We are pleased to report that the Matisse Discounted Bond CEF Strategy (MDFIX) was the #1 ranked Multisector Bond of 2023, based on total return and out of 358 funds in our Morningstar category. MDFIX returned +13.63% (net of fees) for calendar year 2023, finishing 152 basis points ahead of the second best performing fund. More details on fund performance and category rankings can be found in the table below.
As we look ahead to 2024, we believe today’s fixed income markets present investors with a rare opportunity:
- Yields across sectors are more attractive than we’ve seen in recent history;
- The Fed is on the brink of potential interest rate cuts in the months ahead, which should serve as a tailwind for fixed income investments; and
- Discounts to NAV on Bond Closed-End Funds (CEFs) are at historically wide levels.
We believe MDFIX is extremely well positioned to take advantage of these potential return catalysts, and we are very optimistic about the year ahead.
Morningstar Category: Multisector Bond (as of December 31st, 2023)
| As of 12/31/23 | YTD | 1-Year | 3-Year (Annualized) | Since Inception 4/30/20 (Annualized) |
|---|---|---|---|---|
| MDFIX | +13.63% | +13.63% | +1.55% | +8.03% |
| % Rank in Category | 1st Percentile | 1st Percentile | 19th Percentile | — |
| Absolute Rank in Category | 1st | 1st | 41st | — |
| # of Funds in Category | 358 | 358 | 322 | — |
This ranking was generated by Morningstar and includes all share classes for funds with multiple share classes. The performance used for this ranking information was based on total return, and some fees were waived during the period per the Advisor’s expense limitation agreement with the Fund. Absolute Rank in Category measures the numeric rank of the Fund in its category when the category is sorted in descending order by total return (i.e. 1st would be the best performing fund in the category for the specified time period).
Performance (as of Most Recent Quarter-End)
| Performance as of 3/31/2024 | 3-Month | YTD | 1-Year | 3-Year | Since Inception MDFIX 4/30/2020 (average annual) |
|---|---|---|---|---|---|
| MDFIX | 4.32% | 4.32% | 13.65% | 1.78% | 8.67% |
| Bloomberg US Aggregate Bond Index | -0.78% | -0.78% | 1.70% | -2.46% | -2.15% |
| Bloomberg VLI High Yield Index | 1.27% | 1.27% | 10.99% | 1.80% | 5.41% |
| FT Taxable Fixed Income CEF Index | 6.57% | 6.57% | 17.83% | 1.00% | 8.19% |
Performance data quoted is past performance, which is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. An investment’s return and principal value will fluctuate such that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance current to the most recent month end can be obtained by calling 1-800-773-3863. Performance shown assumes reinvestment of dividends and capital gains distributions. Total return measures net investment income and capital gain or loss from portfolio investments. Total Fund Expenses are 3.50% for MDFIX (as of August 1, 2023).
Bloomberg US Aggregate Bond Index: is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate pass-throughs), ABS and CMBS (agency and non-agency).
Bloomberg VLI High Yield Index: a component of the US Corp High Yield Index that is designed to track a more liquid component of the USD-denominated, high yield, fixed-rate corporate bond market. The US High Yield VLI uses the same eligibility criteria as the US Corp High Yield Index, but includes only bonds that have a minimum amount outstanding of USD500mn and less than five years from issue date.
FT Taxable Fixed Income CEF Index: a capitalization weighted index designed to provide a broad representation of the taxable fixed income closed-end fund universe. The taxable fixed income closed-end fund market is comprised of the following sectors; high yield corporate, senior loan, global income, emerging market income, multi-sector, government, convertible, and mortgage funds.
| Yield as of 3/31/2024 | Distribution Rate | Subsidized 30-Day SEC Yield | Unsubsidized 30-Day SEC Yield |
|---|---|---|---|
| MDFIX | 7.06% | 5.24% | 4.98% |
Distribution Rate is calculated by annualizing actual distributions for the quarterly period ended on the date shown and dividing by the net asset value on the last business day for the same period. Distributions may include capital gains distributions or a return of capital.
Subsidized yield reflects fee waivers and/or expense reimbursements during the period. Without waivers and/or reimbursements, yields would be reduced. Unsubsidized yield does not adjust for any fee waivers and/or expense reimbursements in effect. The Expense Limitation Agreement runs through July 31, 2024 and may be terminated by the Board of Trustees of the Fund at any time.
An investment in the Fund is subject to investment risks, including the possible loss of some or all of the principal amount invested. There can be no assurance that the Fund will be successful in meeting its investment objective. Generally, the Fund will be subject to the following additional risks: Closed-End Fund Risk, Control of Closed-End Funds Risk, Convertible Securities Risk, Credit Risk, Cybersecurity Risk, Derivatives Risk, Equity Securities Risk, Fixed Income Securities Risk, Foreign Securities Risk, Fund of Funds Risk, General Investment Risks, Interest Rate Risk, Investment Advisor Risk, Junk Bond Risk, Leverage Risk, Limited History of Operations Risk, Loans Risk, Management Style Risk, Market Risk, Money Market Mutual Fund Risk, Pandemic Risk, Prepayment Risk, and Quantitative Model Risk. More information about these risks and other risks can be found in the Fund’s prospectus.
The Matisse Funds are distributed by Capital Investment Group, Inc., Member FINRA/SIPC, 100 E. Six Forks Road, Suite 200, Raleigh, North Carolina 27609. There is no affiliation between Matisse Capital, including their principals, and Capital Investment Group, Inc. Serial #RCMAT0124013.
An investor should consider the investment objectives, risks, and charges and expenses of the Fund carefully before investing. The prospectus contains this and other information about the Fund. A copy of the prospectus is available at www.ncfunds.com or by calling Shareholder Services at 1-800-773-3863. The prospectus should be read carefully before investing. Current and future holdings are subject to change and risk.