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Trending ETFs

Name

Price

Aum/Mkt Cap

YIELD

Exp Ratio

Watchlist

$18.57

$801 M

16.26%

$3.02

2.01%

Vitals

YTD Return

1.1%

1 yr return

-5.2%

3 Yr Avg Return

-3.4%

5 Yr Avg Return

N/A

Net Assets

$801 M

Holdings in Top 10

28.5%

52 WEEK LOW AND HIGH

$18.6
$18.19
$19.62

Expenses

OPERATING FEES

Expense Ratio 2.01%

SALES FEES

Front Load 4.75%

Deferred Load N/A

TRADING FEES

Turnover 37.00%

Redemption Fee N/A


Min Investment

Standard (Taxable)

$1,000

IRA

N/A


Fund Classification

Fund Type

Open End Mutual Fund


Name

Price

Aum/Mkt Cap

YIELD

Exp Ratio

Watchlist

$18.57

$801 M

16.26%

$3.02

2.01%

RFXAX - Profile

Distributions

  • YTD Total Return 1.1%
  • 3 Yr Annualized Total Return -3.4%
  • 5 Yr Annualized Total Return N/A
  • Capital Gain Distribution Frequency N/A
  • Net Income Ratio 3.67%
DIVIDENDS
  • Dividend Yield 16.3%
  • Dividend Distribution Frequency Monthly

Fund Details

  • Legal Name
    Rational Special Situations Income Fund
  • Fund Family Name
    Rational Funds
  • Inception Date
    Jul 17, 2019
  • Shares Outstanding
    N/A
  • Share Class
    A
  • Currency
    USD
  • Domiciled Country
    United States
  • Manager
    William Van de Water

Fund Description

The Fund seeks to achieve its investment objective by primarily investing in agency and non-agency residential and commercial mortgage-backed securities, with a focus on non-agency residential mortgage-backed securities. Non-agency residential mortgage-backed securities are collateralized by pools of residential mortgages which are not insured by government sponsored enterprises or agencies (such as Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC) and Government National Mortgage Association (GNMA). The Fund’s non-agency mortgage-backed securities investments have a wide variety of payment characteristics and preferences, and can have fixed or floating interest rates. The Fund may also invest in collateralized debt obligations (“CDOs”), collateralized loan obligations (“CLOs”) and other asset-backed securities, including those backed by credit card receivables, auto loans, aircraft leases and student loans. The Fund’s investment sub-advisor, ESM Management, LLC (the “Sub-Advisor”), will allocate the Fund’s investments to asset classes that it views as offering the best values in the marketplace on a relative (risk-adjusted) basis at that time.

The Sub-Advisor seeks to identify, through its own proprietary research and analysis, investments that it believes are undervalued and/or have the potential to achieve an above-market yield over the longer term. The investment strategy also seeks to identify “special situations” within fixed income markets, particularly the market for non-agency mortgage-backed securities, where the Fund will make opportunistic investments in securities that may be mispriced due to structural or market driven factors. In this regard, the Sub-Advisor seeks to identify complexities, inefficiencies or flaws in the underlying legal and technical structures of certain debt issuances that the Sub-Advisor believes may have gone unnoticed by, or that are being misunderstood by, other market participants, such that the market is undervaluing the expected return. These opportunities that the Sub-Advisor seeks to identify may come in the form of flaws of logic or interpretation in a debt security’s pooling and servicing agreements or bond indentures. The Sub-Advisor seeks to identify and then exploit these opportunities while seeking to limit downside exposure. The Sub-Advisor will seek to remedy issues it has identified in the security through activist strategies, including, in cases where the investment’s cash flows are not being directed properly: (i) bringing the technical issue to the attention of indenture trustees or servicers; (ii) negotiating with the applicable parties to compensate the Fund for the issue; or (iii) through litigation or the threat of litigation. Once a potential special situation investment is identified, the Sub-Advisor estimates various factors, including the investment’s anticipated baseline return, potential upside, probability of upside scenario and investment horizon. Based on this analysis and the market opportunity in terms of outstanding issue size and ability to source the security, the Fund’s investment will be sized based on the Sub-Advisor’s discretion.

The implementation of the Sub-Advisor’s “special situations” activist strategies will from time to time cause the Fund to incur special litigation expenses, and the success of the strategies including recovery of such expenses, through the receipt of settlement or judgment amounts, may not occur or may involve longer time frames than originally expected. Investors that redeem shares of the Fund prior to the Fund’s realization of desired investment returns or recovery of litigation expenses may not experience the full intended benefit of the activist strategy and may not experience the same investment returns as investors that did not redeem their shares.

The Fund does not limit its investments to a particular credit quality and may invest without limitation in debt securities rated below investment grade (commonly referred to as “junk” bonds). Below investment grade securities include those rated, at the time of purchase, below Baa3 by Moody’s Investor Services or equivalently by another nationally recognized statistical rating organization (“NRSRO”), as well as non-rated securities determined by the Sub-Advisor to be of comparable quality. The securities underlying the mortgage- and asset-backed securities in which the Fund invests may include distressed debt securities (i.e., underlying loans and assets that are in default or likely to default). An NRSRO will consider the underlying loans or assets collateralizing a mortgage- or asset-backed security when determining the credit rating of such security. The Sub-Advisor will also consider the security’s credit rating when evaluating the security for investment by the Fund.

In managing the Fund’s investments, the Sub-Advisor seeks to construct an investment portfolio with a weighted average maturity that ranges between 1 and 30 years and a weighted average effective duration that ranges between -9 and 9 years. Duration measures the price sensitivity of a fixed income security to changes in interest rates. Effective duration is a measure of the Fund’s portfolio duration adjusted for the anticipated effect of interest rate changes on bond and mortgage pre-payment rates. Certain mortgage-related securities in which the Fund may invest such as interest-only securities and related derivatives have “negative duration.” This means that the value of these instruments normally increases as interest rates increase, unlike most other debt instruments. This generally allows some portion of the portfolio’s market risk to be hedged with a purchase, rather than a short sale, and allows the portfolio to realize positive cash flows on the hedge as a result of interest received with respect to that security.

The Fund may also invest in U.S. Treasury and agency securities, structured notes, and over-the-counter and exchange-traded derivative instruments. The Fund will use derivatives for hedging purposes. The Fund may hedge against rising interest rates through interest rate swaps, interest rate-linked futures and call and put options on interest rate futures. The Fund may hedge against rising default rates through credit default swaps, total return swaps linked to an asset or asset class representative of the default risks faced by the Fund, and credit spread options.

The Fund concentrates its investments in the mortgage-backed securities industry, which includes agency and non-agency mortgage-backed securities.

The Fund is classified as “non-diversified” for purposes of the Investment Company Act of 1940 (the“1940 Act”), which means a relatively high percentage of the Fund’s assets may be invested in the securities of a limited number of issuers.

Distribution Policy: The Fund’s distribution policy is to make twelve monthly distributions to shareholders. The Fund may, at the discretion of management, target a specific level of monthly distributions (including any return of capital) from time to time. Shareholders receiving periodic payments from the Fund may be under the impression that they are receiving net profits. However, all or a portion of a distribution may consist of a return of capital. Shareholders should not assume that the source of a distribution from the Fund is net profit. For more information about the Fund’s distribution policy, please turn to “Additional Information About the Fund’s Principal Investment Strategies and Related Risks – Principal Investment Strategies – Rational Special Situations Income Fund - Distribution Policy and Goals” section in this Prospectus.

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RFXAX - Performance

Return Ranking - Trailing

Period RFXAX Return Category Return Low Category Return High Rank in Category (%)
YTD 1.1% -21.8% 17.7% 81.08%
1 Yr -5.2% -25.4% 12.9% 20.42%
3 Yr -3.4%* -29.6% 53.0% 40.00%
5 Yr N/A* -33.0% 29.1% N/A
10 Yr N/A* -27.0% 13.0% N/A

* Annualized

Return Ranking - Calendar

Period RFXAX Return Category Return Low Category Return High Rank in Category (%)
2022 -6.6% -31.8% 18.4% 20.45%
2021 0.1% -14.3% 103.5% 25.43%
2020 -0.7% -20.2% 60.6% 77.60%
2019 N/A -13.4% 10.9% N/A
2018 N/A -12.3% 4.1% N/A

Total Return Ranking - Trailing

Period RFXAX Return Category Return Low Category Return High Rank in Category (%)
YTD 1.1% -21.8% 28.6% 81.22%
1 Yr -5.2% -25.4% 38.5% 20.72%
3 Yr -3.4%* -29.6% 53.0% 40.37%
5 Yr N/A* -33.0% 30.3% N/A
10 Yr N/A* -26.9% 16.3% N/A

* Annualized

Total Return Ranking - Calendar

Period RFXAX Return Category Return Low Category Return High Rank in Category (%)
2022 -6.6% -31.8% 18.4% 20.45%
2021 0.1% -14.3% 103.5% 25.43%
2020 -0.7% -20.2% 60.6% 77.60%
2019 N/A -13.4% 10.9% N/A
2018 N/A -12.3% 4.7% N/A

NAV & Total Return History


RFXAX - Holdings

Concentration Analysis

RFXAX Category Low Category High RFXAX % Rank
Net Assets 801 M 100 124 B 45.42%
Number of Holdings 898 2 8175 27.60%
Net Assets in Top 10 245 M -1.57 B 20.5 B 33.74%
Weighting of Top 10 28.54% 4.3% 100.0% 48.58%

Top 10 Holdings

  1. First American Government Obligs U 12.12%
  2. Ambac Assurance Corporation 0% 6.74%
  3. Deer Finance Syndicated Loan 2.72%
  4. Deer Finance Syndicated Loan 2.72%
  5. Deer Finance Syndicated Loan 2.72%
  6. Deer Finance Syndicated Loan 2.72%
  7. Deer Finance Syndicated Loan 2.72%
  8. Deer Finance Syndicated Loan 2.72%
  9. Deer Finance Syndicated Loan 2.72%
  10. Deer Finance Syndicated Loan 2.72%

Asset Allocation

Weighting Return Low Return High RFXAX % Rank
Bonds
87.39% -262.75% 188.92% 52.60%
Cash
12.62% -261.12% 362.75% 30.74%
Stocks
0.00% -38.22% 261.12% 87.43%
Preferred Stocks
0.00% 0.00% 31.88% 87.98%
Other
0.00% -25.82% 276.99% 74.45%
Convertible Bonds
0.00% 0.00% 33.50% 96.31%

Bond Sector Breakdown

Weighting Return Low Return High RFXAX % Rank
Securitized
72.72% 0.00% 99.65% 6.31%
Corporate
13.94% 0.00% 100.00% 75.86%
Cash & Equivalents
13.34% 0.00% 100.00% 33.47%
Derivative
0.00% 0.00% 72.98% 88.48%
Municipal
0.00% 0.00% 54.26% 84.36%
Government
0.00% 0.00% 99.43% 95.61%

Bond Geographic Breakdown

Weighting Return Low Return High RFXAX % Rank
US
86.59% -262.75% 194.51% 12.30%
Non US
0.80% -136.75% 90.11% 91.39%

RFXAX - Expenses

Operational Fees

RFXAX Fees (% of AUM) Category Return Low Category Return High Rank in Category (%)
Expense Ratio 2.01% 0.01% 6.46% 13.05%
Management Fee 1.50% 0.00% 2.29% 94.41%
12b-1 Fee 0.25% 0.00% 1.00% 47.13%
Administrative Fee N/A 0.00% 0.70% N/A

Sales Fees

RFXAX Fees (% of AUM) Category Return Low Category Return High Rank in Category (%)
Front Load 4.75% 0.00% 5.75% 13.04%
Deferred Load N/A 1.00% 5.50% N/A

Trading Fees

RFXAX Fees (% of AUM) Category Return Low Category Return High Rank in Category (%)
Max Redemption Fee N/A 0.50% 2.00% N/A

Related Fees

Turnover provides investors a proxy for the trading fees incurred by mutual fund managers who frequently adjust position allocations. Higher turnover means higher trading fees.

RFXAX Fees (% of AUM) Category Return Low Category Return High Rank in Category (%)
Turnover 37.00% 0.00% 496.00% 13.25%

RFXAX - Distributions

Dividend Yield Analysis

RFXAX Category Low Category High RFXAX % Rank
Dividend Yield 16.26% 0.00% 17.85% 20.48%

Dividend Distribution Analysis

RFXAX Category Low Category High Category Mod
Dividend Distribution Frequency Monthly Monthly Monthly Monthly

Net Income Ratio Analysis

RFXAX Category Low Category High RFXAX % Rank
Net Income Ratio 3.67% -1.55% 11.51% 24.10%

Capital Gain Distribution Analysis

RFXAX Category Low Category High Capital Mode
Capital Gain Distribution Frequency Annually Annually Annually

Distributions History

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RFXAX - Fund Manager Analysis

Managers

William Van de Water


Start Date

Tenure

Tenure Rank

Jul 17, 2019

2.87

2.9%

William R. Van de Water has been working in finance since 2005. Mr. Van de Water joined ESM Management LLC as a residential mortgage-backed securities analyst and trader in June 2009 and became a managing director in December 2009. In 2014, Mr. Van de Water became a co-portfolio manager at ESM Management LLC. From 2005 through March 2009, Mr. Van de Water worked in the Boston office of Susquehanna International Group. His primary responsibility was to analyze and trade mortgage-backed securities. Mr. Van de Water earned joint B.S. degrees in Physics, Business, Economics, and Management from the California Institute of Technology in 2005.

Eric Meyer


Start Date

Tenure

Tenure Rank

Jul 17, 2019

2.87

2.9%

Mr. Eric Meyer serves as President & Co-Chief Investment Officer at ESM Management.

Tenure Analysis

Category Low Category High Category Average Category Mode
0.08 28.19 5.64 3.19