ck0001083387-20221231
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| April
30, 2023 |
Prospectus |
www.kineticsfunds.com
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The
Kinetics Spin-off
and Corporate Restructuring
Fund
Advisor
Class A (LSHAX)
Advisor
Class C (LSHCX)
Institutional
Class (LSHUX)
No
Load Class (LSHEX)
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| A
series of Kinetics Mutual Funds, Inc. |
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| The
U.S. Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of the Prospectus. Any
representation to the contrary is a criminal
offense. |
Kinetics
Spin-off and Corporate Restructuring Fund
A
series of Kinetics Mutual Funds, Inc. (the “Company”)
Table
of Contents
This
Prospectus sets forth basic information about the Fund that you should know
before investing. It should be read and retained for future
reference.
The
date of this Prospectus is April 30, 2023.
Investment Objectives
The Kinetics Spin-off and Corporate Restructuring
Fund (the “Fund”) seeks to achieve long-term growth of
capital.
Fees and Expenses of the Fund
This table describes the fees
and expenses that you may pay if you buy, hold, and sell shares of the Fund. You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and example below.
You may qualify for sales charge discounts
for Advisor Class A shares if you and your family invest, or agree to invest in
the future, at least $50,000 in Advisor Class A shares of the Kinetics
Funds. More information about these and other discounts is
available from your financial professional and in the sections titled,
“Description of Classes” beginning on page 33 of the Fund’s prospectus, in
Appendix A to this Prospectus - Financial Intermediary Sales Charge
Variations, and “Purchasing Shares” beginning on page 51 of the Fund’s
statement of additional information.
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Advisor
Class
A Shares |
Advisor
Class
C Shares |
Institutional
Class Shares |
No
Load
Class
Shares |
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Shareholder
Fees
(fees
paid directly from your investment) |
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Maximum
sales charge (load) imposed on purchases (as a percentage of offering
price) |
| 5.75 |
% |
(1) |
| None |
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| None |
| None |
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Maximum
deferred sales charge (load) (as a percentage of the lesser of the value
redeemed or the amount invested) |
| None |
|
| 1.00 |
% |
(2) |
| None |
| None |
|
Redemption
Fee
(as a percentage of amount redeemed on shares held for 30 days or less, if
applicable) |
| 2.00 |
% |
|
| 2.00 |
% |
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| 2.00 |
% |
| 2.00 |
% |
| Wire
fee |
| $15 |
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| $15 |
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| $15 |
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| $15 |
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Overnight
check delivery fee for weekday |
| $25 |
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| $25 |
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| $25 |
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| $25 |
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Retirement
account fees (annual maintenance fee) |
| $15 |
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| $15 |
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| $15 |
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| $15 |
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
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| Management
fees |
| 1.00 |
% |
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| 1.00 |
% |
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| 1.00 |
% |
| 1.00 |
% |
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Distribution
and service (Rule 12b-1) fees |
| 0.25 |
% |
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| 0.75 |
% |
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| None |
| None |
| Other
expenses |
| 0.79 |
% |
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| 0.79 |
% |
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| 0.74 |
% |
| 0.79 |
% |
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Shareholder
service fee |
0.25 |
% |
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| 0.25 |
% |
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| 0.20 |
% |
| 0.25 |
% |
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Other
Operating Expenses |
0.54 |
% |
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| 0.54 |
% |
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| 0.54 |
% |
| 0.54 |
% |
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Acquired
Fund Fees and Expenses |
| 0.13 |
% |
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| 0.13 |
% |
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| 0.13 |
% |
| 0.13 |
% |
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Total
annual fund operating expenses(3) |
| 2.17 |
% |
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| 2.67 |
% |
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| 1.87 |
% |
| 1.92 |
% |
| Fees
waiver and/or expenses reimbursements |
| (0.54) |
% |
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| (0.29) |
% |
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| (0.49) |
% |
(4) |
(0.34) |
% |
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Total
annual fund operating expenses after fee waiver and/or expense
reimbursements (5) |
| 1.63 |
% |
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| 2.38 |
% |
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| 1.38 |
% |
| 1.58 |
% |
(1)No
initial sales charge is applied to purchases of $1 million or more.
(2)A
CDSC of 1.00% will be charged on Advisor Class C Share purchases that are
redeemed in whole or in part within 12 months of purchase.
(3)Total Annual Fund
Operating Expenses do not correlate to the ratio of operating expenses to
average net assets before expense reimbursement found in the “Financial
Highlights” section of this Prospectus, which reflects the Fund’s operating
expenses and does not include acquired fund fees and expenses
(“AFFE”).
(4)The
Fund’s adviser, Horizon Kinetics Asset Management, LLC (“Kinetics” or the
“Investment Adviser”) has contractually agreed to reimburse the Fund the portion
of Shareholder Servicing fees in excess of 0.05% of the average daily net assets
of the Institutional Class until at least April 30, 2024.
(5)In
addition, the Investment Adviser has contractually agreed to waive its fees
and/or pay for operating expenses of the Fund to ensure that total annual fund
operating expenses (excluding, as applicable, front-end or contingent deferred
loads, taxes, leverage interest, brokerage commissions, AFFE (as determined in
accordance with Form N‑1A), expenses incurred in connection with any merger
or reorganization and extraordinary expenses such as litigation expenses) do not
exceed 1.50%, 2.25%, 1.25% and 1.45% of the average daily net assets of the
Advisor Class A Shares, Advisor Class C Shares, Institutional Shares and No Load
Shares, respectively. This agreement is in effect until April 30,
2024, and may be terminated before that date only by the
Company’s Board of Directors. The Fund’s Investment Adviser is permitted to seek
reimbursement from the Fund for a period ending three full years after the date
of the waiver or payment. Any reimbursement is limited to the lesser of the
Expense Cap in effect at the time of the waiver and the Expense Cap in effect at
the time of reimbursement.
Example. This Example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds. This Example assumes that you invest $10,000 in
the Fund for the time periods indicated and then redeem all of your shares at
the end of these periods. The Example also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain the same (taking
into account the expense limitation only in the first year).
Although your actual costs may be higher
or lower, based on these assumptions your cost would be:
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One
Year |
Three
Years |
Five
Years |
Ten
Years |
| Advisor
Class A |
$731 |
$1,141 |
$1,575 |
$2,777 |
| Advisor
Class C |
$241 |
$775 |
$1,336 |
$2,863 |
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Institutional
Class |
$140 |
$513 |
$910 |
$2,022 |
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No
Load Class |
$161 |
$543 |
$950 |
$2,088 |
You would pay the following
expenses if you did not redeem your shares:
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| One
Year |
Three
Years |
Five
Years |
Ten
Years |
| Advisor
Class C |
$344 |
$775 |
$1,336 |
$2,863 |
Portfolio
Turnover.
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, affect the Fund’s performance. During the most recent fiscal
year, the Fund’s portfolio turnover rate was 4% of the average value of its
portfolio.
Principal Investment Strategy
Under normal market conditions,
the Fund will pursue its investment objective by investing at least 80% of its
net assets (plus borrowings for investment purposes) in equity securities of
spin-off companies, companies subject to other forms of corporate restructuring,
parents of any such companies, and publicly traded shareholder activist holding
companies which, by way of their shareholder ownership in other companies, have
caused such other companies to undergo spin-offs and other forms of corporate
restructurings. The Fund is non-diversified. The Fund considers a spin-off
company or a company subject to a corporate restructuring to be any company that
has experienced one of the following events within five years of the Fund’s
investment in the company: a spin-off distribution of stock of a subsidiary
company by its parent company to parent company shareholders; an equity
“carve-out” or
“partial
initial public offering” in which a parent company sells a percentage of the
equity of a subsidiary in a public offering; or the parent company of any such
company after the public disclosure of the corporate restructuring. The Fund may
invest in a parent company of a spin-off company or a company subject to a
corporate restructuring, or a publicly traded shareholder activist holding
company which has caused such other companies to undergo the spin-off or
corporate restructuring, after the public disclosure of the planned spin-off or
corporate restructuring, during the spin-off or corporate restructuring process,
or after the actual spin-off or corporate restructuring. If the Fund invests in
a parent company of a spin-off company or a company subject to a corporate
restructuring prior to a spin-off or restructuring, the Fund would, upon the
completion of the spin-off or restructuring, receive the shares of the spin-off
company. The Fund may retain shares of both the parent and the spin-off company,
the shares of only one, or the shares of neither.
The
Fund will invest in both U.S. and foreign equity stocks. The Fund’s investments
in foreign equity stocks may be in both developed and emerging markets. The
Fund’s equity investments may include common stock, preferred stock, securities
convertible into common stock, warrants, rights and other equity securities
having the characteristics of common stock (such as depositary receipts). The
Fund may invest in any size company, including small- and medium-sized
companies, and further may invest in companies which are financially distressed.
The
Fund may invest up to 20% of its assets in companies that, for a variety of
reasons, the Fund’s Investment Adviser believes may have the potential to be
subject to a spin-off or corporate restructuring within a reasonable period of
time; for example, a similar company may have recently announced a spin-off; the
company may be under investor pressure to consider strategic alternatives; or
the current segments of the company may not have a synergistic fit, and as a
result the company’s stock trades at a discount to that of its closest peers.
The Fund may invest in potential spin-off and corporate restructuring companies
that the Fund’s Investment Adviser believes may, based on its in-house research,
have the most favorable risk/reward characteristics.
The
Investment Adviser seeks to avoid short-term investing and significant portfolio
turnover. The Investment Adviser utilizes its in-house research capabilities to
seek to identify businesses at inflection points in their corporate life cycles
with what the Investment Adviser believes are attractive risk/reward profiles.
The Investment Adviser believes that returns are often the result of the
market’s inefficiency in initially valuing corporate restructurings due in part
to lack of coverage by the investment community and initial indiscriminate
selling pressure. For instance, companies that have been "spun-off" from their
corporate parents by way of corporate restructurings may not be followed closely
by financial sector analysts, which could lead to advantageous disparities
between a company’s valuation and growth prospects relative to its pricing in
the marketplace. The Investment Adviser uses a process that focuses primarily on
the analysis of individual companies rather than on the industry in which the
company may operate. This “bottom-up” approach may result in multiple
investments in the same sector or industry. However, the Investment Adviser pays
careful attention to the limitation of sector and industry concentrations.
The
Fund may maintain during a temporary period, which could be for a short period
or a longer period lasting several years or more, of abnormal conditions, a
significant portion of its total assets in cash and securities, generally
considered to be cash and cash equivalents, including, but not limited to: high
quality, U.S. short-term debt securities and money market instruments. The
Investment Adviser will invest in such short-term cash positions to the extent
that the Investment Adviser is unable to find sufficient investments meeting its
criteria and when the Adviser believes the purchase of additional equity
securities would not further the investment objective of the Fund during such
periods of time. Additionally, to respond to adverse market, economic, political
or other conditions, which may persist for
short
or long periods of time, the Fund may invest up to 100% of its assets in the
types of high quality, U.S. short-term debt securities and money market
instruments described above.
If
the market advances during periods when the Fund is holding a large cash
position, the Fund may not participate as much as it would have if it had been
more fully invested in securities. In the aforementioned temporary defensive
periods, the Investment Adviser believes that an additional amount of liquidity
in the Fund is desirable both to meet operating requirements and to take
advantage of new investment opportunities. When the Fund holds a significant
portion of assets in cash and cash equivalents, it may not meet its investment
objective.
The
Fund held 55.5% of its net assets in the Texas Pacific Land Corporation (the
“Land Corporation”) as of March 31, 2023. The Land Corporation is a corporation
organized under the laws of the state of New York. One of the largest land
owners in Texas, the Land Corporation derives most of its income from oil and
gas royalty revenue, land easements and water royalties and sales. The Land
Corporation has historically operated with minimal operating expenses, little to
no debt and utilized cash flow to return capital to unitholders through share
repurchases and dividends. While the Land Corporation has held the majority of
its assets since its formation in 1888, the development of energy resources
subject to its royalty interests and related land use have experienced rapid
growth in recent years due to advances in energy exploration and extraction
technologies.
Principal Investment Risks
Risk
is inherent in all investing. A summary description of certain principal risks
of investing in the Fund is set forth below. Before you decide whether to invest in the Fund,
carefully consider these risk factors associated with investing in the Fund,
which may cause investors to lose money. There can be no
assurance that the Fund will achieve its investment objective. The first four
risks are prioritized by order of importance. The remaining principal risks are
presented in alphabetical order to facilitate finding particular risks and
comparing them with other funds. Each risk summarized below is considered a
principal risk of investing in the Fund, regardless of the order in which it
appears. Different risks may be more significant at different times depending on
market conditions or other factors.
ª Single
Stock Concentration Risk:
The Fund may hold a large concentration of its net assets in a single security
or issuer. Holding a large concentration in a single security or issuer may
expose the Fund to the market volatility of that specific security or issuer if
the security or issuer performs worse than the market as a whole, which could
adversely affect the Fund’s performance.
ª Non-Diversification
Risk: The Fund is classified as “non-diversified,”
which means the Fund may invest a larger percentage of its assets in the
securities of a smaller number of issuers than a diversified fund. Investment in
securities of a limited number of issuers exposes the Fund to greater market
risk and potential losses than if its assets were diversified among the
securities of a greater number of issuers.
ª Liquidity
Risks:
The Investment Adviser may not be able to sell portfolio securities at an
optimal time or price. The Fund’s significant investment in a single position,
makes the Fund especially susceptible to the risk that during certain periods
the liquidity of the single position will decrease or disappear suddenly and
without warning as a result of adverse market or political events, or adverse
investor perceptions.
ª Sector
Concentration Risk:
Although
the Fund will not concentrate its investments in any industries, the Fund may,
at certain times, have concentrations in one or more sectors which may cause the
Fund to be more sensitive to economic changes or events occurring in those
sectors,
and the Fund’s investments may be more volatile. As of December 31, 2022, the
Fund had 64.1% invested in the Mining, Quarrying, and Oil and Gas Extraction
sector.
ª Convertible
Securities Risk:
Convertible securities are subject to market and interest rate risk and credit
risk. When the market price of the equity security underlying a convertible
security decreases the convertible security tends to trade on the basis of its
yield and other fixed income characteristics, and is more susceptible to credit
and interest rate risks. When the market price of such equity security rises,
the convertible security tends to trade on the basis of its equity conversion
features and be more exposed to market risk. Convertible securities are
typically issued by smaller capitalized companies with stock prices that may be
more volatile than those of other companies.
ª Currency
Risk:
The values of investments in securities denominated in foreign currencies
increase or decrease as the rates of exchange between those currencies and the
U.S. dollar change. Currency conversion costs and currency fluctuations could
erase investment gains or add to investment losses. Currency exchange rates can
be volatile and are affected by factors such as general economic conditions, the
actions of the U.S. and foreign governments or central banks, the imposition of
currency controls, and speculation.
ª Distressed
Securities Risk: Financially
distressed securities involve considerable risk that can result in substantial
or even total loss of the Fund’s investment. It is often difficult to obtain
information as to the true condition of financially distressed securities. These
securities are often subject to litigation among the participants in bankruptcy
or reorganization proceedings.
ª Emerging
Markets Risk:
Many
of the risks with respect to foreign investments are more pronounced for
investments in issuers in developing or emerging market countries. Emerging
market countries tend to have more government exchange controls, more volatile
interest and currency exchange rates, less market regulation, and less developed
economic, political and legal systems than those of more developed countries. In
addition, emerging market countries may experience high levels of inflation and
may have less liquid securities markets and less efficient trading and
settlement systems. The information available about an emerging market issuer
may be less reliable than for comparable issuers in more developed capital
markets. Additionally, there may be less publicly available information about
certain foreign issuers. In addition, investments in certain emerging markets
are subject to an elevated risk of loss resulting from market manipulation and
the imposition of exchange controls (including repatriation restrictions). The
legal rights and remedies available for investors in emerging markets may be
more limited than the rights and remedies available in the U.S., and the ability
of U.S. authorities (e.g., Securities and Exchange Commission (“SEC”) and the
U.S. Department of Justice) to bring actions against bad actors in emerging
markets may be limited.
ª Equity
Risk:
The
value of the equity securities held by the Fund may fall due to general market
and economic conditions, perceptions regarding the industries in which the
issuers of securities held by the Fund participate, or factors relating to
specific companies in which the Fund invests.
ª Event
Driven Risk:
The
Investment Adviser’s evaluation of the outcome of a proposed spin-off or
corporate restructuring may prove incorrect and the Fund’s return on an
investment may be negative. Even if the Investment Adviser’s judgment regarding
the likelihood of a specific outcome proves correct, the expected event may be
delayed or completed on terms other than those originally proposed, which may
cause the Fund to lose money or fail to achieve a desired rate of return. In
addition, the ability of a shareholder activist holding company to effectuate a
spin-off or restructuring is subject to the same risks and the Investment
Adviser’s evaluation of such a company’s capabilities may be incorrect.
ª Foreign
Investment Risk: The
prices of foreign securities may be more volatile than the prices of securities
of U.S. issuers because of economic and social conditions abroad, political
developments
and changes in the regulatory environments of foreign countries. In addition,
changes in exchange rates and interest rates may adversely affect the values of
the Fund’s foreign investments. Foreign companies are generally subject to
different legal and accounting standards than U.S. companies, and foreign
financial intermediaries may be subject to less supervision and regulation than
U.S. financial firms. Additionally, there may be less information publicly
available about certain issues. Foreign securities include American Depositary
Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”). Unsponsored ADRs and
GDRs are organized independently and without the cooperation of the foreign
issuer of the underlying securities, and involve additional risks because U.S.
reporting requirements do not apply and the issuing bank will recover
shareholder distribution costs from changes in share prices and payment of
dividends. Foreign securities in which the Fund invests may be traded in markets
that close before the time that the Fund calculates its NAV. Furthermore,
certain foreign securities in which the Fund invests may be listed on foreign
exchanges that trade on weekends or other days when the Fund does not calculate
its NAV. As a result, the value of the Fund's holdings may change on days when
shareholders are not able to purchase or redeem the Fund's shares.
ª Initial
Public Offerings Risk: The
Fund may purchase securities of companies in IPOs. Special risks associated with
these securities may include limited numbers of shares available for trading,
unseasoned trading, lack of investor knowledge of the companies and the
companies’ limited operating histories. These factors may contribute to
substantial price volatility for the shares of these companies.
ª Large-Cap
Company Risk:
Larger, more established companies may be unable to attain the high growth rates
of successful, smaller companies during periods of economic expansion.
ª Management
and Strategy Risk:
The
value of your investment depends on the judgment of the Investment Adviser about
the quality, relative yield, value or market trends affecting a particular
security, issuer, sector or region, which may prove to be incorrect. Investment
strategies employed by the Investment Adviser in selecting investments for the
Fund may not result in an increase in the value of your investment or in overall
performance equal to that of other investments.
ª Market
Risk:
The
market price of a security or instrument may decline, sometimes rapidly or
unpredictably, due to general market conditions that are not specifically
related to a particular company, such as real or perceived adverse economic or
political conditions throughout the world, changes in the general outlook for
corporate earnings, changes in interest or currency rates or adverse investor
sentiment generally. The market value of a security or instrument also may
decline because of factors that affect a particular industry or industries, such
as labor shortages or increased production costs and competitive conditions
within an industry. Natural disasters, public health emergencies (including
epidemics and pandemics), terrorism and other global unforeseeable events may
lead to instability in world economies and markets, market volatility and may
have adverse long-term effects.
ª Petroleum
and Gas Sector Risk:
The profitability of companies in the oil and gas industry is related to
worldwide energy prices, exploration costs and production spending. Companies in
the oil and gas industry may be at risk for environmental damage claims and
other types of litigation. Companies in the oil and gas industry may be
adversely affected by: natural disasters or other catastrophes; changes in
exchange rates or interest rates; prices for competitive energy services;
economic conditions; tax treatment or government regulation; government
intervention; negative public perception; or unfavorable events in the regions
where companies operate (e.g.,
expropriation, nationalization, confiscation of assets and property, imposition
of restrictions on foreign investments or repatriation of capital, military
coups, social or political unrest, violence or labor unrest). Companies in the
oil and gas industry may have significant
capital
investments in, or engage in transactions involving, emerging market countries,
which may heighten these risks.
ª Preferred
Stock Risk:
Preferred stock represents an equity interest in a company that generally
entitles the holder to receive, in preference to the holders of other stocks
such as common stock, dividends and a fixed share of the proceeds resulting from
a liquidation of the company. The market value of preferred stock is subject to
company-specific and market risks applicable generally to equity securities and
is also sensitive to changes in the company’s creditworthiness, the ability of
the company to make payments on the preferred stock, and changes in interest
rates, typically declining in value if interest rates rise.
ª Small-cap
and Mid-cap Company Risk: The
securities of small-capitalization or mid- capitalization companies may be
subject to more abrupt or erratic market movements and may have lower trading
volumes or more erratic trading than securities of larger, more established
companies or market averages in general. In addition, such companies typically
are more likely to be adversely affected than large capitalization companies by
changes in earning results, business prospects, investor expectations or poor
economic or market conditions.
ª Specific
Strategy/Research Risk: The
Fund’s Investment Adviser and an affiliate of the Fund’s Investment Adviser
author and collaborate on research reports regarding spin-off related companies
for institutional subscribers. Consistent with its compliance policies and
procedures, the Investment Adviser may impose for a period of time an internal
restriction in the trading in certain securities related to spin-off companies,
corporate restructuring companies and/or their parent companies discussed in
these research reports. As a result, the Fund may be prevented from trading in
such securities at their optimal value or time as might otherwise have been
permitted if such restrictions were not in effect. In addition, if subscribers
to the research services buy or sell securities that are described in the
reports, it could potentially have an adverse effect on the price of securities
bought or sold by the Fund.
ª Valuation
Risk:
The
sales price the Fund could receive for any particular portfolio investment may
differ from the Fund’s valuation of the investment, particularly for securities
that trade in thin or volatile markets or that are valued using a fair value
methodology. Fair valuation of the Fund’s investments involves subjective
judgment. Investors who purchase or redeem Fund shares on days when the Fund is
holding fair-valued securities may receive fewer or more shares or lower or
higher redemption proceeds than they would have received if the Investment
Adviser had not fair-valued the security or had used a different valuation
methodology.
ª Warrants
and Rights Risk:
Warrants and rights may lack a liquid secondary market for resale. The prices of
warrants may fluctuate as a result of speculation or other factors. Warrants can
provide a greater potential for profit or loss than an equivalent investment in
the underlying security. Prices of warrants do not necessarily move in tandem
with the prices of their underlying securities and therefore are highly volatile
and speculative investments. Failing to exercise subscription rights to purchase
common stock would dilute the Fund’s interest in the issuing company. The market
for such rights is not well developed, and the Fund may not always realize full
value on the sale of rights.
Who
may want to invest?
The
Fund may be appropriate for investors who:
ª wish
to diversify their portfolios;
ª wish
to generate income and capital; and
ª are comfortable with the risks described
herein.
Performance
The performance
information provided below indicates some of the risks of investing in the Fund
by comparing the Fund with the performance of a broad-based market
index. The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Performance reflects fee waivers in
effect. If fee waivers were not in place, the Fund’s performance would be
reduced.
The
Horizon Spin-off and Corporate Restructuring Fund, a series of Investment
Managers Series Trust (the “Predecessor Fund”) reorganized into the Fund
following the close of business on December 8, 2017. Before the Fund commenced
operations, all of the assets and liabilities of the Predecessor Fund were
transferred to the Fund in a tax-free reorganization (the "Reorganization"). As
a result of the Reorganization, the Fund assumed the performance and accounting
history of the Predecessor Fund prior to the date of the Reorganization.
Performance results shown in the bar chart and the performance table below for
the period through December 31, 2016 reflect the performance of the Predecessor
Fund. On February 11, 2014, the Predecessor Fund’s principal investment
strategy changed. The performance information for periods prior to that date is
attributable to the Predecessor Fund’s previous principal investment strategy.
The
performance information for the period prior to October 10, 2009, is that of the
Liberty Street Horizon Fund, a series of the Forum Funds Trust (the “Liberty
Street Fund”). The Predecessor Fund acquired the assets and liabilities of the
Liberty Street Fund in a reorganization on March 16, 2007. The Liberty Street
Fund’s performance and financial history were adopted by the Predecessor Fund
and, for periods prior to October 10, 2009, are included in the Fund’s
performance and financial history.
The
performance of the Fund reflects the performance of the Predecessor Fund, which
had substantially similar investment strategies. The bar chart shows performance
of the Fund’s Institutional shares. Sales loads are not reflected in the
bar chart, and if those charges were included, returns would be less than those
shown. Advisor Class A, Advisor Class C and No Load Class
shares’ performance would be lower than the Institutional Class performance
because of the higher expenses paid by Advisor Class A, Advisor Class C and No
Load Class shares.
Updated
performance information is available on the Fund’s website at http://www.kineticsfunds.com
or by calling the Fund toll-free at (800)
930-3828.
Important note about performance
reflecting the Fund’s prior investment strategy. The performance shown for periods prior to
February 11, 2014 reflects a previous investment strategy. Effective
February 11, 2014, the Fund’s investment strategy was changed to focus
exclusively on spin-offs and other forms of corporate
restructuring.
Calendar Year Total Return (before taxes) for
Institutional Class Shares
|
|
|
|
|
|
|
|
| |
| Best
Quarter: |
Q1 2021 |
57.89% |
| Worst
Quarter: |
Q1 2020 |
-38.80% |
The after-tax returns for the
Fund’s Institutional Class shares as shown in the following table are calculated
using the historical highest individual federal marginal income tax rates and do
not reflect the impact of state and local taxes. Your actual after-tax returns
depend on your tax situation and may differ from those shown. If you own Fund
shares in a tax-deferred account, such as a 401(k) plan or an individual
retirement account (“IRA”), the information on after-tax returns is not relevant
to your investment. After-tax returns are shown
for Institutional Class shares only. After-tax returns for Advisor Class A,
Advisor Class C and No Load Class shares will
differ.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average
Annual Total Returns (for
the Periods Ended December 31, 2022) |
|
|
| 1
Year |
5
Years |
10
Years |
Since
Inception |
Inception
Date/From |
|
Institutional
Class —
Return Before Taxes |
39.82% |
20.64% |
14.91% |
7.20% |
July 11,
2007 |
|
Institutional
Class —
Return After Taxes on Distributions |
39.20% |
20.20% |
14.54% |
6.89% |
July 11,
2007 |
|
Institutional
Class —
Return After Taxes on Distributions and Sale of Fund
Shares |
24.01% |
16.74% |
12.49% |
5.87% |
July 11,
2007 |
|
Advisor
Class A Shares —
Return Before Taxes |
31.40% |
18.91% |
13.96% |
6.99% |
May 4,
2007 |
|
Advisor
Class C Shares —
Return Before Taxes |
38.36% |
19.43% |
13.80% |
6.68% |
May 24,
2007 |
|
No
Load Class Shares —
Return Before Taxes |
39.43% |
20.42% |
N/A |
20.89% |
December 11,
2017 |
|
S&P
500 Index
(reflects no deduction for
fees, expenses or taxes) |
-18.11% |
9.42% |
12.56% |
8.35% |
July 11,
2007 |
Management
Investment
Adviser. Horizon
Kinetics Asset Management LLC is the Fund’s investment adviser.
Portfolio
Managers. Steven
M. Bregman and Murray Stahl have served as the portfolio managers of the Fund
since its inception in May 2007 and are jointly and primarily responsible for
the day-to-day management of the Fund’s portfolio.
|
|
|
|
|
|
|
|
| |
| Investment
team member |
Primary
Title |
Years
of Service with the Fund |
| Murray
Stahl |
Co-Portfolio
Manager |
15 |
| Steven
Bregman |
Co-Portfolio
Manager |
15 |
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Fund shares on any business day by written
request via mail (Kinetics Mutual Funds – The Kinetics Spin-off and Corporate
Restructuring Fund, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee,
Wisconsin 53201-0701), by telephone at 1-800-930-3828, or through a financial
intermediary. You may also purchase or redeem Fund shares by wire transfer. The
minimum initial investment for both regular accounts and IRAs is $2,500 ($2,000
for Coverdell Education Savings Accounts). There is no minimum on subsequent
investments for all account types. To purchase shares of the Fund, you must
invest at least the minimum amount.
|
|
|
|
|
|
|
|
| |
| Minimum
Investments |
To
Open Your Account |
To
Add to Your Account |
| Advisor
A and Advisor C Shares |
| |
| Standard
Accounts |
$2,500 |
$0 |
| Traditional
and Roth IRA Accounts |
$2,500 |
$0 |
| Accounts
with Systematic Investment Plans |
$2,500 |
$0 |
| Qualified
Retirement Plans |
$2,500 |
$0 |
| No-Load
Shares |
$2,500 |
$0 |
| Institutional
Shares |
| |
| All
Accounts |
$1,000,000 |
$0 |
Fund
shares are redeemable on any business day the New York Stock Exchange (the
“NYSE”) is open for business by written request or by telephone.
Tax
Information
Unless
you are investing through a tax-advantaged arrangement, such as a 401(k) plan or
an individual retirement account, the Fund’s distributions will generally be
taxable to you at ordinary income or capital gains tax rates, and you will
generally recognize gain or loss when you redeem shares.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase shares of the Fund through a broker-dealer or other financial
intermediary, the Fund and its related companies (including the Investment
Adviser) may pay the intermediary for the sale of Fund shares and related
services. These payments may create a conflict of interest by influencing the
broker-dealer or other intermediary to recommend the Fund over another
investment. Ask your financial adviser or visit your financial intermediary’s
website for more information.
|
|
| |
| ADDITIONAL
INFORMATION ABOUT THE FUND’S INVESTMENTS |
Investment
Objective
The
Fund’s investment objective is to achieve long-term growth of capital. There is
no assurance that the Fund will achieve its investment objective.
The
Fund’s investment objective is not fundamental and may be changed by the Board
of Directors of the Company without shareholder approval, upon at least 60 days’
prior written notice to shareholders. The Fund’s investment strategies and
policies may be changed from time to time without shareholder approval or prior
written notice, unless specifically stated otherwise in this Prospectus or the
Statement of Additional Information (“SAI”).
Principal
Investment Strategies
Under
normal market conditions, the Fund will pursue its investment objective by
investing at least 80% of its net assets (plus borrowings for investment
purposes) in equity securities of spin-off companies, companies subject to other
forms of corporate restructuring, parents of any such companies, and publicly
traded shareholder activist holding companies which, by way of their shareholder
ownership in other companies, have caused such other companies to undergo
spin-offs and other forms of corporate restructurings. The Fund considers a
spin-off company or a company subject to a corporate restructuring to be any
company that has experienced one of the following events within five years of
the Fund’s investment in the company: a spin-off distribution of stock of a
subsidiary company by its parent company to parent company shareholders; an
equity “carve-out” or “partial initial public offering” in which a parent
company sells a percentage of the equity of a subsidiary in a public offering;
or the parent company of any such company after the public disclosure of the
corporate restructuring. The Fund may invest in a parent company of a spin-off
company or a company subject to a corporate restructuring, or a publicly traded
shareholder activist holding company which has caused such other companies to
undergo the spin-off or corporate restructuring, after the public disclosure of
the planned spin- off or corporate restructuring, during the spin-off or
corporate restructuring process, or after the actual spin-off or corporate
restructuring. If the Fund invests in a parent company of a spin-off company or
a company subject to a corporate restructuring prior to a spin-off or
restructuring, the Fund would, upon the completion of the spin-off or
restructuring, receive the shares of the spin-off company. The Fund may retain
shares of both the parent and the spin-off company, the shares of only one, or
the shares of neither.
The
Fund will invest in both U.S. and foreign equity stocks. The Fund’s investments
in foreign equity stocks may be in both developed and emerging markets. The
Fund’s equity investments may include common stock, preferred stock, securities
convertible into common stock, warrants, rights and other equity securities
having the characteristics of common stock (such as depositary receipts). The
Fund may invest in any size company, including small- and medium-sized
companies, and further may invest in companies which are financially distressed.
In addition, under certain market conditions, the Fund may invest in a company
at the time of its IPO.
The
Fund may invest up to 20% of its assets in companies that, for a variety of
reasons, the Investment Adviser believes may have the potential to be subject to
a future spin-off or corporate restructuring, including instances in which a
similar company may have recently announced a spin-off; the company may be under
investor pressure to consider strategic alternatives; or the current segments of
the company may not have a synergistic fit, and as a result the company’s stock
trades at a discount to that of its closest peers. The Fund may invest in
potential spin-off and corporate restructuring companies that the Investment
Adviser believes may, based on its in-house research, have the most favorable
risk/reward characteristics.
The
Investment Adviser’s Process. The
Investment Adviser seeks to avoid short-term investing and significant portfolio
turnover. The Investment Adviser utilizes its in-house research capabilities to
seek to identify businesses at inflection points in their corporate life cycles
with what the Investment Adviser believes are attractive risk/reward profiles.
The Investment Adviser believes that returns are often the result of the
market’s inefficiency in initially valuing corporate restructurings due in part
to lack of coverage by the investment community and initial indiscriminate
selling pressure. For instance, companies that have been “spun-off” from their
corporate parents by way of corporate restructurings may not be followed closely
by financial sector analysts, which could lead to advantageous disparities
between a company’s valuation and growth prospects relative to its pricing in
the marketplace. The Investment Adviser uses a process that focuses primarily on
the analysis of individual companies rather than on the industry in which the
company may operate. This “bottom-up” approach may result in multiple
investments in the same sector or industry. However, the Investment Adviser pays
careful attention to the limitation of sector and industry
concentrations.
The
Fund may invest in other securities of either a parent company spinning-off
securities or of the spin-off company, such as preferred stock, warrants,
tracking stocks, contingent value rights and other spin-off equity
securities.
The
Investment Adviser generally sells the Fund’s investments if the Investment
Adviser determines that the characteristics that resulted in the original
purchase decision have changed materially, the investment is no longer earning a
return commensurate with its risk, the Investment Adviser identifies other
investments with more attractive valuations and return characteristics, or the
Fund requires cash to meet redemption requests.
Temporary
and Defensive Cash and Cash Equivalent Holdings. The
Fund may maintain during a temporary period, which could be for a short period
or a longer period lasting several years or more, of abnormal conditions, a
significant portion of its total assets in cash and securities, generally
considered to be cash and cash equivalents, including, but not limited to: high
quality, U.S. short-term debt securities and money market instruments, as
described above. The Investment Adviser will invest in such short-term cash
positions to the extent that the Investment Adviser is unable to find sufficient
investments meeting its criteria and when the Adviser believes the purchase of
additional equity securities would not further the investment objective of the
Fund during such periods of time. Additionally, to respond to adverse market,
economic, political or other conditions, which may persist for short or long
periods of time, the Fund may invest up to 100% of its assets in the types of
high quality, U.S. short-term debt securities and money market instruments
described above.
If
the market advances during periods when the Fund is holding a large cash
position, the Fund may not participate as much as it would have if it had been
more fully invested in securities. In the aforementioned temporary defensive
periods, the Investment Adviser believes that an additional amount of liquidity
in the Fund is desirable both to meet operating requirements and to take
advantage of new investment opportunities. When the Fund holds a significant
portion of assets in cash and cash equivalents, it may not meet its investment
objective.
Principal
Risks of Investing
Risk
is inherent in all investing. A summary description of certain principal risks
of investing in the Fund is set forth below. Before you decide whether to invest
in the Fund, carefully consider these risk factors associated with investing in
the Fund, which may cause investors to lose money. There can be no assurance
that the Fund will achieve its investment objective. Each risk summarized below
is considered a "principal" risk of investing in the Fund, regardless of the
order in which it appears. Different risks may be more significant at different
times depending on market conditions or other factors.
Convertible
Securities Risk. Convertible
securities are securities that are convertible into or exchangeable for common
or preferred stock. The values of convertible securities may be affected by
changes in interest rates, the creditworthiness of their issuer, and the ability
of the issuer to repay principal and to make interest payments. A convertible
security tends to perform more like a stock when the underlying stock price is
high and more like a debt security when the underlying stock price is low. A
convertible security is not as sensitive to interest rate changes as a similar
non-convertible debt security and generally has less potential for gain or loss
than the underlying stock.
Currency
Risk. The
values of investments in securities denominated in foreign currencies increase
or decrease as the rates of exchange between those currencies and the U.S.
dollar change. Currency conversion costs and currency fluctuations could erase
investment gains or add to investment losses. Currency exchange rates can be
volatile and are affected by factors such as general economic conditions, the
actions of the United States and foreign governments or central banks, the
imposition of currency controls, and speculation. Currency risk may be
particularly high to the extent that the Fund invests in foreign currencies or
engages in foreign currency transactions that are economically tied to emerging
market countries. These currency transactions may present market, credit,
currency, liquidity, legal, political and other risks different from, or greater
than, the risks of investing in developed foreign currencies or engaging in
foreign currency transactions that are economically tied to developed foreign
countries.
Distressed
Securities Risk. Financially
distressed securities involve considerable risk that can result in substantial
or even total loss of the Fund’s investment. It is often difficult to obtain
information as to the true condition of financially distressed securities. These
securities are often subject to litigation among the participants in bankruptcy
or reorganization proceedings. Such investments may also be adversely affected
by federal and state laws relating to, among other things, fraudulent transfers
and other voidable transfers or payments, lender liability and a bankruptcy
court’s power to disallow, reduce, subordinate or disenfranchise particular
claims. These and other factors contribute to above-average price volatility and
abrupt and erratic movements of the market prices of these securities. In
addition, the spread between the bid and asked prices of such securities may be
greater than normally expected and it may take a number of years for the market
prices of such securities to reflect their intrinsic values.
Emerging
Markets Risk. To
the extent that the Fund invests in emerging markets, an investment in the Fund
may have the following additional risks: information about the companies in
these countries is not always readily available; stocks of companies traded in
these countries may be less liquid and the prices of these stocks may be more
volatile than the prices of the stocks in more established markets; greater
political and economic uncertainties exist in emerging markets than in developed
foreign markets; the securities markets and legal systems in emerging markets
may not be well developed and may not provide the protections and advantages of
the markets and systems available in more developed countries; and very high
inflation rates may exist in emerging markets and could negatively impact a
country’s economy and securities markets. Additionally, the information
available about an emerging market issuer may be less reliable than for
comparable issuers in more developed capital markets. In addition, investments
in certain emerging markets are subject to an elevated risk of loss resulting
from market manipulation and the imposition of exchange controls (including
repatriation restrictions). The legal rights and remedies available for
investors in emerging markets may be more limited than the rights and remedies
available in the U.S., and the ability of U.S. authorities (e.g., SEC and the
U.S. Department of Justice) to bring actions against bad actors in emerging
markets may be limited. For these and other reasons, the prices of securities in
emerging markets can fluctuate more significantly than the prices of securities
of companies in developed countries. The less developed the country, the greater
effect these risks may have on your investment in the Fund. As a result, an
investment in the Fund may exhibit a higher degree of volatility than either the
general domestic securities market or the securities markets of developed
foreign countries.
Equity
Risk. The
value of equity securities held by the Fund may fall due to general market and
economic conditions, perceptions regarding the industries in which the issuers
of securities held by the Fund participate, or factors relating to specific
companies in which the Fund invests. The price of common stock of an issuer in
the Fund’s portfolio may decline if the issuer fails to make anticipated
dividend payments because, among other reasons, the financial condition of the
issuer declines. Common stock is subordinated to preferred stocks, bonds and
other debt instruments in a company’s capital structure in terms of priority
with respect to corporate income, and therefore will be subject to greater
dividend risk than preferred stocks or debt instruments of such issuers. In
addition, while broad market measures of common stocks have historically
generated higher average returns than fixed income securities, common stocks
have also experienced significantly more volatility in those
returns.
Event-Driven
Risk. The
Investment Adviser’s evaluation of the outcome of a proposed spin-off or
corporate restructuring may prove incorrect and the Fund’s return on an
investment may be negative. Even if the Investment Adviser’s judgment regarding
the likelihood of a specific outcome proves correct, the expected event may be
delayed or completed on terms other than those originally proposed, which may
cause the Fund to lose money or fail to achieve a desired rate of return. These
risks may be realized for a variety of reasons, such as the inability to finance
a transaction, lack of regulatory approval from state, federal or international
agencies or failure of shareholders to approve a transaction. In addition, the
ability of a shareholder activist holding company to effectuate a spin-off or
restructuring is subject to the same risks and the Investment Adviser’s
evaluation of such a company’s capabilities may be incorrect.
Foreign
Investment Risk. Investments
in foreign securities are affected by risk factors generally not thought to be
present in the United States. The prices of foreign securities may be more
volatile than the prices of securities of U.S. issuers because of economic and
social conditions abroad, political developments, and changes in the regulatory
environments of foreign countries. Special risks associated with investments in
foreign markets include less liquidity, less developed or less efficient trading
markets, lack of comprehensive company information, less government supervision
of exchanges, brokers and issuers, greater risks associated with counterparties
and settlement, and difficulty in enforcing contractual obligations. In
addition, changes in exchange rates and interest rates, and imposition of
foreign taxes, may adversely affect the value of the Fund’s foreign investments.
Foreign companies are generally subject to different legal and accounting
standards than U.S. companies, and foreign financial intermediaries may be
subject to less supervision and regulation than U.S. financial firms. Certain
foreign markets may rely heavily on particular industries or foreign capital and
are more vulnerable to diplomatic developments, the imposition of economic
sanctions against a particular country or countries, organizations, entities
and/or individuals, changes in international trading patterns, trade barriers,
and other protectionist or retaliatory measures. International trade barriers or
economic sanctions against foreign countries, organizations, entities and/or
individuals may adversely affect the Fund’s holdings or exposures. The Fund’s
investments in depository receipts (including ADRs and GDRs) are subject to
these risks, even if denominated in U.S. dollars, because changes in currency
and exchange rates affect the values of the issuers of depository receipts. In
addition, the underlying issuers of certain depository receipts, particularly
unsponsored or unregistered depository receipts, are under no obligation to
distribute shareholder communications to the holders of such receipts, or to
pass through to them any voting rights with respect to the deposited securities.
Many of the risks with respect to foreign investments are more pronounced for
investments in developing or emerging market countries. Emerging markets tend to
be more volatile than the markets of more mature economies, and generally have
less diverse and less mature economic structures and less stable political
systems than those of developed countries.
Initial
Public Offerings Risk. The
Fund may purchase securities of companies in IPOs. Special risks associated with
these securities may include limited numbers of shares available for trading,
unseasoned
trading,
lack of investor knowledge of the companies and the companies’ limited operating
histories. These factors may contribute to substantial price volatility for the
shares of these companies. The limited number of shares available for trading in
some IPOs may make it more difficult for the Fund to buy or sell significant
amounts of shares without an unfavorable impact on prevailing market prices.
Some companies whose shares are sold through IPOs are involved in relatively new
industries or lines of business, which may not be widely understood by
investors. Some of these companies may be undercapitalized or regarded as
developmental stage companies without revenues or operating income, or the
near-term prospects of achieving them.
Large-Cap
Company Risk. Larger,
more established companies may be unable to attain the high growth rates of
successful, smaller companies during periods of economic expansion. In addition,
large-capitalization companies may be unable to respond quickly to new
competitive challenges, such as changes in technology and consumer tastes, and
may be more prone to global economic risks.
Liquidity
Risk. Due
to a lack of demand in the marketplace or other factors, the Fund may not be
able to sell some or all of the investments that it holds, or may only be able
to sell those investments at less than desired prices. Liquidity risk arises,
for example, from small average trading volumes, trading restrictions, or
temporary suspensions of trading. Liquidity risk may also refer to the risk that
the Fund will not be able to pay redemption proceeds within the allowable time
period because of unusual market conditions, an unusually high volume of
redemption requests, or other reasons. To meet redemption requests, the Fund may
be forced to sell securities at an unfavorable time and/or under unfavorable
conditions. The Fund’s significant investment in a single position, makes the
Fund especially susceptible to the risk that during certain periods the
liquidity of the single position will decrease or disappear suddenly and without
warning as a result of adverse market or political events, or adverse investor
perceptions.
Management
and Strategy Risk. The
value of your investment depends on the judgment of the Investment Adviser about
the quality, relative yield, value or market trends affecting a particular
security, issuer, sector or region, which may prove to be incorrect. Investment
strategies employed by the Investment Adviser in selecting investments for the
Fund may not result in an increase in the value of your investment or in overall
performance equal to that of other investments.
Market
Risk. An
investment in the Fund is subject to investment risk, including the possible
loss of the entire principal amount that you invest. The Fund’s share price may
be affected by a sudden, sometimes rapid or unpredictable, decline in the market
value of an investment, or by an overall decline in the stock market. Market
risk may affect a single issuer, industry, sector of the economy or the market
as a whole.
An
outbreak of respiratory disease caused by a novel coronavirus was first detected
in China in December 2019 and spread internationally. Since then the number of
cases has fluctuated and new “variants” have been confirmed around the world.
The outbreak resulted in closing borders and quarantines, enhanced health
screenings, cancellations, disrupted supply chains and customer activity, and
produced general concern and uncertainty. The impact of this coronavirus, and
other epidemics and pandemics that may arise in the future, could affect
national and global economies, individual companies and the market in general in
a manner that cannot be foreseen at the present time. Health crises caused by
the outbreak may heighten other pre-existing political, social and economic
risks in a country or region. In the event of a pandemic or an outbreak, there
can be no assurance that the Fund and its service providers will be able to
maintain normal business operations for an extended period of time or will not
lose the services of key personnel on a temporary or long-term basis due to
illness or other reasons. Although vaccines for COVID-19 are available, the full
impacts of a pandemic or disease outbreaks are unknown and the pace of recovery
may vary from market to market.
Russia's
recent military interventions in Ukraine have led to, and may lead to additional
sanctions being levied by the United States, European Union and other countries
against Russia. Russia's military incursion and the resulting sanctions could
adversely affect global energy and financial markets and thus could affect the
value of the Trust's investments, even beyond any direct exposure the Trust may
have to Russian issuers or the adjoining geographic regions. The extent and
duration of the military action, sanctions and resulting market disruptions are
impossible to predict, but could be substantial. Any such disruptions caused by
Russian military action or resulting sanctions may magnify the impact of other
risks described in this Prospectus.
Non-Diversification
Risk. The
Fund is classified as “non-diversified,” which means the Fund may invest a
larger percentage of its assets in the securities of a smaller number of issuers
than a diversified fund. Investment in securities of a limited number of issuers
exposes the Fund to greater market risk and potential losses than if its assets
were diversified among the securities of a greater number of issuers. However,
the Fund will comply with certain diversification requirements imposed by the
Internal Revenue Code of 1986, as amended.
Petroleum
and Gas Sector Risk.
The
profitability of companies in the oil and gas industry is related to worldwide
energy prices, exploration costs and production spending. Companies in the oil
and gas industry may be at risk for environmental damage claims and other types
of litigation. Companies in the oil and gas industry may be adversely affected
by: natural disasters or other catastrophes; changes in exchange rates or
interest rates; prices for competitive energy services; economic conditions; tax
treatment or government regulation; government intervention; negative public
perception; or unfavorable events in the regions where companies operate
(e.g.,
expropriation, nationalization, confiscation of assets and property, imposition
of restrictions on foreign investments or repatriation of capital, military
coups, social or political unrest, violence or labor unrest). Companies in the
oil and gas industry may have significant capital investments in, or engage in
transactions involving, emerging market countries, which may heighten these
risks.
Preferred
Stock Risk. Preferred
stock represents an equity interest in a company that generally entitles the
holder to receive, in preference to the holders of other stocks such as common
stocks, dividends and a fixed share of the proceeds resulting from a liquidation
of the company. Preferred stocks may pay fixed or adjustable rates of return.
The market value of preferred stock is subject to issuer-specific and market
risks applicable generally to equity securities and is sensitive to changes in
the issuer’s creditworthiness, the ability of the issuer to make payments on the
preferred stock and changes in interest rates, typically declining in value if
interest rates rise. In addition, a company’s preferred stock generally pays
dividends only after the company makes required payments to holders of its bonds
and other debt. Therefore, the value of preferred stock will usually react more
strongly than bonds and other debt to actual or perceived changes in the
company’s financial condition or prospects.
Sector
Concentration Risk.
Although
the Fund will not concentrate its investments in any industries, the Fund may,
at certain times, have concentrations in one or more sectors which may cause the
Fund to be more sensitive to economic changes or events occurring in those
sectors. As of December 31, 2022, the Fund had 64.1% invested in the
Mining, Quarrying, and Oil and Gas Extraction sector.
Single
Stock Concentration Risk.
The Fund may hold a large concentration of its net assets in a single security
or issuer. Holding a large concentration in a single security or issuer may
expose the Fund to the market volatility of that specific security or issuer if
the security or issuer performs worse than the market as a whole, which could
adversely affect the Fund’s performance. As of March 31, 2023, the Fund held a
large concentration of its net assets in the Land Corporation. Because a large
portion of the Land Corporation’s revenue is derived from oil and gas royalties,
the performance of the Fund could be adversely affected if the underlying
markets for oil or gas were to decline, thereby having a more significant impact
on the Fund given the concentration in this holding.
Small-Cap
and Mid-Cap Companies Risk. Investing
in small-capitalization or mid-capitalization companies generally involves
greater risks than investing in large-capitalized companies. Small- or mid-cap
companies may have limited product lines, markets or financial resources or may
depend on the expertise of a few people, and may be subject to more abrupt or
erratic market movements than securities of larger, more established companies
or the markets in general. Many small capitalization companies may be in the
early stages of development. Since equity securities of smaller companies may
lack sufficient market liquidity and may not be regularly traded, it may be
difficult or impossible to sell securities at an advantageous time or desirable
price.
Specific
Strategy/Research Risk.
The
Investment Adviser and an affiliate of the Investment Adviser author and
collaborate on research reports regarding spin-off related companies for
institutional subscribers. Consistent with its compliance policies and
procedures, the Investment Adviser may impose for a period of time an internal
restriction in the trading in certain securities related to spin-off companies,
corporate restructuring companies and/or their parent companies discussed in
these research reports. As a result, the Fund may be prevented from trading in
such securities at their optimal value or time as might otherwise have been
permitted if such restrictions were not in effect. In addition, if subscribers
to the research services buy or sell securities that are described in the
reports, it could potentially have an adverse effect on the price of securities
bought or sold by the Fund.
Valuation
Risk. Many
factors may influence the price at which the Fund could sell any particular
portfolio investment. The sales price may well differ—higher or lower—from the
Fund’s last valuation, and such differences could be significant, particularly
for illiquid investments and securities that trade in relatively thin markets
and/or markets that experience extreme volatility. If market conditions make it
difficult to value some investments, the Investment Adviser may value these
investments using more subjective methods, such as fair value methodologies.
Investors who purchase or redeem Fund shares on days when the Fund is holding
fair-valued securities may receive fewer or more shares, or lower or higher
redemption proceeds, than they would have received if the Investment Adviser had
not fair-valued the securities or had used a different valuation methodology.
The value of foreign securities, certain fixed income securities, and currencies
may be materially affected by events after the close of the market on which they
are valued but before the Fund determines its net asset value.
Warrants
and Rights Risk. A
warrant gives the holder a right to purchase, at any time during a specified
period, a predetermined number of shares of common stock at a fixed price.
Unlike a convertible debt security or preferred stock a warrant does not pay
fixed dividends. A warrant may lack a liquid secondary market for resale. The
price of a warrant may fluctuate as a result of speculation or other factors. In
addition, the price of the underlying security may not reach, or have reasonable
prospects of reaching, a level at which the warrant can be exercised prudently
(in which case the warrant may expire without being exercised, resulting in a
loss of the Fund’s entire investment in the warrant). The failure to exercise
subscription rights to purchase common shares would result in the dilution of
the Fund’s interest in the issuing company.
For
further information about the risks of investing in the Fund, please see the
Fund’s SAI.
The
Investment Adviser
The
Fund’s investment adviser is Horizon Kinetics Asset Management LLC (“Kinetics”
or the “Investment Adviser”), 470 Park Avenue South, New York, New York 10016.
The Investment Adviser provides investment advisory services to a family of
seven mutual funds with discretionary management
authority
over approximately $6.950 billion in assets as of March 31, 2023. The
Investment Adviser is a wholly-owned subsidiary of Horizon Kinetics
LLC.
On
April 24, 2019, Kinetics Asset Management LLC (“KAM”), the Fund’s former
investment adviser, reorganized into Horizon Asset Management LLC (“HAM”),
following which HAM was renamed Horizon Kinetics Asset Management LLC. Both KAM
and HAM were wholly-owned subsidiaries of Horizon Kinetics LLC.
As
part of the reorganization, the Fund’s investment advisory agreement was
transferred from KAM to the Investment Adviser, and the Investment Adviser
replaced KAM as the Fund’s investment adviser. The reorganization resulted in no
other change to the terms of the investment advisory agreement, including the
advisory fee rates. Further, the portfolio managers, all of whom are now
employees of the Investment Adviser, have not changed as a result of the
reorganization. KAM was advised by legal counsel that the reorganization did not
result in an “assignment” of the investment advisory agreement (as such term is
defined in the Investment Company Act of 1940, as amended (the “1940 Act”).
The
Investment Adviser conducts investment research and supervision for the Fund and
is responsible for the purchase and sale of securities for the Fund. The
Investment Adviser is entitled to receive an annual fee from the Fund, for its
services of 1.00% of the Fund’s average daily net assets. The advisory fees paid
to the Investment Adviser for the fiscal year ended December 31, 2022 was
1.00%.
Kinetics,
as the Investment Adviser to the Fund, is engaged in a broad range of portfolio
management, portfolio advisory and other business activities. Kinetics’ services
are not exclusive to the Fund and nothing prevents it, or any affiliates, from
providing similar services to other investment funds and other clients (whether
or not their investment objectives, strategies, or criteria are similar to those
of the Fund) or from engaging in other activities.
A
discussion regarding the basis of the Board’s approval of the Advisory Agreement
is included in the Fund’s semi-annual report to shareholders dated June 30,
2022.
Portfolio
Managers
Steven
M. Bregman and Murray Stahl are jointly and primarily responsible for the
day-to-day management of the Fund’s portfolio. Mr. Bregman serves as the
President and a Managing Director and Senior Portfolio Manager of Kinetics, and
also is the President, a Managing Director and a member of the Board of
Directors for Horizon Kinetics. Mr. Stahl serves as the Chief Investment Officer
of Kinetics and Horizon Kinetics. He is also the Chairman of the Board of
Directors for Horizon Kinetics. Messrs. Bregman and Stahl have been portfolio
managers of the Fund since its inception in May 2007.
The
SAI provides additional information about each portfolio manager’s method of
compensation, other accounts managed by the portfolio managers and the portfolio
managers’ ownership of Fund securities.
Fund
Expenses
The
Fund is responsible for its own operating expenses (all of which will be borne
directly or indirectly by the Fund’s shareholders), including among others,
legal fees and expenses of counsel to the Fund and the Fund’s independent
directors; insurance (including directors’ and officers’ errors and omissions
insurance); auditing and accounting expenses; taxes and governmental fees;
listing fees; fees and expenses of the Fund’s custodians, administrators,
transfer agents, registrars and other service providers; expenses for portfolio
pricing services by a pricing agent, if any; expenses in connection with the
issuance and offering of shares; brokerage commissions and other costs of
acquiring or disposing of any portfolio holding of the Fund; and any litigation
expenses.
The
Investment Adviser has contractually agreed to waive its fees and/or pay for
operating expenses of the Fund to ensure that the total annual fund operating
expenses (excluding any front-end or contingent deferred loads, taxes, leverage
interest, brokerage commissions, acquired fund fees and expenses as determined
in accordance with Form N-1A, expenses incurred in connection with any merger or
reorganization, and extraordinary expenses such as litigation expenses) do not
exceed 1.50%, 2.25%, 1.25% and 1.45% of the average daily net assets of the
Advisor Class A Shares, Advisor Class C Shares, Institutional Class Shares and
No Load Class Shares, respectively. This agreement is in effect until
April 30, 2024, and it may be terminated before that date only by the
Company’s Board of Directors.
Any
reduction in advisory fees or payment of the Fund’s expenses made by the
Investment Adviser in a fiscal year may be reimbursed by the Fund for a period
ending three years after the date of reduction or payment if the Investment
Adviser so requests. This reimbursement may be requested from the Fund if the
aggregate amount of operating expenses for a fiscal year, as accrued each month,
does not exceed the lesser of (a) the limitation on Fund expenses in effect at
the time of the relevant reduction in advisory fees or payment of the Fund’s
expenses, or (b) the limitation on Fund expenses at the time of the request.
However, the reimbursement amount may not exceed the total amount of fees waived
or Fund expenses paid by the Investment Adviser and will not include any amounts
previously reimbursed to the Investment Adviser by the Fund. Any such
reimbursement is contingent upon the Board’s subsequent review of the reimbursed
amounts and no reimbursement may cause the total operating expenses paid by the
Fund in a fiscal year to exceed the applicable limitation on Fund expenses. The
Fund must pay current ordinary operating expenses before the Investment Adviser
is entitled to any reimbursement of fees and/or Fund expenses.
Portfolio
Holdings Information
A
description of the Fund’s policies and procedures with respect to the disclosure
of its portfolio securities is available in the Fund’s SAI. The Fund files its
portfolio holdings with the SEC and the holdings are publicly available twice
each fiscal year on Form N-CSR (with respect to each annual and semi-annual
period) and twice each year on Form N-PORT (with respect to the first and third
quarters of the Fund’s fiscal year). The annual and semi-annual reports are
available by contacting Kinetics Mutual Funds, Inc., c/o U.S. Bank Global Fund
Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701 or calling
1-800-930-3828. In addition, the Company may publish on its webpage (www.kineticsfunds.com)
month-end (a) top twenty portfolio holdings of the Fund and the percentage that
each holding represents of the Fund’s net assets and (b) top five performing and
bottom five performing portfolio holdings of the Fund, in all cases no earlier
than twenty calendar days after the end of each calendar month. This information
will be available on the website until the date on which the Fund files its next
quarterly portfolio holdings report on Form N-CSR or Part F of Form N-PORT with
the SEC or until the next month in which portfolio holdings are posted in
accordance with the above policy.
Valuation
of Fund Shares
Shares
of each Class of the Fund are sold at net asset value (“NAV”) per share plus any
applicable sales charge (see “Description of Classes”). The NAVs are determined
by the Fund as of the close of regular trading (generally 4:00 p.m. Eastern
Time) on each day that the New York Stock Exchange (the “Exchange”) is open for
unrestricted business. The Exchange is closed on the following holidays: New
Year’s Day, Martin Luther King, Jr.’s Day, Washington’s Birthday/President’s
Day, Good Friday, Memorial Day, Juneteenth National Independence Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Purchase and
redemption requests are priced based on the next NAV per share calculated after
receipt and acceptance of a completed purchase or redemption request. The NAV
for each Class of shares of the Fund is determined by dividing the value of the
Fund’s securities, cash and other assets attributable to that Class, minus all
expenses and liabilities attributable to that Class, by the number of shares
outstanding of that Class. The NAV for a Class of shares of the Fund takes into
account the expenses and fees of that Class, including management,
administration, distribution and shareholder servicing fees, which are accrued
daily.
The
Fund’s equity securities are valued each day at the last quoted market sale
price on the securities’ principal exchange. If there is no sales price, a
security is valued at the last reported bid price. Securities listed on the
NASDAQ Stock Market, Inc., however, are valued using the Nasdaq Official Closing
Price (“NOCP”), and if no NOCP is available, then at the last reported bid
price. If market quotations are not readily available or if events occur that
may significantly affect the value of a particular security between the time
trading ends on a particular security and the close of regular trading on the
Exchange, securities will be valued at their fair market value as determined in
good faith in accordance with procedures adopted by the Investment Adviser and
approved by the Company’s Board of Directors. The Board has designated the
Investment Adviser as its “valuation designee” under Rule 2a-5 of the 1940 Act,
subject to its oversight. Situations involving significant events may include
those where: a security’s trading has been halted or suspended; the security has
been de-listed from a national exchange; or the security has not been traded for
an extended period of time. In addition, the prices of foreign securities may be
affected by events that occur after the close of a foreign market but before the
Fund prices its shares. See “Trading in Foreign Securities.” The Fund may use
independent pricing services to assist in calculating the NAV per
share.
Futures,
options on futures and swap contracts that are listed or traded on a national
securities exchange, commodities exchange, contract market or over-the-counter
markets and that are freely transferable will be valued at the composite price,
using the National Best Bid and Offer quotes (“NBBO”). NBBO consists of the
highest bid price and lowest ask price across any of the exchanges on which an
option is quoted thus providing a view across the entire U.S. options
marketplace. Composite option pricing calculates the mean of the highest bid
price and lowest ask price across the exchanges where the option is traded. If a
composite price is not available, then a quote is provided by one of the
authorized pricing vendors. If neither a composite price nor a quote from an
authorized pricing provider is available, and it is the day of expiration or
post-expiration, expiring options will be priced at intrinsic value.
Non-exchange traded options also will be valued at the mean between the last bid
and asked quotations. Securities that have no public market and all other assets
of the Fund are considered at such value as the Investment Adviser, as valuation
designee, may determine in good faith, in accordance with the Fund’s valuation
procedures as adopted by the Adviser and approved by the Company’s Board of
Directors.
The
Fund’s debt obligations (including convertible securities) that are either
investment grade or non-investment grade and irrespective of days to maturity
are valued at evaluated mean by one of the authorized third party pricing agents
which rely on various valuation methodologies such as matrix pricing and other
analytical pricing models as well as market transactions and dealer quotations.
Certain instruments such as repurchase agreements, demand notes, and money
market mutual funds are traded at cost and there are no market values available
for those instruments from third parties. Those instruments
are
priced at cost. Debt securities that are not priced by an independent third
party pricing agent shall be valued (a) at the last sale price if such last sale
occurred within the previous five business days, and (b) if there was no
sale price during the previous five business days, at the average of the bids,
or the sole bid if there is only one. Debt securities and other securities,
which, in the judgment of the Investment Adviser, do not properly represent the
value of a security will be valued at their fair market value as determined in
good faith by the Investment Adviser, as valuation designee, in accordance with
procedures adopted by the Investment Adviser and approved by the Company’s Board
of Directors.
Fair
valuation of securities introduces an element of subjectivity to the pricing of
securities. As a result, the price of a security determined through fair
valuation techniques may differ from the price quoted or published by other
sources and may not accurately reflect the market value of the security when
trading resumes. If a reliable market quotation becomes available for a security
formerly valued through fair valuation techniques, the Investment Adviser
compares the new market quotation to the fair value price to evaluate the
effectiveness of the Fund’s fair valuation procedures.
Trading
in Foreign Securities
Trading
in foreign securities may be completed at times when the Exchange is closed. In
computing the NAV per share of the Fund, the value of a foreign security is
determined as of the close of trading on the foreign exchange on which it is
principally traded or as of the scheduled close of trading on the Exchange,
whichever is earlier, at the closing sales prices provided by approved pricing
services or other alternate sources. In the absence of sales, the last available
closing bid will be used. Securities and assets for which market quotations are
not readily available are valued at fair value as determined in good faith by
the Investment Adviser, as valuation designee. Values of foreign securities are
translated from the local currency into U.S. dollars on the basis of the foreign
currency exchange rates, as provided by an independent pricing service or
reporting agency, generally prior to the close of the Exchange. Occasionally,
events affecting the value of foreign securities and such exchange rates occur
between the time at which they are determined and the close of the Exchange,
which events would not be reflected in the computation of the Fund’s NAV. If
events materially affecting the value of such securities or currency exchange
rates occur during such time period, the securities will be valued at their fair
value as determined in good faith by the Investment Adviser, as valuation
designee.
How
to Purchase Shares
In
General
Shares
of the Fund are sold at NAV plus any applicable sales charge, and will be
credited to a shareholder’s account based on the NAV per share next computed
after an order and payment is received. The minimum initial investment for both
regular accounts and individual retirement accounts is $2,500 ($2,000 for
Coverdell Education Savings Accounts). There is no minimum on subsequent
investments for all account types. The Company reserves the right to vary or
waive any minimum investment requirement. The Fund reserves the right to reject
any purchase order if, in its opinion, it is in the Fund’s best interest to do
so. A service fee of $25 will be deducted from a shareholder’s Fund account, in
addition to any loss sustained by the Fund, for any purchases that do not clear.
Your order will not be accepted until a completed New Account Application is
received by the Fund or its transfer agent, U.S. Bank Global Fund Services (in
such capacity, the “Transfer Agent”).
UBS
Financial Services, Inc. (“UBS-FS”), pursuant to an agreement with the Fund, may
make Institutional Class Shares available on certain brokerage platforms at
UBS-FS. For such platforms, UBS-FS may charge commissions on brokerage
transactions in the Fund’s Institutional Class Shares. A shareholder should
contact UBS-FS for information about the commissions charged by UBS-FS for such
transactions. The minimum for Institutional Class Shares is waived for
transactions through such brokerage platforms at UBS-FS.
Investing
by Telephone
If
you have accepted the Telephone and Internet Options on the applicable New
Account Application (the “Application”) and your account has been open for seven
business days, you may purchase additional shares by telephoning the Fund toll
free at 1-800-930-3828. This option allows investors to move money from their
bank account to their Fund account upon request. Only bank accounts held at
domestic institutions that are Automated Clearing House (“ACH”) members may be
used for telephone transactions. Your purchase will take place at the NAV per
share plus any applicable sales charge determined on the day your order is
placed, provided that your order is received prior to 4:00 p.m. Eastern Time.
During
periods of high market activity, you may encounter higher than usual wait times.
Please allow sufficient time to ensure that you will be able to complete your
telephone transaction prior to market close. Once a telephone transaction has
been placed, it cannot be canceled or modified, after the close of regular
trading on the Exchange (generally, 4:00 p.m., Eastern Time).
There
is no minimum on telephone purchases. You may not make your initial purchase of
the Fund’s shares by telephone.
Automatic
Investment Plan
Once
an account has been established, you may purchase shares of the Fund through an
Automatic Investment Plan (“AIP”). You can have money automatically transferred
from your checking, savings or bank money market account on a monthly basis.
There is no minimum purchase amount in order to participate in the
AIP.
To
be eligible for the AIP, your bank must be a domestic institution that is an ACH
member. If your bank rejects your payment, the Transfer Agent will charge a $25
fee to your account. To begin participating in the AIP, please complete the AIP
section on the Application or call the Transfer Agent at 1-800-930-3828 with any
questions. The first AIP purchase will take place no earlier than seven business
days after the Transfer Agent has received your request. Any request to change
or terminate your AIP should be submitted to the Transfer Agent five days prior
to the desired effective date of such change or termination. The Fund may modify
or terminate the AIP at any time.
Purchase
by Mail
To
purchase the Fund’s shares by mail, simply complete and sign the Application and
mail it, along with a check made payable to [NAME OF FUND], c/o Kinetics Mutual
Funds, Inc., to:
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| Regular
Mail |
Overnight
or Express Mail |
|
Kinetics
Mutual Funds, Inc. |
Kinetics
Mutual Funds, Inc. |
|
[NAME
OF FUND] |
[NAME
OF FUND] |
|
c/o
U.S. Bank Global Fund Services |
c/o
U.S. Bank Global Fund Services |
|
P.O.
Box 701 |
615
East Michigan Street, 3rd Floor |
|
Milwaukee,
WI 53201-0701 |
Milwaukee,
WI 53202 |
The
Fund does not consider the U.S. Postal Service or other independent delivery
services to be its agents. Therefore, deposit in the mail or with such services,
or receipt at U.S. Bank Global Fund Services post office box, of purchase orders
or redemption requests does not constitute receipt by the transfer agent of the
Fund. Receipt of purchase orders or redemption requests is based on when the
order is received at the Transfer Agent’s offices.
All
purchases by check must be in U.S. dollars drawn on a bank located within the
United States. The Fund will not accept payment in cash or money orders. To
prevent check fraud, the Fund will not accept third party checks, Treasury
checks, credit card checks, traveler’s checks or starter checks for the purchase
of shares. The Fund is unable to accept post-dated checks or any conditional
order or payment.
Purchase
by Wire
To
open an account by wire, a completed Application is required before your wire
can be accepted. You can mail or overnight deliver your Application to the
Transfer Agent at the above address. Upon receipt of your completed Application,
an account will be established for you. You will need to provide the assigned
account number to your bank when instructing it to wire the funds. Your bank
must include along with the wire the name of the Fund, the account number and
your name so that monies can be correctly applied. To ensure proper application
of wired funds, please call 1-800-930-3828 to notify the applicable Fund that
the wire is coming. Wired funds must be received prior to 4:00 p.m. Eastern Time
to be eligible for same day pricing. The Fund and U.S. Bank N.A. are not
responsible for delays resulting from the banking or Federal Reserve wire
system. Please use the following wiring instructions:
Wire
to: U.S. Bank N.A.
ª ABA
Number: 075000022
ª Credit:
U.S. Bancorp Fund Services, LLC
ª Account:
112-952-137
ª Further
Credit: Kinetics Mutual Funds, Inc.
[NAME
OF FUND]
(Shareholder
Name/Account Registration)
(Shareholder
Account Number)
Subsequent
Investments
You
may add to your account at any time by purchasing shares by mail, by telephone,
or by wire. You may also purchase additional shares online if you have
established an online account. To purchase by mail, submit your check with the
Invest by Mail form attached to your most recent confirmation statement received
from the Transfer Agent. If you do not have the Invest by Mail form, include the
Fund name, your name, address, and account number on a separate piece of paper
along with your check. To purchase by telephone, call 1-800-930-3828 prior to
4:00 p.m. Eastern Time to place your order. To ensure proper application of
wired funds, please call 1-800-930-3828 to notify the Fund that the wire is
coming. All purchase requests must include your shareholder account
number.
Individual
Retirement Accounts
You
may invest in the Fund by establishing a tax-sheltered IRA. The Fund offers
Traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, and Coverdell Education Savings
Accounts. For additional information on IRA options, please call
1-800-930-3828.
Investing
Through Brokers or Agents
You
may invest in the Fund through brokers or agents who have entered into selling
agreements with the Fund’s distributor. The broker or agent may set their own
initial and subsequent investment minimums. You may be charged a fee if you use
a broker or agent to buy or redeem shares of the Fund. A financial intermediary
may impose different sales charge discounts. Sales
charge discount variations specific to financial intermediaries are described in
Appendix A to this Prospectus - Financial Intermediary Sales Charge Variations
(“Appendix A”).
How
to Redeem Shares
In
General
You
may redeem part or all of your shares of the Fund on any business day that the
Fund calculates its NAV per share. To redeem shares, you must contact the Fund
in which you are invested either by mail or by phone to place a redemption
order. Redemption requests may also be placed online if you have established an
online account. You should request your redemption prior to market close to
obtain that day’s closing NAV. Redemption requests received after the close of
the Exchange will be treated as though received on the next business
day.
The
Fund will generally send redemption proceeds the next business day and, in any
event, no later than seven days after the receipt of a redemption request in
“good order” (see below). The Fund typically sends the redemption proceeds on
the next business day (a day when the Exchange is open for normal business)
after the redemption request is received in good order and prior to market
close, regardless of whether the redemption proceeds are sent via check, wire,
or automated clearing house (ACH) transfer. Under unusual circumstances, the
Fund may suspend redemptions, or postpone payment for up to seven days, as
permitted by federal securities law. Please note, however, that when a purchase
order has been made by check or electronic funds transfer through the ACH
network, the Fund will not be able to send your redemption proceeds until the
purchase amount has cleared. This may take up to 12 calendar days. This delay
can be avoided by purchasing shares by wire.
The
Fund typically expects to meet redemption requests by paying out proceeds from
cash or cash equivalent portfolio holdings, or by selling portfolio holdings. In
stressed market conditions, redemption methods may include redeeming in
kind.
Redemption
proceeds may be sent to the address of record, wired to a shareholder’s bank
account of record, or sent via electronic funds transfer through the ACH network
to the shareholder’s bank account of record. Wires are subject to a $15 fee paid
by the investor, but the investor does not incur any charge when proceeds are
sent via the ACH system. If the redemption proceeds are requested to be sent to
an address other than the address of record, or if the address of record has
been changed within 15 days of the redemption request, the request must be in
writing with your signature guaranteed. Signature guarantees can be obtained
from domestic banks, brokers, dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
association, as well as from participants in the New York Stock Exchange
Medallion Signature Program and the Securities Transfer Agents Medallion Program
(“STAMP”), but
not from a
notary
public.
The Fund will not be responsible for interest lost on redemption amounts due to
lost or misdirected mail.
A
signature guarantee, from either a Medallion program member or a non-Medallion
program member, of each owner is required in the following
situations:
ª If
you are requesting a change in account ownership;
ª When
redemption proceeds are payable or sent to any person, address or bank account
not on record;
ª Written
requests to wire redemption proceeds (if not previously authorized on the
account);
ª When
a redemption request is received by the Transfer Agent and the account address
has changed within the last 15 calendar days.
Non-financial
transactions, including establishing or modifying certain services on an
account, may require a signature guarantee, signature verification from a
Signature Validation Program member, or other acceptable form of authentication
from a financial institution source. In addition to the situations described
above, the Fund and/or the Transfer Agent reserve the right at their discretion
to require a
signature
guarantee or signature validation in other circumstances. The Fund reserves the
right to waive any signature guarantee requirement at its/their
discretion.
Written
Redemption
You
can execute most redemptions by furnishing an unconditional written request to
the Fund in which you are invested to redeem your shares at the current NAV per
share. Redemption requests in writing should be sent to the Transfer Agent at:
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|
| |
| Regular
Mail |
Overnight
or Express Mail |
|
Kinetics
Mutual Funds, Inc. |
Kinetics
Mutual Funds, Inc. |
|
[NAME
OF FUND] |
[NAME
OF FUND] |
|
c/o
U.S. Bank Global Fund Services |
c/o
U.S. Bank Global Fund Services |
|
P.O.
Box 701 |
615
East Michigan Street, 3rd Floor |
|
Milwaukee,
WI 53201-0701 |
Milwaukee,
WI 53202 |
The
Fund does not consider the U.S. Postal Service or other independent delivery
services to be its agents. Therefore, deposit in the mail or with such services,
or receipt at U.S. Bank Global Fund Services post office box, of purchase orders
or redemption requests does not constitute receipt by the transfer agent of the
Fund. Receipt of purchase orders or redemption requests is based on when the
order is received at the Transfer Agent’s offices.
Requests
for redemption in “good order” must:
ª indicate
the name of the Fund;
ª be
signed exactly as the shares are registered, including the signature of each
owner (including a signature guarantee when required);
ª specify
the number of shares or dollar amount to be redeemed; and
ª indicate
your account registration number.
Telephone
Redemption
If
you are authorized to perform telephone transactions (either through your
Application or by subsequent arrangement in writing with the Fund) you may
redeem shares in any amount by instructing the Fund in which you are invested by
phone at 1-800-930-3828. A signature guarantee or signature validation may be
required of all shareholders in order to add or change telephone redemption
privileges on an existing account.
Note:
Neither the Fund nor any of its service providers will be liable for any loss or
expense in acting upon instructions that are reasonably believed to be genuine.
To confirm that all telephone instructions are genuine, the Fund will use
reasonable procedures, such as requesting:
ª your
Fund account number;
ª the
name in which your account is registered;
ª the
social security or tax identification number under which the account is
registered; and
ª the
address of the account holder, as stated in the Application.
Note:
If an account has more than one owner or authorized person, the Fund will accept
telephone instructions from any one owner or authorized person.
During
periods of high market activity, you may encounter higher than usual wait times.
Please allow sufficient time to ensure that you will be able to complete your
telephone transaction prior to market close. If you are unable to contact the
Fund by telephone, you may make your redemption request in
writing.
Once a telephone transaction has been placed, it cannot be canceled or modified
after the close of regular trading on the NYSE (generally, 4:00 p.m., Eastern
time).
Wire
Redemption
Wire
transfers may be arranged to redeem shares. However, the Transfer Agent charges
a $15 fee per wire redemption against your account for this service. There is no
minimum on wire redemptions.
Systematic
Withdrawal Plan
If
you own shares with a value of $10,000 or more ($5,000,000 for Institutional
Class shares), you may participate in the Systematic Withdrawal Plan. The
Systematic Withdrawal Plan allows you to make automatic withdrawals from your
account at regular intervals (monthly, quarterly or annually). Proceeds can be
mailed via check to the address of record, or sent via electronic funds transfer
through the ACH system to your bank account if your bank is an ACH system
member. If the date you select to have the withdrawal made is a weekend or
holiday, the redemption will be made on the next business day. Money will be
transferred from your Fund account to the account you chose at the interval you
select on the Application. If you expect to purchase additional shares of the
Fund, it may not be to your advantage to participate in the Systematic
Withdrawal Plan because of the possible adverse tax consequences of making
contemporaneous purchases and redemptions. There is no minimum on systematic
withdrawals. Any request to change or terminate your Systematic Withdrawal Plan
should be submitted to the Transfer Agent five days prior to the next scheduled
withdrawal.
The
Fund’s Right to Redeem an Account
The
Fund reserves the right to redeem the shares of any shareholder, other than a
shareholder who is an active participant in the AIP, whose account balance is
less than $1,000, other than as a result of a decline in the NAV of the Fund.
The Fund will provide shareholders with written notice 30 days prior to
redeeming the shareholder’s account.
IRA
Redemption
If
you are redeeming shares from an IRA, you must indicate on your written
redemption request whether or not to withhold federal income tax. Requests that
do not indicate a preference will be subject to withholding. Shares held in IRA
accounts may be redeemed by telephone at 1-800-930-3828. Investors will be asked
whether or not to withhold taxes from any distribution.
Householding
By
signing the Application, you acknowledge and consent to the householding
(i.e.,
consolidation of mailings) of regulatory documents such as prospectuses, and
certain other shareholder documents. In an effort to decrease costs, the Funds
will reduce the number of duplicate prospectuses, supplements and certain other
shareholder documents you receive by sending only one copy of each to those
addresses shared by two or more accounts. Call toll-free at 1-800-930-3828 to
request individual copies of documents; if your shares are held through a
Financial Intermediary, please contact them directly. The Funds will begin
sending individual copies 30 days after receiving your request. This policy does
not apply to account statements.
Shareholder
Inactivity/Lost Shareholder
It
is important that the Fund maintains a correct address for each investor. An
incorrect address may cause an investor’s account statements and other mailings
to be returned to the Fund. Based upon statutory requirements for returned mail,
the Fund will attempt to locate the investor or rightful owner of the account.
If the Fund is unable to locate the investor, then they will determine whether
the investor’s account can legally be considered abandoned. The Fund is legally
obligated to escheat (or transfer) abandoned property to the appropriate state’s
unclaimed property administrator in accordance with statutory requirements. The
investor’s last known address of record determines which state has jurisdiction.
Under certain circumstances, if no activity occurs in an account within a time
period
specified
by state law, your shares in the Fund may be transferred to that state. Please
contact the Transfer Agent toll-free at 1-800-930-3828 at least annually to
ensure your account remains in active status.
If
you are a resident of the state of Texas, you may designate a representative to
receive notifications that, due to inactivity, your mutual fund account assets
may be delivered to the Texas Comptroller. Please contact the Transfer Agent if
you wish to complete a Texas Designation of Representative form.
Redemption
Fees
The
Fund is designed for long-term investors willing to accept the risks associated
with a long-term investment. In accordance with policies and procedures adopted
by the Board of Directors of the Company, frequent purchases and redemptions of
Fund shares are not encouraged but are generally permitted by the Fund. Such
purchases and redemptions may have an adverse effect on other Fund shareholders,
including, without limitation, the possibility of disrupting portfolio
management strategies, increasing brokerage and administrative costs, harming
Fund performance and possible dilution of the value of Fund shares held by
long-term shareholders. The Company may, in its sole discretion, reject purchase
orders when, in the judgment of management, such rejection is in the best
interest of the Fund and its shareholders. The Fund may assess a 2.00% fee on
the redemption or exchange of Fund shares held for 30 days or less from the date
of purchase. These fees are paid to the Fund to help offset any potential
transaction costs.
The
Fund will use the first-in, first-out method to determine the 30 day holding
period. Under this method, the date of the redemption or exchange will be
compared to the earliest purchase date of shares held in the account. If this
holding period is 30 days or less, the redemption fee will be
assessed.
The
redemption fee will not apply to any shares purchased through reinvested
distributions (dividends and capital gains), or to redemptions made under the
Fund’s systematic programs, as these transactions are typically de minimis. This
fee will also not be assessed to the participants in employer-sponsored
retirement plans that are held at the Fund in an omnibus account (such as
401(k), 403(b), 457, Keogh, Profit Sharing Plans, and Money Purchase Pension
Plans) or to accounts held under trust agreements at a trust institution held at
the Fund in an omnibus account. The redemption fee will also not be assessed to
accounts of the Investment Adviser or its affiliates used to capitalize the Fund
as such accounts will be used specifically to control the volatility of
shareholder subscriptions and redemptions to avoid adverse effects to the Fund.
In addition, the Fund is authorized to waive redemption fees for redemptions
effected pursuant to asset allocation programs, wrap fee programs, other
investment programs offered by financial institutions, and the Company reserves
the right to lower or waive any redemption fee. Although frequent purchases and
redemptions of Fund shares are generally permitted, the Fund only intends to
waive redemption fees for redemptions the Fund reasonably believes do not raise
frequent trading or market timing concerns.
The
Fund reserves the right to modify or eliminate the redemption fees or waivers at
any time and will give shareholders 60 days’ prior written notice of any
material changes, unless otherwise provided by law. The redemption fee policy
may be modified or amended in the future to reflect, among other factors,
regulatory requirements mandated by the SEC.
Currently,
the Fund is limited in its ability to assess or collect the redemption fee on
all shares redeemed by financial intermediaries on behalf of its customers. For
example, where a financial intermediary is not able to determine if the
redemption fee applies and/or is not able to assess or collect the fee, or does
not collect the fee at the time of redemption, the Fund will not receive the
redemption fee. If Fund shares are redeemed by a financial intermediary at the
direction of its customers, the Fund may not know whether a redemption fee is
applicable or the identity of the customer who should be assessed the redemption
fee. Due to operational differences, a financial intermediary’s methods for
tracking and calculating the redemption fee may differ in some respects from
that of the Fund. If necessary, the Fund may prohibit
additional
purchases of Fund shares by a financial intermediary or by certain of the
intermediaries’ customers.
Notice
of Customer Verification
In
compliance with the USA PATRIOT Act of 2001, please note that the Transfer Agent
will verify certain information on your Application as part of the Fund’s
Anti-Money Laundering Program. As requested on the Application, you must supply
your full name, date of birth, social security number and permanent street
address. If you are opening the account in the name of a legal entity
(e.g.,
partnership, limited liability company, business trust, corporation, etc.), you
must also supply the identity of the beneficial owners. Mailing addresses
containing only a P.O. Box will not be accepted. Please contact the Transfer
Agent at 1-800-930-3828 if you need additional assistance when completing your
Application.
If
we do not have a reasonable belief as to the identity of a shareholder, the
account will be rejected or you will not be allowed to perform a transaction on
the account until such information is received. In the rare event that the
Transfer Agent is unable to verify your identity, the Fund reserves the right to
redeem your account at the current day’s net asset value.
Exchange
Privilege
If
you have accepted the Telephone and Internet Options on the Application, you can
exchange your shares in any Fund for shares of the same class of any other Fund
offered by the Company, (e.g.,
Advisor Class A shares for Advisor Class A shares). If the exchange is requested
via telephone, a $5 per exchange transaction cost will be assessed. You should
carefully read the Prospectus of the Fund before exchanging shares into that
Fund. Be advised that exercising the exchange privilege consists of two
transactions: a sale of shares in one Fund and the purchase of shares in another
Fund. Therefore, an exchange of Fund shares held for 30 days or less may be
subject to a 2.00% redemption fee. See “Redemption Fees” above. Further,
exchanges may have certain tax consequences and you could realize short- or
long-term capital gains or losses. Exchanges are generally made only between
identically registered accounts unless you send written instructions with a
signature guarantee requesting otherwise. You should request your exchange prior
to market close to obtain that day’s closing NAV. Exchange requests received
after the close of the Exchange will be treated as though received on the next
business day. In all cases, shareholders will be required to pay a sales charge
only once.
Call
1-800-930-3828 to learn more about the other funds or classes offered by the
Company and about exercising your exchange privilege.
Distributions
and Taxes
Distributions
Distributions
(whether treated for tax purposes as ordinary income, qualified dividend income
or long-term capital gains) to shareholders of the Fund are generally paid in
additional shares of the same Class of the Fund in which shareholders are
already invested, with no sales charge, based on the NAV per share of that Class
as of the close of business on the record date for such distributions. However,
you may elect on the Application to receive distributions as
follows:
Option 1:
To receive income dividends and capital gain distributions in additional Fund
shares.
Option 2:
To receive all income dividends and/or capital gain distributions in cash.
Option 3:
To reinvest capital gain distributions in additional Fund shares, while
receiving income distribution in cash.
Option 4:
To reinvest all income dividends in additional Fund shares, while receiving
capital gain distributions in cash.
You
may change your dividend and capital gain distribution election in writing or by
calling the Transfer Agent in advance of the next distribution.
The
Fund intends to pay any dividends from investment company taxable income and
distributions representing capital gain at least annually, usually in December.
The Fund will advise each shareholder annually of the amounts of dividends from
investment company taxable income and of net capital gain distributions
reinvested or paid in cash to the shareholder during the calendar
year.
If
you selected any distributions to be paid in cash and the U.S. Postal Service
cannot deliver your distribution checks, or if your distribution checks remain
uncashed for six months, your distribution checks will be reinvested in your
account at the then current NAV of the appropriate Fund and your election will
be converted to the purchase of additional shares.
Taxes
The
following is a summary of certain United States tax considerations relevant
under current law, which may be subject to change in the future. Except where
otherwise indicated, the summary assumes you are a U.S. citizen or resident or
otherwise subject to U.S. federal income tax. You should consult your tax
adviser for further information regarding federal, state, local and/or foreign
tax consequences relevant to your specific situation.
Fund
Distributions
The
Fund has qualified and intends to continue to qualify for federal tax purposes
as a regulated investment company and to distribute substantially all of its
taxable income, including its net capital gain (the excess of net long-term
capital gain over net short-term capital loss). Except as otherwise noted below,
you will generally be subject to federal income tax on Fund distributions to you
regardless whether they are paid in cash or reinvested in additional shares.
Fund distributions attributable to short-term capital gains and net investment
income will generally be taxable to you as ordinary income, except as discussed
below.
Distributions
attributable to the net capital gain of the Fund generally are taxable to you as
long-term capital gain, regardless of how long you have held your shares. The
maximum long-term capital gain rate applicable to individuals, estates and
trusts is currently 23.8% (which includes a 3.8% Medicare tax).
Distributions
of “qualifying dividends” will also generally be taxable to you at long-term
capital gain rates, as long as certain requirements are met. In general, if 95%
or more of the gross income of the Fund (other than net capital gain) consists
of dividends received from domestic corporations or “qualified” foreign
corporations (“qualifying dividends”), then all distributions paid by the Fund
to individual shareholders will be taxed at long-term capital gain rates. But if
less than 95% of the gross income of the Fund (other than net capital gain)
consists of qualifying dividends, then distributions paid by the Fund to
individual shareholders will be qualifying dividends only to the extent they are
derived from qualifying dividends earned by the Fund. For the lower rates to
apply, you must have owned your Fund shares for at least 61 days during the
121-day period beginning on the date that is 60 days before the Fund’s
ex-dividend date (and the Fund will need to have met a similar holding period
requirement with respect to the shares of the corporation paying the qualifying
dividend). The amount of the Fund’s distributions that qualify for this
favorable treatment may be reduced as a result of the Fund’s securities lending
activities (if any), a high portfolio turnover rate or investments in debt
securities or non-qualified foreign corporations.
Distributions
from the Fund will generally be taxable to you in the taxable year in which they
are paid, with one exception. Distributions declared by the Fund in October,
November or December and paid in January of the following year are taxed as
though they were paid on December 31. You will be notified annually of the tax
status of distributions to you.
A
portion of distributions attributable to investments in U.S. corporations paid
by the Fund to shareholders who are corporations may also qualify for the
dividends-received deduction for corporations, subject to certain holding period
requirements and debt financing limitations. The amount of such dividends
qualifying for this deduction may, however, be reduced as a result of the Fund’s
securities lending activities (if any), by a high portfolio turnover rate or by
investments in debt securities.
You
should note that if you purchase shares just before a distribution, the purchase
price will reflect the amount of the upcoming distribution, but you will be
taxed on the entire amount of the distribution received, even though, as an
economic matter, the distribution simply constitutes a return of capital. This
adverse tax result is known as “buying into a dividend.”
Sales
and Exchanges
You
will generally recognize taxable gain or loss for federal income tax purposes on
a sale, exchange or redemption of your shares in the Fund, including an exchange
of shares pursuant to the Fund’s exchange privilege, based on the difference
between your tax basis in the shares and the amount you receive for them.
Generally, you will recognize long-term capital gain or loss if you have held
your Fund shares for over twelve months at the time you dispose of
them.
Any
loss realized on shares held for six months or less will be treated as a
long‑term capital loss to the extent of any capital gain dividends that were
received on the shares. Additionally, any loss realized on a disposition of
shares of the Fund may be disallowed under “wash sale” rules to the extent the
shares disposed of are replaced with other shares of the Fund within a period of
61 days beginning 30 days before and ending 30 days after the shares are
disposed of, such as pursuant to a dividend reinvestment in shares of the Fund.
If disallowed, the loss will be reflected in an upward adjustment to the basis
of the shares acquired.
For
shares acquired on or after January 1, 2012, the Fund (or relevant broker or
financial adviser) are required to compute and report to the Internal Revenue
Service (the “IRS”) and furnish to Fund shareholders cost basis information when
such shares are sold or exchanged. The Fund has elected to use the average cost
method, unless you instruct the Fund to use a different IRS-accepted cost basis
method, or choose to specifically identify your shares at the time of each sale
or exchange. If your account is held by your broker or other financial adviser,
they may select a different cost basis method. In these cases, please contact
your broker or other financial adviser to obtain information with respect to the
available methods and elections for your account. You should carefully review
the cost basis information provided by the Fund and make any additional basis,
holding period or other adjustments that are required when reporting these
amounts on your federal and state income tax returns. Fund shareholders should
consult with their tax advisers to determine the best IRS-accepted cost basis
method for their tax situation and to obtain more information about how the cost
basis reporting requirements apply to them.
IRAs
and Other Tax-Qualified Plans
One
major exception to the preceding tax principles is that distributions on, and
sales, exchanges and redemptions of, shares held in an IRA (or other
tax‑qualified plan) will not be currently taxable unless such shares were
acquired with borrowed funds.
Backup
Withholding
On
the Application, you will be asked to certify that your social security number
or taxpayer identification number is correct and that you are not subject to
backup withholding. If you (i) fail to provide a correct taxpayer identification
number in the manner required; (ii) are subject to backup withholding by the IRS
for failure to properly include on your return payments of taxable interest or
dividends; or (iii) fail to certify that you are not subject to backup
withholding when required to do so or that you are an “exempt recipient,” the
IRS may, in certain cases, require the Fund to withhold a
percentage
of dividends or redemption or exchange proceeds. The Fund reserves the right to
reject any Application that does not include a certified social security or
taxpayer identification number. The current backup withholding rate is 24%.
U.S.
Tax Treatment of Foreign Shareholders
Generally,
nonresident aliens, foreign corporations and other foreign investors are subject
to 30% withholding tax on dividends paid by a U.S. corporation, although the
rate may be reduced for an investor that is a qualified resident of a foreign
country with an applicable tax treaty with the United States (provided that the
shareholder furnishes the Fund with a properly completed Form W-8BEN or
W-8BEN-E, as applicable, to establish entitlement for these treaty benefits). In
the case of a regulated investment company such as the Fund, however, certain
categories of dividends are exempt from the 30% withholding tax. These generally
include dividends attributable to the Fund’s net capital gains (the excess of
net long-term capital gains over net short-term capital loss), dividends
attributable to the Fund’s interest income from U.S. obligors and dividends
attributable to net short-term capital gains of the Fund.
Foreign
shareholders will generally not be subject to U.S. tax on gains realized on the
sale, exchange or redemption of shares in the Fund, except that a nonresident
alien individual who is present in the United States for 183 days or more in a
calendar year will be taxable on such gains and on capital gain dividends from
the Fund.
In
contrast, if a foreign investor conducts a trade or business in the United
States and the investment in the Fund is effectively connected with that trade
or business, then the foreign investor’s income from the Fund will generally be
subject to U.S. federal income tax at graduated rates in a manner similar to the
income of a U.S. citizen or resident.
The
Fund will also generally be required to withhold 30% tax on certain payments to
foreign entities that do not provide a Form W-8BEN-E that evidences their
compliance with, or exemption from, specified information reporting requirements
under the Foreign Account Tax Compliance Act.
All
foreign investors should consult their own tax advisers regarding the tax
consequences in their country of residence of an investment in the
Fund.
State
and Local Taxes
You
may also be subject to state and local taxes on distributions, sales, exchanges
and redemptions. State income taxes may not apply, however, to any portions of
the Fund’s distributions, if any, that are attributable to interest on U.S.
government securities or interest on securities of the particular state or
localities within the state in which you live. You should consult your tax
adviser regarding the tax status of distributions in your state and
locality.
More
tax information relating to the Fund is provided in the SAI.
Distribution
of Shares
Rule
12b-1 Plan
The
Fund has adopted separate Retail Distribution Plans pursuant to Rule 12b-1 under
the 1940 Act, which allows the Fund to pay distribution fees for the sale and
distribution of its Advisor Class A shares and Advisor Class C shares,
respectively. Under the Plan for Advisor Class A shares, the Fund may pay as
compensation up to an annual rate of 0.50% (currently limited to 0.25%) of the
average daily NAV of Advisor Class A shares to the distributor or other
qualified recipients under the Plan. Under the Plan for Advisor Class C shares,
the Fund may pay as compensation up to an annual rate of 0.75% of the average
daily NAV of Advisor Class C shares to the distributor. As these fees are paid
out of the Fund’s assets on
an
on-going basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.
Distributor
Kinetics
Funds Distributor LLC (“KFD”), an affiliate of the Investment Adviser, 470 Park
Avenue South, New York, New York 10016, is the distributor for the shares of the
Fund. KFD is a registered broker-dealer and member of the Financial Industry
Regulatory Authority, Inc. Shares of the Fund are offered on a continuous
basis.
Shareholder
Servicing Agents
Pursuant
to separate shareholder servicing plans, the Investment Adviser is responsible
for paying various shareholder servicing agents for performing shareholder
servicing functions and maintaining shareholder accounts. These agents have
written shareholder servicing agreements with the Investment Adviser and perform
these functions on behalf of their clients who own shares of the Fund. For this
service, the Investment Adviser receives an annual shareholder servicing fee
from each Class equal to 0.25% of the Fund’s average daily net assets
attributable to that Class. The Investment Adviser has contractually agreed to
reimburse the Fund a portion of the shareholder servicing fee in excess of 0.05%
of the average daily net assets of the Institutional Class until at least
April 30, 2024.
Arrangements
with Certain Financial Institutions
The
Investment Adviser and/or its affiliates may make payments to selected
affiliated or unaffiliated broker-dealers and other financial institutions
(“Financial Institutions”) from time to time in connection with the sale,
distribution, retention and/or servicing of shares of the Fund and other funds
managed by the Investment Adviser or its affiliates. These payments are made out
of the Investment Adviser’s, and/or its affiliates’, own assets and are not an
additional charge to the Fund. The payments are in addition to the shareholder
servicing fees described in this Prospectus. The amount of such payments may be
significant in amount and the prospect of receiving any such payments may
provide Financial Institutions or their employees with an incentive to favor
sales of shares of the Fund over other investment options. You should contact
your Financial Institution for more information about the payments it may
receive and potential conflicts of interest.
Fund
Administrator
U.S.
Bank Global Fund Services (“Fund Services”) serves as administrator to the Fund.
Custodian,
Transfer Agent, Dividend Disbursing Agent and Fund Accountant
U.S.
Bank N.A. serves as Custodian for the Fund’s cash and securities. The Custodian
does not assist in, and is not responsible for, investment decisions involving
assets of the Fund. Fund Services acts as the Fund’s Transfer Agent, Dividend
Disbursing Agent and Fund Accountant.
Description
of Classes
The
Company has adopted a multiple class plan that allows the Fund to offer one or
more classes of shares. The Fund has registered four classes of shares — Advisor
Class A, Advisor Class C, Institutional and No Load. This Prospectus offers
Advisor Class A, Advisor Class C, Institutional and No Load shares of the Fund.
The different classes of shares represent investments in the same portfolio of
securities, but the classes are subject to different expenses as discussed in
this Prospectus and may have different share prices.
More
About the Advisor Classes
This
Prospectus offers two Advisor Classes of shares of the Fund – Advisor Class A
shares and Advisor Class C shares. The Fund’s Advisor Classes of shares are
sold through broker-dealers and other financial
intermediaries
that provide investment services to the Fund’s shareholders. You should always
discuss with your broker-dealer or financial advisor the suitability of your
investment.
Set
forth below is information about the manner in which the Fund offers shares. A
financial intermediary may offer Fund shares subject to variations in or
elimination of the Fund sales charges (“variations”), provided such variations
are described in Appendix A. All variations described in Appendix A are applied
by the identified financial intermediary. Sales charge variations may apply to
purchases, sales, exchanges and reinvestments of Fund shares and a shareholder
transacting in Fund shares through an intermediary identified on Appendix A
should read the terms and conditions of Appendix A carefully. A variation that
is specific to a particular financial intermediary is not applicable to shares
held directly with the Fund or through another intermediary. Please consult your
financial intermediary with respect to any variations listed in
Appendix A.
Advisor
Class A Shares
Advisor
Class A shares are retail shares that may be purchased by individuals or IRAs.
With Advisor Class A shares, you will pay a sales charge when you invest unless
you qualify for a reduction or waiver of the sales charge. Advisor Class A
shares may impose a Rule 12b-1 fee of up to 0.50% (currently limited to
0.25%) of average daily net assets which is assessed against the Advisor Class A
shares of the Fund.
If
you purchase Advisor Class A shares of the Fund you will pay the NAV per share
next determined after your order is received plus a sales charge (shown in
percentages below) depending on the amount of your investment. The sales charge
is calculated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Amount
of Transaction |
Sales
Charge as a % of Offering Price |
Sales
Charge as a % of Net Asset Value |
Dealers
Reallowance as a % of Offering Price |
| At
Least |
But
Less than |
| $0 |
$50,000 |
5.75% |
6.10% |
5.25% |
| $50,000 |
$100,000 |
4.75% |
4.99% |
4.25% |
| $100,000 |
$250,000 |
3.75% |
3.90% |
3.25% |
| $250,000 |
$500,000 |
2.75% |
2.83% |
2.25% |
| $500,000 |
$1,000,000 |
2.25% |
2.30% |
1.75% |
| $1,000,000 |
and
above |
0.00% |
0.00% |
0.00%* |
* If
you purchase $1 million or more worth of Advisor Class A shares, you will pay no
initial sales charge. A sales charge does not apply to shares that you purchase
through reinvestment of dividends or distributions.
The
offering price includes the sales charge paid at the time of investment. Because
of rounding in the calculation of the “offering price,” the actual sales charge
you pay may be more or less than that calculated using the percentages shown
above. The distributor will receive all sales charges and Rule 12b-1 fees for
the purchase of Advisor Class A shares of the Fund without a dealer of
record.
Waivers
– Advisor Class A Shares
You
will not have to pay a sales charge on purchases of Advisor Class A shares
if:
ª You
are an employee of a broker-dealer or agent that has a selling agreement with
the distributor;
ª You
buy Advisor Class A shares under a wrap program or other all-inclusive fee
program offered by your broker-dealer or agent; or
ª The
sales charge is waived by a broker-dealer or agent who has entered into an
agreement with the Fund’s distributor that allows for load-waived Advisor Class
A shares purchases.
Please
consult your broker-dealer or agent to determine whether you may be eligible for
these waivers.
For
the sales charge variations applicable to shares offered through specific
financial intermediaries, please see Appendix A.
Reducing
Your Sales Charge – Advisor Class A Shares
You
can reduce the sales charge on purchases of Advisor Class A shares
by:
ª purchasing
larger quantities of shares or putting a number of purchases together to obtain
the quantity discounts indicated above;
ª signing
a letter of intent that you intend to purchase more than $50,000 worth of shares
over the next 13 months (see “Letter of Intent – Advisor Class A Shares”
below);
ª using
the reinvestment privilege which allows you to redeem shares and then
immediately reinvest them without a sales charge within 60 days;
ª combining
concurrent purchases of Advisor Class A shares from different funds to obtain
the quantity discounts indicated above; and
ª through
rights of accumulation as discussed below.
Please
note that certain broker-dealers may reduce your sales charges under certain
circumstances. Consult your broker-dealer.
Rights
of Accumulation – Advisor Class A Shares
You
may combine your new purchase of Advisor Class A shares with other Advisor Class
A shares currently owned by you, your spouse, and/or your children under age 21
for the purpose of qualifying for the lower initial sales charge rates that
apply to larger purchases. The applicable sales charge for the new purchase is
based on the total of your current purchase and the current NAV of all other
shares you, your spouse and/or your children under age 21 own. You may combine
only the holdings at the firm at which you are making the current purchase for
the right of accumulation sales charge reduction. You will need to notify the
Fund or your financial intermediary at the time of purchase of any other
accounts that exist.
Letter
of Intent – Advisor Class A Shares
By
signing a Letter of Intent (“LOI”) you can reduce your Advisor Class A sales
charge. Your individual purchases will be made at the applicable sales charge
based on the amount you intend to invest over a 13-month period. The LOI will
apply to all purchases of Advisor Class A shares. Any shares purchased within 90
days of the date you sign the letter of intent may be used as credit toward
completion, but the reduced sales charge will only apply to new purchases made
on or after that date. Purchases resulting from the reinvestment of dividends
and capital gains do not apply toward fulfillment of the LOI. Shares equal to
5.75% of the amount of the LOI will be held in escrow during the 13-month
period. If, at the end of that time the total amount of purchases made is less
than the amount intended, you will be required to pay the difference between the
reduced sales charge and the sales charge applicable to the individual purchases
had the LOI not been in effect. This amount will be obtained from redemption of
the escrow shares. Any remaining escrow shares will be released to
you.
If
you establish an LOI with the Fund, you can aggregate your accounts as well as
the accounts of your immediate family members under age 21. You will need to
provide written instruction with respect to the other accounts whose purchases
should be considered in fulfillment of the LOI. You will need to notify the Fund
or your financial intermediary at the time of purchase of any other accounts
that exist.
Advisor
Class C Shares
Advisor
Class C shares are retail shares and may be purchased by individuals or IRAs.
Advisor Class C shares impose a Rule 12b‑1 fee of 1.00% of average daily
net assets.
Effective
April 2021, Advisor Class C shares will convert automatically into Advisor Class
A shares on the 3rd business day of the month following the eighth anniversary
of the month on which the purchase order was accepted, provided that the Fund or
the financial intermediary through which a shareholder purchased Advisor Class C
shares has records verifying that the Advisor Class C shares have been held for
at least eight years. Group retirement plans held in an omnibus record keeping
platform through a financial intermediary that does not track participant-level
share lot aging may not convert Advisor Class C shares to Advisor Class A
shares.
If
you purchase Advisor Class C shares of the Fund, you will pay the NAV per share
next determined after your order is received. There is no initial sales charge
on this Class at the time you purchase your shares. The distributor may pay your
broker or agent a 1.00% up-front sales commission, which includes an advance of
the first year’s Rule 12b-1 fees and shareholding servicing fees. The
distributor will retain Rule 12b-1 fees and shareholder servicing fees in the
first year to reimburse itself for paying your broker or agent the 1.00%
up-front sales commission.
If
you sell your Advisor Class C shares within 12 months of purchase, you will have
to pay a contingent deferred sales charge of 1.00%, which is applied to the NAV
of the shares on the date of original purchase or on the date of redemption,
whichever is less.
A
financial intermediary may impose different CDSC waivers. CDSC waiver variations
specific to certain financial intermediaries are described in Appendix
A.
The
distributor will receive all sales charges and Rule 12b-1 fees for the purchase
of Advisor Class C shares of the Fund without a dealer of record.
Additional
information regarding sales load breakpoints is available in the Fund’s SAI. The
Fund also provides information regarding the purchase of shares, sales charges
and breakpoint eligibility free of charge on their website at www.kineticsfunds.com.
Counsel
and Independent Registered Public Accounting Firm
Legal
matters in connection with the issuance of shares of common stock of the Fund
are passed upon by Faegre Drinker Biddle & Reath LLP, One Logan Square,
Suite 2000, Philadelphia, PA 19103-6996.
Tait,
Weller & Baker LLP, Two Liberty Place, 50 South 16th Street, Suite 2900,
Philadelphia, PA 19102, is the independent registered public accounting firm for
the Fund.
Description
of Index
The
S&P 500®
Index is an unmanaged index created by Standard & Poor’s Corporation that is
considered to represent U.S. stock market performance in general. The Index is
not an investment product available for purchase and does not include any
deduction for fees, expenses or taxes.
The
following table is intended to help you understand the Fund’s financial
performance. Certain information reflects financial results for a single Fund
class share. The total return figures represent the percentage that an investor
in the Fund would have earned (or lost) on an investment in the Fund (assuming
reinvestment of all dividends and distributions). The financial information for
the periods shown has been audited by Tait, Weller & Baker LLP, an
independent registered public accounting firm, whose report, along with the
Fund’s financial statements, is included in the Fund’s annual report, which is
available upon request or by following the hyperlink to the Annual
Report
dated December 31, 2022.
|
|
| |
|
The
Spin-off and Corporate Restructuring Fund
No
Load Class |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| For
the
Year Ended December 31, 2022 |
For
the
Year Ended
December 31,
2021 |
For
the
Year Ended
December 31,
2020 |
For
the
Year Ended
December 31,
2019 |
For
the
Year Ended
December 31,
2018 |
|
|
PER
SHARE DATA:(1) |
|
|
|
|
|
|
| |
| |
| Net
Asset Value, Beginning of Period |
$19.20 |
|
| $13.45 |
|
| $12.83 |
| $9.77 |
|
| $11.14 |
|
| |
| Income
from Investment Operations: |
|
|
|
|
|
|
| |
| |
|
Net
investment income (loss)(2) |
0.08 |
|
| (0.11) |
|
| 0.10 |
| (0.00 |
) |
(3) |
(0.08) |
|
| |
| Net
realized and unrealized gain (loss) on investments |
7.49 |
|
| 5.88 |
|
| 0.60 |
| 3.06 |
|
| (0.84) |
|
| |
| Total
from Investment Operations |
7.57 |
|
| 5.77 |
|
| 0.70 |
| 3.06 |
|
| (0.92) |
|
| |
| Redemption
Fees |
0.00 |
|
(3) |
0.00 |
|
(3) |
— |
| — |
|
| — |
|
| |
| Less
Distributions: |
|
|
|
|
|
|
| |
| |
| From
net investment income |
— |
|
| (0.02) |
|
| (0.08) |
| — |
|
| — |
|
| |
|
From
net realized gains |
(0.44) |
|
| — |
|
| — |
| — |
|
| (0.45) |
|
| |
|
Total
Distributions |
(0.44) |
|
| (0.02) |
|
| (0.08) |
| — |
|
| (0.45) |
|
| |
| Net
Asset Value, End of Period |
$26.33 |
|
| $19.20 |
|
| $13.45 |
| $12.83 |
|
| $9.77 |
|
| |
| Total
return |
39.43 |
% |
| 42.90 |
% |
| 5.44 |
% |
31.32 |
% |
| (8.22) |
% |
| |
| SUPPLEMENTAL
DATA AND RATIOS |
|
|
|
|
|
|
| |
| |
| Net
assets, end of Period (000’s) |
$149 |
|
| $125 |
|
| $18 |
| $60 |
|
| $11 |
|
| |
| Ratio
of operating expenses to average net assets: |
|
|
|
|
|
|
| |
| |
|
Before
expense reimbursement |
1.79 |
% |
| 1.84 |
% |
| 2.17 |
% |
1.96 |
% |
| 1.81 |
% |
| |
| After
expense reimbursement |
1.45 |
% |
| 1.45 |
% |
| 1.45 |
% |
1.45 |
% |
| 1.45 |
% |
| |
| Ratio
of net investment income (loss) to average net assets: |
0.36 |
% |
| (0.57) |
% |
| 0.92 |
% |
(0.04) |
% |
| (0.63) |
% |
| |
|
Portfolio
turnover rate |
4 |
% |
| 1 |
% |
| 0 |
% |
2 |
% |
| 9 |
% |
| |
(1)Information
presented relates to a share of capital stock outstanding for each
Year.
(2)Net
investment income per share represents net investment income divided by the
average shares outstanding throughout the Year.
(3)Amount
calculated is less than $0.005.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| For
the
Year Ended
December 31,
2022 |
For
the
Year Ended
December 31,
2021 |
For
the
Year Ended
December 31,
2020 |
For
the
Year Ended
December 31,
2019 |
For
the
Year Ended
December 31,
2018 |
| |
|
PER
SHARE DATA:(1) |
|
|
|
|
| |
|
|
| |
| Net
Asset Value, Beginning of Year |
$18.28 |
|
| $12.82 |
|
| $12.25 |
| $9.33 |
| $10.67 |
|
|
| |
|
Income
from Investment Operations: |
|
|
|
|
|
| |
|
| |
|
Net
investment income (loss)(2) |
0.06 |
|
| (0.12) |
|
| 0.09 |
| (0.01) |
| (0.08) |
|
|
| |
|
Net
realized and unrealized gain (loss) on investments |
7.15 |
|
| 5.60 |
|
| 0.55 |
| 2.93 |
| (0.81) |
|
|
| |
|
Total
from Investment Operations |
7.21 |
|
| 5.48 |
|
| 0.64 |
| 2.92 |
| (0.89) |
|
|
| |
| Redemption
Fees |
0.00 |
|
(3) |
0.00 |
|
(3) |
— |
| — |
| — |
|
|
| |
| Less
Distributions: |
|
|
|
|
|
| |
|
| |
|
From
net investment income |
— |
|
| (0.02) |
|
| (0.07) |
| — |
| — |
|
|
| |
|
From
net realized gains |
(0.44) |
|
| — |
|
| — |
| — |
| (0.45) |
|
|
| |
|
Total
Distributions |
(0.44) |
|
| (0.02) |
|
| (0.07) |
| — |
| (0.45) |
|
|
| |
| Net
Asset Value, End of Year |
$25.05 |
|
| $18.28 |
|
| $12.82 |
| $12.25 |
| $9.33 |
|
|
| |
|
Total
return(4) |
39.45 |
% |
| 42.75 |
% |
| 5.21 |
% |
31.30 |
% |
(8.30) |
% |
|
| |
|
SUPPLEMENTAL
DATA AND RATIOS |
|
|
|
|
|
| |
|
| |
| Net
assets, end of Year (000’s) |
$10,649 |
|
| $5,869 |
|
| $2,521 |
| $3,574 |
| $3,303 |
|
|
| |
|
Ratio
of operating expenses to average net assets: |
|
|
|
|
|
| |
|
| |
|
Before
expense reimbursement |
2.04 |
% |
| 2.09 |
% |
| 2.41 |
% |
2.21 |
% |
2.06 |
% |
|
| |
| After
expense reimbursement |
1.50 |
% |
| 1.50 |
% |
| 1.50 |
% |
1.50 |
% |
1.50 |
% |
|
| |
|
Ratio
of net investment income (loss) to average net assets: |
0.30 |
% |
| (0.62) |
% |
| 0.87 |
% |
(0.09) |
% |
(0.68) |
% |
|
| |
| Portfolio
turnover rate |
4 |
% |
| 1 |
% |
| 0 |
% |
2 |
% |
9 |
% |
|
| |
(1)Information
presented relates to a share of capital stock outstanding for each
Year.
(2)Net
investment income per share represents net investment income divided by the
average shares outstanding throughout the Year.
(3)Amount
calculated is less than $0.005.
(4)The
total return calculation does not reflect the 5.75% front end sales charge on
Advisor Class A shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| For
the
Year Ended
December 31,
2022 |
For
the
Year Ended
December 31,
2021 |
For
the
Year Ended
December 31,
2020 |
For
the
Year Ended
December 31,
2019 |
For
the
Year Ended
December 31,
2018 |
| |
|
PER
SHARE DATA:(1) |
|
|
|
|
|
| |
|
|
| |
| Net
Asset Value, Beginning of Year |
$16.95 |
|
| $11.98 |
|
| $11.47 |
|
| $8.80 |
| $10.17 |
|
|
| |
|
Income
from Investment Operations: |
|
|
|
|
|
|
| |
|
| |
|
Net
investment income (loss)(2) |
(0.08) |
|
| (0.23) |
|
| 0.01 |
|
| (0.09) |
| (0.16) |
|
|
| |
|
Net
realized and unrealized gain (loss) on investments |
6.58 |
|
| 5.23 |
|
| 0.50 |
|
| 2.76 |
| (0.76) |
|
|
| |
|
Total
from Investment Operations |
6.50 |
|
| 5.00 |
|
| 0.51 |
|
| 2.67 |
| (0.92) |
|
|
| |
| Redemption
Fees |
0.00 |
|
(3) |
0.00 |
|
(3) |
— |
|
| — |
| — |
|
|
| |
| Less
Distributions: |
|
|
|
|
|
|
| |
|
| |
| From
net investment income |
— |
|
| (0.03 |
) |
| (0.00 |
) |
(3) |
— |
| — |
|
|
| |
|
From
net realized gains |
(0.44) |
|
| — |
|
| — |
|
| — |
| (0.45) |
|
|
| |
|
Total
Distributions |
(0.44 |
) |
| (0.03 |
) |
| (0.00 |
) |
(3) |
— |
| (0.45) |
|
|
| |
| Net
Asset Value, End of Year |
$23.01 |
|
| $16.95 |
|
| $11.98 |
|
| $11.47 |
| $8.80 |
|
|
| |
| Total
return |
38.36 |
% |
| 41.73 |
% |
| 4.47 |
% |
| 30.34 |
% |
(9.00) |
% |
|
| |
|
SUPPLEMENTAL
DATA AND RATIOS |
|
|
|
|
|
|
| |
|
| |
| Net
assets, end of Year (000’s) |
$842 |
|
| $940 |
|
| $2,611 |
|
| $4,064 |
| $4,114 |
|
|
| |
|
Ratio
of operating expenses to average net assets: |
|
|
|
|
|
|
| |
|
| |
|
Before
expense reimbursement |
2.54 |
% |
| 2.59 |
% |
| 2.91 |
% |
| 2.71 |
% |
2.56 |
% |
|
| |
| After
expense reimbursement |
2.25 |
% |
| 2.25 |
% |
| 2.25 |
% |
| 2.25 |
% |
2.25 |
% |
|
| |
| Ratio
of net investment income (loss) to average net assets: |
(0.43) |
% |
| (1.37) |
% |
| 0.12 |
% |
| (0.84) |
% |
(1.43) |
% |
|
| |
| Portfolio
turnover rate |
4 |
% |
| 1 |
% |
| 0 |
% |
| 2 |
% |
9 |
% |
|
| |
(1)Information
presented relates to a share of capital stock outstanding for each
Year.
(2)Net
investment income per share represents net investment income divided by the
average shares outstanding throughout the Year.
(3)Amount
calculated is less than $0.005.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| For
the
Year Ended
December 31,
2022 |
For
the
Year Ended
December 31,
2021 |
For
the
Year Ended
December 31,
2020 |
For
the
Year Ended
December 31,
2019 |
For
the
Year Ended
December 31,
2018 |
| |
|
PER
SHARE DATA:(1) |
|
|
|
|
|
| |
|
|
| |
| Net
Asset Value, Beginning of Year |
$18.40 |
|
| $12.87 |
|
| $12.32 |
|
| $9.36 |
| $10.68 |
|
|
| |
|
Income
from Investment Operations: |
|
|
|
|
|
|
| |
|
| |
|
Net
investment income (loss)(2) |
0.12 |
|
| (0.07) |
|
| 0.12 |
|
| 0.02 |
| (0.05) |
|
|
| |
| Net
realized and unrealized gain (loss) on investments |
7.21 |
|
| 5.62 |
|
| 0.55 |
|
| 2.95 |
| (0.82) |
|
|
| |
| Total
from Investment Operations |
7.33 |
|
| 5.55 |
|
| 0.67 |
|
| 2.97 |
| (0.87) |
|
|
| |
| Redemption
Fees |
0.00 |
|
(3) |
0.00 |
|
(3) |
0.00 |
|
(3) |
— |
| — |
|
|
| |
| Less
Distributions: |
|
|
|
|
|
|
| |
|
| |
| From
net investment income |
(0.04) |
|
| (0.02) |
|
| (0.12) |
|
| (0.01) |
| — |
|
|
| |
|
From
net realized gains |
(0.44) |
|
| — |
|
| — |
|
| — |
| (0.45) |
|
|
| |
|
Total
Distributions |
(0.48) |
|
| (0.02) |
|
| (0.12) |
|
| (0.01) |
| (0.45) |
|
|
| |
| Net
Asset Value, End of Year |
$25.25 |
|
| $18.40 |
|
| $12.87 |
|
| $12.32 |
| $9.36 |
|
|
| |
| Total
return |
39.82 |
% |
| 43.12 |
% |
| 5.46 |
% |
| 31.74 |
% |
(8.11) |
% |
|
| |
|
SUPPLEMENTAL
DATA AND RATIOS |
|
|
|
|
|
|
| |
|
| |
| Net
assets, end of Year (000’s) |
$23,458 |
|
| $17,377 |
|
| $12,387 |
|
| $13,751 |
| $11,290 |
|
|
| |
|
Ratio
of operating expenses to average net assets: |
|
|
|
|
|
|
| |
|
| |
|
Before
expense reimbursement |
1.74 |
% |
| 1.79 |
% |
| 2.11 |
% |
| 1.91 |
% |
1.76 |
% |
|
| |
| After
expense reimbursement |
1.25 |
% |
| 1.25 |
% |
| 1.25 |
% |
| 1.25 |
% |
1.25 |
% |
|
| |
|
Ratio
of net investment income (loss) to average net assets: |
0.56 |
% |
| (0.37) |
% |
| 1.12 |
% |
| 0.16 |
% |
(0.43) |
% |
|
| |
| Portfolio
turnover rate |
4 |
% |
| 1 |
% |
| 0 |
% |
| 2 |
% |
9 |
% |
|
| |
(1)Information
presented relates to a share of capital stock outstanding for each
Year.
(2)Net
investment income per share represents net investment income divided by the
average shares outstanding throughout the Year.
(3)Amount
calculated is less than $0.005.
Appendix
A
Financial
Intermediary Sales Charge Variations
The
availability of certain sales charge waivers and discounts will depend on
whether you purchase your shares directly from the Fund or through a financial
intermediary. Specific intermediaries may have different policies and procedures
regarding the availability of front-end sales charge waivers or CDSC waivers,
which are discussed below. In all instances, it is the shareholder’s
responsibility to notify the Fund or the shareholder’s financial intermediary at
the time of purchase of any relationship or other facts qualifying the purchaser
for sales charge waivers or discounts. For waivers and discounts not available
through a particular intermediary listed below, shareholders will have to
purchase Fund shares directly from the Fund or through another intermediary to
receive Fund imposed waivers or discounts. Please see “Description of Classes”
starting on page 34 of this Prospectus for information about such waivers and
discounts.
Merrill
Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”)
Shareholders
purchasing Fund shares through a Merrill Lynch platform or account will be
eligible only for the following sales charge waivers (front-end sales charge
waivers and contingent deferred, or back-end, sales charge waivers) and
discounts, which may differ from those disclosed elsewhere in the Fund’s
Prospectus or SAI.
|
|
| |
|
Front-end
Sales Charge Waivers on Class A Shares available at Merrill
Lynch
The
front-end sales charge on Advisor Class A shares of the Fund available
through Merrill Lynch are waived for the following purchases:
|
|
•Employer-sponsored
retirement, deferred compensation and employee benefit plans (including
health savings accounts) and trusts used to fund those plans, provided
that the plan is a group plan (more than one participant), the shares are
not held in a commission-based brokerage account and shares are held in
the name of the plan through an omnibus account. |
|
•Shares
purchased by a 529 Plan does not include 529 Plan units or 529-specific
share classes or equivalents) |
|
•Shares
purchased through a Merrill Lynch affiliated investment advisory
program |
|
•Shares
exchanged due to the holdings moving from a Merrill Lynch affiliated
investment advisory program to a Merrill Lynch brokerage (non-advisory)
account pursuant to Merrill Lynch’s policies relating to sales load
discounts and waivers |
|
•Shares
purchased by third party investment advisors on behalf of their advisory
clients through Merrill Lynch’s platform |
|
•Shares
of funds purchased through the Merrill Edge Self-Directed
platform |
|
•Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other
fund within the Kinetics Mutual Funds family) |
|
•Shares
exchanged from Class C (i.e.,
level-load) shares of the same fund pursuant to Merrill Lynch’s policies
relating to sales load discounts and waivers |
|
•Employees
and registered representatives of Merrill Lynch or its affiliates and
their family members |
|
•Directors
of the Fund, and employees of the Fund’s investment adviser or any of its
affiliates, as described in this Prospectus |
|
•Eligible
shares purchased from the proceeds of redemptions within the same Kinetics
Mutual Funds family, provided (1) the repurchase occurs within 90 days
following the redemption, (2) the redemption and purchase occur in the
same account, and (3) redeemed shares were subject to a front-end or
deferred sales load (known as Rights of Reinstatement). Automated
transactions (i.e., systematic purchases and withdrawals) and purchases
made after shares are automatically sold to pay Merrill Lynch’s account
maintenance fees are not eligible for
reinstatement |
|
|
| |
|
CDSC
Waivers on Advisor Class A and Advisor Class C Shares available at Merrill
Lynch |
|
• Death
or disability of the shareholder |
|
• Shares
sold as part of a systematic withdrawal plan as described in the Fund’s
Prospectus |
|
|
| |
|
CDSC
Waivers on Advisor Class A and Advisor Class C Shares available at Merrill
Lynch |
|
• Return
of excess contributions from an IRA Account |
|
• Shares
sold as part of a required minimum distribution for IRA and retirement
accounts pursuant to the Internal Revenue Code |
|
• Shares
sold to pay Merrill Lynch fees but only if the transaction is initiated by
Merrill Lynch |
|
• Shares
acquired through a right of reinstatement |
|
• Shares
held in retirement brokerage accounts, that are exchanged for a lower cost
share class due to transfer to a fee based account or platform (applicable
to Advisor Class A and Advisor Class C shares only)
|
|
•Shares
received through an exchange due to the holdings moving from a Merrill
Lynch affiliated investment advisory program to a Merrill Lynch brokerage
(non-advisory) account pursuant to Merrill Lynch’s policies relating to
sales load discounts and waivers |
|
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|
Front-end
Sales Charge Discounts Available at Merrill Lynch: Breakpoints, Rights of
Accumulation & Letters of Intent |
|
• Breakpoints
as described in this Prospectus. |
|
• Rights
of Accumulation (ROA) which entitle shareholders to breakpoint discounts
as described in the Fund’s prospectus will be automatically calculated
based on the aggregated holding of fund family assets held by accounts
(including 529 program holdings, where applicable) within the purchaser’s
household at Merrill Lynch. Eligible fund family assets not held at
Merrill Lynch may be included in the ROA calculation only if the
shareholder notifies his or her financial advisor about such assets
|
|
• Letters
of Intent (LOI) which allow for breakpoint discounts based on anticipated
purchases within the Kinetics Mutual Funds family, through Merrill Lynch,
over a 13-month period of time |
Morgan
Stanley Smith Barney LLC (“Morgan Stanley”)
Effective
July 1, 2018, shareholders purchasing Fund shares through a Morgan Stanley
Wealth Management transactional brokerage account will be eligible only for the
following front-end sales charge waivers with respect to Class A shares, which
may differ from and may be more limited than those disclosed elsewhere in this
Fund’s Prospectus or SAI.
Front-end
Sales Charge Waivers on Class A Shares available at Morgan Stanley Wealth
Management
•Employer-sponsored
retirement plans (e.g.,
401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and
money purchase pension plans and defined benefit plans). For purposes of this
provision, employer-sponsored retirement plans do not include SEP IRAs, Simple
IRAs, SAR-SEPs or Keogh plans
•Morgan
Stanley employee and employee-related accounts according to Morgan Stanley’s
account linking rules
•Shares
purchased through reinvestment of dividends and capital gains distributions when
purchasing shares of the same fund
•Shares
purchased through a Morgan Stanley self-directed brokerage account
•Class
C (i.e.,
level-load) shares that are no longer subject to a contingent deferred sales
charge and are converted to Class A shares of the same fund pursuant to Morgan
Stanley Wealth Management’s share class conversion program
•Shares
purchased from the proceeds of redemptions within the same fund family, provided
(i) the repurchase occurs within 90 days following the redemption, (ii) the
redemption and purchase occur in the same account, and (iii) redeemed shares
were subject to a front-end or deferred sales charge.
Raymond
James & Associates, Inc., Raymond James Financial Services, Inc. and each
entity’s affiliates (“Raymond James”)
Intermediary-Defined
Sales Charge Waiver Policies
The
availability of certain initial or deferred sales charge waivers and discounts
may depend on the particular financial intermediary or type of account through
which you purchase or hold Fund shares.
Intermediaries
may have different policies and procedures regarding the availability of
front-end sales load waivers or contingent deferred (back-end) sales load
(“CDSC”) waivers, which are discussed below. In all instances, it is the
purchaser’s responsibility to notify the fund or the purchaser’s financial
intermediary at the time of purchase of any relationship or other facts
qualifying the purchaser for sales charge waivers or discounts. For waivers and
discounts not available through a particular intermediary, shareholders will
have to purchase fund shares directly from the fund or through another
intermediary to receive these waivers or discounts.
Effective
March 1, 2019, shareholders purchasing fund shares through a Raymond James
platform or account, or through an introducing broker-dealer or independent
investment adviser for which Raymond James provides trade execution, clearance,
and/or custody services, will be eligible only for the following load waivers
(front-end sales charge waivers and contingent deferred, or back-end, sales
charge waivers) and discounts, which may differ from those disclosed elsewhere
in this Fund’s prospectus or SAI.
Front-end
sales load waivers on Class A shares available at Raymond James
•Shares
purchased in an investment advisory program.
•Shares
purchased within the same fund family through a systematic reinvestment of
capital gains distributions and dividend reinvestment when purchasing shares of
the same fund (but not any other fund within the fund family).
•
Employees and registered representatives of Raymond James or its affiliates and
their family members as designated by Raymond James.
•Shares
purchased from the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within 90 days following the redemption, (2) the
redemption and purchase occur in the same account, and (3) redeemed shares were
subject to a front-end or deferred sales load (known as Rights of
Reinstatement).
•A
shareholder in the Fund’s Class C shares will have their shares converted at net
asset value to Class A shares (or the appropriate share class) of the Fund if
the shares are no longer subject to a CDSC and the conversion is in line with
the policies and procedures of Raymond James.
CDSC
Waivers on Classes A, B and C shares available at Raymond James
•Death
or disability of the shareholder.
•Shares
sold as part of a systematic withdrawal plan as described in the fund’s
prospectus.
•Return
of excess contributions from an IRA Account.
•Shares
sold as part of a required minimum distribution for IRA and retirement accounts
due to the shareholder reaching the qualified age based on applicable IRS
regulations as described in the fund’s prospectus.
•Shares
sold to pay Raymond James fees but only if the transaction is initiated by
Raymond James.
•Shares
acquired through a right of reinstatement.
Front-end
load discounts available at Raymond James: breakpoints, and/or rights of
accumulation, and/or letters of intent
•Breakpoints
as described in this prospectus.
•Rights
of accumulation which entitle shareholders to breakpoint discounts will be
automatically calculated based on the aggregated holding of fund family assets
held by accounts within the purchaser’s household at Raymond James. Eligible
fund family assets not held at Raymond James may be included in the calculation
of rights of accumulation only if the shareholder notifies his or her financial
advisor about such assets.
•Letters
of intent which allow for breakpoint discounts based on anticipated purchases
within a fund family, over a 13-month time period. Eligible fund family assets
not held at Raymond James may be included in the calculation of letters of
intent only if the shareholder notifies his or financial advisor about such
assets.
Janney
Montgomery Scott LLC ("Janney")
Shareholders
purchasing Fund shares through a Janney Montgomery platform or account will be
eligible only for the following sales charge waivers (front-end sales charge
waiver and contingent deferred, or back-end, sales charge waivers) and
discounts, which may differ from those disclosed elsewhere in this Fund's
Prospectus or SAI.
Front-end
sales charge* waivers on Class A shares available at Janney:
• Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other fund
within the fund family).
• Shares
purchased by employees and registered representatives of Janney or its
affiliates and their family members as designated by Janney.
• Shares
purchased from the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within ninety (90) days following the redemption, (2)
the redemption and purchase occur in the same account, and (3) redeemed shares
were subject to a front-end or deferred sales load (i.e., right of
reinstatement).
• Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement plans do
not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
• Shares
acquired through a right of reinstatement.
• Class
C shares that are no longer subject to a contingent deferred sales charge and
are converted to Class A shares of the same fund pursuant to Janney’s policies
and procedures.
CDSC
waivers on Class A and C shares available at Janney:
• Shares
sold upon the death or disability of the shareholder.
• Shares
sold as part of a systematic withdrawal plan as described in the fund’s
Prospectus.
• Shares
purchased in connection with a return of excess contributions from an IRA
account.
• Shares
sold as part of a required minimum distribution for IRA and other retirement
accounts due to the shareholder reaching age 72 as described in the fund’s
Prospectus.
• Shares
sold to pay Janney fees but only if the transaction is initiated by
Janney.
• Shares
acquired through a right of reinstatement.
• Shares
exchanged into the same share class of a different fund.
Front-end
sales charge* discounts available at Janney: breakpoints, rights of
accumulation, and/or letters of intent:
• Breakpoints
as described in the fund’s Prospectus.
• Rights
of accumulation (“ROA”), which entitle shareholders to breakpoint discounts,
will be automatically calculated based on the aggregated holding of fund family
assets held by accounts within the purchaser’s household at Janney. Eligible
fund family assets not held at Janney may be included in the ROA calculation
only if the shareholder notifies his or her financial advisor about such
assets.
• Letters
of intent which allow for breakpoint discounts based on anticipated purchases
within a fund family, over a 13-month time period. Eligible fund family assets
not held at Janney Montgomery Scott may be included in the calculation of
letters of intent only if the shareholder notifies his or her financial advisor
about such assets.
*Also
referred to as an “initial sales charge.”
Kinetics
Mutual Funds, Inc.
|
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| |
Investment
Adviser
and Shareholder Servicing Agent
|
| Horizon
Kinetics Asset Management LLC |
|
| 470
Park Avenue South |
|
| New
York, NY 10016 |
|
|
| |
| Legal
Counsel |
| Faegre
Drinker Biddle & Reath LLP |
|
| One
Logan Square |
|
| Suite
2000 |
|
|
| Philadelphia,
PA 19103-6996 |
|
|
| |
Independent
Registered Public
Accounting Firm
|
| Tait,
Weller & Baker LLP |
|
| Two
Liberty Place |
|
| 50
South 16th Street, Suite 2900 |
|
| Philadelphia,
PA 19102 |
|
|
| |
| Distributor |
| Kinetics
Funds Distributor LLC |
|
| 470
Park Avenue South |
|
| New
York, NY 10016 |
|
|
| |
Transfer
Agent, Fund Accountant,
and Administrator
|
| U.S.
Bank Global Fund Services |
|
| 615
East Michigan Street |
|
| Milwaukee,
WI 53202 |
|
|
| |
| Custodian |
| U.S.
Bank N.A. |
|
| 1555
N. RiverCenter Drive, Suite 302 |
|
| Milwaukee,
WI 53212 |
|
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| |
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| |
|
Kinetics
Spin-off and Corporate Restructuring Fund
A
series of Kinetics Mutual Funds,
Inc. |
You
may obtain the following and other information on the Fund free of
charge:
Statement
of Additional Information (SAI) dated April 30, 2023
The
Fund’s SAI provides more details about the Fund’s policies and management. The
Fund’s SAI is incorporated by reference into this Prospectus.
Annual
and Semi-Annual Report
The
annual
and semi-annual
reports for the Fund provide the most recent financial reports and portfolio
listings. The annual report contains a discussion of the market conditions and
investment strategies that significantly affected the Fund’s performance during
the last fiscal year.
To
receive any of these documents or the Fund’s Prospectus, free of charge, to
request additional information about the Company or to make shareholder
inquiries, please contact us:
|
|
|
|
|
|
|
|
| |
| By
Telephone: |
| By
Internet: |
| (800)
930-3828 |
| http://www.kineticsfunds.com |
By
Mail:
Kinetics
Mutual Funds, Inc.
c/o U.S. Bank Global Fund Services
P.O. Box 701
Milwaukee, WI 53201-0701
Additionally,
the foregoing Fund documents are available on the Fund’s website listed
above.
SEC:
Reports
and other information about the Fund are available on the EDGAR Database on the
SEC’s website at http://www.sec.gov.
Copies of the information may be obtained, after paying a duplicating fee, by
electronic request at the following E-mail address: [email protected].
1940
Act File No. 811-09303
