Both MDFIX and MDCEX can provide investors with a pure play on CEF discounts and instant access to a diversified portfolio of highly discounted, income producing CEFs. Potential return catalysts that can benefit both funds include (i) discount mean reversion, (ii) corporate actions, (iii) increased yield through at-NAV distributions, and (iv) institutional / activist involvement.
MDCEX is our “Go Anywhere” tactical fund that can invest in CEFs in both the equity and fixed income markets. MDFIX invests in fixed income CEFs and employs an active approach to the bond markets. While we consider MDCEX to be an unrestricted portfolio of our best investment ideas in the CEF universe, MDFIX may be more appropriate for investors looking for less equity exposure and potentially less volatility.
| Ticker Symbol | MDFIX | MDCEX |
|---|---|---|
| Name | Matisse Discounted Bond CEF Strategy | Matisse Discounted Closed-End Fund Strategy |
| CUSIP # | 85521B833 | 85520V434 |
| Fund Structure | Open-end investment company | Open-end investment company |
| Fund Type | Fund of funds | Fund of funds |
| Overview | MDFIX | MDCEX |
|---|---|---|
| Objective | Seeks total return with an emphasis on providing current income. The Fund has the potential to generate anticipated monthly cash distributions and grow shareholder investment principal over a longer-term investment horizon. | Seeks long-term capital appreciation and income. The Fund has the potential to generate anticipated monthly cash distributions and grow shareholder investment principal over a longer-term investment horizon. |
| Approach | Invests in fixed income closed-end funds that we believe are best positioned to experience future discount narrowing. | Invests in both equity and fixed income closed- end funds that we believe are best positioned to experience future discount narrowing. |
| Strategy | Opportunistic and quantitative trading strategy that attempts to take advantage of changes in a fixed income closed-end fund’s discount to its net asset value. | Opportunistic and quantitative trading strategy that attempts to take advantage of changes in both an equity and fixed income closed-end fund’s discount to its net asset value. |
| Holdings | Focus on fixed income closed-end funds that trade at substantial discounts to their net asset values and pay regular periodic cash distributions. | Focus on both equity and fixed income closed- end funds that trade at substantial discounts to their net asset values and pay regular periodic cash distributions. |
| Management Style | Actively managed | Actively managed |
| Inception Date | 4/30/2020 | 10/31/2012 |
| Fund Assets | $49.9 Million | $46.9 Million |
| Number of Holdings | 53 | 49 |
| Weighted Average Discount to Net Asset Value of CEF Holdings | -12.4% | -26.5% |
| Income Distributions | Anticipated Monthly | Anticipated Monthly |
| Capital Gains Distributions | Anticipated Annually | Anticipated Annually |
| Managers | MDFIX | MDCEX |
|---|---|---|
| Fund Co-Managers | Eric Boughton, CFA; Bryn Torkelson | Eric Boughton, CFA; Bryn Torkelson |
| Performance as of 3/31/2024 | MDFIX | MDCEX |
|---|---|---|
| 1-Month Total | 1.97% | 3.77% |
| QTD Total | 4.32% | 7.52% |
| YTD Total | 4.32% | 7.52% |
| 1-Year Total | 13.65% | 26.15% |
| 3-Year Annualized | 1.78% | 11.57% |
| 5-Year Annualized | N/A | 9.23% |
| 10-Year Annualized | N/A | 8.43% |
| Since Inception Annualized | 8.67% | 8.31% |
| Since Inception Total | 38.48% | 148.68% |
The performance information quoted represents past performance, which is not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. An investor may obtain performance data current to the most recent month-end by calling 1-800-773-3863. Total return measures net investment income and capital gain or loss from portfolio investments. All performance shown assumes reinvestment of dividends and capital gains distributions.
| Yield as of 3/31/2024 | MDFIX | MDCEX |
|---|---|---|
Distribution Rate| 7.06% | 7.59% |
|
Subsidized 30-Day SEC Yield| 5.24% | 6.00% |
|
Unsubsidized 30-Day SEC Yield| 4.98% | 5.80% |
|
Distribution Rate is calculated by annualizing actual distributions for the monthly 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.
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.
| Annual Fund Operating Expenses | MDFIX | MDCEX |
|---|---|---|
| Advisor Management Fees | 0.70% The Advisor (Matisse Capital) receives a monthly management fee equal to a maximum of 0.70% of the Fund’s net assets. | 0.99% The Advisor (Matisse Capital) receives a monthly management fee equal to a maximum of 0.99% of the Fund’s net assets. |
| Distribution and/or Service (12b-1) Fees Read More | None | None |
| Other Expenses Read More | 0.57% | 0.60% |
| Interest Expense on Borrowings Read More | 0.27% | 0.33% |
| Acquired Fund Fees and Expenses | 1.96% | 1.78% |
| Total Annual Fund Operating Expenses Read More | 3.50% The Advisor (Matisse Capital) receives a monthly management fee equal to a maximum of 0.70% of the Fund’s net assets. | 3.70% The Advisor (Matisse Capital) receives a monthly management fee equal to a maximum of 0.99% of the Fund’s net assets. |
| Less Fee Waiver and/or Expense Limitation | (0.28%) The total amount of Advisor Management Fees, Distribution and/or Service (12b-1) Fees, and Other Expenses cannot exceed 0.99%, per the Fund’s Expense Limitation Agreement. These expenses are direct cash expenses to an investor in the Fund. Any fees above 0.99% are waived and credited back. | (0.34%) The total amount of Advisor Management Fees, Distribution and/or Service (12b-1) Fees, and Other Expenses cannot exceed 1.25%, per the Fund’s Expense Limitation Agreement. These expenses are direct cash expenses to an investor in the Fund. Any fees above 1.25% are waived and credited back. |
| Net Annual Fund Operating Expenses Read More | 3.22% The Advisor (Matisse Capital) receives a monthly management fee equal to a maximum of 0.70% of the Fund’s net assets. | 3.36% The Advisor (Matisse Capital) receives a monthly management fee equal to a maximum of 0.99% of the Fund’s net assets. |
| Risks | The risks associated with investing in the Fund can be found in the prospectus. | The risks associated with investing in the Fund can be found in the prospectus. |
All data as of 3/31/2024 unless otherwise noted.
Definitions
MDFIX Disclosure
The Total Annual Fund Operating Expense for the Fund as disclosed in the prospectus is 3.50% dated August 1, 2023. The Net Operating Expense for the Fund is 3.22%. The Total Operating Expense is required to include expenses incurred indirectly by the Fund through its investments in closed-end funds and other investment companies. The Advisor has entered into an expense limitation agreement with the Fund under which it has agreed to waive or reduce its management fees and assume other expenses of the Fund in an amount that limits the Fund’s Total Annual Fund Operating Expenses (exclusive of (i) any front-end or contingent deferred loads; (ii) brokerage fees and commissions, (iii) acquired fund fees and expenses; (iv) fees and expenses associated with investments in other collective investment vehicles or derivative instruments (including, for example, option and swap fees and expenses); (v) borrowing costs (such as interest and dividend expense on securities sold short); (vi) taxes; and (vii) extraordinary expenses, such as litigation expenses (which may include indemnification of Fund officers and Trustees and contractual indemnification of Fund service providers (other than the Advisor)) to not more than 0.99% of the average daily net assets of the Fund. This contractual arrangement is in effect through July 31, 2024, unless earlier terminated by the Board of Trustees of the Fund at any time. The Advisor cannot recoup from the Fund any amounts paid by the Advisor under the Expense Limitation Agreement.
MDCEX Disclosure
The Total Annual Fund Operating Expense for the Fund as disclosed in the prospectus is 3.70% dated August 1, 2023. The Net Operating Expense for the Fund is 3.36%. The Total Annual Fund Operating Expenses is required to include expenses incurred indirectly by the Fund through its investments in closed-end funds and other investment companies. The Advisor has entered into an expense limitation agreement with the Fund under which it has agreed to waive or reduce its management fees and assume other expenses of the Fund in an amount that limits the Fund’s Total Annual Fund Operating Expenses (exclusive of (i) any front-end or contingent deferred loads; (ii) brokerage fees and commissions, (iii) acquired fund fees and expenses; (iv) fees and expenses associated with investments in other collective investment vehicles or derivative instruments (including, for example, option and swap fees and expenses); (v) borrowing costs (such as interest and dividend expense on securities sold short); (vi) taxes; and (vii) extraordinary expenses, such as litigation expenses (which may include indemnification of Fund officers and Trustees and contractual indemnification of Fund service providers (other than the Advisor)) to not more than 1.25% of the average daily net assets of the Fund. This contractual arrangement is in effect through July 31, 2024, unless earlier terminated by the Board of Trustees of the Fund at any time. The Advisor cannot recoup from the Fund any amounts paid by the Advisor under the Expense Limitation Agreement.