value and Growth) and Growth. The vertical axis is divided into three categories based on individual company size: large, mid and small. Generally, the 400 largest companies in the U.S. are considered Large, the next 1000 largest are Mid and the remainder are Small. Classifications made by Kinetics are for representative purposes only and may change at any time without notice.

Delta: A statistical measure relating the changes in an option’s price to price changes of the option’s underlying security.

Average Put Option % Moneyness: % moneyness refers to a put option’s strike price relative to the price of its underlying security in percentage terms. The average put option % moneyness is the average % moneyness for the option exposures weighted by each option’s % of notional exposure. In-the-money (ITM) refers to a put option with a strike price that is above the underlying security’s price. At-the-money (ATM) refers to a put option with a strike prices that is equal to the underlying security’s price. Out-the-money (OTM) refers to a put option with a strike price that is below the underlying security’s price. For example, a put option that is 5% OTM has a strike price that is 5% below the underlying security’s price and a put option that is 5% ITM has a strike price that is 5% higher than the underlying security’s price.

Annual Distribution Yield: Represents a fund’s distribution made to shareholders of the No Load Class over the past 12 months divided by the No Load Class NAV of the last business day of the period. The distributions consist of income and realized capital gains but does not include return of capital, unless specifically stated. The Fund’s investment advisor has voluntarily agreed to waive management fees and reimburse Fund expenses. The Annual Distribution Yield would have been lower if not for the Fund’s voluntary waivers. The Annual Distribution Yield does not reflect a sales load/charge, which, if applied would lower the yields shown.