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CrossingBridge Low Duration
High Yield Fund
Institutional
Class Shares
(Trading Symbol: CBLDX)
Retail
Class Shares
(Trading Symbol: CBLVX) (not
currently offered)
CrossingBridge Ultra-Short
Duration Fund
Institutional
Class Shares
(Trading Symbol: CBUDX)
CrossingBridge Responsible
Credit Fund
Institutional
Class Shares
(Trading Symbol: CBRDX)
RiverPark Strategic Income
Fund
Institutional
Class Shares
(Trading Symbol: RSIIX)
Retail
Class Shares
(Trading Symbol: RSIVX)
Prospectus
January 28,
2024
The
U.S. Securities and Exchange Commission (the “SEC”) has not approved or
disapproved of these securities or determined if this Prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
CrossingBridge
Low Duration High Yield Fund
CrossingBridge
Ultra-Short Duration Fund
CrossingBridge
Responsible Credit Fund
RiverPark
Strategic Income Fund
Each
a series of Trust for Professional Managers (the “Trust”)
Investment
Objective
The
CrossingBridge Low Duration High Yield Fund (the “Low Duration High Yield Fund”
or “Fund”) seeks high current income and capital appreciation consistent with
the preservation 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.
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
Institutional
Class |
Retail
Class |
Management
Fees |
0.65% |
0.65% |
Distribution
(12b-1) Fees |
None |
0.25% |
Other
Expenses |
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Shareholder
Servicing Plan Fees(1) |
0.10% |
0.10% |
Expense
Recoupment |
0.01% |
0.01% |
Remainder
of Other Expenses(2) |
0.15% |
0.15% |
Total
Annual Fund Operating Expenses(2) |
0.91% |
1.16% |
(1)The
Trust’s Board of Trustees (the “Board of Trustees”) has authorized a shareholder
servicing plan fee up to 0.15% of the Fund’s average daily net assets.
Currently, the shareholder servicing plan fee being charged is 0.10% of the
Fund’s average daily net assets; however, the fee may be increased to 0.15% of
the Fund’s average daily net assets at any time.
(2)Remainder
of Other Expenses includes acquired fund fees and expenses (“AFFE”), which are
indirect fees and expenses that the Fund incurs from investing in the shares of
other mutual funds, including money market funds. Please note that the amount of
Total Annual Fund Operating Expenses shown in the above table will differ from
the Ratio of Expenses to Average Net Assets figures found within the “Financial
Highlights” section of the Prospectus, which reflects the direct operating
expenses of the Fund and does not include indirect expenses, such as
AFFE.
Example
This Example is intended to help you compare the costs of
investing in the Fund with the cost of investing in other mutual funds. The
Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then hold or redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the Fund’s operating expenses remain the same.
Although your actual costs may be higher
or lower, based on these assumptions, your costs would
be:
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Share
Class |
One
Year |
Three
Years |
Five
Years |
Ten
Years |
Institutional
Class |
$93 |
$290 |
$504 |
$1,120 |
Retail
Class |
$118 |
$368 |
$638 |
$1,409 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions or spreads, 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 the Total 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
130.57% of the average
value of its portfolio.
Principal Investment
Strategies
Under
normal market conditions, the Fund will invest at least 80% of its net assets
(plus any borrowings for investment purposes) in fixed income securities and
loans issued by companies that are rated below investment grade (i.e.,
“junk” bonds and loans). The fixed income securities and loans in which the Fund
invests include traditional corporate bonds, zero-coupon bonds, commercial
paper, exchange-traded notes (“ETNs”), distressed debt securities (i.e.,
fixed income securities that are near to going into default), bank loan
assignments and/or participations, private placements, mortgage- and
asset-backed securities, U.S. Government obligations, sovereign debt and bank
loans to corporate borrowers, and may have fixed, floating or variable rates.
The Fund typically focuses on instruments that have short durations
(i.e.,
have an expected duration of three years or less from the time of purchase
through maturity, call, or corporate action). To the extent the Fund invests in
other investment companies, including exchange-traded funds (“ETFs”), the Fund
will consider the underlying holdings of such funds for purposes of meeting its
policy of investing at least 80% of its net assets in fixed income securities
and loans of companies that have been rated below investment grade.
The Fund may
invest up to 35% of its total assets in foreign fixed income instruments,
including those denominated in U.S. dollars or other currencies, and may also
invest without limit in Rule 144A fixed income securities. Additionally, the
Fund may invest up to 25% of its total assets in convertible bonds, up to 25% of
its total assets in Yankee bonds, and up to 20% in preferred stocks, special
purpose acquisition companies (“SPACs”), and income producing equities. The
Fund’s investments in derivative instruments, specifically futures contracts,
options, options on futures contracts, swap agreements and forward currency
contracts (collectively, “Derivatives”), may be used as a substitute for making
direct investments in the underlying instruments or to reduce exposure to, or
“hedge” against, market volatilities and other risks. The Fund may use a
Derivative rather than investing directly in an underlying asset class as a
low-cost, effective means to gain exposure to such asset
class.
The
Fund will sell an investment during portfolio rebalancing periods when the
Fund’s holdings in that investment are larger than the allocation suggested by
the Adviser’s investment models or when a more attractive investment becomes
available. The Adviser may engage in active trading of the Fund’s portfolio
investments, resulting in a high portfolio turnover rate, to achieve the Fund’s
investment objective.
There is no assurance the Fund will achieve its investment
objective.
Principal
Risks
Before
investing in the Fund, you should carefully consider your own investment goals,
the amount of time you are willing to leave your money invested, and the amount
of risk you are willing to take. Remember, in addition
to possibly not achieving your investment goals,
you
could lose money by investing in the Fund. The Fund’s 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. The
principal risks of investing in the Fund are:
Asset-Backed
and Mortgage-Backed Securities Risk.
Asset-backed and mortgage-backed securities are subject to risk of prepayment.
These types of securities may also decline in value because of mortgage
foreclosures or defaults on the underlying obligations. Asset-backed and
mortgage-backed securities are also subject to extension risk, the risk that
rising interest rates could cause prepayments to decrease, extending the life of
asset-backed and mortgage-backed securities with lower payment
rates.
Bank
Loans Risk. The
Fund’s investments in secured and unsecured assignments and/or participations in
bank loans may create substantial risk. In making investments in such loans,
which are made by banks or other financial intermediaries to borrowers, the Fund
will depend primarily upon the creditworthiness of the borrower for payment of
principal and interest. As a result, sale proceeds related to the sale of loans
may not be available to make additional investments or to meet the Fund’s
redemption obligations until potentially a substantial period after the sale of
the loans. The Fund, therefore, may be forced to sell other assets at a loss to
pay redemption proceeds.
A
significant portion of bank loans may be “covenant lite” loans that may contain
fewer or less restrictive constraints on the borrower and fewer or no financial
maintenance covenants and restrictions. A covenant lite loan typically contains
fewer clauses which allow an investor to proactively enforce financial
covenants. Covenant lite loans also generally provide fewer investor protections
if certain criteria are breached. The Fund may experience losses or delays in
enforcing its rights on its holdings of covenant lite loans. The secondary
market for bank loans is a private, unregulated inter-dealer or inter-bank
resale market. Purchases and sales of loans are generally subject to contractual
restrictions that must be satisfied before a loan can be bought or sold. These
restrictions may impede the Fund’s ability to buy or sell loans and may
negatively impact the transaction price. It may take longer than seven days for
transactions in loans to settle. The Fund may hold cash, sell investments or
temporarily borrow from banks to meet short-term liquidity needs due to the
extended loan settlement process, such as to satisfy redemption requests from
Fund shareholders. U.S. federal securities laws afford certain protections
against fraud and misrepresentation in connection with the offering or sale of a
security, as well as against manipulation of trading markets for securities. The
typical practice of a lender in relying exclusively or primarily on reports from
the borrower may involve the risk of fraud, misrepresentation, or market
manipulation by the borrower. It is unclear whether U.S. federal securities law
protections are available to an investment in a loan. In certain circumstances,
loans may not be deemed to be securities, and in the event of fraud or
misrepresentation by a borrower, lenders may not have the protection of the
anti-fraud provisions of the federal securities laws. However, contractual
provisions in the loan documents may offer some protections, and lenders may
also avail themselves of common-law fraud protections under applicable state
law.
Below
Investment Grade Securities Risks (commonly referred to as “junk” bonds).
The
Fund may invest 100% of its assets in fixed-income instruments that are or are
deemed to be the equivalent in terms of quality to securities rated below
investment grade by nationally recognized statistical rating agencies and
accordingly involve great risk. Such securities are regarded as predominantly
speculative with respect to the issuer’s capacity to pay interest and repay
principal in accordance with the terms of the obligations and involve major risk
to adverse conditions. These securities offer higher returns than bonds with
higher ratings as compensation for holding an obligation of an issuer perceived
to be less creditworthy. The market prices of such securities are also subject
to abrupt and erratic market movements and above-average price volatility, and
the spread between the bid and ask prices of such securities may be greater than
those prevailing in other securities markets. Changes in economic conditions or
developments regarding issuers of non-investment grade debt securities are more
likely to cause price volatility and weaken the capacity of such issuers to make
principal and interest payments than is the case for higher grade debt
securities. In addition, the market for lower grade debt securities may be
thinner and less active than for higher grade debt
securities.
Convertible
Securities Risk. A
convertible security is a fixed-income security (a debt instrument or a
preferred stock) which may be converted at a stated price within a specified
period of time into a certain quantity of the common stock of the same or a
different issuer. The market value of a convertible security performs like that
of a regular debt security, that is, if market interest rates rise, the value of
the convertible security falls.
Corporate
Events Risk. Corporate
events risk is the risk that a corporate transaction or opportunity will not
occur, or a natural disaster or regulatory change will cause an abrupt downgrade
in a corporate bond which may lower the Fund’s
performance.
Counterparty
Risk.
Counterparty risk arises upon entering into borrowing arrangements or Derivative
transactions and is the risk from the potential inability of counterparties to
meet the terms of their contracts.
Credit-Related
Instruments Risk.
Interest rates may go up resulting in a decrease in the value of the securities
held by the Fund. Interest rates have been rising from historically low levels,
so the Fund faces a heightened risk that interest rates may continue to rise. A
credit rating assigned to a particular debt security is essentially the opinion
of an NRSRO as to the credit quality of an issuer and may prove to be
inaccurate. There is also the risk that a bond issuer may “call,” or repay, its
high yielding bonds before their maturity dates. Debt securities subject to
prepayment can offer less potential for gains during a declining interest rate
environment and similar or greater potential for loss in a rising interest rate
environment. Limited trading opportunities for certain fixed income securities
may make it more difficult to sell or buy a security at a favorable price or
time, particularly during periods of market turmoil, and may also make these
securities difficult to value.
Credit
Risk. Debt
portfolios are subject to credit risk. Credit risk refers to the likelihood that
an issuer will default in the payment of principal and/or interest on an
instrument. Financial strength and solvency of an issuer are the primary factors
influencing credit risk. In addition, lack or inadequacy of collateral or credit
enhancement for a debt instrument may affect its credit risk. Credit risk may
change over the life of an instrument, and debt obligations which are rated by
rating agencies are often reviewed and may be subject to
downgrade.
Cybersecurity
Risk.
With the increased use of technologies such as the Internet to conduct business,
the Fund is susceptible to operational, information security, and related risks.
Cyber incidents affecting the Fund or its service providers have the ability to
cause disruptions and impact business operations, potentially resulting in
financial losses, interference with the Fund’s ability to calculate its NAV,
impediments to trading, the inability of shareholders to transact business,
violations of applicable privacy and other laws, regulatory fines, penalties,
reputational damage, reimbursement or other compensation costs, or additional
compliance costs.
Derivatives
Risk. The
Fund’s use of swap contracts, interest rate futures and options on interest rate
futures involves risks different from, or possibly greater than the risks
associated with investing directly in securities including leverage risk,
tracking risk and counterparty default risk. Option positions may expire
worthless exposing the Fund to potentially significant losses. To the extent the
Fund invests in Derivatives, the risks below may affect its
performance:
Interest
Rate Risk. Underlying
investments may lose value due to interest rate
changes.
Liquidity
Risk. The
Fund may not be able to sell or close out a Derivative
instrument.
Options
and Futures Risk. Options
and futures contracts may be more volatile than investments directly in the
underlying securities, involve additional costs and may involve a small initial
investment relative to the risk
assumed.
Swap
Agreements Risk. A
swap contract may not be assigned without the consent of the counterparty, and
may result in losses in the event of a default or bankruptcy of the
counterparty.
Distressed
Securities Risk.
The Fund may invest in securities of companies that are experiencing significant
financial or business difficulties, including companies involved in bankruptcy
or other reorganization and liquidation proceedings. Although such investments
may result in significant returns to the Fund, they involve a substantial degree
of risk. Any one or all of the issuers of the securities in which the Fund may
invest may be unsuccessful or not show any return for a considerable period of
time. The level of analytical sophistication, both financial and legal,
necessary for successful investment in companies experiencing significant
business and financial difficulties is unusually high. There is no assurance
that the Adviser will correctly evaluate the value of the assets collateralizing
the Fund’s loans or the prospects for a successful reorganization or similar
action. In any reorganization or liquidation proceeding relating to a company in
which the Fund invests, the Fund may lose its entire investment or may be
required to accept cash or securities with a value less than the Fund’s original
investment. Under such circumstances, the returns generated from the Fund’s
investments in distressed securities may not adequately compensate for the risks
assumed. In addition, there is no minimum credit standard that is a prerequisite
to the Fund’s investment in any instrument, and a significant portion of the
obligations and preferred stock in which the Fund invests may be less than
investment grade.
Equity
Securities Risk. The
Fund may invest in income producing equity securities. Although investments in
income producing equity securities are considered safer than equity securities
in general, and equities historically have been a leading choice for long-term
investors, the values of stocks rise and fall depending on many factors. The
stock or other security of a company may not perform as well as expected, and
may decrease in value, because of factors related to the company (such as poorer
than expected earnings or certain management decisions) or to the industry in
which the company is engaged (such as a reduction in the demand for products or
services in a particular industry). Market and economic factors may adversely
affect securities markets generally, which could in turn adversely affect the
value of the Fund’s investments, regardless of the performance or expected
performance of companies in which the Fund
invests.
Exchange-Traded
Note Risk. The
value of an ETN may be influenced by time to maturity, level of supply and
demand for the ETN, volatility and lack of liquidity in the underlying
securities markets, changes in the applicable interest rates, changes in the
issuer’s credit rating and economic, legal, political or geographic events that
affect the referenced index. In addition, the notes issued by ETNs and held by
the Fund are unsecured debt of the
issuer.
Fixed
Income Securities Market Risk.
Difficult conditions in the broader financial markets have in the past resulted
in a temporary but significant contraction in liquidity for fixed income
securities. Liquidity relates to the ability of the Fund to sell its investments
in a timely manner at a price approximately equal to its value on the Fund’s
books. To the extent that the market for fixed income securities suffers such a
contraction, securities that were considered liquid at the time of investment
could become temporarily illiquid, and the Adviser may experience delays or
difficulty in selling assets at the prices at which the Fund carries such
assets, which may result in a loss to the Fund. There is no way to predict
reliably when such market conditions could re-occur or how long such conditions
could persist.
In
the event of a severe market contraction precipitated by general market turmoil,
economic conditions, changes in prevailing interest rates or otherwise, coupled
with extraordinary levels of Fund shareholder redemption requests, the Fund may
have to consider selling its holdings at a loss including at prices below the
current value on the Fund’s books, borrowing money to satisfy redemption
requests in accordance with the Fund’s borrowing policy or postponing payment of
redemption requests for up to seven days or longer, as permitted by applicable
law, or other extraordinary measures. In addition, if the Fund needed to sell
large blocks of investments to meet shareholder redemption requests or to raise
cash, those sales could further reduce prices, particularly for lower-rated and
unrated securities.
In
response to rising inflation, the Federal Reserve began raising short-term
interest rates in 2022 with the potential for further rate increases.
Uncertainty regarding the ability of the Federal Reserve to successfully control
inflation, the potential for incremental rate increases, and the full impact of
prior rate increases may negatively impact fixed income security prices and
increase market volatility. In general, the market price of fixed income
securities with longer maturities will increase or decrease more in response to
changes in interest rates than shorter-term
securities.
Fixed
Income Securities Risk. The
Fund invests a significant portion of its assets in fixed income securities.
Fixed income securities are subject to credit risk and market risk, including
interest rate risk. Credit risk is the risk of the issuer’s inability to meet
its principal and interest payment obligations. Market risk is the risk of price
volatility due to such factors as interest rate sensitivity, market perception
of the creditworthiness of the issuer and general market liquidity. There is no
limitation on the maturities of fixed income securities in which the Fund
invests. Securities having longer maturities generally involve greater risk of
fluctuations in value resulting from changes in interest
rates.
Floating
Rate Risk. Securities
with floating interest rates generally are less sensitive to interest rate
changes but may decline in value if their interest rates do not rise as much, or
as quickly, as interest rates in general. Conversely, floating rate instruments
will not generally increase in value if interest rates decline. Changes in
interest rates will also affect the amount of interest income the Fund earns on
its floating rate investments.
Foreign
Investments Risk. Investments
in fixed income securities of U.S. and foreign issuers and instruments that are
linked to fixed income securities (collectively, “Credit-Related Instruments”)
involve certain risks not generally associated with investments in the
securities of U.S. issuers, including changes in currency exchange rates,
unstable political, social and economic conditions, a lack of adequate or
accurate company information, differences in the way securities markets operate,
less secure international banks or securities depositories than those in the
U.S. and foreign controls on investment. In addition, individual international
country economies may differ favorably or unfavorably from the U.S. economy in
such respects as growth of gross domestic product, rates of inflation, capital
reinvestment, resources, self-sufficiency and balance of payments position.
Income earned on foreign investments may be subject to foreign withholding
taxes.
Forward
Currency Contracts. The
Fund may enter into forward currency contracts. A forward currency contract is
an obligation to purchase or sell a specific currency at a future date, which
may be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. For example, the Fund might
purchase a particular currency or enter into a forward currency contract to
preserve the U.S. dollar price of securities it intends to or has contracted to
purchase. Alternatively, it might sell a particular currency on either a spot or
forward basis to hedge against an anticipated decline in the dollar value of
securities it intends to or has contracted to sell. Although this strategy could
minimize the risk of loss due to a decline in the value of the hedged currency,
it could also limit any potential gain from an increase in the value of the
currency.
General
Market Risk. Certain
securities selected for the Fund’s portfolio may be worth less than the price
originally paid for them, or less than they were worth at an earlier
time.
Government
Securities Risk. The
Fund invests in securities issued or guaranteed by the U.S. Government, its
agencies and instrumentalities (including government-sponsored enterprises).
Securities issued by
agencies
and instrumentalities may not be guaranteed or insured by the U.S. Government
and may only be supported by the credit of the issuing
entity.
High
Portfolio Turnover Risk. 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.
Interest
Rate Risk. The
prices of securities in general and fixed-income securities in particular tend
to be sensitive to interest rate fluctuations. Increases in interest rates can
result in significant declines in the prices of fixed-income securities.
Securities with floating interest rates generally are less sensitive to interest
rate changes but may decline in value if their interest rates do not rise as
much, or as quickly, as interest rates in general. The negative impact on fixed
income securities generally from rate increases, regardless of the cause, could
be swift and significant, which could result in losses by the Fund, even if
anticipated by the Adviser. Starting in 2022, the Federal Reserve began to
increase interest rates in an effort to combat inflation which has resulted in
periods of volatility.
Leverage
Risk.
Derivatives may create economic leverage and can result in losses to the Fund
that exceed the original amount
invested.
Liquidity
Risk.
Certain investments and markets can become illiquid at times and negatively
impact the price of an investment if the Fund were to sell during times of
illiquidity.
Management
Risk. Investment
strategies employed by the 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 other investments.
Other
Investment Company and Exchange-Traded Fund Risk.
When the Fund invests in other investment companies, including closed-end funds
and ETFs, it will bear additional expenses based on its pro rata share of the
other investment company’s operating expenses, including the potential
duplication of management fees. The risk of owning another investment company
generally reflects the risks of owning the underlying investments the other
investment company holds. The Fund also will incur brokerage costs when it
purchases and sells investment company shares, ETFs may trade at a discount or
premium to NAV. There can be no assurance that an active trading market for an
ETF’s shares will exist. Shares of closed-end funds frequently trade at a price
per share that is less than the net asset value (“NAV”) per share. There can be
no assurance that the market discount on shares of any closed-end fund purchased
by the Fund will ever decrease or that when the Fund seeks to sell shares of a
closed-end fund, it can receive the NAV of those shares. There are greater risks
involved in investing in securities with limited market
liquidity.
Preferred
Stock Risk.
Preferred stocks may be more volatile than fixed income securities and are more
correlated with the issuer’s underlying common stock than fixed income
securities. Additionally, the dividend on a preferred stock may be changed or
omitted by the issuer, and participation in the growth of an issuer may be
limited.
Prepayment
Risk. The risk that the issuer of a debt security repays all or a portion
of the principal prior to the security’s maturity therefore resulting in lower
yields to shareholders of the Fund. The Fund may be unable to re-invest the
proceeds in an investment with as great a yield.
Recent
Market Events Risk. U.S.
and international markets have experienced and may continue to experience
significant periods of volatility in recent years and months due to a number of
economic, political and global macro factors including uncertainty regarding
inflation and central banks’ interest rate increases, the possibility of a
national or global recession, trade tensions, political events, the war between
Russia and Ukraine, significant conflict between Israel and Hamas in the Middle
East, and the impact of the coronavirus (COVID-19) global pandemic. The impact
of COVID-19 may last for an extended period of time. As a result of continuing
political tensions and armed conflicts, including the war between Ukraine and
Russia, the U.S. and the European Union imposed sanctions on certain Russian
individuals and companies, including certain financial institutions, and have
limited certain exports and imports to and from Russia. The war has contributed
to recent market volatility and may continue to do so. Continuing market
volatility as a result of recent market conditions or other events may have an
adverse effect on the performance of the
Fund.
Redemption
Risk. The
Fund may experience periods of heavy redemptions that could cause the Fund to
liquidate its assets at inopportune times or at a loss or depressed value,
particularly during periods of declining or illiquid
markets.
Rule
144A Securities Risk. The
market for Rule 144A securities typically is less active than the market for
publicly-traded securities. Rule 144A securities carry the risk that the
liquidity of these securities may become impaired, making it more difficult for
the Fund to sell these securities.
Sovereign
Debt Risk.
The
Fund may invest in securities issued or guaranteed by foreign governmental
entities (known as sovereign debt securities). These investments are subject to
the risk of payment delays or defaults, due, for example, to cash flow problems,
insufficient foreign currency reserves, political considerations, large debt
positions relative to the country’s economy, or failure to implement economic
reforms. There is no legal or bankruptcy process for collecting sovereign
debt.
SPACs
Risk. The
Fund invests in equity securities of SPACs, which raise assets to seek potential
business combination opportunities. Unless and until a business combination is
completed, a SPAC generally invests its assets in U.S. government securities,
money market securities, and cash. Because SPACs have no operating history or
ongoing business other than seeking a business combination, the value of their
securities is particularly dependent on the ability of the entity’s management
to identify and complete a profitable business combination. There is no
guarantee that the SPACs in which the Fund invests will complete a business
combination or that any business combination that is completed will be
profitable. The market perception of a SPAC’s ability to complete a business
combination could materially impact the market value of the SPAC’s
securities.
Public stockholders of SPACs may not be afforded a meaningful
opportunity to vote on a proposed initial business combination because certain
stockholders, including stockholders affiliated with the management of the SPAC,
may have sufficient voting power, and a financial incentive, to approve such a
transaction without support from public stockholders. As a result, a SPAC may
complete a business combination even though a majority of its public
stockholders do not support such a combination. Some SPACs may pursue a business
combination only within certain industries or regions, which may increase the
volatility of their prices.
Tax
Risk.
The Fund’s investment strategies, specifically its investments in Derivatives,
may subject the Fund to special tax rules, the effect of which may be to
accelerate income to the Fund, defer losses to the Fund, cause adjustments in
the holding periods of the Fund’s securities, convert long-term capital gains
into short-term capital gains or convert short-term capital losses into
long-term capital losses.
Tracking
Risk.
The value of the Derivative instruments the Fund uses may not correlate to (or
track) the values of the underlying securities. When used for hedging purposes,
lack of correlation between price or
rate
movements of the Derivative instrument and the underlying investment sought to
be hedged may prevent the Fund from achieving the intended hedging effect or
expose the Fund to risk of loss.
Trade
Versus
Settlement
Risk.
The
Funds
may
invest
in securities that have varied settlement terms and dates. The longer the amount
of time between trade date and settlement date the greater the risk that
settlement will occur on a timely basis.
Yankee
Bond Risk. Yankee
bonds are subject to the same risks as other debt issues, notably credit risk,
market risk, currency and liquidity risk. Other risks include adverse political
and economic developments; the extent and quality of government regulations of
financial markets and institutions; the imposition of foreign withholding taxes;
and the expropriation or nationalization of foreign
issuers.
Zero
Coupon Securities Risk. While
interest payments are not made on such securities, holders of such securities
are deemed to have received income annually, notwithstanding that cash may not
be received currently. Some of these securities may be subject to substantially
greater price fluctuations during periods of changing market interest rates than
are comparable securities that pay interest currently. Longer term zero coupon
bonds are more exposed to interest rate risk than shorter term zero coupon
bonds.
Performance
The bar chart
demonstrates some of the risks of investing in the Fund by showing changes in
the performance of the Institutional Class shares of the Fund from
year-to-year. The Average Annual Total Returns table also
demonstrates these risks by showing how the Fund’s average annual total returns
for the one year, five year and since inception periods compare with those of a
broad measure of market performance, as well as two secondary indices provided
to show broader market perspective. The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.crossingbridgefunds.com
or by calling the Fund toll-free at 888-898-2780.
Calendar Year Returns as of
December 31*
* The
returns shown in the bar chart are for Institutional Class shares of the Fund.
Retail Class shares would have
substantially
similar
annual returns because the shares are invested in the same portfolio of
securities and the annual returns would differ only
to
the extent that the classes do not have the same
expenses.
During
the period shown in the bar chart, the best performance for a
quarter was 4.34% (for the quarter ended June 30, 2020) and
the worst performance was
-5.07% (for the quarter ended March 31,
2020).
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Average
Annual Total Returns
(for
the periods ended December 31, 2023) |
Institutional
Class Shares |
One
Year |
Five
Year |
Since
Inception
(February 1,
2018) |
Return Before
Taxes |
7.63% |
4.59% |
4.16% |
Return After
Taxes on Distributions |
4.34% |
2.54% |
2.28% |
Return After
Taxes on Distributions and Sale of Fund
Shares |
4.45% |
2.65% |
2.39% |
ICE
BofA 0-3 Year U.S. High Yield Excluding Financials Index
(reflects no deduction for
fees, expenses, or taxes) |
11.16% |
5.00% |
4.37% |
ICE
BofA 0-3 Year U.S. Treasury Index
(reflects no deduction for
fees, expenses, or taxes) |
4.55% |
1.50% |
1.58% |
ICE
BofA 1-3 Year U.S. Corporate Bond Index
(reflects no deduction for
fees, expenses, or taxes) |
5.61% |
2.16% |
2.13% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown, and
after-tax returns are not relevant to investors who hold their Fund shares
through tax-deferred or other tax-advantaged arrangements such as 401(k) plans
or individual retirement accounts (“IRA”). After tax returns are shown
only for Institutional Class shares and after tax returns for Retail Class
shares will vary.
In
certain cases, the figure representing “Return After Taxes on Distributions and
Sale of Fund Shares” may be higher than the other return figures for the same
period. A higher after-tax return results when a capital loss occurs upon
redemption and provides an assumed tax benefit to the
investor.
Management
Investment
Adviser. CrossingBridge
Advisors, LLC, located at 427 Bedford Road, Suite 220, Pleasantville, New York,
10570, is the Fund’s investment adviser.
Portfolio
Managers.
David K. Sherman, President of the Adviser, has served as the Fund’s lead
portfolio manager since inception in 2018. T. Kirk Whitney, CFA®,
Assistant Portfolio Manager of the Adviser, has served as the Fund’s assistant
portfolio manager since 2021.
For
important information about the purchase and sale of Fund shares, tax
information and financial intermediary compensation, please turn to “Purchase
and Sale of Fund Shares, Taxes and Financial Intermediary Compensation” on page
42 of the Prospectus.
Investment
Objective
The
CrossingBridge Ultra-Short Duration Fund (“Ultra-Short Duration Fund” or the
“Fund”) seeks to offer a higher yield than cash instruments while maintaining a
low duration.
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.
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
Institutional
Class |
Management
Fees |
0.65% |
Distribution
and Service (12b-1) Fees |
None |
Shareholder
Servicing Fees(1) |
0.10% |
Other
Expenses(2) |
0.31% |
Total
Annual Fund Operating Expenses(2) |
1.06% |
Less:
Fee Waiver and/or Expense Reimbursement |
-0.15% |
Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement(2)(3) |
0.91% |
(1)The
Trust’s Board of Trustees (the “Board of Trustees”) has authorized a shareholder
servicing plan fee up to 0.15% of the Fund’s average daily net assets.
Currently, the shareholder servicing plan fee being charged is 0.10% of the
Fund’s average daily net assets; however, the fee may be increased to 0.15% of
the Fund’s average daily net assets at any time.
(2)Other
Expenses includes acquired fund fees and expenses (“AFFE”), which are indirect
fees and expenses that the Fund incurs from investing in the shares of other
mutual funds, including money market funds. Please note that the amount of Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement
shown in the above table will differ
from the Ratio of Expenses to Average Net Assets figures found within the
“Financial Highlights” section of the Prospectus, which reflects the direct
operating expenses of the Fund and does not include indirect expenses, such as
AFFE.
(3)Pursuant
to an operating expense limitation agreement between CrossingBridge Advisors,
LLC (the “Adviser”), the Fund’s investment adviser, and the Trust, on behalf of
the Fund, the Adviser has agreed to waive its management fees and/or reimburse
Fund expenses to ensure that Total Annual Fund Operating Expenses (exclusive of
front-end or contingent deferred loads, Rule 12b-1 plan fees, shareholder
servicing plan fees, leverage (i.e.,
any expenses incurred in connection with borrowings made by the Fund) interest
(including interest incurred in connection with bank and custody overdrafts),
brokerage commissions and other transactional expenses, expenses incurred in
connection with any merger or reorganization, dividends or interest on short
positions, acquired fund fees and expenses or extraordinary expenses such as
litigation (collectively “Excluded Expenses”)) do not exceed 0.80% of the Fund’s
average annual net assets, through at least January 31,
2025. To the extent the Fund incurs Excluded Expenses, Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement may
be greater than 0.80%. The operating expense limitation agreement can be
terminated only by, or with the consent of, the Board of Trustees. The Adviser
may request recoupment of previously waived fees and paid expenses from the Fund
up to three years from the date such fees and expenses were waived or paid,
subject to the operating expense limitation agreement, if such reimbursement
will not cause the Fund’s expense ratio, after recoupment has been taken into
account, to exceed the lesser of: (1) the expense limitation in place at the
time of the waiver and/or expense payment; or (2) the expense limitation in
place at the time of the recoupment.
Example
This
Example is intended to help you compare the costs of investing in the Fund with
the cost of investing in other mutual funds. The Example assumes that you invest
$10,000 in the Fund for the time periods indicated and then hold or redeem all
of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the
Fund’s operating expenses remain the same. The operating expense limitation
agreement discussed in the table above is reflected only through January 31,
2025. Although your actual costs may be higher
or lower, based on these assumptions, your costs would
be:
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One
Year |
Three
Years |
Five
Years |
Ten
Years |
$93 |
$322 |
$570 |
$1,281 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions or spreads, 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 the Total 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 217.47% of the average value of its
portfolio.
Principal Investment
Strategies
The
Fund seeks to offer a higher yield than cash instruments while maintaining a low
duration by investing primarily in fixed income securities consistent with
capital preservation. The Fund defines fixed income securities to include:
bills, notes, bonds, debentures, convertible bonds, loan participations,
syndicated loan assignments, mortgage- and asset-backed securities, Rule 144A
fixed income securities, zero coupon securities, sovereign debt and other
evidence of indebtedness issued by U.S. or foreign corporations, governments,
government agencies or government instrumentalities, including floating-rate
securities, preferred stock and fixed income-like equities. Convertible bonds,
preferred stocks, and fixed income-like equities (e.g.,
special purpose acquisition companies (“SPACs”)) provide interest income and/or
the potential for capital appreciation while having an effective maturity.
Floating-rate securities provide interest income that can increase or decrease
with interest rates. The Fund invests in individual fixed income securities
without restriction as to issuer credit quality, capitalization or security
maturity. Though the Fund can invest in securities domiciled in foreign
countries and denominated in foreign currencies, the Fund invests primarily in
securities denominated in U.S. dollars issued by issuers domiciled in developed
markets. The Fund may invest up to 100% of its
assets in lower-quality fixed income securities — commonly known as “high yield”
or “junk” bonds. Junk bonds are generally rated lower than Baa3 by Moody’s
Investors Service, Inc. (“Moody’s”) or lower than BBB- by S&P Global Ratings
Services (“S&P”) (“S&P”). The Adviser believes these investments are
consistent with the preservation of capital. The Fund may invest in companies
that are in default, subject to bankruptcy or
reorganization.
The
Adviser seeks to manage interest rate, default and currency risks. The Adviser
manages interest rate risk by maintaining, under normal market conditions, an
average portfolio duration of 1 or less by investing in short-term, medium-term
and floating rate securities. The stated maturity for a fixed income security
may be longer than its expected maturity used for the portfolio duration
calculation. The stated maturity may differ from the expected maturity as a
result of market conditions or corporate actions (such as a change of control
‘put’ provision or corporate redemption feature). Duration is a measure of
sensitivity of a security’s price to changes in interest rates. For example, a
security with a duration of 1 would be expected to decrease in price 1% for
every 1% rise in interest rates (the inverse is true as well).
The
Adviser manages default risk by selecting securities of issuers that it believes
will pay interest and principal regardless of their credit rating, based upon
the Adviser’s credit analysis of each issuer. The Adviser may also select
securities that are in default, subject to bankruptcy or reorganization where
the
Adviser
believes the risks to be consistent with capital preservation, based on the
Adviser’s analysis of an issuer’s liquidation value or post-bankruptcy or
post-reorganization value.
The
Adviser manages foreign currency risk by investing primarily in securities
denominated in U.S. dollars, such as Yankee bonds. If the Fund were to invest in
foreign currency denominated securities, the Fund restricts such activity to
less than 35% of the Fund’s total assets. When deemed appropriate, the Adviser
may hedge the foreign currency exposure typically, and primarily, with forward
currency contracts. A forward currency contract is an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of days
from the date of the contract agreed upon by the parties.
The
Adviser may engage in active and frequent trading, resulting in a high portfolio
turnover rate, to achieve the Fund’s investment objective.
There
is no assurance that the Fund will achieve its investment
objective.
Principal
Risks
Before
investing in the Fund, you should carefully consider your own investment goals,
the amount of time you are willing to leave your money invested, and the amount
of risk you are willing to take. Remember, in
addition to possibly not achieving your investment goals,
you
could lose money by investing in the Fund. The Fund’s 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. The
principal risks of investing in the Fund are:
Asset-Backed
and Mortgage-Backed Securities Risk. Asset-backed and mortgage-backed securities are subject to risk of
prepayment. These types of securities may also decline in value because of
mortgage foreclosures or defaults on the underlying obligations. Asset-backed
and mortgage-backed securities are also subject to extension risk, the risk that
rising interest rates could cause prepayments to decrease, extending the life of
asset-backed and mortgage-backed securities with lower payment
rates.
Bank
Loans Risk. The
Fund’s investments in secured and unsecured assignments and/or participations in
bank loans may create substantial risk. In making investments in such loans,
which are made by banks or other financial intermediaries to borrowers, the Fund
will depend primarily upon the creditworthiness of the borrower for payment of
principal and interest. As a result, sale proceeds related to the sale of loans
may not be available to make additional investments or to meet the Fund’s
redemption obligations until potentially a substantial period after the sale of
the loans. The Fund, therefore, may be forced to sell other assets at a loss to
pay redemption proceeds.
A
significant portion of bank loans may be “covenant lite” loans that may contain
fewer or less restrictive constraints on the borrower and fewer or no financial
maintenance covenants and restrictions. A covenant lite loan typically contains
fewer clauses which allow an investor to proactively enforce financial
covenants. Covenant lite loans also generally provide fewer investor protections
if certain criteria are breached. The Fund may experience losses or delays in
enforcing its rights on its holdings of covenant lite loans. The secondary
market for bank loans is a private, unregulated inter-dealer or inter-bank
resale market. Purchases and sales of loans are generally subject to contractual
restrictions that must be satisfied before a loan can be bought or sold. These
restrictions may impede the Fund’s ability to buy or sell loans and may
negatively impact the transaction price. It may take longer than seven days for
transactions in loans to settle. The Fund may hold cash, sell investments or
temporarily borrow from banks to meet short-term liquidity needs due to the
extended loan settlement process, such as to satisfy redemption requests from
Fund shareholders. U.S. federal securities laws afford certain protections
against fraud and misrepresentation in connection with the offering or sale of a
security, as well as against manipulation of trading markets for securities. The
typical practice of a
lender in relying exclusively or primarily on reports from the
borrower may involve the risk of fraud, misrepresentation, or market
manipulation by the borrower. It is unclear whether U.S. federal securities law
protections are available to an investment in a loan. In certain circumstances,
loans may not be deemed to be securities, and in the event of fraud or
misrepresentation by a borrower, lenders may not have the protection of the
anti-fraud provisions of the federal securities laws. However, contractual
provisions in the loan documents may offer some protections, and lenders may
also avail themselves of common-law fraud protections under applicable state
law.
Below
Investment Grade Securities Risks (commonly referred to as “junk” bonds).
The Fund may invest 100% of its assets in fixed-income instruments
that are or are deemed to be the equivalent in terms of quality to securities
rated below investment grade by nationally recognized statistical rating
agencies and accordingly involve great risk. Such securities are regarded as
predominantly speculative with respect to the issuer’s capacity to pay interest
and repay principal in accordance with the terms of the obligations and involve
major risk to adverse conditions. These securities offer higher returns than
bonds with higher ratings as compensation for holding an obligation of an issuer
perceived to be less creditworthy. The market prices of such securities are also
subject to abrupt and erratic market movements and above-average price
volatility, and the spread between the bid and ask prices of such securities may
be greater than those prevailing in other securities markets. Changes in
economic conditions or developments regarding issuers of non-investment grade
debt securities are more likely to cause price volatility and weaken the
capacity of such issuers to make principal and interest payments than is the
case for higher grade debt securities. In addition, the market for lower grade
debt securities may be thinner and less active than for higher grade debt
securities.
Convertible
Securities Risk. A convertible security is a fixed-income security (a debt instrument
or a preferred stock) which may be converted at a stated price within a
specified period of time into a certain quantity of the common stock of the same
or a different issuer. The market value of a convertible security performs like
that of a regular debt security, that is, if market interest rates rise, the
value of the convertible security falls.
Corporate
Events Risk. Corporate events risk is the risk that a corporate transaction or
opportunity will not occur, or a natural disaster or regulatory change will
cause an abrupt downgrade in a corporate bond which may lower the Fund’s
performance.
Credit-Related
Instruments Risk. Interest rates may go up resulting in a decrease in the value of the
securities held by the Fund. Interest rates have been rising from historically
low levels, so the Fund faces a heightened risk that interest rates may continue
to rise. A credit rating assigned to a particular debt security is essentially
the opinion of an NRSRO as to the credit quality of an issuer and may prove to
be inaccurate. There is also the risk that a bond issuer may “call,” or repay,
its high yielding bonds before their maturity dates. Debt securities subject to
prepayment can offer less potential for gains during a declining interest rate
environment and similar or greater potential for loss in a rising interest rate
environment. Limited trading opportunities for certain fixed income securities
may make it more difficult to sell or buy a security at a favorable price or
time, particularly during periods of market turmoil, and may also make these
securities difficult to value.
Credit
Risk. Debt
portfolios are subject to credit risk. Credit risk refers to the likelihood that
an issuer will default in the payment of principal and/or interest on an
instrument. Financial strength and solvency of an issuer are the primary factors
influencing credit risk. In addition, lack or inadequacy of collateral or credit
enhancement for a debt instrument may affect its credit risk. Credit risk may
change over the life of
an instrument, and debt obligations which are rated by rating
agencies are often reviewed and may be subject to downgrade.
Cybersecurity
Risk. With the increased use of technologies such as the Internet to
conduct business, the Fund is susceptible to operational, information security,
and related risks. Cyber incidents affecting the Fund or its service providers
have the ability to cause disruptions and impact business operations,
potentially resulting in financial losses, interference with the Fund’s ability
to calculate its NAV, impediments to trading, the inability of shareholders to
transact business, violations of applicable privacy and other laws, regulatory
fines, penalties, reputational damage, reimbursement or other compensation
costs, or additional compliance costs.
Distressed
Securities Risk. The Fund may invest in securities of companies that are experiencing
significant financial or business difficulties, including companies involved in
bankruptcy or other reorganization and liquidation proceedings. Although such
investments may result in significant returns to the Fund, they involve a
substantial degree of risk. Any one or all of the issuers of the securities in
which the Fund may invest may be unsuccessful or not show any return for a
considerable period of time. The level of analytical sophistication, both
financial and legal, necessary for successful investment in companies
experiencing significant business and financial difficulties is unusually high.
There is no assurance that the Adviser will correctly evaluate the value of the
assets collateralizing the Fund’s loans or the prospects for a successful
reorganization or similar action. In any reorganization or liquidation
proceeding relating to a company in which the Fund invests, the Fund may lose
its entire investment or may be required to accept cash or securities with a
value less than the Fund’s original investment. Under such circumstances, the
returns generated from the Fund’s investments in distressed securities may not
adequately compensate for the risks assumed. In addition, there is no minimum
credit standard that is a prerequisite to the Fund’s investment in any
instrument, and a significant portion of the obligations and preferred stock in
which the Fund invests may be less than investment grade.
Equity
Securities Risk. The Fund may invest in income producing equity securities. Although
investments in income producing equity securities are considered safer than
equity securities in general, and equities historically have been a leading
choice for long-term investors, the values of stocks rise and fall depending on
many factors. The stock or other security of a company may not perform as well
as expected, and may decrease in value, because of factors related to the
company (such as poorer than expected earnings or certain management decisions)
or to the industry in which the company is engaged (such as a reduction in the
demand for products or services in a particular industry). Market and economic
factors may adversely affect securities markets generally, which could in turn
adversely affect the value of the Fund’s investments, regardless of the
performance or expected performance of companies in which the Fund
invests.
Fixed
Income Securities Market Risk.
Difficult conditions in the broader financial markets have in the past resulted
in a temporary but significant contraction in liquidity for fixed income
securities. Liquidity relates to the ability of the Fund to sell its investments
in a timely manner at a price approximately equal to its value on the Fund’s
books. To the extent that the market for fixed income securities suffers such a
contraction, securities that were considered liquid at the time of investment
could become temporarily illiquid, and the Adviser may experience delays or
difficulty in selling assets at the prices at which the Fund carries such
assets, which may result in a loss to the Fund. There is no way to predict
reliably when such market conditions could re-occur or how long such conditions
could persist.
In
the event of a severe market contraction precipitated by general market turmoil,
economic conditions, changes in prevailing interest rates or otherwise, coupled
with extraordinary levels of Fund shareholder
redemption
requests, the Fund may have to consider selling its holdings at a loss including
at prices below the current value on the Fund’s books, borrowing money to
satisfy redemption requests in accordance with the Fund’s borrowing policy or
postponing payment of redemption requests for up to seven days or longer, as
permitted by applicable law, or other extraordinary measures. In addition, if
the Fund needed to sell large blocks of investments to meet shareholder
redemption requests or to raise cash, those sales could further reduce prices,
particularly for lower-rated and unrated securities.
In
response to rising inflation, the Federal Reserve began raising short-term
interest rates in 2022 with the potential for further rate increases.
Uncertainty regarding the ability of the Federal Reserve to successfully control
inflation, the potential for incremental rate increases, and the full impact of
prior rate increases may negatively impact fixed income security prices and
increase market volatility. In general, the market price of fixed income
securities with longer maturities will increase or decrease more in response to
changes in interest rates than shorter-term
securities.
Fixed
Income Securities Risk. The Fund invests a significant portion of its assets in fixed income
securities. Fixed income securities are subject to credit risk and market risk,
including interest rate risk. Credit risk is the risk of the issuer’s inability
to meet its principal and interest payment obligations. Market risk is the risk
of price volatility due to such factors as interest rate sensitivity, market
perception of the creditworthiness of the issuer and general market liquidity.
There is no limitation on the maturities of fixed income securities in which the
Fund invests. Securities having longer maturities generally involve greater risk
of fluctuations in value resulting from changes in interest
rates.
Floating
Rate Risk. Securities with floating interest rates generally are less sensitive
to interest rate changes but may decline in value if their interest rates do not
rise as much, or as quickly, as interest rates in general. Conversely, floating
rate instruments will not generally increase in value if interest rates decline.
Changes in interest rates will also affect the amount of interest income the
Fund earns on its floating rate investments.
Foreign
Investments Risk. Investments in fixed income securities of U.S. and foreign issuers
and instruments that are linked to fixed income securities (collectively,
“Credit-Related Instruments”) involve certain risks not generally associated
with investments in the securities of U.S. issuers, including changes in
currency exchange rates, unstable political, social and economic conditions, a
lack of adequate or accurate company information, differences in the way
securities markets operate, less secure international banks or securities
depositories than those in the U.S. and foreign controls on investment. In
addition, individual international country economies may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross domestic
product, rates of inflation, capital reinvestment, resources, self-sufficiency
and balance of payments position. Income earned on foreign investments may be
subject to foreign withholding taxes.
Forward
Currency Contracts. The
Fund may enter into forward currency contracts. A forward currency contract is
an obligation to purchase or sell a specific currency at a future date, which
may be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. For example, the Fund might
purchase a particular currency or enter into a forward currency contract to
preserve the U.S. dollar price of securities it intends to or has contracted to
purchase. Alternatively, it might sell a particular currency on either a spot or
forward basis to hedge against an anticipated decline in the dollar value of
securities it intends to or has contracted to sell. Although this
strategy could minimize the risk of loss due to a decline in the
value of the hedged currency, it could also limit any potential gain from an
increase in the value of the currency.
General
Market Risk. Certain securities selected for the Fund’s portfolio may be worth
less than the price originally paid for them, or less than they were worth at an
earlier time.
Government
Securities Risk. The Fund invests in securities issued or guaranteed by the U.S.
Government, its agencies and instrumentalities (including government-sponsored
enterprises). Securities issued by agencies and instrumentalities may not be
guaranteed or insured by the U.S. Government and may only be supported by the
credit of the issuing entity.
High
Portfolio Turnover Risk. 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.
Interest
Rate Risk. The prices of securities in general and fixed-income securities in
particular tend to be sensitive to interest rate fluctuations. Increases in
interest rates can result in significant declines in the prices of fixed-income
securities. Securities with floating interest rates generally are less sensitive
to interest rate changes but may decline in value if their interest rates do not
rise as much, or as quickly, as interest rates in general. The negative impact
on fixed income securities generally from rate increases, regardless of the
cause, could be swift and significant, which could result in losses by the Fund,
even if anticipated by the Adviser. Starting in 2022, the Federal Reserve began
to increase interest rates in an effort to combat inflation which has resulted
in periods of volatility.
Liquidity
Risk. Certain investments and markets can become illiquid at times and
negatively impact the price of an investment if the Fund were to sell during
times of illiquidity.
Management
Risk. Investment strategies employed by the 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 other
investments.
Preferred
Stock Risk. Preferred stocks may be more volatile than fixed income securities
and are more correlated with the issuer’s underlying common stock than fixed
income securities. Additionally, the dividend on a preferred stock may be
changed or omitted by the issuer, and participation in the growth of an issuer
may be limited.
Prepayment
Risk. The risk that the issuer of a debt security repays all or a portion
of the principal prior to the security’s maturity therefore resulting in lower
yields to shareholders of the Fund. The Fund may be unable to re-invest the
proceeds in an investment with as great a yield.
Recent
Market Events Risk. U.S.
and international markets have experienced and may continue to experience
significant periods of volatility in recent years and months due to a number of
economic, political and global macro factors including uncertainty regarding
inflation and central banks’ interest rate increases, the possibility of a
national or global recession, trade tensions, political events, the war between
Russia and Ukraine, significant conflict between Israel and Hamas in the Middle
East, and the impact of the coronavirus (COVID-19) global pandemic. The impact
of COVID-19 may last for an extended period of time. As a result of continuing
political tensions and armed conflicts, including the war between Ukraine and
Russia, the U.S. and the European Union imposed sanctions on certain Russian
individuals
and companies, including certain financial institutions, and have
limited certain exports and imports to and from Russia. The war has contributed
to recent market volatility and may continue to do so. Continuing market
volatility as a result of recent market conditions or other events may have an
adverse effect on the performance of the Fund.
Redemption
Risk. The Fund may experience periods of heavy redemptions that could cause
the Fund to liquidate its assets at inopportune times or at a loss or depressed
value, particularly during periods of declining or illiquid
markets.
Rule
144A Securities Risk. The market for Rule 144A securities typically is less active than the
market for publicly-traded securities. Rule 144A securities carry the risk that
the liquidity of these securities may become impaired, making it more difficult
for the Fund to sell these securities.
Sovereign
Debt Risk.
The Fund may invest in securities issued or guaranteed by foreign
governmental entities (known as sovereign debt securities). These investments
are subject to the risk of payment delays or defaults, due, for example, to cash
flow problems, insufficient foreign currency reserves, political considerations,
large debt positions relative to the country’s economy, or failure to implement
economic reforms. There is no legal or bankruptcy process for collecting
sovereign debt.
SPACs
Risk. The
Fund invests in equity securities of SPACs, which raise assets to seek potential
business combination opportunities. Unless and until a business combination is
completed, a SPAC generally invests its assets in U.S. government securities,
money market securities, and cash. Because SPACs have no operating history or
ongoing business other than seeking a business combination, the value of their
securities is particularly dependent on the ability of the entity’s management
to identify and complete a profitable business combination. There is no
guarantee that the SPACs in which the Fund invests will complete a business
combination or that any business combination that is completed will be
profitable. The market perception of a SPAC’s ability to complete a business
combination could materially impact the market value of the SPAC’s
securities.
Public stockholders of SPACs may not be afforded a meaningful
opportunity to vote on a proposed initial business combination because certain
stockholders, including stockholders affiliated with the management of the SPAC,
may have sufficient voting power, and a financial incentive, to approve such a
transaction without support from public stockholders. As a result, a SPAC may
complete a business combination even though a majority of its public
stockholders do not support such a combination. Some SPACs may pursue a business
combination only within certain industries or regions, which may increase the
volatility of their prices.
Trade
Versus
Settlement
Risk.
The
Funds
may
invest in securities that have varied settlement terms and dates. The
longer the amount of time between trade date and settlement date the greater the
risk that settlement will occur on a timely basis.
Yankee
Bond Risk. Yankee bonds are subject to the same risks as other debt issues,
notably credit risk, market risk, currency and liquidity risk. Other risks
include adverse political and economic developments; the extent and quality of
government regulations of financial markets and institutions; the imposition of
foreign withholding taxes; and the expropriation or nationalization of foreign
issuers.
Zero
Coupon Securities Risk. While
interest payments are not made on such securities, holders of such securities
are deemed to have received income annually, notwithstanding that cash may not
be received currently. Some of these securities may be subject to substantially
greater price fluctuations during periods of changing market interest rates than
are comparable securities that pay interest currently.
Longer term zero coupon bonds are more exposed to interest rate risk
than shorter term zero coupon bonds.
Performance
The bar chart demonstrates some of the risks of investing
in the Fund by showing changes in the Fund’s performance from year-to-year. The Average Annual
Total Returns table also demonstrates these risks by showing how the Fund’s
average annual total returns for the one year and since inception periods
compare with those of a broad measure of market performance, as well as two
secondary indices provided to show broader market perspective. The
Fund’s past performance, before and after taxes, is not necessarily an
indication of how the Fund will perform in the future. Updated
performance information is available on the Fund’s website at www.crossingbridgefunds.com
or by calling the Fund toll-free at 888-898-2780.
Calendar Year Returns as of
December 31
During
the period shown in the bar chart, the best performance for a
quarter was 1.70% (for the quarter ended December 31, 2023) and
the worst performance was
0.00% (for the quarter ended March 31,
2022).
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Average
Annual Total Returns
(for
the periods ended December 31, 2023) |
Institutional
Class Shares |
One
Year |
Since
Inception
(June 30,
2021) |
Return Before
Taxes |
5.65% |
3.32% |
Return After
Taxes on Distributions |
3.25% |
1.85% |
Return After
Taxes on Distributions and Sale of Fund
Shares |
3.31% |
1.92% |
ICE
BofA 0-1 Year U.S. Corporate Index
(reflects no deduction for
fees, expenses, or taxes) |
5.67% |
2.28% |
ICE
BofA 0-1 Year U.S. Treasury Index
(reflects no deduction for
fees, expenses, or taxes) |
5.05% |
2.26% |
ICE
BofA 0-3 Year U.S. Fixed Rate Asset Backed Securities Index
(reflects no deduction for
fees, expenses, or taxes) |
5.61% |
1.32% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual
after-tax returns depend on an investor’s tax situation and may differ from
those shown, and after-tax returns are not relevant to investors who hold
their Fund shares through tax-deferred or other tax-advantaged
arrangements such as 401(k) plans or individual retirement accounts
(“IRA”).
In
certain cases, the figure representing “Return After Taxes on Distributions and
Sale of Fund Shares” may be higher than the other return figures for the same
period. A higher after-tax return results when a capital loss occurs upon
redemption and provides an assumed tax benefit to the
investor.
Management
Investment
Adviser. CrossingBridge
Advisors, LLC, located at 427 Bedford Road, Suite 220, Pleasantville, New York,
10570, is the Ultra-Short Duration Fund’s investment adviser.
Portfolio
Managers.
David K. Sherman, President of the Adviser, has served as the Ultra-Short
Duration Fund’s lead portfolio manager since inception in 2021. T. Kirk Whitney,
CFA®,
Assistant Portfolio Manager of the Adviser, has served as the Fund’s assistant
portfolio manager since inception in 2021.
For
important information about the purchase and sale of Fund shares, tax
information and financial intermediary compensation, please turn to “Purchase
and Sale of Fund Shares, Taxes and Financial Intermediary Compensation” on page
42 of the Prospectus.
Investment
Objective
The
CrossingBridge Responsible Credit Fund (“Responsible Credit Fund” or the “Fund”)
seeks high current income and capital appreciation consistent with the
preservation 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.
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
Institutional
Class |
Management
Fees |
0.65% |
Distribution
and Service (12b-1) Fees |
None |
Shareholder
Servicing Fees(1) |
0.10% |
Other
Expenses(2) |
0.96% |
Total
Annual Fund Operating Expenses(2) |
1.71% |
Less:
Fee Waiver and/or Expense Reimbursement |
-0.80% |
Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement(2)(3) |
0.91% |
(1)The
Trust’s Board of Trustees (the “Board of Trustees”) has authorized a shareholder
servicing plan fee up to 0.15% of the Fund’s average daily net assets.
Currently, the shareholder servicing plan fee being charged is 0.10% of the
Fund’s average daily net assets; however, the fee may be increased to 0.15% of
the Fund’s average daily net assets at any time.
(2)Other
Expenses include acquired fund fees and expenses (“AFFE”), which are indirect
fees and expenses that the Fund incurs from investing in the shares of other
mutual funds, including money market funds. Please note that the amount of Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement
shown in the above table will differ
from the Ratio of Expenses to Average Net Assets figures found within the
“Financial Highlights” section of the Prospectus, which reflects the direct
operating expenses of the Fund and does not include indirect expenses, such as
AFFE.
(3)Pursuant
to an operating expense limitation agreement between CrossingBridge Advisors,
LLC (the “Adviser”), the Fund’s investment adviser, and the Trust, on behalf of
the Fund, the Adviser has agreed to waive its management fees and/or reimburse
Fund expenses to ensure that Total Annual Fund Operating Expenses (exclusive of
front-end or contingent deferred loads, Rule 12b-1 plan fees, shareholder
servicing plan fees, leverage (i.e.,
any expenses incurred in connection with borrowings made by the Fund) interest
(including interest incurred in connection with bank and custody overdrafts),
brokerage commissions and other transactional expenses, expenses incurred in
connection with any merger or reorganization, dividends or interest on short
positions, acquired fund fees and expenses or extraordinary expenses such as
litigation (collectively “Excluded Expenses”)) do not exceed 0.80% of the Fund’s
average annual net assets, through at least January 31,
2025. To the extent the Fund incurs Excluded Expenses, Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement may
be greater than 0.80%. The operating expense limitation agreement can be
terminated only by, or with the consent of, the Board of Trustees. The Adviser
may request recoupment of previously waived fees and paid expenses from the Fund
up to three years from the date such fees and expenses were waived or paid,
subject to the operating expense limitation agreement, if such reimbursement
will not cause the Fund’s expense ratio, after recoupment has been taken into
account, to exceed the lesser of: (1) the expense limitation in place at the
time of the waiver and/or expense payment; or (2) the expense limitation in
place at the time of the recoupment.
Example
This
Example is intended to help you compare the costs of investing in the Fund with
the cost of investing in other mutual funds. The 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 those periods. The Example also assumes that
your investment has a 5% return each year and that the Fund’s
operating expenses remain the same. The operating expense limitation agreement
discussed in the table above is reflected only through January 31,
2025. Although your actual costs may be higher
or lower, based on these assumptions, your costs would
be:
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One
Year |
Three
Years |
Five
Years |
Ten
Years |
$93 |
$461 |
$853 |
$1,953 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions or spreads, 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 the Total 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 129.55% of the average value of its
portfolio.
Principal Investment
Strategies
The
Fund seeks to achieve its investment objective by investing primarily in fixed
income securities while actively managing interest rate and default risks. Under
normal circumstances, the Fund invests at least 80% of its net assets (plus the
amount of any borrowings for investment purposes) in fixed income securities
that meet the Adviser’s responsible investing criteria.
Investment
decisions for the Fund are made by the Adviser based on a bottom-up analysis of
an issuer’s business model, quantitative and qualitative factors, as well as the
Adviser’s “responsible investing criteria” (i.e.,
specific exclusionary and inclusionary criteria based on environmental, social
and governance (“ESG”) standards). The Adviser utilizes a proprietary matrix to
measure an issuer’s ESG engagement. The Adviser’s proprietary matrix sets a
minimum threshold level that must be achieved for an issuer’s securities or
other instruments to satisfy the Fund’s responsible investing criteria. The
Adviser sources information relating to its responsible investing criteria from
publicly-available resources such as financial filings, presentations, news
articles, and management discussions. The Adviser monitors an issuer’s
conformity to its responsible investing criteria and each holding will be
formally reviewed by the Adviser at least annually.
The
Adviser believes that ESG industry standards will evolve over time, and such
standards will continue to enhance the Adviser’s ability to identify and measure
behaviors. The Adviser believes that certain products and business practices of
an issuer may be detrimental and incompatible with mainstream views of
responsible investing. Therefore, certain exclusionary criteria are applied by
the Adviser as a first step in determining an individual investment’s
suitability for the Fund. Issuers whose business is primarily engaged in one of
the following activities will be excluded from the Fund:
•Weapons;
•Tobacco;
•Alcohol
and Marijuana (for Recreational Purposes);
•Gambling;
•Pornography/Adult
Entertainment;
•Certain
Fossil Fuels (including Coal Mining and Fracking Exploration);
•Nuclear
Fission (typically Power Plants);
•International
Norms Violations; and
•Corporations
or Sovereign Entities not adhering to the United Nations Global Compact
Principles and the Organization for Economic Co-operation and Development (OECD)
Guidelines for Multi-National Enterprises.
The
Adviser considers any issuer whose business generates 10% or more of its
revenues from one of the activities noted above to be “primarily engaged” in
such activities and subject to exclusion. The Adviser may expand the list of
exclusionary activities from time to time. The Adviser applies its exclusionary
criteria to any investment considered for inclusion in the Fund’s portfolio.
The
Adviser believes that applying an exclusionary screen to issuers that are
non-conforming to its ESG standards is an important first step, but believes it
is also important to integrate those issuers that have a positive ESG impact or
ESG mindfulness that meet the Adviser’s inclusionary criteria described in the
objectives below. The Adviser believes that responsible issuers can reward
shareholders while being mindful of their ESG impact. As a responsible investor,
the Adviser seeks to invest with issuers providing positive leadership in the
pursuit of the following objectives:
Environmental
Objectives:
•Reduce
the negative operational impact and practices on the environment;
•Reduce
the use of scarce resources;
•Reduce
carbon emissions; and
•Pursue
resource efficiency, sustainability, and innovation.
Social
Objectives:
•Treat
all constituencies in a proper and ethical manner;
•Address
all constituencies in a fair and equitable manner;
•Promote
health and well-being for all constituencies;
•Protect
sensitive data for all constituencies;
•Market
products in a sincere and factual approach;
•Provide
employees with development and opportunity in an appropriate workplace; and
•Recognize
barriers of underrepresented groups by supporting diversity and
inclusion.
Governance
Objectives:
•Independent
members of an issuers Board that provide checks and balances;
•Diversification
of backgrounds, skills, and philosophy among an issuers Board or executive
officers;
•Promote
transparency and communication;
•Exercise
and supports law abidingness externally and from within;
•Develop
programs to measure and improve environmental impact and social practices;
•Respect
lenders rights and value similarly to shareholders; and
•Advocate
ethical standards in operations and dealings with customers, employees,
regulators, business partners and the greater community.
At
least 80% of the Fund’s assets will be comprised of investments of issuers
satisfying the Adviser’s minimum threshold for the inclusionary criteria. The
Adviser deems governmental securities of G7 countries (Canada, France, Germany,
Italy, Japan, the United Kingdom and the United States) to be of the highest ESG
quality. Governmental securities of non-G7 countries will be evaluated by the
Adviser on a case-by-case basis for inclusion in the Fund’s investment
portfolio.
The
Fund defines fixed income securities to include: bills, notes, bonds,
debentures, convertible bonds, loan participations, mortgage- and asset-backed
securities, Rule 144A fixed income securities, zero coupon securities,
syndicated loan assignments, sovereign debt and other evidence of indebtedness
issued by U.S. or foreign corporations, governments, government agencies or
government instrumentalities,
including
floating-rate securities, commercial paper, preferred stock and fixed
income-like equities. Convertible bonds, preferred stocks, and fixed income-like
equities (e.g.
special
purpose acquisition companies (“SPACs”)) provide interest income and/or the
potential for capital appreciation while having an effective maturity.
Floating-rate securities provide interest income that can increase or decrease
with interest rates. The Fund invests in individual fixed income securities
without restriction as to issuer credit quality, capitalization or security
maturity. The Fund may invest up to 100% of its assets in lower-quality fixed
income securities — commonly known as “high yield” or “junk” bonds. Junk bonds
are generally rated lower than Baa3 by Moody’s Investors Service (“Moody’s”) or
lower than BBB- by Standard and Poor’s Rating Group (“S&P”). The Fund may
invest in junk bonds that are in default, subject to bankruptcy or
reorganization. High yield bonds have a higher expected rate of default than
higher quality bonds.
The
Adviser seeks to manage duration, currency, and default risks. Although the
Adviser will take macro factors into consideration, the portfolio duration is
primarily driven by bottom-up investment opportunities. Under normal market
conditions, the Adviser will generally pursue a portfolio duration of 2 to 4.
Duration is a measure of sensitivity of a security’s price to changes in
interest rates. For example, a security with a duration of 2 would be expected
to decrease in price 2% for every 1% rise in interest rates (the inverse is true
as well).
The
Adviser manages default risk by selecting securities of issuers that it believes
will pay interest and principal regardless of their credit rating, based upon
the Adviser’s credit analysis of each issuer. The Adviser may also select
securities that are in default, subject to bankruptcy or reorganization where
the Adviser believes the risks to be consistent with capital preservation, based
on the Adviser’s analysis of an issuer’s liquidation value or post-bankruptcy or
post-reorganization value.
The
Adviser manages foreign currency risk by investing primarily in securities
denominated in U.S. dollars, such as Yankee bonds. If the Fund were to invest in
foreign currency denominated securities, the Fund restricts such activity to
less than 35% of the Fund’s total assets. When deemed appropriate, the Adviser
may hedge the foreign currency exposure typically, and primarily, with forward
currency contracts. A forward currency contract is an obligation to purchase or
sell a specific currency at a future date, which may be any fixed number of days
from the date of the contract agreed upon by the parties.
The
Fund is “non-diversified” for purposes of the Investment Company Act of 1940, as
amended (the “1940 Act”), which means that the Fund may invest in fewer
securities at any one time than a diversified fund. However, the adviser manages
the impact of the risk of each investment by a considered analysis of
appropriate sizing and portfolio diversification.
The
Fund may engage in active trading of its portfolio, resulting in a high turnover
rate.
There
is no assurance that the Fund will achieve its investment
objective.
Principal
Risks
Before
investing in the Fund, you should carefully consider your own investment goals,
the amount of time you are willing to leave your money invested, and the amount
of risk you are willing to take. Remember, in
addition to possibly not achieving your investment goals,
you
could lose money by investing in the Fund. The Fund’s 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. The
principal risks of investing in the Fund are:
Asset-Backed
and Mortgage-Backed Securities Risk. Asset-backed and mortgage-backed securities are subject to risk of
prepayment. These types of securities may also decline in value because of
mortgage foreclosures or defaults on the underlying obligations. Asset-backed
and mortgage-backed securities are also subject to extension risk, the risk that
rising interest rates could cause prepayments to decrease, extending the life of
asset-backed and mortgage-backed securities with lower payment
rates.
Bank
Loans Risk. The
Fund’s investments in secured and unsecured assignments and/or participations in
bank loans may create substantial risk. In making investments in such loans,
which are made by banks or other financial intermediaries to borrowers, the Fund
will depend primarily upon the creditworthiness of the borrower for payment of
principal and interest. As a result, sale proceeds related to the sale of loans
may not be available to make additional investments or to meet the Fund’s
redemption obligations until potentially a substantial period after the sale of
the loans. The Fund, therefore, may be forced to sell other assets at a loss to
pay redemption proceeds.
A significant portion of bank loans may be “covenant lite” loans that
may contain fewer or less restrictive constraints on the borrower and fewer or
no financial maintenance covenants and restrictions. A covenant lite loan
typically contains fewer clauses which allow an investor to proactively enforce
financial covenants. Covenant lite loans also generally provide fewer investor
protections if certain criteria are breached. The Fund may experience losses or
delays in enforcing its rights on its holdings of covenant lite loans. The
secondary market for bank loans is a private, unregulated inter-dealer or
inter-bank resale market. Purchases and sales of loans are generally subject to
contractual restrictions that must be satisfied before a loan can be bought or
sold. These restrictions may impede the Fund’s ability to buy or sell loans and
may negatively impact the transaction price. It may take longer than seven days
for transactions in loans to settle. The Fund may hold cash, sell investments or
temporarily borrow from banks to meet short-term liquidity needs due to the
extended loan settlement process, such as to satisfy redemption requests from
Fund shareholders. U.S. federal securities laws afford certain protections
against fraud and misrepresentation in connection with the offering or sale of a
security, as well as against manipulation of trading markets for securities. The
typical practice of a lender in relying exclusively or primarily on reports from
the borrower may involve the risk of fraud, misrepresentation, or market
manipulation by the borrower. It is unclear whether U.S. federal securities law
protections are available to an investment in a loan. In certain circumstances,
loans may not be deemed to be securities, and in the event of fraud or
misrepresentation by a borrower, lenders may not have the protection of the
anti-fraud provisions of the federal securities laws. However, contractual
provisions in the loan documents may offer some protections, and lenders may
also avail themselves of common-law fraud protections under applicable state
law.
Below
Investment Grade Securities Risks (commonly referred to as “junk” bonds).
The Fund may invest 100% of its assets in fixed-income instruments
that are or are deemed to be the equivalent in terms of quality to securities
rated below investment grade by nationally recognized statistical rating
agencies and accordingly involve great risk. Such securities are regarded as
predominantly speculative with respect to the issuer’s capacity to pay interest
and repay principal in accordance with the terms of the obligations and involve
major risk to adverse conditions. These securities offer higher returns than
bonds with higher ratings as compensation for holding an obligation of an issuer
perceived to be less creditworthy. The market prices of such securities are also
subject to abrupt and erratic market movements and above-average price
volatility, and the spread between the bid and ask prices of such securities may
be greater than those prevailing in other securities markets. Changes in
economic conditions or developments regarding issuers of non-investment grade
debt securities are more likely to cause price volatility and weaken the
capacity of such issuers to make principal and interest payments than is the
case for higher grade debt securities. In addition, the market for lower grade
debt securities may be thinner and less active than for higher grade debt
securities.
Convertible
Securities Risk. A convertible security is a fixed-income security (a debt instrument
or a preferred stock) which may be converted at a stated price within a
specified period of time into a certain quantity of the common stock of the same
or a different issuer. The market value of a convertible security performs like
that of a regular debt security, that is, if market interest rates rise, the
value of the convertible security falls.
Corporate
Events Risk. Corporate events risk is the risk that a corporate transaction or
opportunity will not occur, or a natural disaster or regulatory change will
cause an abrupt downgrade in a corporate bond which may lower the Fund’s
performance.
Credit-Related
Instruments Risk. Interest rates may go up resulting in a decrease in the value of the
securities held by the Fund. Interest rates have been rising from historically
low levels, so the Fund faces a heightened risk that interest rates may continue
to rise. A credit rating assigned to a particular debt security is essentially
the opinion of an NRSRO as to the credit quality of an issuer and may prove to
be inaccurate. There is also the risk that a bond issuer may “call,” or repay,
its high yielding bonds before their maturity dates. Debt securities subject to
prepayment can offer less potential for gains during a declining interest rate
environment and similar or greater potential for loss in a rising interest rate
environment. Limited trading opportunities for certain fixed income securities
may make it more difficult to sell or buy a security at a favorable price or
time, particularly during periods of market turmoil, and may also make these
securities difficult to value.
Credit
Risk. Debt portfolios are subject to credit risk. Credit risk refers to the
likelihood that an issuer will default in the payment of principal and/or
interest on an instrument. Financial strength and solvency of an issuer are the
primary factors influencing credit risk. In addition, lack or inadequacy of
collateral or credit enhancement for a debt instrument may affect its credit
risk. Credit risk may change over the life of an instrument, and debt
obligations which are rated by rating agencies are often reviewed and may be
subject to downgrade.
Cybersecurity
Risk. With the increased use of technologies such as the Internet to
conduct business, the Fund is susceptible to operational, information security,
and related risks. Cyber incidents affecting the Fund or its service providers
have the ability to cause disruptions and impact business operations,
potentially resulting in financial losses, interference with the Fund’s ability
to calculate its NAV, impediments to trading, the inability of shareholders to
transact business, violations of applicable privacy and other laws, regulatory
fines, penalties, reputational damage, reimbursement or other compensation
costs, or additional compliance costs.
Distressed
Securities Risk.
The Fund may invest in securities of companies that are experiencing significant
financial or business difficulties, including companies involved in bankruptcy
or other reorganization and liquidation proceedings. Although such investments
may result in significant returns to the Fund, they involve a substantial degree
of risk. Any one or all of the issuers of the securities in which the Fund may
invest may be unsuccessful or not show any return for a considerable period of
time. The level of analytical sophistication, both financial and legal,
necessary for successful investment in companies experiencing significant
business and financial difficulties is unusually high. There is no assurance
that the Adviser will correctly evaluate the value of the assets collateralizing
the Fund’s loans or the prospects for a successful reorganization or similar
action. In any reorganization or liquidation proceeding relating to a company in
which the Fund invests, the Fund may lose its entire investment or may be
required to accept cash or securities with a value less than the Fund’s original
investment. Under
such circumstances, the returns generated from the Fund’s investments
in distressed securities may not adequately compensate for the risks assumed. In
addition, there is no minimum credit standard that is a prerequisite to the
Fund’s investment in any instrument, and a significant portion of the
obligations and preferred stock in which the Fund invests may be less than
investment grade.
Equity
Securities Risk. The Fund may invest in income producing equity securities. Although
investments in income producing equity securities are considered safer than
equity securities in general, and equities historically have been a leading
choice for long-term investors, the values of stocks rise and fall depending on
many factors. The stock or other security of a company may not perform as well
as expected, and may decrease in value, because of factors related to the
company (such as poorer than expected earnings or certain management decisions)
or to the industry in which the company is engaged (such as a reduction in the
demand for products or services in a particular industry). Market and economic
factors may adversely affect securities markets generally, which could in turn
adversely affect the value of the Fund’s investments, regardless of the
performance or expected performance of companies in which the Fund
invests.
ESG
Investment Risk. The Fund’s focus on sustainability considerations (ESG criteria) may
limit the number of investment opportunities available to the Fund, and as a
result, at times, the Fund may underperform funds that are not subject to
similar investment considerations.
Fixed
Income Securities Market Risk.
Difficult conditions in the broader financial markets have in the past resulted
in a temporary but significant contraction in liquidity for fixed income
securities. Liquidity relates to the ability of the Fund to sell its investments
in a timely manner at a price approximately equal to its value on the Fund’s
books. To the extent that the market for fixed income securities suffers such a
contraction, securities that were considered liquid at the time of investment
could become temporarily illiquid, and the Adviser may experience delays or
difficulty in selling assets at the prices at which the Fund carries such
assets, which may result in a loss to the Fund. There is no way to predict
reliably when such market conditions could re-occur or how long such conditions
could persist.
In
the event of a severe market contraction precipitated by general market turmoil,
economic conditions, changes in prevailing interest rates or otherwise, coupled
with extraordinary levels of Fund shareholder redemption requests, the Fund may
have to consider selling its holdings at a loss including at prices below the
current value on the Fund’s books, borrowing money to satisfy redemption
requests in accordance with the Fund’s borrowing policy or postponing payment of
redemption requests for up to seven days or longer, as permitted by applicable
law, or other extraordinary measures. In addition, if the Fund needed to sell
large blocks of investments to meet shareholder redemption requests or to raise
cash, those sales could further reduce prices, particularly for lower-rated and
unrated securities.
In response to rising inflation, the Federal Reserve began raising
short-term interest rates in 2022 with the potential for further rate increases.
Uncertainty regarding the ability of the Federal Reserve to successfully control
inflation, the potential for incremental rate increases, and the full impact of
prior rate increases may negatively impact fixed income security prices and
increase market volatility. In general, the market price of fixed income
securities with longer maturities will increase or decrease more in response to
changes in interest rates than shorter-term securities.
Fixed
Income Securities Risk. The
Fund invests a significant portion of its assets in fixed income securities.
Fixed income securities are subject to credit risk and market risk, including
interest rate risk. Credit risk is the risk of the issuer’s inability to meet
its principal and interest payment obligations. Market risk is the risk of price
volatility due to such factors as interest rate sensitivity, market perception
of the creditworthiness of the issuer and general market liquidity.
There is no limitation on the maturities of fixed income securities in which the
Fund invests. Securities having longer maturities generally involve greater risk
of fluctuations in value resulting from changes in interest
rates.
Floating
Rate Risk. Securities with floating interest rates generally are less sensitive
to interest rate changes but may decline in value if their interest rates do not
rise as much, or as quickly, as interest rates in general. Conversely, floating
rate instruments will not generally increase in value if interest rates decline.
Changes in interest rates will also affect the amount of interest income the
Fund earns on its floating rate investments.
Foreign
Investments Risk. Investments in fixed income securities of U.S. and foreign issuers
and instruments that are linked to fixed income securities (collectively,
“Credit-Related Instruments”) involve certain risks not generally associated
with investments in the securities of U.S. issuers, including changes in
currency exchange rates, unstable political, social and economic conditions, a
lack of adequate or accurate company information, differences in the way
securities markets operate, less secure international banks or securities
depositories than those in the U.S. and foreign controls on investment. In
addition, individual international country economies may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross domestic
product, rates of inflation, capital reinvestment, resources, self-sufficiency
and balance of payments position. Income earned on foreign investments may be
subject to foreign withholding taxes.
Forward
Currency Contracts. The Fund may enter into forward currency contracts. A forward
currency contract is an obligation to purchase or sell a specific currency at a
future date, which may be any fixed number of days from the date of the contract
agreed upon by the parties, at a price set at the time of the contract. For
example, the Fund might purchase a particular currency or enter into a forward
currency contract to preserve the U.S. dollar price of securities it intends to
or has contracted to purchase. Alternatively, it might sell a particular
currency on either a spot or forward basis to hedge against an anticipated
decline in the dollar value of securities it intends to or has contracted to
sell. Although this strategy could minimize the risk of loss due to a decline in
the value of the hedged currency, it could also limit any potential gain from an
increase in the value of the currency.
General
Market Risk. Certain securities selected for the Fund’s portfolio may be worth
less than the price originally paid for them, or less than they were worth at an
earlier time.
Government
Securities Risk. The Fund invests in securities issued or guaranteed by the U.S.
Government, its agencies and instrumentalities (including government-sponsored
enterprises). Securities issued by agencies and instrumentalities may not be
guaranteed or insured by the U.S. Government and may only be supported by the
credit of the issuing entity.
High
Portfolio Turnover Risk. 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.
Interest
Rate Risk. The
prices of securities in general and fixed-income securities in particular tend
to be sensitive to interest rate fluctuations. Increases in interest rates can
result in significant declines in the prices of fixed-income securities.
Securities with floating interest rates generally are less sensitive to interest
rate changes but may decline in value if their interest rates do not rise as
much, or as quickly, as
interest rates in general. The negative impact on fixed income
securities generally from rate increases, regardless of the cause, could be
swift and significant, which could result in losses by the Fund, even if
anticipated by the Adviser. Starting in 2022, the Federal Reserve began to
increase interest rates in an effort to combat inflation which has resulted in
periods of volatility.
Liquidity
Risk. Certain investments and markets can become illiquid at times and
negatively impact the price of an investment if the Fund were to sell during
times of illiquidity.
Management
Risk. Investment strategies employed by the 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 other
investments.
Non-Diversification
Risk. The Fund is classified as a “non-diversified” investment company
under the Investment Company Act of 1940, as amended (the “1940 Act”).
Therefore, the Fund may invest a relatively high percentage of its assets in a
smaller number of issuers or may invest a larger proportion of its assets in the
obligations of a single issuer. As a result, the gains and losses on a single
investment may have a greater impact on the Fund’s net asset value (“NAV”) and
may make the Fund more volatile than more diversified funds.
Preferred
Stock Risk. Preferred stocks may be more volatile than fixed income securities
and are more correlated with the issuer’s underlying common stock than fixed
income securities. Additionally, the dividend on a preferred stock may be
changed or omitted by the issuer, and participation in the growth of an issuer
may be limited.
Prepayment
Risk. The risk that the issuer of a debt security repays all or a portion
of the principal prior to the security’s maturity therefore resulting in lower
yields to shareholders of the Fund. The Fund may be unable to re-invest the
proceeds in an investment with as great a yield.
Recent
Market Events Risk. U.S. and international markets have experienced and may continue to
experience significant periods of volatility in recent years and months due to a
number of economic, political and global macro factors including uncertainty
regarding inflation and central banks’ interest rate increases, the possibility
of a national or global recession, trade tensions, political events, the war
between Russia and Ukraine, significant conflict between Israel and Hamas in the
Middle East, and the impact of the coronavirus (COVID-19) global pandemic. The
impact of COVID-19 may last for an extended period of time. As a result of
continuing political tensions and armed conflicts, including the war between
Ukraine and Russia, the U.S. and the European Union imposed sanctions on certain
Russian individuals and companies, including certain financial institutions, and
have limited certain exports and imports to and from Russia. The war has
contributed to recent market volatility and may continue to do so. Continuing
market volatility as a result of recent market conditions or other events may
have an adverse effect on the performance of the Fund.
Redemption
Risk. The Fund may experience periods of heavy redemptions that could cause
the Fund to liquidate its assets at inopportune times or at a loss or depressed
value, particularly during periods of declining or illiquid
markets.
Rule
144A Securities Risk. The market for Rule 144A securities typically is less active than the
market for publicly-traded securities. Rule 144A securities carry the risk that
the liquidity of these securities may become impaired, making it more difficult
for the Fund to sell these securities.
Sovereign
Debt Risk.
The Fund may invest in securities issued or guaranteed by foreign
governmental entities (known as sovereign debt securities). These investments
are subject to the risk of payment delays or defaults, due, for example, to cash
flow problems, insufficient foreign currency reserves, political considerations,
large debt positions relative to the country’s economy, or failure to implement
economic reforms. There is no legal or bankruptcy process for collecting
sovereign debt.
SPACs
Risk. The
Fund invests in equity securities of SPACs, which raise assets to seek potential
business combination opportunities. Unless and until a business combination is
completed, a SPAC generally invests its assets in U.S. government securities,
money market securities, and cash. Because SPACs have no operating history or
ongoing business other than seeking a business combination, the value of their
securities is particularly dependent on the ability of the entity’s management
to identify and complete a profitable business combination. There is no
guarantee that the SPACs in which the Fund invests will complete a business
combination or that any business combination that is completed will be
profitable. The market perception of a SPAC’s ability to complete a business
combination could materially impact the market value of the SPAC’s
securities.
Public stockholders of SPACs may not be afforded a meaningful
opportunity to vote on a proposed initial business combination because certain
stockholders, including stockholders affiliated with the management of the SPAC,
may have sufficient voting power, and a financial incentive, to approve such a
transaction without support from public stockholders. As a result, a SPAC may
complete a business combination even though a majority of its public
stockholders do not support such a combination. Some SPACs may pursue a business
combination only within certain industries or regions, which may increase the
volatility of their prices.
Trade
Versus
Settlement
Risk.
The
Funds
may
invest in securities that have varied settlement terms and dates. The
longer the amount of time between trade date and settlement date the greater the
risk that settlement will occur on a timely basis.
Yankee
Bond Risk. Yankee bonds are subject to the same risks as other debt issues,
notably credit risk, market risk, currency and liquidity risk. Other risks
include adverse political and economic developments; the extent and quality of
government regulations of financial markets and institutions; the imposition of
foreign withholding taxes; and the expropriation or nationalization of foreign
issuers.
Zero
Coupon Securities Risk. While interest payments are not made on such securities, holders of
such securities are deemed to have received income annually, notwithstanding
that cash may not be received currently. Some of these securities may be subject
to substantially greater price fluctuations during periods of changing market
interest rates than are comparable securities that pay interest currently.
Longer term zero coupon bonds are more exposed to interest rate risk than
shorter term zero coupon bonds.
Performance
The bar chart
demonstrates some of the risks of investing in the Fund by showing changes in
the Fund’s performance from year-to-year. The Average Annual
Total Returns table also demonstrates these risks by showing how the Fund’s
average annual total returns for the one year and since inception periods
compare with those of a broad measure of market performance, as well as two
secondary indices provided to show broader market perspective. The
Fund’s past performance, before and after taxes, is not necessarily an
indication of how the Fund will perform in the future. Updated
performance information is available on the Fund’s website at www.crossingbridgefunds.com
or by calling the Fund toll-free at 888-898-2780.
Calendar Year Returns as of
December 31
During
the period shown in the bar chart, the best performance for a
quarter was 2.89% (for the quarter ended September 30, 2023) and
the worst performance was
-1.62% (for the quarter ended June 30,
2022).
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Average
Annual Total Returns
(for
the periods ended December 31, 2023) |
Institutional
Class Shares |
One
Year |
Since
Inception
(June 30,
2021) |
Return Before
Taxes |
7.97% |
4.35% |
Return
After Taxes on Distributions |
4.28% |
1.61% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
4.63% |
2.17% |
ICE
BofA U.S. High Yield Index
(reflects no deduction for
fees, expenses, or taxes) |
13.46% |
0.93% |
ICE
BofA U.S. Corporate Index
(reflects no deduction for
fees, expenses, or taxes) |
8.40% |
-3.38% |
ICE
BofA 3-7 Year U.S. Treasury Index
(reflects no deduction for
fees, expenses, or taxes) |
4.36% |
-2.51% |
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown, and
after-tax returns are not relevant to investors who hold their Fund shares
through tax-deferred or other tax-advantaged arrangements such as 401(k) plans
or individual retirement accounts (“IRA”).
In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax benefit to the investor.
Management
Investment
Adviser. CrossingBridge
Advisors, LLC, located at 427 Bedford Road, Suite 220, Pleasantville, New York,
10570, is the Responsible Credit Fund’s investment adviser.
Portfolio
Managers.
David K. Sherman, President of the Adviser, has served as the Fund’s lead
portfolio manager since inception in 2021. T. Kirk Whitney, CFA®,
Assistant Portfolio Manager of the Adviser, has served as the Fund’s assistant
portfolio manager since inception in 2021.
For
important information about the purchase and sale of Fund shares, tax
information and financial intermediary compensation, please turn to “Purchase
and Sale of Fund Shares, Taxes and Financial Intermediary Compensation” on page
42 of the Prospectus.
Investment
Objective
The
RiverPark Strategic Income Fund (the “Strategic Income Fund” or the “Fund”)
seeks high current income and capital appreciation consistent with the
preservation 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.
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
Institutional Class
|
Retail
Class |
Management
Fees |
0.65% |
0.65% |
Distribution
(12b-1) Fees |
None |
0.25% |
Other
Expenses |
| |
Shareholder
Servicing Plan Fee(1) |
0.11% |
0.11% |
Other
Expenses |
0.18% |
0.18% |
Interest
Expense and Dividends on Short Positions |
0.04% |
0.04% |
Total
Annual Fund Operating Expenses |
0.98% |
1.23% |
(1)The
Trust’s Board of Trustees (the “Board of Trustees”) has authorized a shareholder
servicing plan fee up to 0.15% of the Fund’s average daily net assets.
Currently, the shareholder servicing plan fee being charged is 0.11% of the
Fund’s average daily net assets; however, the fee may be increased to 0.15% of
the Fund’s average daily net assets at any time.
Example
This Example is intended to help you compare the costs of
investing in the Fund with the cost of investing in other mutual funds. The
Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then hold or redeem all of your shares at the end of those
periods. The Example also assumes that your investment has a 5% return each year
and that the Fund’s operating expenses remain the same.
Although your actual costs may be higher
or lower, based on these assumptions, your costs would
be:
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Share
Class |
One
Year |
Three
Years |
Five
Years |
Ten
Years |
Institutional
Class |
$100 |
$312 |
$542 |
$1,201 |
Retail
Class |
$125 |
$390 |
$676 |
$1,489 |
Portfolio
Turnover
The
Fund pays transaction costs, such as commissions or spreads, 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 the Total Annual Fund Operating Expenses or in the Example, affect the Fund’s
performance. For the fiscal year ended September 30, 2023, the portfolio
turnover rate of the Fund was 104.44%.
Principal Investment
Strategies
The
Fund seeks to achieve its investment objective by investing in both investment
grade and non-investment grade debt, preferred stock, convertible bonds
(i.e.,
debt securities that provide the Fund with a right or an obligation to exchange
the debt security for a predetermined number of shares in the issuing
company),
bank loans, high yield bonds, mortgage- and asset-backed securities, special
purpose acquisition companies (“SPACs”) and income producing equities
(collectively, “Securities”) that CrossingBridge Advisors, LLC (the “Adviser”),
the Fund’s investment adviser, deems appropriate for the Fund’s investment
objective. The Fund will invest at least 80% of its net assets (plus the amount
of any borrowings for investment purposes) in fixed income securities and income
producing equities. The Fund may invest up to 100% of its assets in fixed income
securities. The Fund will invest in fixed income securities of various credit
qualities (i.e.,
investment grade and below investment grade (i.e.,
junk bonds)) and maturities (i.e., long-term, intermediate and short-term). The Fund may invest up to
100% of its assets in below investment grade fixed income securities. The Fund
will invest in individual fixed income securities without restriction as to
duration. The Fund’s investment in below investment grade fixed income
securities may include distressed securities, which are fixed income securities
issued by companies experiencing significant financial or business difficulties
such as bankruptcy, reorganization or liquidation proceedings. The Fund will
invest primarily in U.S. dollar-denominated securities but may invest up to 35%
of its assets in foreign fixed income securities including sovereign debt and
foreign currency-denominated securities. The Fund may hedge the foreign currency
exposure by investing in forward currency contracts. A forward currency contract
is an obligation to purchase or sell a specific currency at a future date, which
may be any fixed number of days from the date of the contract agreed upon by the
parties. The Fund may also invest up to 35% of its assets in income producing
equities that either have a substantial dividend yield or where the Adviser
believes the issuing company will distribute significant assets over a certain
period of time. The Fund’s investments will be diversified across individual
issuers and industries. The Fund, however, will invest without restriction as to
issuer credit quality, or security maturity.
Although
the Adviser will take macro factors (i.e.,
the effect of interest rates on the Fund’s investments) into consideration, the
Fund’s portfolio construction is primarily driven by bottom-up investment
analysis. This means that the Adviser looks at Securities on an individual basis
to determine if a Security is an attractive investment opportunity and if it is
consistent with the Fund’s investment objective. The Fund’s buy and sell
decisions are driven by the Adviser’s investment process. The Fund may hold
Securities until maturity but will sell a Security when the Adviser determines a
Security is no longer an attractive investment opportunity consistent with the
Fund’s investment objective, when a more attractive investment opportunity
becomes available or to satisfy redemption requests. In addition, a Security may
be purchased at a premium or discount and/or sold prior to maturity where the
Adviser believes it is advantageous to do so. The Fund may invest up to 15% of
the value of its total assets to effect short sales of securities, including up
to 10% in short sales of exchange-traded funds (“ETFs”) to hedge the portfolio
if the Adviser believes it is consistent with achieving the Fund’s investment
objective. Other than for temporary purposes, the Fund will not borrow in order
to gain leverage.
The
Fund may engage in active trading of its portfolio, resulting in a high turnover
rate.
There
is no assurance that the Fund will achieve its investment
objectives.
Principal
Risks
Before
investing in the Fund, you should carefully consider your own investment goals,
the amount of time you are willing to leave your money invested, and the amount
of risk you are willing to take. Remember, in
addition to possibly not achieving your investment goals,
you
could lose money by investing in the Fund. The Fund’s 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. The
principal risks of investing in the Fund are:
Asset-Backed
and Mortgage-Backed Securities Risk. Asset-backed and mortgage-backed securities are subject to risk of
prepayment. These types of securities may also decline in value because of
mortgage foreclosures or defaults on the underlying obligations. Asset-backed
and mortgage-backed securities are also subject to extension risk, the risk that
rising interest rates could cause prepayments to decrease, extending the life of
asset-backed and mortgage-backed securities with lower payment
rates.
Bank
Loans Risk. The
Fund’s investments in secured and unsecured assignments and/or participations in
bank loans may create substantial risk. In making investments in such loans,
which are made by banks or other financial intermediaries to borrowers, the Fund
will depend primarily upon the creditworthiness of the borrower for payment of
principal and interest. As a result, sale proceeds related to the sale of loans
may not be available to make additional investments or to meet the Fund’s
redemption obligations until potentially a substantial period after the sale of
the loans. The Fund, therefore, may be forced to sell other assets at a loss to
pay redemption proceeds.
A significant portion of bank loans may be “covenant lite” loans that
may contain fewer or less restrictive constraints on the borrower and fewer or
no financial maintenance covenants and restrictions. A covenant lite loan
typically contains fewer clauses which allow an investor to proactively enforce
financial covenants. Covenant lite loans also generally provide fewer investor
protections if certain criteria are breached. The Fund may experience losses or
delays in enforcing its rights on its holdings of covenant lite loans. The
secondary market for bank loans is a private, unregulated inter-dealer or
inter-bank resale market. Purchases and sales of loans are generally subject to
contractual restrictions that must be satisfied before a loan can be bought or
sold. These restrictions may impede the Fund’s ability to buy or sell loans and
may negatively impact the transaction price. It may take longer than seven days
for transactions in loans to settle. The Fund may hold cash, sell investments or
temporarily borrow from banks to meet short-term liquidity needs due to the
extended loan settlement process, such as to satisfy redemption requests from
Fund shareholders. U.S. federal securities laws afford certain protections
against fraud and misrepresentation in connection with the offering or sale of a
security, as well as against manipulation of trading markets for securities. The
typical practice of a lender in relying exclusively or primarily on reports from
the borrower may involve the risk of fraud, misrepresentation, or market
manipulation by the borrower. It is unclear whether U.S. federal securities law
protections are available to an investment in a loan. In certain circumstances,
loans may not be deemed to be securities, and in the event of fraud or
misrepresentation by a borrower, lenders may not have the protection of the
anti-fraud provisions of the federal securities laws. However, contractual
provisions in the loan documents may offer some protections, and lenders may
also avail themselves of common-law fraud protections under applicable state
law.
Below
Investment Grade Securities Risks (commonly referred to as “junk” bonds).
The Fund may invest 100% of its assets in fixed-income instruments
that are or are deemed to be the equivalent in terms of quality to securities
rated below investment grade by nationally recognized statistical rating
agencies and accordingly involve great risk. Such securities are regarded as
predominantly speculative with respect to the issuer’s capacity to pay interest
and repay principal in accordance with the terms of the obligations and involve
major risk to adverse conditions. These securities offer higher returns than
bonds with higher ratings as compensation for holding an obligation of an issuer
perceived to be less creditworthy. The market prices of such securities are also
subject to abrupt and erratic market movements and above-average price
volatility, and the spread between the bid and ask prices of such securities may
be greater than those prevailing in other securities markets. Changes in
economic conditions or developments regarding issuers of non-investment grade
debt securities are more likely to cause price volatility and weaken the
capacity of such issuers to make principal and interest payments than is the
case for higher grade debt securities. In addition, the market for lower grade
debt securities may be thinner and less active than for higher grade debt
securities.
Convertible
Securities Risk. A convertible security is a fixed-income security (a debt instrument
or a preferred stock) which may be converted at a stated price within a
specified period of time into a certain quantity of the common stock of the same
or a different issuer. The market value of a convertible security performs like
that of a regular debt security, that is, if market interest rates rise, the
value of the convertible security falls.
Credit
Risk. Debt portfolios are subject to credit risk. Credit risk refers to the
likelihood that an issuer will default in the payment of principal and/or
interest on an instrument. Financial strength and solvency of an issuer are the
primary factors influencing credit risk. In addition, lack or inadequacy of
collateral or credit enhancement for a debt instrument may affect its credit
risk. Credit risk may change over the life of an instrument, and debt
obligations which are rated by rating agencies are often reviewed and may be
subject to downgrade.
Cybersecurity
Risk. With the increased use of technologies such as the Internet to
conduct business, the Fund is susceptible to operational, information security,
and related risks. Cyber incidents affecting the Fund or its service providers
have the ability to cause disruptions and impact business operations,
potentially resulting in financial losses, interference with the Fund’s ability
to calculate its NAV, impediments to trading, the inability of shareholders to
transact business, violations of applicable privacy and other laws, regulatory
fines, penalties, reputational damage, reimbursement or other compensation
costs, or additional compliance costs.
Distressed
Securities Risk. The Fund may invest in securities of companies that are experiencing
significant financial or business difficulties, including companies involved in
bankruptcy or other reorganization and liquidation proceedings. Although such
investments may result in significant returns to the Fund, they involve a
substantial degree of risk. Any one or all of the issuers of the securities in
which the Fund may invest may be unsuccessful or not show any return for a
considerable period of time. The level of analytical sophistication, both
financial and legal, necessary for successful investment in companies
experiencing significant business and financial difficulties is unusually high.
There is no assurance that the Adviser will correctly evaluate the value of the
assets collateralizing the Fund’s loans or the prospects for a successful
reorganization or similar action. In any reorganization or liquidation
proceeding relating to a company in which the Fund invests, the Fund may lose
its entire investment or may be required to accept cash or securities with a
value less than the Fund’s original investment. Under such circumstances, the
returns generated from the Fund’s investments in distressed securities may not
adequately compensate for the risks assumed. In addition, there is no minimum
credit standard that is a prerequisite to the Fund’s investment in any
instrument, and a significant portion of the obligations and preferred stock in
which the Fund invests may be less than investment grade.
Equity
Securities Risk. The Fund may invest in income producing equity securities. Although
investments in income producing equity securities are considered safer than
equity securities in general, and equities historically have been a leading
choice for long-term investors, the values of stocks rise and fall depending on
many factors. The stock or other security of a company may not perform as well
as expected, and may decrease in value, because of factors related to the
company (such as poorer than expected earnings or certain management decisions)
or to the industry in which the company is engaged (such as a reduction in the
demand for products or services in a particular industry). Market and economic
factors may adversely affect securities markets generally, which could in turn
adversely affect the value of the Fund’s investments, regardless of the
performance or expected performance of companies in which the Fund
invests.
Fixed
Income Securities Market Risk.
Difficult conditions in the broader financial markets have in the past resulted
in a temporary but significant contraction in liquidity for fixed income
securities. Liquidity relates to the ability of the Fund to sell its investments
in a timely manner at a price approximately equal to its value on the Fund’s
books. To the extent that the market for fixed income securities suffers such a
contraction, securities that were considered liquid at the time of investment
could become temporarily illiquid, and the Adviser may experience delays or
difficulty in selling assets at the prices at which the Fund carries such
assets, which may result in a loss to the Fund. There is no way to predict
reliably when such market conditions could re-occur or how long such conditions
could persist.
In
the event of a severe market contraction precipitated by general market turmoil,
economic conditions, changes in prevailing interest rates or otherwise, coupled
with extraordinary levels of Fund shareholder redemption requests, the Fund may
have to consider selling its holdings at a loss including at prices below the
current value on the Fund’s books, borrowing money to satisfy redemption
requests in accordance with the Fund’s borrowing policy or postponing payment of
redemption requests for up to seven days or longer, as permitted by applicable
law, or other extraordinary measures. In addition, if the Fund needed to sell
large blocks of investments to meet shareholder redemption requests or to raise
cash, those sales could further reduce prices, particularly for lower-rated and
unrated securities.
In
response to rising inflation, the Federal Reserve began raising short-term
interest rates in 2022 with the potential for further rate increases.
Uncertainty regarding the ability of the Federal Reserve to successfully control
inflation, the potential for incremental rate increases, and the full impact of
prior rate increases may negatively impact fixed income security prices and
increase market volatility. In general, the market price of fixed income
securities with longer maturities will increase or decrease more in response to
changes in interest rates than shorter-term securities.
Fixed
Income Securities Risk. The
Fund invests a significant portion of its assets in fixed income securities.
Fixed income securities are subject to credit risk and market risk, including
interest rate risk. Credit risk is the risk of the issuer’s inability to meet
its principal and interest payment obligations. Market risk is the risk of price
volatility due to such factors as interest rate sensitivity, market perception
of the creditworthiness of the issuer and general market liquidity. There is no
limitation on the maturities of fixed income securities in which the Fund
invests. Securities having longer maturities generally involve greater risk of
fluctuations in value resulting from changes in interest
rates.
Foreign
Investments Risk. Investments in fixed income securities of U.S. and foreign issuers
and instruments that are linked to fixed income securities (collectively,
“Credit-Related Instruments”) involve certain risks not generally associated
with investments in the securities of U.S. issuers, including changes in
currency exchange rates, unstable political, social and economic conditions, a
lack of adequate or accurate company information, differences in the way
securities markets operate, less secure international banks or securities
depositories than those in the U.S. and foreign controls on investment. In
addition, individual international country economies may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross domestic
product, rates of inflation, capital reinvestment, resources, self-sufficiency
and balance of payments position. Income earned on foreign investments may be
subject to foreign withholding taxes.
Forward
Currency Contracts. The
Fund may enter into forward currency contracts. A forward currency contract is
an obligation to purchase or sell a specific currency at a future date, which
may be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. For example, the Fund might
purchase a particular currency or enter into a forward currency contract to
preserve the U.S. dollar price of securities it intends to or has contracted to
purchase. Alternatively, it might sell a particular currency on either a spot or
forward basis to hedge against an
anticipated decline in the dollar value of securities it intends to
or has contracted to sell. Although this strategy could minimize the risk of
loss due to a decline in the value of the hedged currency, it could also limit
any potential gain from an increase in the value of the
currency.
General
Market Risk. Certain securities selected for the Fund’s portfolio may be worth
less than the price originally paid for them, or less than they were worth at an
earlier time.
High
Portfolio Turnover Risk. 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.
Illiquid
Investments Risk. Illiquid investments include any investment that the Fund reasonably
expects cannot be sold or disposed of in current market conditions in seven
calendar days or less without the sale or dispositions significantly changing
the market value of the investment, and include repurchase agreements maturing
in more than seven days. The Fund’s investments in certain types of fixed income
securities such as bank loans, mortgage-backed securities and below investment
grade fixed income securities could have the effect of increasing the amount of
the Fund’s assets invested in illiquid investments if market conditions develop
that make such investments difficult to sell. Liquidity risk may be higher in a
rising interest rate environment, when the value and liquidity of fixed-income
securities generally decline. Illiquid investments involve the risk that the
securities will not be able to be sold at the time desired by the Adviser or at
prices approximating the value at which the Fund is carrying the
securities.
Interest
Rate Risk. The prices of securities in general and fixed-income securities in
particular tend to be sensitive to interest rate fluctuations. Increases in
interest rates can result in significant declines in the prices of fixed-income
securities. Securities with floating interest rates generally are less sensitive
to interest rate changes but may decline in value if their interest rates do not
rise as much, or as quickly, as interest rates in general. The negative impact
on fixed income securities generally from rate increases, regardless of the
cause, could be swift and significant, which could result in losses by the Fund,
even if anticipated by the Adviser. Starting in 2022, the Federal Reserve began
to increase interest rates in an effort to combat inflation which has resulted
in periods of volatility.
Management
Risk. Investment strategies employed by the 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 other
investments.
Preferred
Stock Risk. Preferred stocks may be more volatile than fixed income securities
and are more correlated with the issuer’s underlying common stock than fixed
income securities. Additionally, the dividend on a preferred stock may be
changed or omitted by the issuer, and participation in the growth of an issuer
may be limited.
Recent
Market Events Risk. U.S.
and international markets have experienced and may continue to experience
significant periods of volatility in recent years and months due to a number of
economic, political and global macro factors including uncertainty regarding
inflation and central banks’ interest rate increases, the possibility of a
national or global recession, trade tensions, political events, the war between
Russia and Ukraine, significant conflict between Israel and Hamas in the Middle
East, and the impact of the coronavirus (COVID-19) global pandemic. The impact
of COVID-19 may last for an extended period
of time. As a result of continuing political tensions and armed
conflicts, including the war between Ukraine and Russia, the U.S. and the
European Union imposed sanctions on certain Russian individuals and companies,
including certain financial institutions, and have limited certain exports and
imports to and from Russia. The war has contributed to recent market volatility
and may continue to do so. Continuing market volatility as a result of recent
market conditions or other events may have an adverse effect on the performance
of the Fund.
Short
Sales Risk. A short sale is the sale by the Fund of a security which it does
not own in anticipation of purchasing the same security in the future at a lower
price to close the short position. A short sale will be successful if the price
of the shorted security decreases. However, if the underlying security goes up
in price during the period in which the short position is outstanding, the Fund
will realize a loss. The risk on a short sale is unlimited because the Fund must
buy the shorted security at the higher price to complete the transaction.
Therefore, short sales may be subject to greater risks than investments in long
positions. With a long position, the maximum sustainable loss is limited to the
amount paid for the security plus the transaction costs, whereas there is no
maximum attainable price of the shorted security. The Fund would also incur
increased transaction costs associated with selling securities short. In
addition, if the Fund sells securities short, it must maintain a segregated
account with its custodian containing cash or high-grade securities equal to (i)
the greater of the current market value of the securities sold short or the
market value of such securities at the time they were sold short, less (ii) any
collateral deposited with the Fund’s broker (not including the proceeds from the
short sales).
Sovereign
Debt Risk.
The Fund may invest in securities issued or guaranteed by foreign
governmental entities (known as sovereign debt securities). These investments
are subject to the risk of payment delays or defaults, due, for example, to cash
flow problems, insufficient foreign currency reserves, political considerations,
large debt positions relative to the country’s economy, or failure to implement
economic reforms. There is no legal or bankruptcy process for collecting
sovereign debt.
SPACs
Risk. The
Fund invests in equity securities of SPACs, which raise assets to seek potential
business combination opportunities. Unless and until a business combination is
completed, a SPAC generally invests its assets in U.S. government securities,
money market securities, and cash. Because SPACs have no operating history or
ongoing business other than seeking a business combination, the value of their
securities is particularly dependent on the ability of the entity’s management
to identify and complete a profitable business combination. There is no
guarantee that the SPACs in which the Fund invests will complete a business
combination or that any business combination that is completed will be
profitable. The market perception of a SPAC’s ability to complete a business
combination could materially impact the market value of the SPAC’s
securities.
Public stockholders of SPACs may not be afforded a meaningful
opportunity to vote on a proposed initial business combination because certain
stockholders, including stockholders affiliated with the management of the SPAC,
may have sufficient voting power, and a financial incentive, to approve such a
transaction without support from public stockholders. As a result, a SPAC may
complete a business combination even though a majority of its public
stockholders do not support such a combination. Some SPACs may pursue a business
combination only within certain industries or regions, which may increase the
volatility of their prices.
Performance
The bar chart
demonstrates some of the risks of investing in the Fund by showing changes in
the Fund’s performance from year to year for Institutional Class
shares. The Average Annual Total Returns table also demonstrates
these risks by showing how average annual returns for the Fund’s Institutional
Class and Retail Class shares for the one year, five year, and ten year periods
compare with those of a broad measure of market performance as well as the
performance of two categories of mutual funds comprised
of
funds that are managed with similar investment strategies to the Fund.
Performance data for the classes varies based on differences in their fee and
expense structures. Performance for Retail Class shares would be lower as
expenses for Retail Class shares are higher.
Effective
on May 12, 2023, the RiverPark Strategic Income Fund, a series of RiverPark
Funds Trust (the “Predecessor Fund”) reorganized into the Fund, a newly-created
series of the Trust (the “Reorganization”). For periods prior to the
Reorganization the performance figures for Institutional Class and Retail Class
shares reflect the historical performance of the Institutional Class and Retail
Class shares, respectively, of the Predecessor Fund. Cohanzick Management, LLC,
an affiliated entity of the Adviser, served as the investment sub-adviser of the
Predecessor Fund, and David K. Sherman, the Fund’s sole portfolio manager,
served as the sole portfolio manager of the Predecessor Fund since the
Predecessor Fund’s inception. The Fund has adopted the performance and financial
history of the Predecessor Fund. The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.crossingbridgefunds.com
or by calling the Fund toll-free at 888-898-2780.
Calendar
Year Returns as of December 31*
*
The returns shown in the
bar chart are for Institutional Class shares of the Fund. Retail Class shares
would have substantially similar annual returns because the shares are invested
in the same portfolio of securities and the annual returns would differ only to
the extent that the classes do not have the same
expenses.
During
the period of time shown in the bar chart, the highest quarterly
return for Institutional Class shares was 9.83% for the quarter
ended June 30, 2020, and the
lowest quarterly return for
Institutional Class shares was -12.86% for the quarter ended March 31,
2020.
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Average
Annual Total Returns
(for
the periods ended December 31, 2023) |
Institutional
Class Shares |
One
Year |
Five
Year |
Ten
Year |
Return
Before Taxes |
9.62% |
4.84% |
4.04% |
Return
After Taxes on Distributions |
6.28% |
2.34% |
1.63% |
Return
After Taxes on Distributions and Sales of Fund
Shares |
5.62% |
2.62% |
1.98% |
Retail
Class Shares |
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Return
Before Taxes |
9.36% |
4.65% |
3.79% |
Bloomberg
U.S. Aggregate Bond Index(1)
(reflects no deduction for
fees, expenses, or taxes) |
5.53% |
1.10% |
1.81% |
ICE
BofA U.S. High Yield Index(1)
(reflects no deduction for
fees, expenses, or taxes) |
13.46% |
5.21% |
4.51% |
ICE
BofA 3-7 Year U.S. Treasury Index
(reflects no deduction for
fees, expenses, or taxes) |
4.36% |
0.92% |
1.35% |
ICE
BofA U.S. Corporate Index
(reflects no deduction for
fees, expenses, or taxes) |
8.40% |
2.63% |
2.98% |
(1) The Fund
has changed its primary broad-based index from the Bloomberg U.S. Aggregate Bond
Index to the ICE BofA U.S. High Yield Index because the Adviser believes the ICE
BofA U.S. High Yield Index is more representative of the investment approach
used to manage the Fund.
After-tax returns are
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown, and
after-tax returns shown are not relevant to investors who hold their Fund shares
through tax-deferred or other tax-advantaged arrangements, such as 401(k) plans
or individual retirement accounts (“IRAs”). The
after-tax returns are shown for Institutional Class shares only and after-tax
returns for Retail Class shares will vary.
In certain cases, the figure
representing “Return After Taxes on Distributions and Sale of Fund Shares” may
be higher than the other return figures for the same period. A higher after-tax
return results when a capital loss occurs upon redemption and provides an
assumed tax benefit to the investor.
Management
Investment
Adviser. CrossingBridge
Advisors, LLC, located at 427 Bedford Road, Suite 220, Pleasantville, New York,
10570, is the Fund’s investment adviser.
Portfolio
Managers.
David K. Sherman, President of the Adviser, has served as the lead portfolio
manager of the Fund and the Predecessor Fund since its inception in 2013.
Spencer Rolfe, Assistant Portfolio Manager of the Adviser, has served as the
assistant portfolio manager of the Fund since July 2023.
For
important information about the purchase and sale of Fund shares, tax
information and financial intermediary compensation, please turn to “Purchase
and Sale of Fund Shares, Taxes and Financial Intermediary Compensation” on page
42 of the Prospectus.
Purchase
and Sale of Fund Shares
You
may conduct transactions (share purchases or redemptions) via written request by
mail (CrossingBridge Funds, c/o U.S. Bank Global Fund Services, P.O. Box 701,
Milwaukee, WI 53201-0701), by wire transaction, or by contacting the Funds by
telephone at 888-898-2780, on any day the New York Stock Exchange (“NYSE”) is
open for trading.
Investors
who wish to purchase or redeem Fund shares through a financial intermediary
should contact the financial intermediary directly.
Minimum
initial and subsequent investment amounts are shown below.
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Share
Purchase Amounts |
Institutional Class
- All Funds |
Retail
Class - Low Duration High Yield Fund and Strategic Income Fund
Only |
Minimum
Initial Investment – All Accounts |
$0
for certain institutional investors as described under “Minimum Investment
Amounts”; $5,000 for all other investors |
$2,500 |
Minimum
Subsequent Investment |
None |
None |
Automatic
Investment Plan (Low Duration High Yield Fund, Ultra-Short Duration,
Responsible Credit) |
$100 |
$100 |
Automatic
Investment Plan (Strategic Income Fund) |
$1,000 |
$100 |
Tax
Information
Each
Fund’s distributions will be taxed as ordinary income or long-term capital
gains, unless you are investing through a tax-deferred arrangement, such as a
401(k) plan or an IRA.
You
may be taxed later upon withdrawal of monies from tax-deferred
arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase Fund shares through a broker-dealer, or other financial
intermediary (such as a bank), the Funds and their related companies may pay the
intermediary for the sale of Fund shares and related services.
These
payments may create conflicts of interest by influencing the broker-dealer or
other intermediary and your salesperson to recommend the Funds over another
investment.
Ask
your salesperson or visit your financial intermediary’s website for more
information.
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CrossingBridge
Low Duration High Yield Fund |
Investment
Objective
The
Low Duration High Yield Fund seeks high current income and capital appreciation
consistent with the preservation of capital using a low duration
mandate.
Principal
Investment Strategies
Under
normal market conditions, the Low Duration High Yield Fund will invest at least
80% of its net assets (plus any borrowings for investment purposes) in fixed
income securities and loans issued by companies that are rated below investment
grade (i.e.,
“junk” bonds and loans). The Fund considers below investment grade instruments
to include instruments with ratings lower than BBB- by S&P Global Ratings
Services (“S&P”) or Baa3 by Moody’s Investors Service, Inc. (“Moody’s”), or
that are not rated or considered by the Adviser to be equivalent to high yield
instruments. The Fund generally invests in high yield instruments rated CCC or
better by S&P or Moody’s, but retains the discretion to invest in lower
rated instruments.
The
fixed income securities and loans in which the Low Duration High Yield Fund
expects to invest include traditional corporate bonds, zero-coupon bonds,
commercial paper, ETNs, distressed debt securities, bank loan assignments and/or
participations, private placements, and mortgage- and asset-backed securities,
U.S. Government obligations and bank loans to corporate borrowers, and may have
fixed, floating or variable rates. The Fund typically focuses on instruments
that have short durations (i.e.,
have an expected duration of three years or less from the time of purchase
through maturity, call, or corporate action). Duration is a measure of a debt
instrument’s price sensitivity to yield. Higher duration indicates debt
instruments that are more sensitive to interest rate changes. Bonds with shorter
duration are typically less sensitive to interest rate changes. For example, a
security with a duration of two would be expected to decrease in price 2% for
every 1% rise in interest rates. Duration takes into account a debt instrument’s
cash flows over time, including the possibility that a debt instrument might be
prepaid by the issuer or redeemed by the holder prior to its stated maturity
date. In contrast, maturity measures only the time until final payment is due.
The Adviser seeks to preserve the Fund’s principal by managing interest rate,
default and currency risks.
The
Low Duration High Yield Fund may invest up to 35% of its total assets in foreign
fixed income instruments, including those denominated in U.S. dollars or other
currencies, and may also invest without limit in Rule 144A fixed income
securities. Additionally, the Fund may invest up to 25% of its total assets in
convertible bonds, up to 25% of its total assets in Yankee bonds, and up to 20%
in preferred stocks, SPACs and income producing equities. The Fund’s investments
in Derivatives, specifically futures contracts, options, options on futures
contracts, swap agreements and forward currency contracts may be used as a
substitute for making direct investments in the underlying instruments or to
reduce exposure to, or “hedge,” against market volatilities and other risks. The
Fund may use a Derivative rather than investing directly in an underlying asset
class as a low-cost, effective means to gain exposure to an asset class.
Derivatives involve the use of leverage. Accordingly, the Fund will maintain
long positions in securities available for collateral, consisting of cash, cash
equivalents and other liquid securities, to comply with applicable legal
requirements. Additionally, for hedging purposes, the Fund may invest up to 25%
of its total assets in other investment companies, such as exchange-traded
funds. The Fund may also utilize leverage of no more than 33% of the Fund’s
total assets as part of the portfolio management process.
The
Adviser manages default risk by selecting securities of issuers that it believes
will pay interest and principal regardless of their credit rating, based upon
the Adviser’s credit analysis of each issuer. However, the Adviser also selects
securities that are in default, subject to bankruptcy or reorganization where
the Adviser believes the risks to be consistent with capital preservation, based
on the Adviser’s analysis of an issuer’s liquidation value or post-bankruptcy or
post-reorganization value. The Adviser believes that the combination of this
fundamental analysis and the short duration characteristics of the securities
result in a low volatility, absolute return risk profile. The Adviser manages
foreign currency risk by restricting foreign currency denominated securities to
less than 35% of the Fund’s assets.
Due
to the nature of securities in which the Low Duration High Yield Fund invests,
the Fund is expected to have relatively high portfolio turnover compared to
other types of funds. The Fund’s portfolio turnover rate is expected to exceed
100% per year. To implement its principal investment strategies, the Fund may
invest in various types of high yield securities, as discussed in greater detail
below.
The
Adviser applies a “bottom up” approach in choosing the Low Duration High Yield
Fund’s investments. In other words, the Adviser looks at each fixed income
security to determine whether that security is an attractive investment
opportunity, consistent with the Fund’s investment objective. Fixed income
securities are generally held in the Fund’s portfolio until maturity or
effective maturity. However, a fixed income security may be sold prior to
maturity. For example, a fixed income security may be sold prior to maturity in
light of a corporate action or announcement affecting the issuer. In addition, a
security may be purchased at a discount and/or sold prior to maturity where the
Adviser believes it is advantageous to do so.
Fixed
Income Securities. The
Low Duration High Yield Fund intends to invest in fixed income securities that
are subject to the risk of default by the issuer with respect to principal and
interest payments on its obligations (i.e.
credit risk) as well as price volatility due to such factors as interest rate
sensitivity, market perception of the creditworthiness of the issuer and general
market liquidity (i.e.
market risk). Bonds and similar fixed income securities generally are either
secured or unsecured. Although secured bonds entitle holders to an interest in
the assets of the issuer that are pledged as collateral for the bonds, the
proceeds from the sale of such collateral may not fully repay the creditors in
the event of a default. Holders of unsecured bonds represent the most junior
position of an issuer’s creditors.
Bank
Loans. The
Low Duration High Yield Fund may invest up to 35% of its net assets in bank
loans. Bank loans generally take longer to settle than other domestic fixed
income securities.
Below
Investment Grade Securities.
The Low Duration High Yield Fund expects to invest under normal conditions at
least 80% of the net assets (plus the amount of any borrowings for investment
purposes) of the Fund in fixed income instruments which are or are deemed to be
the equivalent in terms of quality to securities rated below investment grade by
Moody’s Investors Service, Inc. and Standard & Poor’s Corporation and
accordingly involve great risk. Such securities are regarded as predominantly
speculative with respect to the issuer’s capacity to pay interest and repay
principal in accordance with the terms of the obligations and involve major risk
to adverse conditions. These securities offer higher returns than bonds with
higher ratings as compensation for holding an obligation of an issuer perceived
to be less creditworthy.
Foreign
Securities.
The Low Duration High Yield Fund may invest up to 35% of the total portfolio in
foreign securities, including sovereign debt. Such investments may include
direct investments in securities of foreign issuers and investments in
depositary receipts (such as ADRs) that represent indirect interests in
securities of foreign issuers.
Illiquid
Securities.
The Low Duration High Yield Fund may invest up to 15% of its net assets in
illiquid securities.
Investments
in Asset-Backed Securities. Asset-backed
securities are bonds backed by pools of assets such as motor vehicle installment
sale contracts, sale/lease-back obligations in the utility, airline and rail
shipping industries, installment loan contracts, leases of various types of real
and personal property, receivables from revolving credit (credit card)
agreements, corporate receivables or cash flows from operating assets such as
royalties and leases. The value of asset-backed securities, like that of
traditional fixed-income securities, typically increases when interest rates
fall and decreases when interest rates rise. However, asset-backed securities
differ from traditional fixed-income securities because of their potential for
prepayment. The value of asset-backed securities may also be affected by the
creditworthiness of the servicing agent for the pool, the originator of the
loans or receivables, or the financial institution(s) providing the credit
support. In addition, asset-backed securities are not backed by any governmental
agency.
Investments
in Mortgage-Backed Securities.
Mortgage-backed securities are securities that directly or indirectly represent
a participation in, or are secured by and payable from, mortgage loans secured
by real property. There currently are three basic types of mortgage-backed
securities:
1.those
issued or guaranteed by the U.S. Government or one of its agencies or
instrumentalities, such as GNMA or “Ginnie Mae” (Government National Mortgage
Association), FNMA or “Fannie Mae” (Federal National Mortgage Association) and
FHLMC or “Freddie Mac” (Federal Home Loan Mortgage Corporation);
2.those
issued by private issuers that represent an interest in or are collateralized by
mortgage-backed securities issued or guaranteed by the U.S. Government or one of
its agencies or instrumentalities; and,
3.those
issued by private issuers that represent an interest in or are collateralized by
whole mortgage loans or mortgage-backed securities without a government
guarantee but that usually have some form of private credit
enhancement.
The
yield characteristics of mortgage-backed securities differ from traditional debt
securities. Among the major differences are that interest and principal payments
are made more frequently, usually monthly, and that principal may be prepaid at
any time because the underlying mortgage loans generally may be prepaid at any
time. The rate of pre-payments on underlying mortgages will affect the price and
volatility of a mortgage-backed security, and may have the effect of shortening
or extending the effective duration of the mortgage-backed security relative to
what was anticipated at the time of purchase. To the extent that unanticipated
rates of pre-payment on underlying mortgages increase the effective duration of
a mortgage-backed security, the volatility of such mortgage-backed security can
be expected to increase.
Other
Information about the Low Duration High Yield Fund and its Non-Principal
Investment Strategies
Short
Sales.
As a non-principal investment strategy, the Low Duration High Yield Fund may
engage in short selling of securities. Selling securities short involves selling
securities the seller (e.g.,
the Fund) does not own (but has borrowed) in anticipation of a decline in the
market price of such securities. To deliver the securities to the buyer, the
seller must arrange through a broker to borrow the securities and, in so doing,
the seller becomes obligated to replace the securities borrowed at their market
price at the time of the replacement. In a short sale, the proceeds the seller
receives from the sale may be retained by the
broker
until the seller replaces the borrowed securities. The seller may have to pay a
premium to borrow the securities and must pay any dividends or interest payable
on the securities until they are replaced.
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CrossingBridge
Ultra-Short Duration Fund |
Investment
Objective
The
Ultra-Short Duration Fund seeks to offer a higher yield than cash instruments
while maintaining a low duration.
Principal
Investment Strategies
The
Ultra-Short Duration Fund seeks to offer a higher yield than cash instruments
while maintaining a low duration by investing primarily in fixed income
securities consistent with capital preservation. The Fund defines fixed income
securities to include: bills, notes, bonds, debentures, convertible bonds, loan
participations, syndicated loan assignments, mortgage- and asset-backed
securities, Rule 144A fixed income securities, zero coupon securities, sovereign
debt and other evidence of indebtedness issued by U.S. or foreign corporations,
governments, government agencies or government instrumentalities, including
floating-rate securities, preferred stock and fixed income-like equities.
Convertible bonds, preferred stocks, and fixed income-like equities (e.g.,
SPACs) provide interest income and/or the potential for capital appreciation
while having an effective maturity. Floating-rate securities provide interest
income that can increase or decrease with interest rates. The Fund invests in
individual fixed income securities without restriction as to issuer credit
quality, capitalization or security maturity. Though the Fund can invest in
securities domiciled in foreign countries and denominated in foreign currencies,
the Fund invests primarily in securities denominated in U.S. dollars issued by
issuers domiciled in developed markets. The Fund may invest up to 100% of its
assets in lower-quality fixed income securities — commonly known as “high yield”
or “junk” bonds. Junk bonds are generally rated lower than Baa3 by Moody’s or
lower than BBB- by S&P. The Adviser believes these investments are
consistent with the preservation of capital. The Fund may invest in companies
that are in default, subject to bankruptcy or reorganization.
The
Adviser seeks to manage interest rate, default and currency risks. The Adviser
manages interest rate risk by maintaining, under normal market conditions, an
average portfolio duration of 1 or less by investing in short-term, medium-term
and floating rate securities. The stated maturity for a fixed income security
may be longer than its expected maturity used for the portfolio duration
calculation. The stated maturity may differ from the expected maturity as a
result of market conditions or corporate actions (such as a change of control
‘put’ provision or corporate redemption feature). Duration is a measure of
sensitivity of a security’s price to changes in interest rates. For example, a
security with a duration of 1 would be expected to decrease in price 1% for
every 1% rise in interest rates (the inverse is true as well).
The
Adviser manages default risk by selecting securities of issuers that it believes
will pay interest and principal regardless of their credit rating, based upon
the Adviser’s credit analysis of each issuer. The Adviser may also select
securities that are in default, subject to bankruptcy or reorganization where
the Adviser believes the risks to be consistent with capital preservation, based
on the Adviser’s analysis of an issuer’s liquidation value or post-bankruptcy or
post-reorganization value.
The
Adviser manages foreign currency risk by investing primarily in securities
denominated in U.S. dollars, such as Yankee bonds. If the Ultra-Short Duration
Fund were to invest in foreign currency denominated securities, the Fund
restricts such activity to less than 35% of the Fund’s total assets. When deemed
appropriate, the Adviser may hedge the foreign currency exposure typically, and
primarily, with forward currency contracts. A forward currency contract is an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties.
The
Adviser applies a “bottom up” approach in selecting investments for the
Ultra-Short Duration Fund. The Adviser looks at each security to determine
whether that security is an attractive investment opportunity, consistent with
the Fund’s investment objective. The Adviser may choose to sell securities as it
deems appropriate. For example, the Adviser monitors Fund investments for both
market movements as well as for changes in operations and/or credit quality and
investments will be sold if they meet price targets or if the Adviser’s initial
investment thesis has changed. To the extent it is determined that a position is
deteriorating with uncertainty of recovery, the Adviser will take proactive
steps to limit losses.
Due
to the nature of securities in which the Ultra-Short Duration Fund invests, the
Fund is expected to have relatively high portfolio turnover compared to other
types of funds.
Fixed-Income
Securities.
The Ultra-Short Duration Fund intends to invest primarily in fixed income
securities. Such securities are subject to the risk of default by the issuer
with respect to principal and interest payments on its obligations (i.e.
credit risk) as well as price volatility due to such factors as interest rate
sensitivity, market perception of the creditworthiness of the issuer and general
market liquidity (i.e.
market risk). Bonds and similar fixed-income securities generally are either
secured or unsecured. Although secured bonds entitle holders to an interest in
the assets of the issuer that are pledged as collateral for the bonds, the
proceeds from the sale of such collateral may not fully repay the creditors in
the event of a default. Holders of unsecured bonds represent the most junior
position of an issuer’s creditors.
Bank
Loans. The
Ultra-Short Duration Fund may invest no more than 25% of its net assets in bank
loans. Bank loans generally take longer to settle than other domestic fixed
income securities.
Below
Investment Grade Securities.
The Ultra-Short Duration Fund may invest without limitation in fixed-income
instruments which are or are deemed to be the equivalent in terms of quality to
securities rated below investment grade by nationally recognized statistical
rating agencies and accordingly involve greater risk. These securities have a
higher risk of default. Such securities are regarded as predominantly
speculative with respect to the issuer’s capacity to pay interest and repay
principal in accordance with the terms of the obligations and involve major risk
to adverse conditions.
Foreign
Securities.
The Ultra-Short Duration Fund may invest up to 35% of its net assets in foreign
fixed income securities. Such investments may include direct investments in
securities of foreign issuers and investments in depositary receipts (such as
ADRs) that represent indirect interests in securities of foreign issuers. The
Fund will not invest in the debt of companies located in emerging markets. A
company will be deemed to be located in an emerging market for this purpose when
both its headquarters and principal place of business are located in an emerging
market.
Asset-Backed
Securities.
The Fund may invest in asset-backed securities that are equipment trust
certificates.
Other
Information about the Ultra-Short Duration Fund and its Non-Principal Investment
Strategies
Illiquid
Investments.
The Ultra-Short Duration Fund may invest up to 15% of its net assets in illiquid
investments. Illiquid investments include any investment that the Fund
reasonably expects cannot be sold or disposed of in current market conditions in
seven calendar days or less without the sale or dispositions significantly
changing the market value of the investment.
Short
Sales.
As a non-principal strategy, the Ultra-Short Duration Fund may effect short
sales of securities. Loans in the aggregate, to cover overdrafts and for
investment purposes, may not exceed the maximum amount that the borrower is
permitted under the 1940 Act. The Fund may not sell a security short if, as a
result of that sale, the current value of securities sold short by the Fund
would exceed 10% of the value of the Fund’s net assets. However, short sales
effected “against the box” to hedge against a decline in the value of a security
owned by the Fund are not subject to this 10% limitation.
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CrossingBridge
Responsible Credit Fund |
Investment
Objective
The
Responsible Credit Fund seeks to preserve capital and attain long-term total
return through income and moderate capital appreciation over a credit
cycle.
Principal
Investment Strategies
The
Responsible Credit Fund seeks to achieve its investment objective by investing
primarily in fixed income securities while actively managing interest rate and
default risks. Under normal circumstances, the Fund invests at least 80% of its
net assets (plus the amount of any borrowings for investment purposes) in fixed
income securities that meet the Adviser’s responsible investing
criteria.
Investment
decisions for the Responsible Credit Fund are made by the Adviser based on a
bottom-up analysis of an issuer’s business model, quantitative and qualitative
factors, as well as the Adviser’s “responsible investing criteria” (i.e.,
specific exclusionary and inclusionary criteria based on ESG standards). The
Adviser utilizes a proprietary matrix to measure an issuer’s ESG engagement. The
Adviser’s proprietary matrix sets a minimum threshold level that must be
achieved for an issuer’s securities or other instruments to satisfy the Fund’s
responsible investing criteria. The Adviser sources information relating to its
responsible investing criteria from publicly-available resources such as
financial filings, presentations, news articles, and management discussions. The
Adviser monitors an issuer’s conformity to its responsible investing criteria
and each holding will be formally reviewed by the Adviser at least annually.
The
Adviser believes that ESG industry standards will evolve over time, and such
standards will continue to enhance the Adviser’s ability to identify and measure
behaviors. The Adviser believes that certain products and business practices of
an issuer may be detrimental and incompatible with mainstream views of
responsible investing. Therefore, certain exclusionary criteria are applied by
the Adviser as a first step in determining an individual investment’s
suitability for the Responsible Credit Fund. Issuers whose business is primarily
engaged in one of the following activities will be excluded from the
Fund:
•Weapons;
•Tobacco;
•Alcohol
and Marijuana (for Recreational Purposes);
•Gambling;
•Pornography/Adult
Entertainment;
•Certain
Fossil Fuels (including Coal Mining and Fracking Exploration);
•Nuclear
Fission (typically Power Plants);
•International
Norms Violations; and
•Corporations
or Sovereign Entities not adhering to the United Nations Global Compact
Principles and the Organization for Economic Co-operation and Development (OECD)
Guidelines for Multi-National Enterprises.
The
Adviser considers any issuer whose business generates 10% or more of its
revenues from one of the activities noted above to be “primarily engaged” in
such activities and subject to exclusion. The Adviser
may
expand the list of exclusionary activities from time to time. The Adviser
applies its exclusionary criteria to any investment considered for inclusion in
the Responsible Credit Fund’s portfolio.
The
Adviser believes that applying an exclusionary screen to issuers that are
non-conforming to its ESG standards is an important first step, but believes it
is also important to integrate those issuers that have a positive ESG impact or
ESG mindfulness that meet the Adviser’s inclusionary criteria described in the
objectives below. The Adviser believes that responsible issuers can reward
shareholders while being mindful of their ESG impact. As a responsible investor,
the Adviser seeks to invest with issuers providing positive leadership in the
pursuit of the following objectives:
Environmental
Objectives:
•Reduce
the negative operational impact and practices on the environment;
•Reduce
the use of scarce resources;
•Reduce
carbon emissions; and
•Pursue
resource efficiency, sustainability, and innovation.
Social
Objectives:
•Treat
all constituencies in a proper and ethical manner;
•Address
all constituencies in a fair and equitable manner;
•Promote
health and well-being for all constituencies;
•Protect
sensitive data for all constituencies;
•Market
products in a sincere and factual approach;
•Provide
employees with development and opportunity in an appropriate workplace; and
•Recognize
barriers of underrepresented groups by supporting diversity and
inclusion.
Governance
Objectives:
•Independent
members of an issuers Board that provide checks and balances;
•Diversification
of backgrounds, skills, and philosophy among an issuers Board or executive
officers;
•Promote
transparency and communication;
•Exercise
and supports law abidingness externally and from within;
•Develop
programs to measure and improve environmental impact and social practices;
•Respect
lenders rights and value similarly to shareholders; and
•Advocate
ethical standards in operations and dealings with customers, employees,
regulators, business partners and the greater community.
At
least 80% of the Responsible Credit Fund’s assets will be comprised of
investments of issuers satisfying the Adviser’s minimum threshold for the
inclusionary criteria. The Adviser deems governmental securities of G7 countries
(Canada, France, Germany, Italy, Japan, the United Kingdom and the United
States) to be of the highest ESG quality. Governmental securities of non-G7
countries will be evaluated by the Adviser on a case-by-case basis for inclusion
in the Fund’s investment portfolio.
The
Responsible Credit Fund defines fixed income securities to include: bills,
notes, bonds, debentures, convertible bonds, loan participations, mortgage- and
asset-backed securities, Rule 144A fixed income securities, zero coupon
securities, syndicated loan assignments, sovereign debt and other evidence of
indebtedness issued by U.S. or foreign corporations, governments, government
agencies or government instrumentalities, including floating-rate securities,
commercial paper, preferred stock and fixed income-like equities.
Convertible
bonds, preferred stocks, and fixed income-like equities (e.g.
special
purpose
acquisition
companies (“SPACs”)) provide interest income and/or the potential for capital
appreciation while having an effective maturity.
Floating-rate
securities provide interest income that can increase or decrease with interest
rates.
The
Fund invests in individual fixed income securities without restriction as to
issuer credit quality, capitalization or security maturity. The Fund may invest
up to 100% of its assets in lower-quality fixed income securities — commonly
known as “high yield” or “junk” bonds. Junk bonds are generally rated lower than
Baa3 by Moody’s Investors Service (“Moody’s”) or lower than BBB- by Standard and
Poor’s Rating Group (“S&P”). The Fund may invest in junk bonds that are in
default, subject to bankruptcy or reorganization. High yield bonds have a higher
expected rate of default than higher quality bonds.
The
Adviser seeks to manage duration, currency, and default risks. Although the
Adviser will take macro factors into consideration, the portfolio duration is
primarily driven by bottom-up investment opportunities. Under normal market
conditions, the Adviser will generally pursue a portfolio duration of 2 to 4.
Duration is a measure of sensitivity of a security’s price to changes in
interest rates. For example, a security with a duration of 2 would be expected
to decrease in price 2% for every 1% rise in interest rates (the inverse is true
as well).
The
Adviser manages default risk by selecting securities of issuers that it believes
will pay interest and principal regardless of their credit rating, based upon
the Adviser’s credit analysis of each issuer. The Adviser may also select
securities that are in default, subject to bankruptcy or reorganization where
the Adviser believes the risks to be consistent with capital preservation, based
on the Adviser’s analysis of an issuer’s liquidation value or post-bankruptcy or
post-reorganization value.
The
Adviser manages foreign currency risk by investing primarily in securities
denominated in U.S. dollars, such as Yankee bonds. If the Responsible Credit
Fund were to invest in foreign currency denominated securities, the Fund
restricts such activity to less than 35% of the Fund’s total assets. When deemed
appropriate, the Adviser may hedge the foreign currency exposure typically, and
primarily, with forward currency contracts. A forward currency contract is an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties.
In
selecting investments for the Responsible Credit Fund, the Adviser looks at each
security to determine whether that security is an attractive investment
opportunity, consistent with the Fund’s investment objective. The Adviser may
choose to sell securities as it deems appropriate. For example, the Adviser
monitors Fund investments for both market movements as well as for changes in
operations and/or credit quality and investments will be sold if they meet price
targets or if the Adviser’s initial investment thesis has changed. To the extent
it is determined that a position is deteriorating with uncertainty of recovery,
the Adviser will take proactive steps to limit losses.
The
Responsible Credit Fund is “non-diversified” for purposes of the 1940 Act, which
means that the Fund may invest in fewer securities at any one time than a
diversified fund. However, the adviser manages the impact of the risk of each
investment by a considered analysis of appropriate sizing and portfolio
diversification.
Due
to the nature of securities in which the Responsible Credit Fund invests, the
Fund is expected to have relatively high portfolio turnover compared to other
types of funds.
Fixed-Income
Securities.
Under normal circumstances the Responsible Credit Fund intends to invest at
least 80% of its net assets (plus the amount of any borrowings for investment
purposes) in fixed-income securities. Such securities are subject to the risk of
default by the issuer with respect to principal and interest payments on its
obligations (i.e.
credit risk) as well as price volatility due to such factors as
interest
rate sensitivity, market perception of the creditworthiness of the issuer and
general market liquidity (i.e.
market risk). Bonds and similar fixed-income securities generally are either
secured or unsecured. Although secured bonds entitle holders to an interest in
the assets of the issuer that are pledged as collateral for the bonds, the
proceeds from the sale of such collateral may not fully repay the creditors in
the event of a default. Holders of unsecured bonds are general obligations of
the issuer and creditors may have limited recourse to assets.
Below
Investment Grade Securities.
The Responsible Credit Fund may invest without limitation in fixed-income
instruments which are or are deemed to be the equivalent in terms of quality to
securities rated below investment grade by nationally recognized statistical
rating agencies and accordingly involve greater risk. These securities have a
higher risk of default. Such securities are regarded as predominantly
speculative with respect to the issuer’s capacity to pay interest and repay
principal in accordance with the terms of the obligations and involve major risk
to adverse conditions.
Income
Producing Equities. The
Responsible Credit Fund may invest up to 35% of its net assets in income
producing equities to include preferred stock, liquidating trusts and other
securities with a defined maturity, liquidation or put date. These securities
include equities with an above average dividend yield, preferred equities and
equities that in the Adviser’s opinion will distribute assets to shareholders
over a certain period of time.
Special
Purpose Acquisition Companies.
The Responsible Credit Fund may invest in blank check companies, such as SPACs
or similar special purpose entities that pool funds to seek potential
acquisition opportunities. A SPAC is a publicly-traded company that raises funds
from public investors in an initial public offering (“IPO”) in order to pursue
the acquisition of an unspecified company. Unless and until an acquisition
meeting the SPAC’s requirements is completed, a SPAC generally invests its
assets (less a portion retained to cover expenses) in U.S. Government
securities, money market securities and cash; if an acquisition that meets the
requirements for the SPAC is not completed within a pre-established period of
time, the invested funds are returned to the entity’s shareholders. If an
acquisition is proposed, investors have the choice of holding their shares or
redeeming them for their pro rata share of the SPAC’s assets. Because SPACs and
similar entities have no operating history or ongoing business other than
seeking acquisitions, the value of their securities is particularly dependent on
the ability of the entity’s management to identify and complete a profitable
acquisition. Some SPACs may pursue acquisitions only within certain industries
or regions, which may increase the volatility of their securities’ prices. In
addition, these securities, which are typically traded in the OTC market, may be
considered illiquid and/or be subject to restrictions on resale.
Foreign
Securities. The
Responsible Credit Fund may invest up to 35% of its net assets in foreign fixed
income securities. Such investments may include direct investments in securities
of foreign issuers and investments in depositary receipts (such as ADRs) that
represent indirect interests in securities of foreign issuers. The Fund will not
invest in the debt of companies located in emerging markets. A company will be
deemed to be located in an emerging market for this purpose when both its
headquarters and principal place of business are located in an emerging
market.
Convertible
Bonds. The
Responsible Credit Fund may invest up to 25% of its net assets in convertible
bonds.
Distressed
Securities. The
Responsible Credit Fund may invest up to 25% of its net assets in securities of
companies that are experiencing significant financial or business difficulties,
including companies involved in bankruptcy or other reorganization and
liquidation proceedings. Although such investments may result in significant
returns to the Fund, they involve a substantial degree of risk.
Bank
Loans. The
Responsible Credit Fund may invest up to 30% of its net assets in bank loans.
Bank loans generally take longer to settle than other domestic fixed income
securities.
Asset-Backed
Securities.
The Responsible Credit Fund may invest in asset-backed securities.
Other
Information about the Responsible Credit Fund and its Non-Principal Investment
Strategies
Collateralized
Loan Obligations and Privately Issued Securities.
As a non-principal strategy, the Responsible Credit Fund may also invest in
collateralized loan obligations (“CLOs”) and privately issued
securities.
Illiquid
Investments.
The Responsible Credit Fund may invest up to 15% of its net assets in illiquid
investments. Illiquid investments include any investment that the Fund
reasonably expects cannot be sold or disposed of in current market conditions in
seven calendar days or less without the sale or dispositions significantly
changing the market value of the investment.
Short
Sales. As
a non-principal strategy, the Responsible Credit Fund may invest up to 15% of
the value of its total assets to effect short sales of securities. The Fund may
not sell a security short if, as a result of that sale, the current value of
securities sold short by the Fund would exceed 15% of the value of the Fund’s
net assets. However, short sales effected “against the box” to hedge against a
decline in the value of a security owned by the Fund are not subject to this 15%
limitation.
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RiverPark
Strategic Income Fund |
Investment
Objective
The
Strategic Income Fund seeks high current income and capital appreciation
consistent with the preservation of capital.
Principal
Investment Strategies
The
Strategic Income Fund seeks to achieve its investment objective by investing in
Securities that the Adviser deems appropriate for the Fund’s investment
objective. The Fund will invest at least 80% of its net assets (plus the amount
of any borrowings for investment purposes) in fixed income securities and income
producing equities. The Fund may invest up to 100% of its assets in fixed income
securities. The Fund will invest in fixed income securities of various credit
qualities (i.e., investment grade and below investment grade (i.e,, junk bonds)
and maturities (i.e., long-term, intermediate and short-term). The Fund may
invest up to 100% of its assets in below investment grade fixed income
securities. The Fund will invest in individual fixed income securities without
restriction as to duration. The Adviser does not rely on independent rating
agencies to determine the risk associated with an investment. Rather, it relies
on its own research and familiarity with an issue to make investment decisions.
The Fund will invest across various maturities (i.e., long-term, intermediate
and short-term). The Adviser will analyze the expected yield to maturity of a
potential investment to determine if the yield, in the Adviser’s opinion, fairly
compensates the Fund for the risks associated with investing in longer dated
maturities.
The
Strategic Income Fund will invest primarily in U.S. Denominated securities but
may invest up to 35% of its assets in foreign fixed income securities including
sovereign debt and foreign currency denominated securities. The Fund may hedge
the foreign currency exposure by investing in forward currency contracts. A
forward currency contract is an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days from the date
of the contract agreed upon by the parties. The Fund may also invest up to 35%
of its assets in income producing equities that either have a substantial
dividend yield or where the Adviser believes the issuing company will distribute
significant assets over a certain period of time. The Fund’s investments will be
diversified across individual issuers and industries. The
Fund,
however, will invest without restriction as to issuer credit quality,
capitalization, or security maturity. The Adviser believes there are periods of
time where high yield Securities have a superior risk return tradeoff than other
times and will invest a greater percentage of the Fund in high yield Securities
when it determines it is advantageous to do so. Similarly, there are periods of
time, where the risks of rising interest rates are higher than normal, and the
Fund will likely invest a larger percentage of its assets in shorter dated fixed
income instruments to mitigate some of those risks.
Although
the Adviser will take macro factors (i.e., the effect of interest rates on the
Strategic Income Fund’s investments) into consideration, the Fund’s portfolio
construction is primarily driven by bottom-up investment analysis. This means
that the Adviser looks at Securities on an individual basis to determine if a
Security is an attractive investment opportunity and if it is consistent with
the Fund’s investment objective. The Fund’s buy and sell decisions are driven by
the Adviser’s investment process. The Fund may hold Securities until maturity
but will sell a Security when the Adviser determines a Security is no longer an
attractive investment opportunity consistent with the Fund’s investment
objective, when a more attractive investment opportunity becomes available or to
satisfy redemption requests. The Fund may invest up to 15% of the value of its
total assets to effect short sales of securities, including up to 10% in short
sales of ETFs. In addition, a Security may be purchased at a premium or discount
and/or sold prior to maturity where the Adviser believes it is advantageous to
do so. Other than for temporary purposes, the Fund will not borrow in order to
gain leverage.
The
Strategic Income Fund may engage in active trading of its portfolio, resulting
in a high turnover rate.
There
is no assurance that the Strategic Income Fund will achieve its investment
objectives. In pursuing its investment objective, the Fund will invest in the
following types of Securities:
Fixed
Income Securities. The
Strategic Income Fund may invest up to 100% of its assets in fixed income
securities. There is no limitation on the maturities of fixed income securities
in which the Fund invests. Securities having longer maturities generally involve
greater risk of fluctuations in value resulting from changes in interest
rates.
Below
Investment Grade Securities. The
Strategic Income Fund may invest without limitation in fixed- income instruments
which are or are deemed to be the equivalent in terms of quality to securities
rated below investment grade by nationally recognized statistical rating
agencies and accordingly involve greater risk. These securities have a higher
risk of default. Such securities are regarded as predominantly speculative with
respect to the issuer’s capacity to pay interest and repay principal in
accordance with the terms of the obligations and involve major risk to adverse
conditions.
Income
Producing Equities. The
Strategic Income Fund may invest up to 35% of its net assets in income producing
equities to include preferred stock, liquidating trusts and other securities
with a defined maturity, liquidation or put date. These securities include
equities with an above average dividend yield, preferred equities and equities
that in the Adviser’s opinion will distribute assets to shareholders over a
certain period of time.
Special
Purpose Acquisition Companies. The
Strategic Income Fund may invest in blank check companies, such as SPACs or
similar special purpose entities that pool funds to seek potential acquisition
opportunities. A SPAC is a publicly-traded company that raises funds from public
investors in an initial public offering (“IPO”) in order to pursue the
acquisition of an unspecified company. Unless and until an acquisition meeting
the SPAC’s requirements is completed, a SPAC generally invests its assets (less
a portion retained to cover expenses) in U.S. Government securities, money
market securities and cash; if an acquisition that meets the requirements for
the SPAC is not completed within a pre-established period of time, the invested
funds are returned to the entity’s shareholders. If an acquisition is proposed,
investors
have the choice of holding their shares or redeeming them for their pro rata
share of the SPAC’s assets. Because SPACs and similar entities have no operating
history or ongoing business other than seeking acquisitions, the value of their
securities is particularly dependent on the ability of the entity’s management
to identify and complete a profitable acquisition. Some SPACs may pursue
acquisitions only within certain industries or regions, which may increase the
volatility of their securities’ prices. In addition, these securities, which are
typically traded in the OTC market, may be considered illiquid and/or be subject
to restrictions on resale.
Foreign
Securities. The
Strategic Income Fund may invest up to 35% of its net assets in foreign fixed
income securities. Such investments may include direct investments in securities
of foreign issuers and investments in depositary receipts (such as ADRs) that
represent indirect interests in securities of foreign issuers. The Fund will not
invest in the debt of companies located in emerging markets. A company will be
deemed to be located in an emerging market for this purpose when both its
headquarters and principal place of business are located in an emerging market.
Investments in non-US companies include American Depositary Receipts (“ADRs”)
and similar investments, including European Depositary Receipts (“EDRs”) and
Global Depositary Receipts (“GDRs”), dollar-denominated foreign securities and
securities purchased directly on foreign exchanges. ADRs, EDRs and GDRs are
depositary receipts for non-US company stocks that are not themselves listed on
a U.S. exchange, and are issued by a bank and held in trust at that bank, and
that entitle the owner of such depositary receipts to any capital gains or
dividends from the foreign company stocks underlying the depositary receipts.
ADRs are U.S. dollar denominated. EDRs and GDRs are typically U.S. dollar
denominated but may be denominated in a foreign currency.
Convertible
Bonds. The
Strategic Income Fund may invest up to 25% of its net assets in convertible
bonds.
Distressed
Securities. The
Strategic Income Fund may invest up to 25% of its net assets in securities of
companies that are experiencing significant financial or business difficulties,
including companies involved in bankruptcy or other reorganization and
liquidation proceedings. Although such investments may result in significant
returns to the Fund, they involve a substantial degree of risk.
Bank
Loans. The
Strategic Income Fund may invest up to 25% of its net assets in bank loans. Bank
loans generally take longer to settle than other domestic fixed income
securities.
Asset-Backed
Securities.
The Strategic Income Fund may invest up to 15% of its net assets in asset-backed
securities including equipment trust certificates.
Mortgage-Backed
Securities. The Strategic Income Fund may invest up to 15% of its net assets in
mortgage-backed securities.
Short
Sales.
The Strategic Income Fund may invest up to 15% of the value of its total assets
to effect short sales of securities. The Fund may not sell a security short if,
as a result of that sale, the current value of securities sold short by the Fund
would exceed 15% of the value of the Fund’s net assets. However, short sales
effective to hedge against a decline in the value of a security owned by the
Fund are not subject to this 15% limitation.
Other
Information about the Strategic Income Fund and its Non-Principal Investment
Strategies
Illiquid
Investments. The
Strategic Income Fund may invest up to 15% of its net assets in illiquid
investments. Illiquid investments include any investment that the Fund
reasonably expects cannot be sold or disposed of in current market conditions in
seven calendar days or less without the sale or dispositions significantly
changing the market value of the investment.
Temporary
or Defensive Positions.
During periods of adverse market or economic conditions, or when, in the opinion
of the Adviser, certain abnormal or extraordinary circumstances exist, including
periodic episodes where certain issuers call a portion of a Fund’s portfolio and
the Adviser is unable to locate eligible portfolio securities in which to
invest, the Fund may, as a temporary or defensive measure, invest all or a
substantial portion of its assets in high quality, fixed income securities,
money market instruments, or cash or cash equivalents, including investment
grade short-term obligations. Investment grade obligations include securities
issued or guaranteed by the U.S. Government, its agencies and instrumentalities,
as well as securities rated in one of the four highest rating categories by at
least two nationally recognized statistical rating organizations rating that
security. To the extent that a Fund invests in money market funds for its cash
positions, there will be some duplication of expenses because the Fund will bear
its pro rata portion of such money market funds’ management fees and operational
expenses.
The
Fund will not be pursuing its investment objectives in these
circumstances.
Change
in Investment Objective.
Each Fund’s investment objective may be changed without the approval of the
Fund’s shareholders upon 60 days’ prior written notice to shareholders. The
Responsible Credit Fund may not make any change in its investment policy of
investing at least 80% of net assets in fixed income securities that meets the
Adviser’s responsible investing criteria (as defined herein), without first
changing the Fund’s name and providing shareholders with at least 60 days’ prior
written notice.
Before
investing in a Fund, you should carefully consider your own investment goals,
the amount of time you are willing to leave your money invested, and the amount
of risk you are willing to take. Remember, in addition to possibly not achieving
your investment goals, you
could lose all or a portion of your investment in a Fund.
The Funds’ 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 Funds,
regardless of the order in which it appears.
The
Fund’s principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each Fund (except as
specifically noted herein) is subject to the following risks:
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| Low
Duration High Yield Fund |
Ultra-Short
Duration Fund |
Responsible
Credit Fund |
Strategic
Income Fund |
Asset-Backed
and Mortgage-Backed Securities Risk |
ü |
ü |
ü |
ü |
Bank
Loans Risk |
ü |
ü |
ü |
ü |
Below
Investment Grade Securities Risk |
ü |
ü |
ü |
ü |
Convertible
Securities Risk |
ü |
ü |
ü |
ü |
Corporate
Events Risk |
ü |
ü |
ü |
— |
Counterparty
Risk |
ü |
— |
— |
— |
Credit-Related
Instruments Risk |
ü |
ü |
ü |
— |
Credit
Risk |
ü |
ü |
ü |
ü |
Cybersecurity
Risk |
ü |
ü |
ü |
ü |
Derivatives
Risk |
ü |
— |
— |
— |
Distressed
Securities Risk |
ü |
ü |
ü |
ü |
Equity
Securities Risk |
ü |
ü |
ü |
ü |
ESG
Investment Risk |
— |
— |
ü |
— |
|
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| |
| Low
Duration High Yield Fund |
Ultra-Short
Duration Fund |
Responsible
Credit Fund |
Strategic
Income Fund |
Exchange-Traded
Note Risk |
ü |
— |
— |
— |
Fixed
Income Securities Market Risk |
ü |
ü |
ü |
ü |
Fixed
Income Securities Risk |
ü |
ü |
ü |
ü |
Floating
Rate Risk |
ü |
ü |
ü |
— |
Foreign
Investments Risk |
ü |
ü |
ü |
ü |
Forward
Currency Contracts Risk |
ü |
ü |
ü |
ü |
General
Market Risk |
ü |
ü |
ü |
ü |
Government
Securities Risk |
ü |
ü |
ü |
— |
High
Portfolio Turnover Risk |
ü |
ü |
ü |
ü |
Illiquid
Investments Risk |
— |
X |
X |
ü |
Insolvency
Risk |
X |
X |
X |
X |
Interest
Rate Risk |
ü |
ü |
ü |
ü |
Leverage
Risk |
ü |
— |
— |
— |
Liquidity
Risk |
ü |
ü |
ü |
— |
Management
Risk |
ü |
ü |
ü |
ü |
Non-Diversification
Risk |
— |
— |
ü |
— |
Other
Investment Companies and Exchange-Traded Funds Risk |
ü |
— |
— |
— |
Preferred
Stock Risk |
ü |
ü |
ü |
ü |
Prepayment
Risk |
ü |
ü |
ü |
— |
Recent
Market Events Risk |
ü |
ü |
ü |
ü |
Redemption
Risk |
ü |
ü |
ü |
— |
Rule
144A Securities Risk |
ü |
ü |
ü |
— |
Securities
Lending Risk |
X |
X |
X |
X |
Short
Sales Risk |
X |
X |
X |
ü |
Sovereign
Debt Risk |
ü |
ü |
ü |
ü |
SPACs
Risk |
ü |
ü |
ü |
ü |
Tax
Risk |
ü |
— |
— |
— |
Tracking
Risk |
ü |
— |
— |
— |
Trade
Versus Settlement Risk |
ü |
ü |
ü |
— |
Yankee
Bond Risk |
ü |
ü |
ü |
— |
Zero
Coupon Securities Risk |
ü |
ü |
ü |
— |
ü Principal
Risk
X Non-Principal
Risk
— Not
Applicable
Asset-Backed
and Mortgage-Backed Securities Risk.
Asset-backed
and mortgage-backed securities are subject to risk of prepayment. This is more
likely to occur when interest rates fall because many borrowers refinance
mortgages to take advantage of more favorable rates. Prepayments on mortgage-
backed securities are also affected by other factors, such as the volume of home
sales. The Funds’ yield will be reduced if cash from prepaid securities is
reinvested in securities with lower interest rates. The risk of prepayment may
also decrease the value of mortgage-backed securities. Asset-backed securities
may have a higher level of default and recovery risk than mortgage-backed
securities. However, both of
these
types of securities may decline in value because of mortgage foreclosures or
defaults on the underlying obligations. Enforcing rights against the underlying
assets or collateral may be difficult, or the underlying assets or collateral
may be insufficient if the issuer defaults. The values of certain types of
mortgage-backed securities, such as inverse floaters and interest-only and
principal-only securities, may be extremely sensitive to changes in interest
rates and prepayment rates. Asset-backed and mortgage- backed securities are
also subject to extension risk, the risk that rising interest rates could cause
prepayments to decrease, extending the life of asset-backed and mortgage-backed
securities with lower payment rates. Mortgage-backed securities (“MBS”)
generally are classified as either commercial MBS (“CMBS”) or residential MBS
(“RMBS”), each of which are subject to certain specific risks. RMBS are subject
to the risks generally associated with fixed-income securities and
mortgage-backed securities. Delinquencies and defaults by borrowers in payments
on the underlying mortgages, and the related losses, are affected by general
economic conditions, the borrower’s equity in the mortgaged property and the
borrower’s financial circumstances. The market for CMBS developed more recently
and is relatively small compared to the market for RMBS. CMBS may lack
standardized terms, have shorter maturities than residential mortgage loans and
may provide for payment of all or substantially all of the principal only at
maturity rather than regular amortization of principal. Adverse changes in
economic conditions and circumstances are more likely to have an adverse impact
on MBS secured by loans on commercial properties than on those secured by loans
on residential properties.
Bank
Loans Risk. The
Funds may invest in bank loans. The secondary market for bank loans is a
private, unregulated inter-dealer or inter-bank resale market.
Bank
loans are usually rated below investment grade. The market for bank loans may be
subject to irregular trading activity, wide bid/ask spreads and extended trade
settlement periods. Purchases and sales of loans are generally subject to
contractual restrictions that must be satisfied before a loan can be bought or
sold. These restrictions may impede a Fund’s ability to buy or sell loans and
may negatively impact the transaction price. It may take longer than seven days
for transactions in loans to settle. The Fund may hold cash, sell investments or
temporarily borrow from banks or other lenders to meet short-term liquidity
needs due to the extended loan settlement process, such as to satisfy redemption
requests from Fund shareholders.
Investments
in bank loans are typically in the form of an assignment or participation.
Investors in a loan participation assume the credit risk associated with the
borrower and may assume the credit risk associated with an interposed financial
intermediary. Accordingly, if a lead lender becomes insolvent or a loan is
foreclosed, the Funds could experience delays in receiving payments or suffer a
loss. In an assignment, the Funds effectively become a lender under the loan
agreement with the same rights and obligations as the assigning bank or other
financial intermediary. Accordingly, if the loan is foreclosed, the Funds could
become part owner of any collateral, and would bear the costs and liabilities
associated with owning and disposing of the collateral. Due to their lower place
in the borrower’s capital structure and possible unsecured status, junior loans
involve a higher degree of overall risk than senior loans of the same borrower.
In addition, the floating rate feature of loans means that bank loans will not
generally experience capital appreciation in a declining interest rate
environment.
Declines
in interest rates may also increase prepayments of debt obligations and require
the Fund to invest assets at lower yields.
A
significant portion of bank loans may be “covenant lite” loans that may contain
fewer or less restrictive constraints on the borrower and fewer or no financial
maintenance covenants and restrictions. A covenant lite loan typically contains
fewer clauses which allow an investor to proactively enforce financial
covenants. Covenant lite loans also generally provide fewer investor protections
if certain criteria are breached. The Funds may experience losses or delays in
enforcing their rights on its holdings of covenant lite loans.
U.S.
federal securities laws afford certain protections against fraud and
misrepresentation in connection with the offering or sale of a security, as well
as against manipulation of trading markets for securities. The typical practice
of a lender in relying exclusively or primarily on reports from the borrower may
involve the risk of fraud, misrepresentation, or market manipulation by the
borrower. It is unclear whether U.S. federal securities law protections are
available to an investment in a loan. In certain circumstances, loans may not be
deemed to be securities, and in the event of fraud or misrepresentation by a
borrower, lenders may not have the protection of the anti-fraud provisions of
the federal securities laws. However, contractual provisions in the loan
documents may offer some protections, and lenders may also avail themselves of
common-law fraud protections under applicable state law.
Below
Investment Grade Securities Risks (commonly referred to as “junk”
bonds).
Fixed-income instruments that are or are deemed to be the equivalent in terms of
quality to securities rated below investment grade by nationally recognized
statistical rating agencies are regarded as predominantly speculative with
respect to the issuer’s capacity to pay interest and repay principal in
accordance with the terms of the obligations and involve major risk to adverse
conditions. These securities offer higher returns than bonds with higher ratings
as compensation for holding an obligation of an issuer perceived to be less
creditworthy. The market prices of such securities are also subject to abrupt
and erratic market movements and above-average price volatility, and the spread
between the bid and asked prices of such securities may be greater than those
prevailing in other securities markets. Changes in economic conditions or
developments regarding issuers of non-investment grade debt securities are more
likely to cause price volatility and weaken the capacity of such issuers to make
principal and interest payments than is the case for higher grade debt
securities. In addition, the market for lower grade debt securities may be
thinner and less active than for higher grade debt securities.
Convertible
Securities Risk.
A
convertible security is a fixed income security (a debt instrument or a
preferred stock) that may be converted at a stated price within a specified
period of time into a certain quantity of the common stock of the same or a
different issuer. The market value of a convertible security will perform the
same as a regular fixed income security; that is, if market interest rates rise,
the value of the convertible security falls. Convertible securities are senior
to common stock in an issuer’s capital structure, but are subordinated to any
senior debt securities. As a result, in the event of a liquidation of the
issuing company, holders of convertible securities generally would be paid after
the company’s creditors but before the company’s common shareholders.
Consequently, an issuer’s convertible securities generally may be viewed as
having more risk than its debt securities but less risk than its common stock.
While providing a fixed income stream (generally higher in yield than the income
derivable from common stock but lower than that afforded by a similar
non-convertible security), a convertible security also gives an investor the
opportunity, through its conversion feature, to participate in the capital
appreciation of the issuing company depending upon a market price advance in the
convertible security’s underlying common stock. If a convertible security held
by a Fund is called for redemption, the Fund will be required to surrender the
security for redemption, convert it into the issuing company’s common stock or
cash at a time that may be unfavorable to the Fund.
Corporate
Events Risks. Corporate
event risk is the risk that a corporate transaction or opportunity will not
occur, or a natural disaster or regulatory change will cause an abrupt downgrade
in a corporate bond which may lower a Fund’s performance.
Counterparty
Risk.
Counterparty
risk arises upon entering into borrowing arrangements or derivative transactions
and is the risk from the potential inability or unwillingness of counterparties
to meet the
terms
of their contracts. If the counterparty defaults, the Funds’ losses will
generally consist of the net amount of contractual payments that it has not yet
received, though the Funds’ maximum risk due to counterparty credit risk could
extend to the notional amount of the contract should the underlying asset on
which the contract is written have no offsetting market value. The “notional
value” is generally defined as the value of the Derivative’s underlying assets
at the spot price. The Funds could be exposed to increased leverage risk should
it finance Derivative transactions without holding cash or cash equivalents
equal to the notional value of its Derivative positions.
Credit-Related
Instruments.
Credit-Related Instruments held by a Fund may be subject to interest rate risk,
call risk, prepayment and extension risk, credit risk, and liquidity risk, which
are more fully described below.
Call
Risk.
During periods of declining interest rates, a bond issuer may “call,” or repay,
its high yielding bonds before their maturity dates. A Fund would then be forced
to invest the unanticipated proceeds at lower interest rates, resulting in a
decline in its income.
Credit
Risk.
Credit-Related Instruments are generally subject to the risk that the issuer may
be unable to make principal and interest payments when they are due. There is
also the risk that the investments could lose value because of a loss of
confidence in the ability of the borrower to pay back debt. Lower rated
Credit-Related Instruments involve greater credit risk, including the
possibility of default or bankruptcy.
Interest
Rate Risk.
Credit-Related Instruments are subject to the risk that the investments could
lose value because of interest rate changes. For example, bonds tend to decrease
in value if interest rates rise. Credit-Related Instruments with longer
maturities sometimes offer higher yields, but are subject to greater price
shifts as a result of interest rate changes than fixed income investments with
shorter maturities.
Liquidity
Risk.
Trading opportunities are more limited for Credit-Related Instruments that have
not received any credit ratings, have received ratings below investment grade or
are not widely held. These features make it more difficult to sell or buy an
investment at a favorable price or time. Consequently, a Fund may have to accept
a lower price to sell an investment, sell other securities to raise cash or give
up an investment opportunity, any of which could have a negative effect on its
performance. Infrequent trading of securities may also lead to an increase in
their price volatility. Liquidity risk also refers to the possibility that a
Fund may not be able to sell an investment or close out an investment contract
when it wants to. If this happens, a Fund will be required to hold the
investment or keep the position open, and it could incur losses.
Prepayment
and Extension Risk.
Many types of Credit-Related Instruments are subject to prepayment risk.
Prepayment occurs when the issuer of a Fixed Income Investment can repay
principal prior to the security’s maturity. Credit-Related Instruments subject
to prepayment can offer less potential for gains during a declining interest
rate environment and similar or greater potential for loss in a rising interest
rate environment. In addition, the potential impact of prepayment features on
the price of a fixed income security can be difficult to predict and result in
greater volatility. On the other hand, rising interest rates could cause
prepayments of the obligations to decrease, extending the life of mortgage- and
asset-backed securities with lower payment rates. This is known as extension
risk and may increase a Fund’s sensitivity to rising rates and its potential for
price declines.
Credit
Risk.
Debt portfolios are subject to credit risk. Credit risk refers to the likelihood
that an issuer will default in the payment of principal and/or interest on an
instrument. Financial strength and solvency of an issuer are the primary factors
influencing credit risk. In addition, lack or inadequacy of collateral or credit
enhancement
for a debt instrument may affect its credit risk. Credit risk may change over
the life of an instrument, and debt obligations which are rated by rating
agencies are often reviewed and may be subject to downgrade.
Cybersecurity
Risk. With
the increased use of technologies such as the Internet to conduct business, the
Funds are susceptible to operational, information security, and related risks.
In general, cyber incidents can result from deliberate attacks or unintentional
events. Cyber attacks include, but are not limited to, gaining unauthorized
access to digital systems (e.g.,
through “hacking” or malicious software coding) for purposes of misappropriating
assets or sensitive information, corrupting data, or causing operational
disruption. Cyber attacks may also be carried out in a manner that does not
require gaining unauthorized access, such as causing denial-of-service attacks
on websites (i.e.,
efforts to make network services unavailable to intended users). Cyber incidents
affecting a Fund or its service providers have the ability to cause disruptions
and impact business operations, potentially resulting in financial losses,
interference with a Fund’s ability to calculate its NAV, impediments to trading,
the inability of shareholders to transact business, violations of applicable
privacy and other laws, regulatory fines, penalties, reputational damage,
reimbursement or other compensation costs, or additional compliance costs.
Similar adverse consequences could result from cyber incidents affecting issuers
of securities in which a Fund invests, counterparties with which a Fund engages
in transactions, governmental and other regulatory authorities, exchange and
other financial market operators, banks, brokers, dealers, insurance companies
and other financial institutions (including financial intermediaries and service
providers for shareholders) and other parties. In addition, substantial costs
may be incurred in order to prevent any cyber incidents in the future. While the
Funds’ service providers have established business continuity plans in the event
of, and risk management systems to prevent, such cyber incidents, there are
inherent limitations in such plans and systems including the possibility that
certain risks have not been identified. Furthermore, the Funds cannot control
the cybersecurity plans and systems put in place by their service providers or
any other third parties whose operations may affect the Funds or their
shareholders. As a result, the Funds and their shareholders could be negatively
impacted.
Derivatives
Risk.
Derivatives
are financial instruments that derive their performance, at least in part, from
the performance of an underlying asset, index or interest rate. Derivatives
entered into by a Fund can be volatile and involve various types and degrees of
risk, depending upon the characteristics of a particular Derivative and the
portfolio of the Fund. Derivatives permit portfolio managers or the Adviser to
increase or decrease the level of risk of an investment portfolio, or change the
character of the risk to which an investment portfolio is exposed in much the
same way as the managers can increase or decrease the level of risk, or change
the character of the risk, of an investment portfolio by making investments in
specific securities. Derivatives may entail investment exposures that are
greater than their cost would suggest, meaning that a small investment in
Derivatives could have a large potential effect on performance of the Fund. In
addition, Derivatives also involve the risk of mispricing or improper valuation.
The Low Duration High Yield Fund’s use of Derivatives may include total return
swaps, options and futures designed to replicate the performance of a Fund or to
adjust market or risk exposure.
If
a Fund invests in Derivatives at inopportune times or incorrectly judges market
conditions, the investments may reduce the return of the Fund or result in a
loss. The Fund could also experience losses if Derivatives are poorly correlated
with its other investments, or if the Fund is unable to liquidate the position
because of an illiquid secondary market. The market for many Derivatives is, or
suddenly can become, illiquid. Changes in liquidity may result in significant,
rapid and unpredictable changes in the prices for Derivatives. Furthermore, when
seeking to obtain short exposure by investing in Derivatives, the Fund may be
subject to regulatory restrictions, as discussed in “Short Sales Risk,” below.
To the extent the Fund invests in Derivatives, the risks below may affect its
performance:
Futures
Contract Risk.
Futures
contracts are subject to the same risks as the underlying investments that they
represent, but also may involve risks different from, and possibly greater than,
the risks associated with investing directly in the underlying
investments.
Investments
in futures contracts involve additional costs, may be more volatile than other
investments and may involve a small initial investment relative to the risk
assumed.
If
the Adviser incorrectly forecasts the value of investments in using a futures
contract, a Fund might have been in a better position if the Fund had not
entered into the contract.
Options
Risk.
Options
and options on futures contracts are subject to the same risks as the
investments in which the Fund invests directly, but also may involve risks
different from, and possibly greater than, the risks associated with investing
directly in the underlying investments. Investments in options and options on
futures involve additional costs, may be more volatile than other investments
and may involve a small initial investment relative to the risk
assumed.
If
the Adviser incorrectly forecasts the value of investments in using an option or
futures contract, the Fund might have been in a better position if the Fund had
not entered into the contract.
In
addition, the value of an option may not correlate perfectly to the underlying
financial asset, index or other investment or overall securities
markets.
Swap
Agreements Risk.
Swap
agreements are two-party contracts entered into primarily by institutional
investors for periods ranging from a few weeks to more than a year, and will not
have liquidity beyond the counterparty to the agreement.
In
a standard swap transaction, two parties agree to exchange the returns earned on
specific assets, such as the return on, or increase in value of, a particular
dollar amount invested at a particular interest rate, in a particular foreign
currency, or in a “basket” of securities representing a particular
index.
A
swap contract may not be assigned without the consent of the counter-party, and
may result in losses in the event of a default or bankruptcy of the
counter-party.
Distressed
Securities Risk.
The
Funds may invest in securities of companies that are experiencing significant
financial or business difficulties, including companies involved in bankruptcy
or other reorganization and liquidation proceedings. Although such investments
may result in significant returns to the Funds, they involve a substantial
degree of risk.
Any
one or all of the issuers of the securities in which the Funds may invest may be
unsuccessful or not show any return for a considerable period of time. The level
of analytical sophistication, both financial and legal, necessary for successful
investment in companies experiencing significant business and financial
difficulties is unusually high. There is no assurance that the Adviser will
correctly evaluate the value of the assets collateralizing the Funds’ loans or
the prospects for a successful reorganization or similar action. In any
reorganization or liquidation proceeding relating to a company in which the
Funds invests, the applicable Fund may lose its entire investment or may be
required to accept cash or securities with a value less than the applicable
Fund’s original investment. Under such circumstances, the returns generated from
the applicable Fund’s investments may not adequately compensate for the risks
assumed. In addition, there is no minimum credit standard that is a prerequisite
to the Funds’ investments in any instrument, and a significant portion of the
obligations and preferred stock in which either Fund invests may be less than
investment grade.
Equity
Securities Risk.
The
Funds will be exposed to equity market risk through direct investments in equity
securities, and its investment in other equity-linked instruments.
Common
stocks are susceptible to general stock market fluctuations and to volatile
increases and decreases in value as market confidence in and perceptions of
their issuers change.
Preferred
stocks are subject to the risk that the dividend on the
stock
may be changed or omitted by the issuer, and participation in the growth of an
issuer may be limited.
ESG
Investment Risk.
A Fund’s focus on sustainability considerations (ESG criteria) may limit the
number of investment opportunities available to the Fund, and as a result, at
times, the
Fund may underperform funds that are not subject to similar investment
considerations.
Exchange-Traded
Note Risk.
ETNs
are subject to the credit risk of the issuer.
The
value of an ETN will vary and may be influenced by the level of supply and
demand for the ETN, volatility and lack of liquidity in underlying securities,
currency and commodities markets as well as changes in the applicable interest
rates, changes in the issuer’s credit rating, and economic, legal, political, or
geographic events that affect the referenced index.
There
may be restrictions on the Fund’s right to redeem its investment in an ETN,
which is meant to be held until maturity. The Fund’s decision to sell its ETN
holdings may be limited by the availability of a secondary market.
Fixed
Income Securities Market Risk.
The Funds may invest in fixed income securities. Difficult conditions in the
broader financial markets have in the past resulted in a temporary but
significant contraction in liquidity for fixed income securities. Liquidity
relates to the ability of a Fund to sell its investments in a timely manner at a
price approximately equal to its value on such Fund’s books. To the extent that
the market for fixed income securities suffers such a contraction, securities
that were considered liquid at the time of investment could become temporarily
illiquid, and the Adviser may experience delays or difficulty in selling assets
at the prices at which the Fund carries such assets, which may result in a loss
to such Fund. There is no way to predict reliably when such market conditions
could re-occur or how long such conditions could persist.
In
the event of a severe market contraction precipitated by general market turmoil,
economic conditions, changes in prevailing interest rates or otherwise, coupled
with extraordinary levels of Fund shareholder redemption requests, a Fund may
have to consider selling its holdings at a loss including at prices below the
current value on the Fund’s books, borrowing money to satisfy redemption
requests in accordance with the Fund’s borrowing policy or postponing payment of
redemption requests for up to seven days or longer, as permitted by applicable
law, or other extraordinary measures. In addition, if a Fund needed to sell
large blocks of investments to meet shareholder redemption requests or to raise
cash, those sales could further reduce prices, particularly for lower-rated and
unrated securities.
In
response to rising inflation, the Federal Reserve began raising short-term
interest rates in 2022 with the potential for further rate increases.
Uncertainty regarding the ability of the Federal Reserve to successfully control
inflation, the potential for incremental rate increases, and the full impact of
prior rate increases may negatively impact fixed income security prices and
increase market volatility. In general, the market price of fixed income
securities with longer maturities will increase or decrease more in response to
changes in interest rates than shorter-term securities.
Fixed
Income Securities Risk. The
Fund invests a significant portion of its assets in fixed income
securities.
Fixed
income securities are subject to credit risk and market risk, including interest
rate risk.
Credit
risk is the risk of the issuer’s inability to meet its principal and interest
payment obligations.
Market
risk is the risk of price volatility due to such factors as interest rate
sensitivity, market perception of the creditworthiness of the issuer and general
market liquidity.
There
is no limitation on the maturities of fixed income securities in which the Fund
invests.
Securities
having longer maturities generally involve greater risk of fluctuations in value
resulting from changes in interest rates.
Floating
Rate Risk.
Securities
with floating interest rates generally are less sensitive to interest rate
changes but may decline in value if their interest rates do not rise as much, or
as quickly, as interest rates in general. Conversely, floating rate instruments
will not generally increase in value if interest rates decline. Changes in
interest rates will also affect the amount of interest income a Fund earns on
its floating rate investments.
Foreign
Investments Risk.
The Funds’ performance will be influenced by political, social and economic
factors affecting the non-US countries and companies in which the Funds invest.
Non-US securities carry special risks, such as less developed or less efficient
trading markets, political instability, a lack of company information, differing
auditing and legal standards, and, potentially, less liquidity. Additionally,
certain non- US markets may rely heavily on particular industries 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 Funds’ foreign holdings or exposures.
Investments
in non-US companies include American Depositary Receipts (“ADRs”) and similar
investments, including European Depositary Receipts (“EDRs”) and Global
Depositary Receipts (“GDRs”), dollar-denominated foreign securities and
securities purchased directly on foreign exchanges. ADRs, EDRs and GDRs are
depositary receipts for non-US company stocks that are not themselves listed on
a U.S. exchange, and are issued by a bank and held in trust at that bank, and
that entitle the owner of such depositary receipts to any capital gains or
dividends from the foreign company stocks underlying the depositary receipts.
ADRs are U.S. dollar denominated. EDRs and GDRs are typically U.S. dollar
denominated but may be denominated in a foreign currency.
For
example, the United Kingdom (UK) withdrew from the European Union (EU) on
January 31, 2020 following a June 2016 referendum referred to as “Brexit.”
Although the UK and EU agreed to a provisional trade deal in December 2020 that
was later ratified by the EU Parliament and entered into force on May 1, 2021,
certain post-EU arrangements, such as those relating to the offering of
cross-border financial services and sharing of cross-border data, have yet to be
reached and the EU’s willingness to grant equivalency to the UK remains
uncertain. There is significant market uncertainty regarding Brexit’s
ramifications, and the range of possible political, regulatory, economic and
market outcomes are difficult to predict. The uncertainty surrounding the UK’s
economy, and its legal, political, and economic relationship with the remaining
member states of the EU, may cause considerable disruption in securities
markets, including decreased liquidity and increased volatility, as well as
currency fluctuations in the British pound’s exchange rate against the U.S.
dollar.
Forward
Currency Contracts Risk. The
Funds may enter into forward currency contracts. A forward currency contract is
an obligation to purchase or sell a specific currency at a future date, which
may be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. For example, the Funds
might purchase a particular currency or enter into a forward currency contract
to preserve the U.S. dollar price of securities it intends to or has contracted
to purchase. Alternatively, it might sell a particular currency on either a spot
or forward basis to hedge against an anticipated decline in the dollar value of
securities it intends to or has contracted to sell. Although this strategy could
minimize the risk of loss due to a decline in the value of the hedged currency,
it could also limit any potential gain from an increase in the value of the
currency.
General
Market Risk. The
market value of a security may move up or down, sometimes rapidly and
unpredictably. These fluctuations may cause a security to be worth less than the
price originally paid for it, or less than it was worth at an earlier time.
Market risk may affect a single issuer, industry, sector of the economy or the
market as a whole. Global economies and financial markets are increasingly
interconnected, which increases the possibilities that conditions in one country
or region might adversely impact issuers in a different country or region. The
securities markets have experienced substantially lower valuations, reduced
liquidity, price volatility, credit downgrades, increased likelihood of default,
and valuation difficulties, all of which may increase the risks of investing in
securities held by the Funds.
Government
Securities Risk.
U.S.
Government obligations include securities issued or guaranteed as to principal
and interest by the U.S. Government, its agencies or instrumentalities, such as
the U.S. Treasury.
Payment
of principal and interest on U.S. Government obligations may be backed by the
full faith and credit of the United States or may be backed solely by the
issuing or guaranteeing agency or instrumentality itself. In the latter case,
the investor must look principally to the agency or instrumentality issuing or
guaranteeing the obligation for ultimate repayment, which agency or
instrumentality may be privately owned.
There
can be no assurance that the U.S. Government would provide financial support to
its agencies or instrumentalities (including government-sponsored enterprises)
where it is not obligated to do so.
As
a result, there is a risk that these entities will default on a financial
obligation.
For
instance, securities issued by Ginnie Mae are supported by the full faith and
credit of the U.S. Government.
Securities
issued by Fannie Mae and Freddie Mac are supported only by the discretionary
authority of the U.S. Government.
However,
the obligations of Fannie Mae and Freddie Mac have been placed into
conservatorship until the entities are restored to a solvent financial
condition.
Securities
issued by the Student Loan Marketing Association or “Sallie Mae” are supported
only by the credit of that agency.
High
Portfolio Turnover Risk.
The
Funds pay transaction costs, such as commissions, when they buy and sell
securities (or “turns over” their portfolios).
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 Funds’ performance.
Illiquid
Investments Risk.
Illiquid investments include any investment that a Fund reasonably expects
cannot be sold or disposed of in current market conditions in seven calendar
days or less without the sale or dispositions significantly changing the market
value of the investment, and include repurchase agreements maturing in more than
seven days. Illiquid investments involve the risk that the securities will not
be able to be sold at the time desired by the Adviser or at prices approximating
the value at which a Fund is carrying the securities.
Insolvency
Risk.
The Funds’ investments in fixed income securities may be subject to various laws
enacted in the jurisdiction or state of the borrower for the protection of
creditors. If an unpaid creditor files a lawsuit seeking payment, the court may
invalidate all or part of the borrower’s debt as a fraudulent conveyance,
subordinate such indebtedness to existing or future creditors of the borrower or
recover amounts previously paid by the borrower in satisfaction of such
indebtedness, based on certain tests for borrower insolvency and other facts and
circumstances, which may vary by jurisdiction. There can be no assurance as to
what standard a court would apply in order to determine whether the borrower was
“insolvent” after giving effect to the incurrence of the indebtedness, or that
regardless of the method of valuation, a court would not determine that the
borrower was “insolvent” after giving effect to such incurrence. In addition, in
the event of the insolvency of a borrower, payments made on fixed income
securities
could be subject to avoidance as a “preference” if made within a certain period
of time (which may be as long as one year and one day) before
insolvency.
Interest
Rate Risk.
The prices of securities in general and fixed-income securities in particular
tend to be sensitive to interest rate fluctuations. Increases in interest rates
can result in significant declines in the prices of fixed-income securities.
Securities with floating interest rates generally are less sensitive to interest
rate changes but may decline in value if their interest rates do not rise as
much, or as quickly, as interest rates in general. The negative impact on fixed
income securities generally from rate increases, regardless of the cause, could
be swift and significant, which could result in losses by the Funds, even if
anticipated by the Adviser. Starting in 2022, the Federal Reserve began to
increase interest rates in an effort to combat inflation, which has resulted in
periods of volatility.
Leverage
Risk.
Investments
in Derivatives and selling securities short involve the use of leverage.
Leverage can increase the investment returns of the Funds. However, if the
investment decreases in value, the Funds will suffer a greater loss than would
have resulted without the use of leverage. The Fund will maintain long positions
in securities available for collateral, consisting of cash, cash equivalents,
and other liquid securities, to meet any applicable asset coverage obligations
under the 1940 Act. However, if the value of such collateral declines, margin
calls by lending brokers could result in the liquidation of such collateral
securities at disadvantageous prices.
Liquidity
Risk.
Certain
securities, including Credit-Risk Related Instruments in which the Funds invest,
and markets can become illiquid at times and negatively impact the price of an
investment if the Funds were to sell during times of illiquidity. The Funds may
have to lower the price, sell other securities or forego an investment
opportunity, any of which may have a negative effect on the management or
performance of the Funds.
Management
Risk. The
ability of a Fund to meet its investment objective is directly related to the
Adviser’s investment strategies for the Fund. The value of your investment in a
Fund may vary with the effectiveness of the Adviser’s research, analysis and
asset allocation among portfolio securities. If the Adviser’s investment
strategies do not produce the expected results, your investment could be
diminished or even lost.
Other
Investment Companies and Exchange-Traded Funds Risk. Federal
law generally prohibits a mutual fund from acquiring shares of an investment
company if, immediately after such acquisition, the Funds and their affiliated
persons would hold more than 3% of such investment company’s total outstanding
shares.
This
prohibition may prevent the Funds from allocating its investments in an optimal
manner.
You
will indirectly bear fees and expenses charged by the underlying funds in
addition to the Funds’ direct fees and expenses and, as a result, your cost of
investing in the Funds will generally be higher than the cost of investing
directly in the underlying fund shares.
An
investment in an ETF generally presents the same primary risks as an investment
in a conventional mutual fund (i.e.,
one that is not exchange traded) that has the same investment objective,
strategies and policies. The price of an ETF can fluctuate within a wide range,
and the Funds could lose money when investing in an ETF if the prices of the
securities owned by the ETF go down. In addition, ETFs are subject to the
following risks that do not apply to conventional mutual funds: (1) the market
price of the ETF’s shares may trade at a discount to their NAV; (2) an active
trading market for an ETF’s shares may not develop or be maintained; or (3)
trading of an ETF’s shares may be halted if the listing exchange’s officials
deem such action appropriate, the shares are de-listed from the exchange, or the
activation of
market-wide
“circuit breakers” (which are tied to large decreases in stock prices) halts
stock trading generally. Additionally, ETFs have management and other fees,
which increase their cost.
Preferred
Stock Risk.
The
value of preferred stocks may decline due to general market conditions which are
not specifically related to a particular company or to factors affecting a
particular industry or industries. Preferred stocks may be more volatile than
fixed income securities and are more correlated with the issuer’s underlying
common stock than fixed income securities. While most preferred stocks pay a
dividend, the Funds may purchase preferred stock where the issuer has omitted,
or is in danger of omitting, payment of its dividend.
Prepayment
Risk.
Many
types of debt securities, including floating rate loans and mortgage-related
securities, may reflect an interest in periodic payments made by borrowers.
Although debt securities and other obligations typically mature after a
specified period of time, borrowers may pay them off sooner. When a prepayment
happens, all or a portion of the obligation will be prepaid. A borrower is more
likely to prepay an obligation which bears a relatively high rate of interest.
This means that in times of declining interest rates, there is a greater
likelihood that a Fund’s higher yielding securities will be pre-paid and the
Fund will probably be unable to re-invest those proceeds in an investment with
as great a yield, causing the Fund’s yield to decline. Securities subject to
prepayment risk generally offer less potential for gains when prevailing
interest rates fall. If a Fund buys those investments at a premium, accelerated
prepayments on those investments could cause the Fund to lose a portion of its
principal investment and result in lower yields to shareholders. The increased
likelihood of prepayment when interest rates decline also limits market price
appreciation, especially certain loans and mortgage-backed securities. The
effect of prepayments on the price of a security may be difficult to predict and
may increase the security’s price volatility. Interest-only and principal-only
securities are especially sensitive to interest rate changes, which can affect
not only their prices but can also change the income flows and repayment
assumptions about those investments.
Recent
Market Events Risk. U.S.
and international markets have experienced and may continue to experience
significant periods of volatility in recent years and months due to a number of
economic, political and global macro factors including uncertainty regarding
inflation and central banks’ interest rate increases, the possibility of a
national or global recession, trade tensions, political events, the war between
Russia and Ukraine, significant conflict between Israel and Hamas in the Middle
East, and the impact of the coronavirus (COVID-19) global pandemic. The impact
of COVID-19 may last for an extended period of time. As a result of continuing
political tensions and armed conflicts, including the war between Ukraine and
Russia, the U.S. and the European Union imposed sanctions on certain Russian
individuals and companies, including certain financial institutions, and have
limited certain exports and imports to and from Russia. The war has contributed
to recent market volatility and may continue to do so. Continuing market
volatility as a result of recent market conditions or other events may have an
adverse effect on the performance of the Fund.
Additionally,
a rise in protectionist trade policies, slowing global economic growth, risks
associated with epidemic and pandemic diseases, risks associated with the United
Kingdom’s departure from the European Union, the risk of trade disputes, and the
possibility of changes to some international trade agreements, could affect the
economies of many nations, including the United States, in ways that cannot
necessarily be foreseen at the present time. Continuing market volatility as a
result of recent market conditions or other events may have adverse effects on
your account.
Redemption
Risk.
The
Funds may experience periods of heavy redemptions that could cause a Fund to
liquidate its assets at inopportune times or at a loss or depressed value,
particularly during periods of
declining
or illiquid markets.
Redemption
risk is greater to the extent that a Fund has investors with large
shareholdings, short investment horizons, or unpredictable cash flow
needs.
In
addition, redemption risk is heightened during periods of overall market
turmoil.
If
a Fund is forced to liquidate its assets under unfavorable conditions or at
inopportune times, the value of your investment could decline.
SPACs
Risk. The
Funds invest in equity securities of SPACs, which raise assets to seek potential
business combination opportunities. Unless and until a business combination is
completed, a SPAC generally invests its assets in U.S. government securities,
money market securities, and cash. If a business combination that meets the
requirements for the SPAC is not completed within a pre-established period of
time (e.g.,
two years), the invested funds are returned to the entity’s shareholders.
Because SPACs have no operating history or ongoing business other than seeking a
business combination, the value of their securities is particularly dependent on
the ability of the entity’s management to identify and complete a profitable
acquisition. Public stockholders of SPACs may not be afforded a meaningful
opportunity to vote on a proposed initial business combination because certain
stockholders, including stockholders affiliated with the management of the SPAC,
may have sufficient voting power, and a financial incentive, to approve such a
transaction without support from public stockholders. As a result, a SPAC may
complete a business combination even though a majority of its public
stockholders do not support such a combination. There is no guarantee that the
SPACs in which a Fund invests will complete a business combination or that any
business combination that is completed will be profitable. Some SPACs may pursue
a business combination only within certain industries or regions, which may
increase the volatility of their prices. SPACs may also encounter intense
competition from other entities having a similar business objective, such as
private investors or investment vehicles and other SPACs, competing for the same
acquisition targets, which could make completing an attractive business
combination more difficult.
To
the extent a SPAC is invested in cash or cash equivalents, this may impact the
ability of a Fund to meet its investment objectives.
Investments
in a SPAC may be considered illiquid and/or subject to restrictions on
resale.
The
economic terms of the investments made by a SPAC’s sponsors, directors, officers
and their affiliates usually differ from those of the public shareholders such
as the Funds.
Sponsors,
directors, officers and their affiliates may have financial incentives that
differ from public shareholders which may result from securities ownership,
compensation arrangements or relationships with affiliated entities that may
lead to conflicts of interest when evaluating potential business combination
opportunities. The compensation arrangement of a SPAC’s sponsors, directors,
officers or affiliates may create financial incentives to complete a business
combination transaction even if the transaction may not be in the best interest
of other shareholders.
Rule
144A Securities Risk.
Rule
144A securities are purchased in transactions exempt from the registration
requirements of the Securities Act of 1933, as amended, (the “Securities Act”)
pursuant to Rule 144A of the Securities Act. Rule 144A securities may only be
sold to qualified institutional buyers, such as the Fund.
The
market for Rule 144A securities typically is less active than the market for
public securities.
Rule
144A securities carry the risk that the trading market may not continue and the
Fund might be unable to dispose of these securities promptly or at reasonable
prices and might thereby experience difficulty satisfying redemption
requirements.
Securities
Lending Risk. Each
Fund may make secured loans of its portfolio securities. Borrowers of the Fund’s
securities may provide collateral in the form of cash that is reinvested in
securities. The securities in which the collateral is invested may not perform
sufficiently to cover the return collateral payments owed to borrowers. In
addition, delays may occur in the recovery of securities from borrowers, which
could
interfere with the Fund’s ability to vote proxies or to settle transactions. To
the extent a Fund lends its securities, it may be subject to these
risks.
Sovereign
Debt Risk.
The Funds may invest in securities issued or guaranteed by foreign governmental
entities (known as sovereign debt securities). These investments are subject to
the risk of payment delays or defaults, due, for example, to cash flow problems,
insufficient foreign currency reserves, political considerations, large debt
positions relative to the country’s economy, or failure to implement economic
reforms. There is no legal or bankruptcy process for collecting sovereign
debt.
Certain
issuers of sovereign debt may be dependent on disbursements from foreign
governments, multilateral agencies and others abroad to reduce principal and
interest liabilities on their debt. Such disbursements may be conditioned upon a
debtor’s implementation of economic reforms and/or economic performance and the
timely service of such debtor’s obligations. A failure on the part of the debtor
to implement such reforms, achieve such levels of economic performance or repay
principal or interest when due may result in the cancellation of such third
parties’ commitments to lend funds to the debtor, which may impair the debtor’s
ability to service its debts on a timely basis. As a holder of sovereign debt,
the Funds may be requested to participate in the restructuring of such sovereign
indebtedness, including the rescheduling of payments and the extension of
further loans to debtors, which may adversely affect the Funds. There can be no
assurance that such restructuring will result in the repayment of all or part of
the debt.
Tax
Risk.
Each
Fund’s investments and investment strategies, specifically its investments in
Derivatives, may subject the Fund to special federal income tax provisions that
may, among other things: (i) disallow, suspend or otherwise limit the allowance
of certain losses or deductions; (ii) accelerate income to the Fund; (iii)
convert long-term capital gain taxed at lower rates into short-term capital gain
or ordinary income taxed at higher rates; (iv) convert an ordinary loss or a
deduction into a capital loss (the deductibility of which is more limited); (v)
treat dividends that would otherwise constitute “qualified dividend” income as
non-qualified dividend income; or (vi) create a risk that the Fund will fail the
diversification and source of income requirements under Sections 851 to 855 of
the Internal Revenue Code of 1986, as amended (the “Code”), which could cause
the Fund to fail to qualify for the tax treatment applicable to a regulated
investment company.
Tracking
Risk.
The
value of the Derivative instruments the Low Duration high Yield Fund uses may
not correlate to (or track) the values of the underlying securities.
When
used for hedging purposes, lack of correlation between price or rate movements
of the Derivative instrument and the underlying investment sought to be hedged
may prevent the Fund from achieving the intended hedging effect or expose the
Fund to risk of loss.
Trade
Versus Settlement Risk. The
Funds may invest in securities that have varied settlement terms and dates. The
longer the amount of time between trade date and settlement date the greater the
risk that settlement will occur on a timely basis.
Yankee
Bond Risk. Yankee
bonds are subject to the same risks as other debt issues, notably credit risk,
market risk, currency and liquidity risk.
Other
risks include adverse political and economic developments; the extent and
quality of government regulations of financial markets and institutions; the
imposition of foreign withholding taxes; and the expropriation or
nationalization of foreign issuers.
Zero
Coupon Securities Risk. While
interest payments are not made on such securities, holders of such securities
are deemed to have received income (“phantom income”) annually, notwithstanding
that cash may not be received currently.
The
effect of owning instruments that do not make current interest payments is that
a fixed yield is earned not only on the original investment but also, in effect,
on all discount accretion during the life of the obligations.
This
implicit reinvestment of earnings at a fixed rate eliminates the risk of being
unable to invest distributions at a rate as high as the implicit yield on the
zero coupon bond, but at the same time eliminates the holder’s ability to
reinvest at higher rates in the future.
For
this reason, some of these securities may be subject to substantially greater
price fluctuations during periods of changing market interest rates than are
comparable securities that pay interest currently.
Longer
term zero coupon bonds are more exposed to interest rate risk than shorter term
zero coupon bonds.
Zero
coupon securities may be subject to greater fluctuation in value and less
liquidity in the event of adverse market conditions than comparably rated
securities that pay cash interest at regular intervals.
Further,
to maintain its qualification for pass-through treatment under the Federal tax
laws, the Fund is required to distribute income to its shareholders and,
consequently, may have to dispose of other, more liquid portfolio securities
under disadvantageous circumstances or may have to leverage itself by borrowing
in order to generate the cash to satisfy these distributions.
The
required distributions may result in an increase in the Fund’s exposure to zero
coupon securities.
During
a period of severe market conditions, the market for such securities may become
even less liquid.
In
addition, as these securities do not pay cash interest, the Fund’s investment
exposure to these securities and their risks, including credit risk, will
increase during the time these securities are held in the Fund’s
portfolio.
A
description of the Funds’ policies and procedures with respect to the disclosure
of the Funds’ portfolio holdings is available in the Funds’ Statement of
Additional Information (“SAI”). Disclosure of the Funds’ holdings is required to
be made quarterly within 60 days of the end of each fiscal quarter in the annual
and semi-annual reports to Fund shareholders and in the quarterly holdings
report on Part F of Form N-PORT. The annual and semi-annual reports to Fund
shareholders are available free of charge by contacting the CrossingBridge
Funds, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI
53201-0701 or calling 888-898-2780, or by visiting the Funds’ website at
www.crossingbridgefunds.com. Part F of Form N-PORT is available on the SEC’s
website at www.sec.gov.
The
Trust, on behalf of the Funds, has entered into an investment advisory agreement
(“Advisory Agreement”) with CrossingBridge Advisors, LLC, located at 427 Bedford
Road, Suite 220, Pleasantville, NY 10570. The Adviser is registered as an
investment adviser with the SEC and was formed in December 2016. CrossingBridge
Advisors, LLC is a wholly-owned subsidiary of ENDI Corp. The Adviser and its
affiliates have managed a variety of credit-related investment vehicles and/or
accounts since 1996. As of September 30, 2023, the Adviser managed over $1.77
billion in assets. Under the Advisory Agreement, the Adviser has overall
responsibility for the general management and investment of each Fund’s
portfolio, subject to the supervision of the Board of Trustees. Each Fund
compensates the Adviser for its services at the annual rate of 0.65% of its
average annual net assets, payable on a monthly basis in arrears. For the fiscal
year ended September 30, 2023, the Adviser received management fees of 0.66% and
0.50% (net of fee waivers) of the Low Duration High Yield Fund and Ultra-Short
Duration Fund’s average daily net assets, respectively. For the fiscal year
ended September 30, 2023, the Adviser
did
not receive a management fee after application of the operating expense
limitation agreement for the Responsible Credit Fund. For the fiscal period from
October 1, 2022 through the Reorganization, RiverPark Advisors, LLC, the
investment advisor to the Predecessor Fund, received a management fee of 0.65%
of the Predecessor Fund’s average daily net assets. For the period from the
Reorganization through September 30, 2023, the Adviser received a management fee
of 0.65% of the Strategic Income Fund’s average daily net assets.
Fund
Expenses.
Each Fund is responsible for its own operating expenses; however, pursuant to an
operating expense limitation agreement between the Adviser and the Trust, on
behalf of the Funds, the Adviser has agreed to waive its management fees and/or
reimburse expenses of the Funds to ensure that the total amount of each Fund’s
operating expenses (exclusive of Excluded Expenses) does not exceed 0.80% of the
average net assets of each of the Low Duration High Yield Fund, Ultra-Short
Duration Fund and Responsible Credit Fund, through at least January 31, 2025 and
0.82% of the average net assets of the Strategic Income Fund through at least
May 12, 2025. Each expense limitation agreement is subject to annual re-approval
of the agreement by the Board of Trustees thereafter. Any waiver of management
fees or payment of expenses made by the Adviser may be reimbursed by the Funds
in subsequent years if the Adviser so requests. This reimbursement may be
requested if the aggregate amount actually paid by a Fund toward operating
expenses for such fiscal year (taking into account the reimbursement) does not
exceed the applicable limitation on Fund expenses at the time of the waiver. The
Adviser may request recoupment of previously waived fees and paid expenses from
a Fund for three years from the date such fees and expenses were waived or paid,
subject to the operating expense limitation agreement and is permitted to be
reimbursed for fee reductions and/or expense payments made in the prior three
years, if such reimbursement will not cause the Fund’s expense ratio, after
recoupment has been taken into account, to exceed the lesser of: (1) the expense
limitation in place at the time of the waiver and/or expense payment; or (2) the
expense limitation in place at the time of the recoupment. Any such
reimbursement will be reviewed by the Board of Trustees. The operating expense
limitation agreement can be terminated only by, or with the consent of, the
Board of Trustees.
A
discussion regarding the basis of the Board of Trustees’ approval of the
Advisory Agreement between the Adviser and the Trust, on behalf of the Funds, is
included in the Funds’ annual report to shareholders for the fiscal year ended
September 30, 2023.
The
Adviser also serves as investment adviser to the CrossingBridge Pre-Merger SPAC
ETF, a separate series of the Trust.
David
K. Sherman
is the Founder and President of the Adviser, a wholly owned subsidiary of ENDI
Corp., and serves as the Lead Portfolio Manager of the Funds. Mr. Sherman served
as the sole portfolio manager of the Predecessor Fund, since the Predecessor
Fund’s inception. Mr. Sherman has 35 years of investment management experience
and founded Cohanzick Management, LLC in 1996. Prior to establishing Cohanzick,
Mr. Sherman was actively involved as a senior executive in Leucadia National
Corporation’s corporate investments and acquisitions and was Treasurer of the
holding company’s insurance operations. Mr. Sherman holds a Bachelor of Science
from Washington University.
T.
Kirk Whitney, CFA®
is an Assistant Portfolio Manager of the Adviser, a wholly owned subsidiary of
ENDI Corp., and serves as an Assistant Portfolio Manager of the Funds.
Mr.
Whitney joined Cohanzick Management, LLC as a Portfolio Analyst in 2013, rising
to his current role of Assistant Portfolio Manager. Mr. Whitney has over 20
years of experience having worked at the Solaris Group, Concordia
Advisors,
Alliance Capital and Bloomberg. Mr. Whitney holds a B.S. from Pennsylvania State
University.
Spencer
Rolfe is
an Assistant Portfolio Manager of the Adviser, a wholly owned subsidiary of ENDI
Corp., and serves as the Assistant Portfolio Manager of the Strategic Income
Fund. Prior to joining the Adviser, Mr. Rolfe was a Managing Director at Corvid
Peak Capital Management and an Analyst at Arena Investors, focusing on credit
opportunities and special situations. Mr. Rolfe began his career at Cohanzick
Management, LLC, an affiliate of the Adviser, in 2017, covering performing and
distressed credit opportunities and equity special situations. In addition, Mr.
Rolfe is a Teaching Assistant within the Finance Department of New York
University’s Stern Business School with a focus on Global Value Investing. Mr.
Rolfe received his B.A. from the University of Missouri.
The
SAI provides additional information about the portfolio managers’ compensation,
other accounts managed and ownership of securities in the Funds.
CFA®
is a registered trademark owned by the CFA Institute.
Pursuant
to the Trust’s Amended and Restated Declaration of Trust (the “Declaration of
Trust”), and subject to the limitations disclosed in the Declaration of Trust, a
Fund shareholder may only bring a derivative action if (i) the shareholder or
shareholders make a pre-suit demand upon the Board of Trustees to bring the
subject action unless an effort to cause the Board of Trustees to bring such an
action is not likely to succeed (as defined in the Declaration of Trust); (ii)
shareholders eligible to bring such derivative action under the Delaware
Statutory Trust Act who hold at least 10% of the outstanding voting securities
of the Trust, or 10% of the outstanding voting securities of the series or class
to which such action relates, shall join in the request for the Board of
Trustees to commence such action; and (iii) the Board of Trustees is afforded a
reasonable amount of time to consider such shareholder request and to
investigate the basis of such claim. The Board of Trustees shall be entitled to
retain counsel or other advisors in considering the merits of the request and
shall require an undertaking by the shareholders making such request to
reimburse the Trust for the expense of any such advisors in the event that the
Trustees determine not to bring such action. The provision requiring at least
10% of the outstanding voting securities of the Trust, applicable series or
class to join in the request to bring the derivative action and the provision
requiring an undertaking by the requesting shareholders to reimburse the Trust
for the expense of any advisors retained by the Board of Trustees in the event
that the Trustees determine not to bring such action, do not apply to claims
brought under federal securities laws.
The
Low Duration High Yield Fund and Strategic
Income Fund
each offer Institutional Class shares and Retail Class shares. The Ultra-Short
Duration Fund and the Responsible Credit Fund offer Institutional Class shares.
Retail Class shares of the Low Duration High Yield Fund are not currently
available for purchase. The different classes of shares represent investments in
the same portfolio of securities, but the classes are subject to different
expenses and may have different share prices as outlined below.
Institutional
Class Shares.
Institutional Class shares are offered for sale at NAV without the imposition of
a sales charge or Rule 12b-1 distribution fee. Institutional Class shares are
subject to a shareholder
servicing
fee at an annual rate not to exceed 0.15% of a Fund’s average daily net assets,
attributable to Institutional Class shares. Currently, the shareholder servicing
fee authorized is 0.10% for the Low Duration High Yield Fund, Ultra-Short
Duration Fund and Responsible Credit Fund and 0.11% for the Strategic
Income Fund;
however, the fee may be increased to 0.15% of a Fund’s average daily net assets
attributable to Institutional Class shares at any time. Institutional Class
shares are offered primarily to institutions such as pension and profit sharing
plans, employee benefit trusts, endowments, foundations, corporations and high
net worth individuals. Institutional Class shares may also be offered through
certain financial intermediaries that charge their customers transaction or
other distribution or service fees with respect to their customer’s investments
in the Fund. Pension and profit sharing plans, employee trusts and employee
benefit plan alliances and “wrap account” or “managed fund” programs established
with broker-dealers or financial intermediaries that maintain an omnibus or
pooled account for the Fund and do not require the Fund to pay a fee, generally
may purchase Institutional Class shares, subject to investment
minimums.
Retail
Class Shares.
Retail Class shares of the Low Duration High Yield Fund and Strategic
Income Fund
are offered for sale at NAV, without the imposition of a sales charge. Retail
Class shares are subject to a 0.25% Rule 12b-1 distribution fee on an annual
basis. Retail Class shares of a Fund are also subject to a shareholder servicing
fee at an annual rate not to exceed 0.15% of a Fund’s average daily net assets
attributable to Retail Class shares. Currently, the shareholder servicing fee
authorized is 0.10% for the Low Duration High Yield Fund and 0.11% for the
Strategic
Income Fund;
however, the fee may be increased to 0.15% of a Fund’s average daily net assets
attributable to Retail Class shares at any time. As a result, Retail Class
shares pay higher annual expenses than Institutional Class shareholders.
The
Low Duration High Yield Fund and Strategic
Income Fund
have adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the
1940 Act. Under the Plan, a Fund is authorized to pay the Distributor, or such
other entities as approved by the Board of Trustees, Rule 12b-1 distribution
fees for the costs and services it provides and expenses it bears in the sale
and distribution of Retail Class shares of a Fund (the “Rule 12b-1 Fee”). The
maximum annual rate of the Rule 12b-1 Fee is 0.25% of a Fund’s average daily net
assets attributable to Retail Class shares. Amounts received under the Plan may
be paid to other persons, including the Adviser, for any distribution or service
activity. Because these fees are paid out of a Fund’s assets attributable to
Retail Class shares on an on-going basis, over time these fees will increase the
cost of your investment in a Fund and may cost you more than paying other types
of sales charges.
The
Trust, on behalf of the Funds, has also adopted a Shareholder Servicing Plan
that allows the Funds to make payments to financial intermediaries and other
persons for certain personal services for shareholders and/or the maintenance of
shareholder accounts. The shares of the Funds are subject to shareholder
servicing fee at an annual rate not to exceed 0.15% of a Fund’s average daily
net assets attributable to Institutional Class and Retail Class shares (as
applicable). Currently, the shareholder servicing fee authorized is 0.10% of the
Low Duration High Yield Fund, Ultra-Short Duration Fund and the Responsible
Credit Fund’s average daily net assets, and 0.11% of the Strategic
Income Fund’s
average daily net assets; however, the fee may be increased to 0.15% of a Fund’s
average daily net assets, at any time. Because these fees are paid out of a
Fund’s assets on an ongoing basis, over time these fees will increase the cost
of your investment in the Fund and may cost you more than paying other types of
sales charges.
The
price of a Fund’s shares is its NAV. The NAV is calculated by dividing the value
of a Fund’s total assets, less its liabilities, by the number of its shares
outstanding. In calculating the NAV, portfolio securities are valued using
current market values or official closing prices, if available. The NAV is
calculated at the close of regular trading on the NYSE, (generally
4:00 p.m., Eastern time). The NAV will not be calculated on days on which
the NYSE is closed for trading. If the NYSE closes early, the Funds will
calculate the NAV as of the close of trading on the NYSE on that day. If an
emergency exists as permitted by the SEC, the NAV may be calculated at a
different time.
Each
equity security owned by a Fund, including shares of closed-end funds, that is
listed on a national securities exchange, except for portfolio securities listed
on the NASDAQ Stock Market, LLC (“NASDAQ”), is valued at its last sale price on
that exchange on the close of that exchange on the date as of which assets are
valued. If a security is listed on more than one exchange, the Funds will use
the price on the exchange that the Funds generally consider to be the principal
exchange on which the security is traded.
Portfolio
securities listed on NASDAQ will be valued at the NASDAQ Official Closing Price
(“NOCP”), which may not necessarily represent the last sale price. If the NOCP
is not available, such securities shall be valued at the last sell price on the
day of valuation. If there has been no sale on such exchange or on NASDAQ on
such day, the security is valued at the mean between the most recent quoted bid
and asked prices at the close of the exchange on such day or the security is
valued at the latest sales price on the “composite market” for the day such
security is being valued. The composite market is defined as the consolidation
of the trade information provided by national securities and foreign exchanges
and over-the-counter (“OTC”) markets as published by an approved independent
pricing service (“Pricing Service”).
Exchange-traded
options are valued at the composite price, using the National Best Bid and Offer
quotes. If there are no trades for the option on a given business day, composite
option pricing calculates the mean of the highest bid price and lowest ask price
across the exchanges where the option is traded. Option contracts on securities,
currencies and other financial instruments traded in the OTC market with less
than 180 days remaining until their expiration are valued at the evaluated price
provided by the broker-dealer with which the option was traded. Option contracts
on securities, currencies and other financial instruments traded in the OTC
market with 180 days or more remaining until their expiration are valued at the
prices provided by a recognized independent broker-dealer.
Debt
securities, including short-term debt securities having a maturity of 60 days or
less, are valued at the mean in accordance with prices supplied by a Pricing
Service. Pricing Services may use various valuation methodologies such as the
mean between the bid and ask prices, matrix pricing method or other analytical
pricing models as well as market transactions and dealer quotations. If a price
is not available from a Pricing Service, the most recent quotation obtained from
one or more broker-dealers known to follow the issue will be obtained.
Quotations will be valued at the mean between the bid and the offer. Fixed
income securities purchased on a delayed-delivery basis are typically marked to
market daily until settlement at the forward settlement date. Any discount or
premium is accreted or amortized using the constant yield method until maturity.
Forward currency contracts are valued at the mean between the bid and asked
prices.
If
market quotations are not readily available or deemed unreliable, a security or
other asset will be valued at its fair value as determined under the Adviser’s
fair value pricing procedures subject to oversight by the Board of Trustees.
These fair value pricing procedures will also be used to price a security when
corporate
events, events in the securities market or world events cause the Adviser to
believe that the security’s last sale price may not reflect its actual fair
market value. The intended effect of using fair value pricing procedures is to
ensure that a Fund’s shares are accurately priced. The Adviser will regularly
evaluate whether a Fund’s fair value pricing procedures continue to be
appropriate in light of the specific circumstances of the Fund and the quality
of prices obtained.
When
fair value pricing is employed, the prices of securities used by each Fund to
calculate its NAV may differ from quoted or published prices for the same
securities. Due to the subjective and variable nature of fair value pricing, it
is possible that the fair value determined for a particular security may be
materially different (higher or lower) from the price of the security quoted or
published by others or the value when trading resumes or realized upon its sale.
Therefore, if a shareholder purchases or redeems Fund shares when a Fund holds
securities priced at a fair value, the number of shares purchased or redeemed
may be higher or lower than it would be if the Fund were using market-value
pricing. The Adviser anticipates that the Funds’ portfolio holdings will be fair
valued only if market quotations for those holdings are not readily available or
considered unreliable.
In
the case of foreign securities, the occurrence of certain events after the close
of foreign markets, but prior to the time a Fund’s NAV is calculated (such as a
significant surge or decline in the U.S. or other markets) often will result in
an adjustment to the trading prices of foreign securities when foreign markets
open on the following business day. If such events occur, the Funds will value
foreign securities at fair value, taking into account such events, in
calculating the NAV. In such cases, use of these evaluated prices can reduce an
investor’s ability to seek to profit by estimating the Funds’ NAV in advance of
the time the NAV is calculated. In the event a Fund holds portfolio securities
that trade in foreign markets or that are primarily listed on foreign exchanges
that trade on weekends or other days when the Fund does not price its shares,
the Fund’s NAV may change on days when shareholders will not be able to purchase
or redeem the Fund’s shares.
All
purchase requests received in good order by the Funds’ transfer agent, U.S.
Bancorp Fund Services, LLC (the “Transfer Agent”) or by an authorized financial
intermediary (an “Authorized Intermediary,” as defined below) before the close
of the NYSE (generally 4:00 p.m., Eastern time) will be processed at that
day’s NAV per share. Purchase requests received by the Transfer Agent or an
Authorized Intermediary after the close of the NYSE (generally 4:00 p.m.,
Eastern time) will receive the next business day’s NAV per share. An Authorized
Intermediary is a financial intermediary (or its authorized designee) that has
made arrangements with a Fund to receive purchase and redemption orders on its
behalf (“Authorized Intermediary”). For additional information about purchasing
shares through financial intermediaries, please see “Purchasing Shares Through a
Financial Intermediary,” below.
All
account applications (each an “Account Application”) to purchase Fund shares are
subject to acceptance by the Funds and are not binding until so accepted. It is
the policy of the Funds not to accept applications under certain circumstances
or in amounts considered disadvantageous to shareholders. Your order will not be
accepted until the Funds or the Transfer Agent receives a completed Account
Application in good order. The Funds reserve the right to reject any Account
Application.
The
Funds reserve the right to reject any purchase order or suspend the offering of
shares if, in their discretion, it is in a Fund’s best interest to do so. For
example, a purchase order may be refused if it appears so large that it would
disrupt the management of the Funds. Purchases may also be rejected from persons
believed to be “market-timers,” as described under the section entitled “Tools
to Combat Frequent Transactions,” below. In addition, a service fee, which is
currently $25, as well as any loss sustained by the Funds, will be deducted from
a shareholder’s account for any payment that is returned to
the
Transfer Agent unpaid. Written notice of a rejected purchase order will be
provided to the investor within one or two business days under normal
circumstances. The Funds and the Transfer Agent will not be responsible for any
losses, liability, cost or expense resulting from rejecting any purchase order.
Your order will not be accepted until a completed Account Application is
received by the Funds or the Transfer Agent.
Shares
of the Funds have not been registered for sale outside of the United States. The
Funds generally do not sell shares to investors residing outside the United
States, even if they are United States citizens or lawful permanent residents,
except to investors with United States military APO or FPO
addresses.
Minimum
Investment Amounts
The
Low Duration High Yield Fund offers investors two classes of shares:
Institutional Class shares and Retail Class shares. Retail Class shares of the
Low Duration High Yield Fund are not currently available for purchase. The
Ultra-Short Duration Fund and Responsible Credit Fund each offer Institutional
Class shares. Minimum initial investment amounts are shown below. There is no
minimum investment requirement for subsequent investments.
|
|
|
|
|
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|
| |
Share
Purchase Amounts |
Institutional Class
- All Funds |
Retail
Class - Low Duration High Yield Fund and Strategic Income Fund
Only |
Minimum
Initial Investment – All Accounts |
$0
for certain institutional investors as described under “Minimum Investment
Amounts”; $5,000 for all other investors |
$2,500 |
Minimum
Subsequent Investment |
None |
None |
Automatic
Investment Plan (Low Duration High Yield Fund, Ultra-Short Duration,
Responsible Credit) |
$100 |
$100 |
Automatic
Investment Plan (Strategic Income Fund) |
$1,000 |
$100 |
Institutional
Class shares are offered without any minimum initial investment to the following
types of qualifying institutional investors:
1.Broker-dealers,
registered investment advisers, insurance companies, trust institutions or bank
trust departments purchasing for their own account or for the account of other
institutional investors;
2.Managed
account programs that charge an asset-based fee provided by a broker-dealer,
registered investment adviser, insurance company, trust institution or bank
trust departments;
3.Employee
benefit plans investing through an investment adviser, a broker-dealer or
another financial intermediary;
4.Any
state, county, or city, or any governmental instrumentality, department,
authority or agency;
5.Charitable
organizations (as defined for purposes of Section 501(c)(3) of the Code) or
charitable remainder trusts or life income pools established for the benefit of
a charitable organization;
6.Insurance
company separate accounts;
7.Health
savings account programs provided by a broker-dealer, registered investment
adviser, insurance company, trust institution or bank trust
department;
8.Other
institutions and intermediaries approved by the Funds’ distributor;
and
9.Officers,
directors and employees of the Adviser and its affiliates; trustees, officers
and service providers of the Trust and the Funds; registered representatives and
employees of financial intermediaries with a current selling agreement with the
Distributor or the Adviser; and immediate family members of such
persons.
The
Funds reserve the right to waive or change the minimum initial investment or
minimum subsequent investment amounts at its discretion. Shareholders will be
given at least 30 days’ written notice of any increase in the minimum dollar
amount of initial or subsequent investments. For accounts sold through financial
intermediaries, it is the primary responsibility of the financial intermediary
to ensure compliance with investment minimums.
Purchase
Requests Must be Received in Good Order
Your
share price will be the next NAV per share calculated after the Transfer Agent
or your Authorized Intermediary receives your purchase request in good order.
For purchases made through the Transfer Agent, “good order” means that your
purchase request includes:
•the
name of the Fund and share class you are investing in;
•the
dollar amount of shares to be purchased;
•your
Account Application or investment stub; and
•a
check payable to the Fund you are investing in.
For
information about your financial intermediary’s requirements for purchases in
good order, please contact your financial intermediary.
Purchase
by Mail
To
purchase Fund shares by mail, simply complete and sign the Account Application
and mail it, together with your check made payable to the Fund you are investing
in, to one of the addresses below. To make additional investments once you have
opened your account, write your account number on the check and send it together
with the Invest by Mail form from your most recent confirmation statement
received from the Transfer Agent. If you do not have the Invest by Mail form,
include the name of the Fund you are investing in and your name, address, and
account number on a separate piece of paper and mail it with your check made
payable to the Fund you are investing in, to:
|
|
|
|
| |
Regular
Mail |
Overnight
or Express Mail |
CrossingBridge
Funds |
CrossingBridge
Funds |
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
Funds do not consider the U.S. Postal Service or other independent delivery
services to be their agents. Therefore, deposit in the mail or with such
services, or receipt at the Transfer Agent’s post office box, of purchase orders
or redemption requests does not constitute receipt by the Transfer Agent.
Receipt of purchase orders or redemption requests is based on when the order is
received at the Transfer Agent’s offices. All purchase checks must be in U.S.
dollars drawn on a domestic financial institution. The Funds will not accept
payment in cash or money orders. To prevent check fraud, the Funds will not
accept third party checks, Treasury checks, credit card checks, traveler’s
checks or starter checks for the purchase of shares. The Funds are unable to
accept post-dated checks or any conditional order or payment.
Purchase
by Wire
If
you are making your first investment in the Funds through a wire purchase, the
Transfer Agent must have a completed Account Application before you wire funds.
You can mail or use an overnight service to deliver your Account Application to
the Transfer Agent at the above address. Upon receipt of your completed Account
Application, the Transfer Agent will establish an account for you. Once your
account has been established, you may instruct your bank to send the wire. Prior
to sending the wire, please call the Transfer Agent at 888-898-2780 to advise
them of the wire and to ensure proper credit upon receipt. Your bank must
include the name of the Fund you are investing in, your name and your account
number so that monies can be correctly applied. Your bank should transmit
immediately available funds by wire to:
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| |
Wire
to: |
U.S.
Bank National Association |
| 777
East Wisconsin Avenue |
| Milwaukee,
Wisconsin 53202 |
ABA
Number: |
075000022 |
Credit: |
U.S.
Bancorp Fund Services, LLC |
Account: |
112-952-137 |
Further
Credit: |
(name
of the Fund you are investing in) |
| (Shareholder
Name/Account Registration) |
| (Shareholder
Account Number) |
Wired
funds must be received prior to the close of the NYSE (generally 4:00 p.m.,
Eastern time) to be eligible for same day pricing. The Funds and U.S. Bank
National Association, the Funds’ custodian, are not responsible for the
consequences of delays resulting from the banking or Federal Reserve wire
system, or from incomplete wiring instructions.
Investing
by Telephone
Telephone
purchase privileges are automatically provided unless you specifically decline
the option on your Account Application. If your account has been open for at
least 7 business days, you may purchase additional shares by calling the Funds
toll free at 888-898-2780. You must also have submitted a voided check or a
savings deposit slip to have banking information established on your account.
This option allows investors to move money from their bank account to their Fund
account upon request. Only bank accounts held at domestic financial institutions
that are Automated Clearing House (“ACH”) members may be used for telephone
transactions. Telephone purchases are subject to applicable minimum investment
amounts for subsequent investments. If your order is received prior to the close
of the NYSE (generally 4:00 p.m., Eastern time), shares will be purchased in
your account at the applicable price determined on the day your order is placed.
During periods of high market activity, shareholders may encounter higher than
usual call waiting times. Please allow sufficient time to place your telephone
transaction.
Retirement
Accounts
The
Funds offer prototype documents for a variety of retirement accounts for
individuals and small businesses. Please call 888-898-2780 for information
on:
•Individual
Retirement Plans, including Traditional IRAs and Roth IRAs.
•Small
Business Retirement Plans, including Simple IRAs and SEP IRAs.
There
may be special distribution requirements for a retirement account, such as
required distributions or mandatory federal income tax withholdings. For more
information, call the number listed above. Direct shareholder accounts may be
charged a $15 annual account maintenance fee for each retirement account up to a
maximum of $30 annually and a $25 fee for transferring assets to another
custodian or for closing a retirement account. Fees charged by other
institutions may vary.
Automatic
Investment Plan
For
your convenience, the Funds offer an Automatic Investment Plan (“AIP”). Under
the AIP, after your initial investment, you may authorize the Funds to withdraw
automatically from your personal checking or savings account any amount that you
wish to invest, which must be at least $100 on a monthly basis. In order to
participate in the AIP, your bank must be a member of the ACH network. If you
wish to enroll in the AIP, complete the appropriate section in the Account
Application. The Funds may terminate or modify this privilege at any time. You
may terminate your participation in the AIP at any time by notifying the
Transfer Agent five days prior to the effective date of the request. A $25 fee
will be charged if your bank does not honor the AIP draft for any
reason.
Purchasing
Shares Through a Financial Intermediary
Investors
may be charged a fee if they effect transactions through a financial
intermediary. If you are purchasing shares through a financial intermediary, you
must follow the procedures established by your financial intermediary. Your
financial intermediary is responsible for sending your purchase order and wiring
payment to the Transfer Agent. Your financial intermediary holds the shares in
your name and receives all confirmations of purchases and sales. Financial
intermediaries placing orders for themselves or on behalf of their customers
should call the Funds toll free at 888-898-2780, or follow the instructions
listed in the sections above entitled “Investing by Telephone,” “Purchase by
Mail” and “Purchase by Wire.”
If
you place an order for a Fund’s shares through a financial intermediary that is
not an Authorized Intermediary in accordance with such financial intermediary’s
procedures, and such financial intermediary then transmits your order to the
Transfer Agent in accordance with the Transfer Agent’s instructions, your
purchase will be processed at the NAV next calculated after the Transfer Agent
receives your order. The financial intermediary must promise to send to the
Transfer Agent immediately available funds in the amount of the purchase price
in accordance with the Transfer Agent’s procedures. If payment is not received
within the time specified, the Transfer Agent may rescind the transaction and
the financial intermediary will be held liable for any resulting fees or
losses.
In
the case of Authorized Intermediaries that have made satisfactory payment or
redemption arrangements with the Funds, orders will be processed at the NAV next
calculated after receipt in good order by the Authorized Intermediary (or its
authorized designee), consistent with applicable laws and regulations. An order
is deemed to be received when the Funds or an Authorized Intermediary accepts
the order. Authorized Intermediaries may be authorized to designate other
intermediaries to receive purchase and redemption requests on behalf of the
Funds.
For
more information about your financial intermediary’s rules and procedures,
whether your financial intermediary is an Authorized Intermediary, and whether
your financial intermediary imposes cut-off times for the receipt of orders that
are earlier than the cut-off times established by the Funds, you should contact
your financial intermediary directly.
Anti-Money
Laundering Program
The
Trust has established an Anti-Money Laundering Compliance Program as required by
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”) and related
anti-money laundering laws and regulations. To ensure compliance with these
laws, the Account Application asks for, among other things, the following
information for all “customers” seeking to open an “account” (as those terms are
defined in rules adopted pursuant to the USA PATRIOT Act):
•full
name;
•date
of birth (individuals only);
•Social
Security or taxpayer identification number; and
•permanent
street address (a P.O. Box number alone is not acceptable).
If
you are opening an account in the name of certain legal entities (e.g.,
a partnership, limited liability company, business trust, corporation, etc.),
you must also supply the identity of the beneficial owners of the legal entity.
Accounts opened by entities, such as corporations, limited liability companies,
partnerships or trusts, will require additional documentation.
If
any information listed above is missing, your Account Application will be
returned and your account will not be opened. In compliance with the USA PATRIOT
Act and other applicable anti-money laundering laws and regulations, the
Transfer Agent will verify the information on your application. The Funds
reserve the right to request additional clarifying information and may close
your account and redeem your shares at the next computed NAV if such clarifying
information is not received by the Funds within a reasonable time of the request
or if the Fund cannot form a reasonable belief as to the true identity of a
customer. In the rare event that we are unable to verify your identity, the
Funds reserve the right to redeem your account at the current day’s NAV. If you
require additional assistance when completing your application, please contact
the Transfer Agent at 888-898-2780.
Orders
to sell or “redeem” shares may be placed either directly with the Funds or
through an Authorized Intermediary. If you originally purchased your shares
through an Authorized Intermediary, your redemption order must be placed with
the same Authorized Intermediary in accordance with the procedures established
by that Authorized Intermediary. Your Authorized Intermediary is responsible for
sending your order to the Transfer Agent and for crediting your account with the
proceeds. You may redeem the Funds’ shares on any business day that the Funds
calculate their NAV. The price at which redemptions are effected is based on the
NAV next calculated after the request is received in good order. To redeem
shares directly with the Funds, you must contact the Funds either by mail or by
phone to place a redemption request. Your redemption request must be received in
good order (as discussed under “Payment of Redemption Proceeds,” below) prior to
the close of the regular trading sessions of the NYSE (generally 4:00 p.m.,
Eastern time) by the Transfer Agent or by your Authorized Intermediary in order
to obtain that day’s closing NAV. Redemption requests received by the Transfer
Agent or an Authorized Intermediary after the close of the NYSE will be treated
as though received on the next business day.
Shareholders
who hold their shares through an IRA or other tax-advantaged account must
indicate on their written redemption request whether or not to withhold federal
income tax. Redemption requests failing to indicate an election not to have tax
withheld will generally be subject to 10% withholding. Shares held in IRA or
other retirement plan accounts may be redeemed by telephone at 888-898-2780.
Investors will be asked whether or not to withhold taxes from any
distribution.
Payment
of Redemption Proceeds
You
may redeem your Fund shares at the NAV per share next determined after the
Transfer Agent or your Authorized Intermediary receives your redemption request
in good order. Your redemption request cannot be processed on days the NYSE is
closed. Redemption proceeds with respect to all requests received by the
Transfer Agent or your Authorized Intermediary in good order before the close of
the regular trading session of the NYSE (generally 4:00 p.m., Eastern time) will
usually be sent one to three business days following the receipt of your
redemption request.
A
redemption request made through the Transfer Agent will be deemed in “good
order” if it includes:
•the
shareholder’s name;
•the
name of the Fund and share class you are redeeming from;
•the
account number;
•the
share or dollar amount to be redeemed; and
•signatures
by all shareholders on the account and signature guarantee(s), if
applicable.
The
Funds reserve the right to change the requirements of “good order.” Shareholders
will be given advance notice if the requirements of “good order” change. For
information about your financial intermediary’s requirements for redemption
requests in good order, please contact your financial intermediary.
You
may receive proceeds of your sale by a check sent to the address of record,
electronically via the ACH network using the previously established bank
instructions or via federal wire transfer to your pre-established bank account.
The Funds typically expect that it will take one to three business days
following the receipt of your redemption request to pay out redemption proceeds
regardless of whether the redemption proceeds are paid by check, ACH transfer or
wire. Please note that wires are subject to a $15 fee. There is no charge to
have proceeds sent via ACH; however, funds are typically credited to your bank
within two to three business days after redemption. In all cases, proceeds will
be sent within seven calendar days after the Funds receive your redemption
request.
The
Funds typically expect they will hold cash or cash equivalents to meet
redemption requests. The Funds may also uses the proceeds from the sale of
portfolio securities to meet redemption requests if consistent with the
management of the Funds. These redemption methods will be used regularly under
normal market conditions and may also be used during periods of stressed market
conditions.
If
the Transfer Agent has not yet collected payment for the shares you are selling,
it may delay sending the proceeds until the payment is collected, which may take
up to twelve calendar days from the purchase date or until your payment has
cleared. Shareholders can avoid this delay by utilizing the wire purchase
option. Furthermore, there are certain times when you may be unable to sell Fund
shares or receive proceeds. Specifically, the Funds may suspend the right to
redeem shares or postpone the date of payment upon redemption for more than
seven calendar days as determined by the SEC: (1) for any period during which
the NYSE is closed (other than customary weekend or holiday closings) or trading
on the NYSE is restricted; (2) for any period during which an emergency exists
as a result of which disposal by the Funds of securities owned by them is not
reasonably practicable or it is not reasonably practicable for the Funds to
fairly determine the value of their net assets; or (3) for such other periods as
the SEC may permit for the protection of shareholders. Your ability to redeem
shares online or by telephone may be delayed or restricted after you change your
address. You may change your address at any time by telephone or written
request, addressed to the Transfer Agent. Confirmations of an address change
will be sent to both your old and new address. Redemption proceeds will be sent
to the address of
record.
The Funds are not responsible for interest lost on redemption amounts due to
lost or misdirected mail.
Please
note, under unusual circumstances, the Funds may suspend redemptions, as
permitted by federal securities law. The Funds may delay paying redemption
proceeds for up to seven calendar days after receiving a request if an earlier
payment could adversely affect the Funds.
Redemptions
in Kind. The
Funds generally pay redemption proceeds in cash. However, the Trust, on behalf
of the Funds, has filed a notice of election under Rule 18f-1 under the 1940
Act, under which the Trust, on behalf of the Funds, has reserved the right for
the Funds to redeem in-kind under certain circumstances, meaning that redemption
proceeds are paid in liquid securities with a market value equal to the
redemption price. These securities redeemed in kind remain subject to general
market risks until sold. If the Funds pay your redemption proceeds by a
distribution of securities, you could incur brokerage or other charges when
converting the securities to cash. For federal income tax purposes, redemptions
in kind are taxed in the same manner to a redeeming shareholder as redemptions
paid in cash. In addition, sales of such in-kind securities may generate taxable
gains.
Redemption
in-kind proceeds are limited to securities that are traded on a public
securities market or for which quoted bid prices are available. In the unlikely
event that a Fund does redeem shares in kind, the procedures utilized by the
Fund to determine the securities to be distributed to redeeming shareholders
will generally be representative of a shareholder’s interest in the Fund’s
portfolio securities. However, the Funds may also redeem in kind using
individual securities as circumstances dictate. Redemptions in-kind are
typically used to meet redemption requests that represent a large percentage of
a Fund’s net assets in order to minimize the effect of large redemptions on the
Fund and its remaining shareholders. Redemptions in-kind may be used in
circumstances as described above and during periods of stressed market
conditions.
Signature
Guarantees
The
Transfer Agent may require a signature guarantee for certain redemption
requests. Signature guarantees can be obtained from domestic banks, brokers,
dealers, credit unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations, 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. A signature guarantee, from either a Medallion program member or a
non-Medallion program member, of each owner is required in the following
situations:
•if
ownership is being changed on your account;
•when
redemption proceeds are payable or sent to any person, address or bank account
not on record;
•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, a 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 Funds and/or the Transfer Agent
reserve the right to require a signature guarantee or other acceptable signature
verification in other instances based on the circumstances relative to the
particular situation.
Redemption
by Mail
You
can execute most redemptions by furnishing an unconditional written request to
the Funds to redeem your shares at the current NAV. Redemption requests in
writing should be sent to the Transfer Agent at:
|
|
|
|
| |
Regular
Mail |
Overnight
or Express Mail |
CrossingBridge
Funds |
CrossingBridge
Funds |
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
Funds do not consider the U.S. Postal Service or other independent delivery
services to be their agents. Therefore, deposit in the mail or with such
services, or receipt at the Transfer Agent’s post office box, of purchase orders
or redemption requests does not constitute receipt by the Transfer Agent.
Receipt of purchase orders or redemption requests is based on when the order is
received at the Transfer Agent’s offices.
Telephone
Redemption
Telephone
redemption privileges are automatically provided unless you specifically decline
the option on your Account Application.
You
may redeem shares, in any amount, by instructing the Funds by telephone at
888-898-2780.
A
signature verification from a Signature Validation Program member or other
acceptable form of authentication from a financial institution source may be
required of all shareholders in order to add or change telephone redemption
privileges on an existing account.
Telephone
redemptions will not be made if you have notified the Transfer Agent of a change
of address within 15 calendar days before the redemption request. Once a
telephone transaction has been placed, it may not be cancelled or modified after
the close of regular trading on the NYSE (generally, 4:00 p.m., Eastern time).
If an account has more than one owner or authorized person, the Funds will
accept telephone instructions from any one owner or authorized person. All
telephone calls will be recorded for your protection.
Written
confirmations will be provided for all purchase and redemption transactions
initiated by telephone.
Wire
Redemption
Wire
transfers may be arranged to redeem shares. The Transfer Agent charges a fee,
currently $15, per wire redemption against your account on dollar specific
trades, and from proceeds on complete redemptions and share-specific trades.
There is no charge to have proceeds sent via ACH.
Systematic
Withdrawal Program (“SWP”)
The
Funds offer a SWP whereby shareholders or their representatives may request a
redemption in a specific dollar amount be sent to them each month, calendar
quarter or year. Investors may choose to have a check sent to the address of
record, or proceeds may be sent to a pre-designated bank account via the ACH
network. To start the SWP, your account must have Fund shares with a value of at
least $10,000, and the minimum payment amount is $100. The SWP may be terminated
or modified by the Funds at any time. You may terminate your participation in
the SWP at any time in writing or by telephoning the Transfer Agent no later
than five days before the next scheduled withdrawal. A withdrawal under the SWP
involves a redemption of Fund shares, and may result in a taxable capital gain
or loss for federal income tax purposes. In addition, if the amount withdrawn
exceeds the amounts credited to your account, the account ultimately may be
depleted. To establish the SWP, complete the SWP section of the Account
Application. Please call 888-898-2780 for additional information regarding the
SWP.
The
Funds’ Right to Redeem an Account
The
Funds reserve the right to redeem the shares of any shareholder whose account
balance is less than $2,500, other than as a result of a decline in the NAV of
the Funds or for market reasons. The Funds will provide a shareholder with
written notice 30 calendar days prior to redeeming the shareholder’s account. A
redemption by the Funds of a shareholder’s account may result in a taxable
capital gain or loss for federal income tax purposes.
You
may exchange all or a portion of your investment from one CrossingBridge Fund to
an identically registered account in another CrossingBridge Fund within the same
class. Any new account established through an exchange will be subject to the
minimum investment requirements described above under “How to Purchase Shares,”
unless the account qualifies for a waiver of the initial investment requirement.
Exchanges will be executed on the basis of the relative NAV of the shares
exchanged. An exchange of Fund shares is considered to be a sale of shares for
federal income tax purposes on which you may realize a taxable capital gain or
loss. A $5 fee will be applied to all exchanges of Fund shares requested by
telephone.
Call
the Funds (toll-free) at 888-898-2780 to learn more about
exchanges.
The
Funds are intended for long-term investors. Short-term “market-timers” who
engage in frequent purchases and redemptions may disrupt a Fund’s investment
program and create additional transaction costs that are borne by all of the
Funds’ shareholders. The Board of Trustees has adopted policies and procedures
that are designed to discourage excessive, short-term trading and other abusive
trading practices that may disrupt portfolio management strategies and harm
performance. The Funds take steps to reduce the frequency and effect of these
activities in the Funds. These steps may include, among other things, monitoring
trading activity and using fair value pricing, when the Adviser determines
current market prices are not readily available. Although these efforts are
designed to discourage abusive trading practices, these tools cannot eliminate
the possibility that such activity will occur. The Funds seek to exercise their
judgment in implementing these tools to the best of their abilities in a manner
that they believe is consistent with shareholder interests. Except as noted
herein, the Funds apply all restrictions uniformly in all applicable
cases.
Monitoring
Trading Practices.
The Funds monitor selected trades in an effort to detect excessive short-term
trading activities. If, as a result of this monitoring, the Funds believe that a
shareholder has engaged in excessive short-term trading, they may, in their
discretion, ask the shareholder to stop such activities or refuse to process
purchases in the shareholder’s accounts. In making such judgments, the Funds
seek to act in a manner that they believe is consistent with the best interests
of their shareholders. The Funds use a variety of techniques to monitor for and
detect abusive trading practices. These techniques may change from time to time
as determined by the Funds in their sole discretion. To minimize harm to the
Funds and their shareholders, the Funds reserve the right to reject any purchase
order (but not a redemption request), in whole or in part, for any reason
(including, without limitation, purchases by persons whose trading activity in
Fund shares is believed by the Adviser to be harmful to a Fund) and without
prior notice. The Funds may decide to restrict purchase and sale activity in
their shares based on various factors, including whether frequent purchase and
sale activity will disrupt portfolio management strategies and adversely affect
Fund performance.
Fair
Value Pricing.
The Funds employ fair value pricing selectively to ensure greater accuracy in
their daily NAVs and to prevent dilution by frequent traders or market timers
who seek to take advantage of temporary market anomalies. The Adviser has
developed procedures which utilize fair value pricing when reliable market
quotations are not readily available or the Funds’ Pricing Service does not
provide a valuation (or provides a valuation that, in the judgment of the
Adviser, does not represent the security’s fair value), or when, in the judgment
of the Adviser, events have rendered the market value unreliable. Valuing
securities at fair value involves reliance on judgment. Fair value
determinations are made in good faith in accordance with procedures adopted by
the Adviser. There can be no assurance that the Funds will obtain the fair value
assigned to a security if they were to sell the security at approximately the
time at which the Funds determine their NAV per share. More detailed information
regarding fair value pricing and changes to the Funds’ fair value pricing
procedures can be found in this Prospectus under the heading entitled “Share
Price.”
Due
to the complexity and subjectivity involved in identifying abusive trading
activity and the volume of shareholder transactions the Funds handle, there can
be no assurance that the Funds’ efforts will identify all trades or trading
practices that may be considered abusive. In particular, since the Funds receive
purchase and sale orders through Authorized Intermediaries that use group or
omnibus accounts, the Funds cannot always detect frequent trading. However, the
Funds will work with Authorized Intermediaries as necessary to discourage
shareholders from engaging in abusive trading practices and to impose
restrictions on excessive trades. In this regard, the Funds have entered into
information sharing agreements with Authorized Intermediaries pursuant to which
these intermediaries are required to provide to the Funds, at the Funds’
request, certain information relating to their customers investing in the Funds
through non-disclosed or omnibus accounts. The Funds will use this information
to attempt to identify abusive trading practices. Authorized Intermediaries are
contractually required to follow any instructions from the Funds to restrict or
prohibit future purchases from shareholders that are found to have engaged in
abusive trading in violation of the Funds’ policies. However, the Funds cannot
guarantee the accuracy of the information provided to them from Authorized
Intermediaries and cannot ensure that they will always be able to detect abusive
trading practices that occur through non-disclosed and omnibus accounts. As a
result, the Funds’ ability to monitor and discourage abusive trading practices
in non-disclosed and omnibus accounts may be limited.
Telephone
Transactions. If
you have not declined telephone privileges on the Account Application or in a
letter to the Funds, you may be responsible for any fraudulent telephone orders
as long as the Funds have taken reasonable precautions to verify your identity.
In addition, once you place a telephone transaction request, it cannot be
canceled or modified after the close of regular trading on the NYSE (generally
4:00 p.m., Eastern time).
During
periods of significant economic or market change, telephone transactions may be
difficult to complete. If you are unable to contact the Funds by telephone, you
may also mail the requests to the Funds at the address listed previously in the
section entitled “How to Purchase Shares,” above. Neither the Funds nor the
Transfer Agent are liable for any loss incurred due to failure to complete a
telephone transaction prior to the close of the NYSE (generally 4:00 p.m.,
Eastern time).
Telephone
trades must be received by or prior to the close of the NYSE (generally 4:00
p.m., Eastern time). During periods of high market activity, shareholders may
encounter higher than usual call waiting times. Please allow sufficient time to
ensure that you will be able to complete your telephone transaction
prior
to the close of the NYSE. The Funds are not responsible for delays due to
communication or transmission outages subject to applicable law.
Neither
the Funds nor any of their service providers will be liable for any loss or
expense in acting upon instructions that are reasonably believed to be genuine
subject to applicable law. If an account has more than one owner or authorized
person, the Funds will accept telephone instructions from any one owner or
authorized person. To confirm that all telephone instructions are genuine, the
Funds will use reasonable procedures, such as requesting that you correctly
state:
•that
you correctly state your Fund account number;
•the
name in which your account is registered; or
•the
Social Security or taxpayer identification number under which the account is
registered.
Policies
of Authorized Intermediaries. Your
Authorized Intermediary may establish policies that differ from those of the
Funds. For example, the institution may charge transaction fees, set higher
minimum investments or impose certain limitations on buying or selling shares in
addition to those identified in this Prospectus. Please contact your Authorized
Intermediary for details.
Closure
of a Fund.
The Adviser retains the right to close a Fund (or partially close a Fund) or to
place restrictions on purchases of Fund shares if it is determined to be in the
best interest of shareholders. Based on market and Fund conditions, the Adviser
may decide to close a Fund to new investors, all investors or certain classes of
investors (such as fund supermarkets) at any time. If a Fund is closed to new
purchases it will continue to honor redemption requests, unless the right to
redeem shares has been temporarily suspended as permitted by federal
law.
Householding.
In an effort to decrease costs, the Funds intend to 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 and to shareholders the Funds reasonably believe are from the same
family or household. If you would like to discontinue householding for your
accounts, please call toll-free at 888-898-2780 to request individual copies of
these documents, or if your shares are held through an Authorized Intermediary,
please contact them. Once the Funds receive notice to stop householding, the
Funds will begin sending individual copies within 30 days after receiving your
request. This policy does not apply to account statements.
Lost
Shareholders, Inactive Accounts and Unclaimed Property.
It is important that the Funds maintain a correct address for each shareholder.
An incorrect address may cause a shareholder’s account statements and other
mailings to be returned to the Funds. Based upon statutory requirements for
returned mail, the Funds will attempt to locate the shareholder or rightful
owner of the account. If the Funds are unable to locate the shareholder, then it
will determine whether the shareholder’s account can legally be considered
abandoned. Your mutual fund account may be transferred to the state government
of your state of residence if no activity occurs within your account during the
“inactivity period” specified in your state’s abandoned property laws. The Funds
are legally obligated to escheat (or transfer) abandoned property to the
appropriate state’s unclaimed property administrator in accordance with
statutory requirements. The shareholder’s last known address of record
determines which state has jurisdiction. Please proactively contact the Transfer
Agent toll-free at 888-898-2780 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.
IRA
Accounts.
IRA accounts will be charged a $15 annual maintenance fee.
The
Trust has entered into a Distribution Agreement (the “Distribution Agreement”)
with Quasar Distributors, LLC (the “Distributor”) located at Three Canal Plaza,
Suite 100, Portland, Maine 04104, pursuant to which the Distributor acts as the
Funds’ principal underwriter, provides certain administration services and
promotes and arranges for the sale of the Funds’ shares. The offering of the
Funds’ shares is continuous, and the Distributor distributes the Funds’ shares
on a best efforts basis. The Distributor is not obligated to sell any certain
number of shares of a Fund. The Distributor is a registered broker-dealer and
member of the Financial Industry Regulatory Authority, Inc.
The
Funds may pay fees to intermediaries, such as banks, broker-dealers, financial
advisors or other financial institutions, including affiliates of the Adviser,
for recordkeeping, sub-administration, sub-accounting, sub-transfer agency and
other shareholder services (collectively, “sub-TA services”) associated with
shareholders whose shares are held of record in omnibus and networked accounts,
retirement plans, other group accounts or accounts traded through registered
securities clearing agents in lieu of the transfer agent providing such
services.
The
Adviser, out of its own resources and legitimate profits and without additional
cost to the Funds or their shareholders, may provide additional cash payments to
certain intermediaries. These payments, sometimes referred to as revenue
sharing, are in addition to Rule 12b-1 fees, shareholder servicing plan fees and
sub-TA fees paid by the Funds, if any. Revenue sharing payments may be made to
intermediaries for sub-TA services or distribution-related services, such as
marketing support; access to third party platforms; access to sales meetings,
sales representatives and management representatives of the intermediary; and
inclusion of the Funds on a sales list, including a preferred or select sales
list, and in other sales programs. The Adviser may also pay cash compensation in
the form of finder’s fees that vary depending on the dollar amount of the shares
sold. From time to time, and in accordance with applicable rules and
regulations, the Adviser may also provide non-cash compensation to
representatives of various intermediaries who sell Fund shares or provide
services to Fund shareholders.
The
Funds will make distributions of net investment income, if any, at least
monthly. The Funds will make distributions of net capital gain, if any, at least
annually, typically during the month of December. The Funds may make additional
distributions if deemed to be desirable at another time during the
year.
All
distributions will be reinvested in additional Fund shares unless you choose one
of the following options: (1) receive distributions of net capital gain in
cash, while reinvesting net investment income distributions in additional Fund
shares; (2) receive all distributions in cash; or (3) reinvest net capital
gain distributions in additional Fund shares, while receiving distributions of
net investment income in cash.
If
you wish to change your distribution option, write to or call the Transfer Agent
in advance of the payment date of the distribution. However, any such change
will be effective only as to distributions for which the record date is five or
more calendar days after the Transfer Agent has received the
request.
If
you elect to receive distributions in cash and the U.S. Postal Service is unable
to deliver your check, or if a check remains uncashed for six months, the Funds
reserve the right to reinvest the distribution check in your account at the
Funds’ then-current NAV per share and to reinvest all subsequent
distributions.
Changes
in income tax laws, potentially with retroactive effect, could impact the Funds’
investments or the tax consequences to you of investing in the Funds. Some of
the changes could affect the timing, amount and tax treatment of the Funds’
distributions made to shareholders. Please consult your tax advisor before
investing.
Distributions
of the Funds’ investment company taxable income (which includes, but is not
limited to, interest, dividends, net short-term capital gain and net gain from
foreign currency transactions), if any, are generally taxable to the Funds’
shareholders as ordinary income. For a non-corporate shareholder, to the extent
that the Funds’ distributions of investment company taxable income are
attributable to and reported as “qualified dividend” income, such income may be
subject to tax at the reduced federal income tax rates applicable to net
long-term capital gain, if certain holding period requirements have been
satisfied by the shareholder. For a corporate shareholder, a portion of the
Funds’ distributions of investment company taxable income may qualify for the
intercorporate dividends-received deduction to the extent the Funds receive
dividends directly or indirectly from U.S. corporations, report the amount
distributed as eligible for the deduction and the corporate shareholder meets
certain holding period requirements with respect to its shares. Due to the
Funds’ investment objectives, which generally involve investing in fixed income
securities, it is possible that there will be no or limited income that
qualifies for these “qualified dividend” income or dividends-received rules. To
the extent that the Funds’ distributions of investment company taxable income
are attributable to net short-term capital gain, such distributions will be
treated as ordinary income and cannot generally be offset by a shareholder’s
capital losses from other investments.
Distributions
of the Funds’ net capital gain (net long-term capital gain less net short-term
capital loss) are generally taxable to such Fund’s shareholders as long-term
capital gain regardless of the length of time that a shareholder has owned Fund
shares. Distributions of net capital gain are not eligible for qualified
dividend income treatment or the dividends-received deduction referred to
above.
You
will be taxed in the same manner whether you receive your distributions (of
investment company taxable income or net capital gain) in cash or reinvest them
in additional Fund shares. Distributions are generally taxable when received.
However, distributions declared in October, November or December to shareholders
of record and paid the following January are taxable as if received on December
31.
In
addition to the federal income tax, certain individuals, trusts and estates may
be subject to a net investment income (“NII”) tax of 3.8%. The NII tax is
imposed on the lesser of: (i) a taxpayer’s investment income, net of deductions
properly allocable to such income, or (ii) the amount by which such taxpayer’s
modified adjusted gross income exceeds certain thresholds ($250,000 for married
individuals filing jointly, $200,000 for unmarried individuals, and $125,000 for
married individuals filing separately). The Funds’ distributions are includable
in a shareholder’s investment income for purposes of this NII tax. In addition,
any capital gain realized by a shareholder upon a sale, exchange or redemption
of Fund shares is includable in such shareholder’s investment income for
purposes of this NII tax.
Shareholders
who sell, exchange or redeem shares generally will have a capital gain or loss
from the sale, exchange or redemption. The amount of the gain or loss and the
applicable rate of federal income tax will depend generally upon the amount paid
for the shares, the amount received from the sale, exchange or redemption
(including redemptions in-kind) and how long the shares were held by a
shareholder. Gain or loss realized upon a sale, exchange or redemption of Fund
shares will generally be treated as a long-term capital gain or loss if the
shares have been held for more than one year and, if held for one year or less,
as a short-term capital gain or loss. Any loss arising from the sale, exchange
or redemption of shares held for six months or less, however, is treated as a
long-term capital loss to the extent of any distributions of net capital gain
received or deemed to be received with respect to such shares. In determining
the holding period of such shares for this purpose, any period during which your
risk of loss is offset by means of options, short sales or similar transactions
is not counted. If you purchase a Fund’s shares (through reinvestment of
distributions or otherwise) within 30 days before or after selling, exchanging
or redeeming the same Fund’s shares at a loss, all or part of that loss will not
be deductible and will instead increase the basis of the new
shares.
The
Funds are required to report to certain shareholders and the IRS the cost basis
of Fund shares acquired on or after January 1, 2012 when such shareholders
subsequently sell, exchange or redeem those shares. The Funds will determine
cost basis of such shares using the average cost method unless you elect in
writing (and not over the telephone) any alternate IRS-approved cost basis
method. Please see the SAI for more information regarding cost basis
reporting.
The
federal income tax status of all distributions made by a Fund for the preceding
year will be annually reported to shareholders. Distributions made by a Fund may
also be subject to state and local taxes. Additional tax information may be
found in the SAI.
This
section is not intended to be a full discussion of federal income tax laws and
the effect of such laws on you. There may be other federal, state, foreign or
local tax considerations applicable to a particular investor. You are urged to
consult your own tax adviser.
The
following financial highlights tables show the Low Duration High Yield Fund’s
financial performance information for the Fund’s Institutional Class shares for
the fiscal years ended September 30, 2019, 2020, 2021, 2022 and 2023, and the
Responsible Credit Fund and Ultra-Short Duration Fund’s financial performance
from June 30, 2021 (commencement of operations) to the fiscal period ended
September 30, 2021 and the fiscal years ended September 30, 2022 and September
30, 2023.
The
Financial Highlights information presented for the Strategic Income Fund is the
financial history of the Predecessor Fund for periods prior to the
Reorganization. Prior to the Reorganization, the Fund was a “shell” fund with no
assets and had not commenced operations.
Certain
information reflects financial results for a single share of a Fund.
The
total return in the table represents the rate that you would have earned or lost
on an investment in a Fund (assuming you reinvested all
distributions).
This
information has been audited by Cohen & Company, Ltd., the independent
registered public accounting firm of the Funds and the Predecessor Fund, whose
report, along with the Funds’ financial statements, are included in the Funds’
2023 Annual
Report
to Shareholders,
which is available upon request.
As
of September 30, 2023, the Low Duration High Yield Fund’s Retail Class shares
had not commenced operations; accordingly, there are no financial highlights
available for Retail Class shares as of the date of this
Prospectus.
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CROSSINGBRIDGE
LOW DURATION HIGH YIELD FUND |
Institutional
Class |
|
|
|
|
| |
Per
Share Data for a Share Outstanding Throughout Each Year |
|
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|
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| |
|
| |
| Year
Ended September 30, |
| 2023 |
2022 |
2021 |
2020 |
2019 |
Net
Asset Value, Beginning of Year |
$9.84 |
| $10.36 |
| $9.86 |
| $10.04 |
| $10.06 |
|
|
|
|
|
| |
Income
from investment operations: |
|
|
|
| |
Net
investment income(1) |
0.72 |
| 0.33 |
| 0.34 |
| 0.35 |
| 0.29 |
|
Net
realized and unrealized gain (loss) on investments(2) |
(0.06) |
| (0.36) |
| 0.54 |
| (0.18) |
| (0.02) |
|
Total
from investment operations |
0.66 |
| (0.03) |
| 0.88 |
| 0.17 |
| 0.27 |
|
|
|
|
|
| |
Less
distributions paid: |
|
|
|
| |
From
net investment income |
(0.73) |
| (0.33) |
| (0.38) |
| (0.35) |
| (0.29) |
|
From
net realized gains |
(0.11) |
| (0.16) |
| — |
| — |
|
(0.00)(3) |
Total
distributions paid |
(0.84) |
| (0.49) |
| (0.38) |
| (0.35) |
| (0.29) |
|
|
|
|
|
| |
Net
Asset Value, End of Year |
$9.66 |
| $9.84 |
| $10.36 |
| $9.86 |
| $10.04 |
|
Total
Return(4) |
7.02 |
% |
(0.39%) |
9.13 |
% |
1.80 |
% |
2.71 |
% |
|
|
|
|
| |
Supplemental
Data and Ratios: |
|
|
|
| |
Net
assets, end of year (000’s) |
$606,430 |
| $544,893 |
| $326,484 |
| $144,124 |
| $129,019 |
|
|
|
|
|
| |
Ratio
of expenses to average net assets: |
|
|
|
| |
Before
waivers and reimbursements of expenses |
0.90%(5) |
0.88%(6) |
0.91%(7) |
0.96 |
% |
1.08 |
% |
After
waivers and reimbursements of expenses |
0.90%(5) |
0.88%(6) |
0.88%(7) |
0.90 |
% |
0.96 |
% |
Ratio
of net investment income to average net assets: |
|
|
|
| |
Before
waivers and reimbursements of expenses |
7.33 |
% |
3.30 |
% |
3.34 |
% |
3.35 |
% |
2.83 |
% |
After
waivers and reimbursements of expenses |
7.33 |
% |
3.30 |
% |
3.37 |
% |
3.41 |
% |
2.95 |
% |
Portfolio
turnover rate(8) |
130.57 |
% |
136.70 |
% |
169.73 |
% |
224.86 |
% |
198.63 |
% |
(1)Per
share net investment income was calculated using average shares outstanding
method.
(2)Net
realized and unrealized gain (loss) per share in the caption are balancing
amounts necessary to reconcile the change in net asset value per share for the
period and may not reconcile with the aggregate gains and losses in the
Statements of Operations included in the annual report to
shareholders.
(3)Less
than $0.005 per share.
(4)Total
return represents the rate that investor would have earned or lost on an
investment in the Fund, assuming reinvestment of dividends.
(5)This
ratio includes previous expense reimbursements recouped by the Adviser. If this
recoupment was excluded, this ratio would be 0.89%.
(6)This
ratio includes previous expense reimbursements recouped by the Adviser. If this
recoupment was excluded, this ratio would be 0.85%.
(7)This
ratio includes previous expense reimbursements recouped by the Adviser. If this
recoupment was excluded, this ratio would be unchanged.
(8)Short-term
securities with maturities less than or equal to 365 days are excluded from the
portfolio turnover calculation.
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CROSSINGBRIDGE
RESPONSIBLE CREDIT FUND |
Institutional
Class |
|
|
| |
Per
Share Data for a Share Outstanding Throughout Each
Year/Period |
|
|
| |
| Year
Ended |
Year
Ended |
Period
from
June
30, 2021(1) |
| September
30, |
September
30, |
through
September 30, |
| 2023 |
2022 |
2021 |
Net
Asset Value, Beginning of Year/Period |
$9.65 |
$10.01 |
$10.00 |
|
|
| |
Income
from investment operations: |
|
| |
Net
investment income(2) |
0.81 |
0.38 |
0.06 |
Net
realized and unrealized loss on investments(3) |
(0.13) |
(0.33) |
(0.01) |
Total
from investment operations |
0.68 |
0.05 |
0.05 |
|
|
| |
Less
distributions paid: |
|
| |
From
net investment income |
(0.83) |
(0.39) |
(0.04) |
From
net realized gains |
(0.14) |
(0.02) |
— |
Total
distributions paid |
(0.97) |
(0.41) |
(0.04) |
|
|
| |
Net
Asset Value, End of Year/Period |
$9.36 |
$9.65 |
$10.01 |
|
|
| |
Total
Return(4) |
7.45% |
0.45% |
0.57% |
|
|
| |
Supplemental
Data and Ratios: |
|
| |
Net
assets, end of year/period (000’s) |
$27,293 |
$21,162 |
$16,889 |
|
|
| |
Ratio
of expenses to average net assets: |
|
| |
Before
waivers and reimbursements of expenses(5) |
1.70% |
1.97% |
2.77% |
After
waivers and reimbursements of expenses(5) |
0.90% |
0.89% |
0.91%(6) |
Ratio
of net investment income to average net assets: |
|
| |
Before
waivers and reimbursements of expenses(5) |
7.70% |
2.75% |
0.50% |
After
waivers and reimbursements of expenses(5) |
8.50% |
3.83% |
2.36% |
Portfolio
turnover rate(7) |
129.55% |
173.58% |
39.47% |
(1)Commencement
of investment operations.
(2)Per
share net investment income was calculated using average shares outstanding
method.
(3)Net
realized and unrealized loss per share in the caption are balancing amounts
necessary to reconcile the change in net asset value per share for the period
and may not reconcile with the aggregate gains and losses in the Statements of
Operations included in the annual report to shareholders.
(4)Total
return represents the rate that investor would have earned or lost on an
investment in the Fund, assuming reinvestment of dividends. Total return for a
period of less than one year is not annualized.
(5)Annualized
for periods less than one year.
(6)The
ratio of expenses to average net assets after waivers and reimbursement of
expenses includes bank loan service charges. Excluding these charges, the ratio
was 0.90%.
(7)Portfolio
turnover not annualized for periods less than one year. Short-term securities
with maturities less than or equal to 365 days are excluded from the portfolio
turnover calculation.
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CROSSINGBRIDGE
ULTRA-SHORT DURATION FUND |
Institutional
Class |
|
|
| |
Per
Share Data for a Share Outstanding Throughout Each
Year/Period |
|
|
| |
| Year
Ended |
Year
Ended |
Period
from
June
30, 2021(1) |
| September
30, |
September
30, |
through
September 30, |
| 2023 |
2022 |
2021 |
Net
Asset Value, Beginning of Year/Period |
$9.97 |
$10.01 |
$10.00 |
|
|
| |
Income
from investment operations: |
|
| |
Net
investment income (loss)(2) |
0.53 |
0.16 |
(0.01) |
Net
realized and unrealized gain (loss) on investments(3) |
0.00(4) |
(0.05) |
0.02 |
Total
from investment operations |
0.53 |
0.11 |
0.01 |
|
|
| |
Less
distributions paid: |
|
| |
From
net investment income |
(0.53) |
(0.14) |
— |
From
net realized gains |
(0.06) |
(0.01) |
— |
Total
distributions paid |
(0.59) |
(0.15) |
— |
|
|
| |
Net
Asset Value, End of Year/Period |
$9.91 |
$9.97 |
$10.01 |
Total
Return(5) |
5.44% |
1.12% |
0.07% |
|
|
| |
Supplemental
Data and Ratios: |
|
| |
Net
assets, end of year/period (000’s) |
$94,545 |
$68,333 |
$37,061 |
|
|
| |
Ratio
of expenses to average net assets: |
|
| |
Before
waivers and reimbursements of expenses(6) |
1.05% |
1.13% |
2.68% |
After
waivers and reimbursements of expenses(6) |
0.90% |
0.89% |
0.90% |
Ratio
of net investment income (loss) to average net assets: |
|
| |
Before
waivers and reimbursements of expenses(6) |
5.18% |
1.40% |
(2.06%) |
After
waivers and reimbursements of expenses(6) |
5.33% |
1.64% |
(0.28%) |
Portfolio
turnover rate(7) |
217.47% |
155.17% |
41.74% |
(1)Commencement
of investment operations.
(2)Per
share net investment income (loss) was calculated using average shares
outstanding method.
(3)Net
realized and unrealized gain (loss) per share in the caption are balancing
amounts necessary to reconcile the change in net asset value per share for the
period and may not reconcile with the aggregate gains and losses in the
Statements of Operations included in the annual report to
shareholders.
(4)Amount
between $0.00 and $0.005 per share.
(5)Total
return represents the rate that investor would have earned or lost on an
investment in the Fund, assuming reinvestment of dividends. Total return for a
period of less than one year is not annualized.
(6)Annualized
for periods less than one year.
(7)Portfolio
turnover not annualized for periods less than one year. Short-term securities
with maturities less than or equal to 365 days are excluded from the portfolio
turnover calculation.
|
|
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|
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|
| |
RIVERPARK
STRATEGIC INCOME FUND |
Institutional
Class |
|
|
|
|
| |
Per
Share Data for a Share Outstanding Throughout Each Year |
|
| |
| Year
Ended September 30, |
| 2023 |
2022 |
2021 |
2020 |
2019 |
Net
Asset Value, Beginning of Year |
$8.71 |
$9.33 |
$8.60 |
$9.10 |
$9.42 |
|
|
|
|
| |
Income
from investment operations: |
|
|
|
| |
Net
investment income(1) |
0.68 |
0.45 |
0.45 |
0.49 |
0.41 |
Net
realized and unrealized gain (loss) on investments(2) |
(0.14) |
(0.55) |
0.70 |
(0.51) |
(0.30) |
Total
from investment operations |
0.54 |
(0.10) |
1.15 |
(0.02) |
0.11 |
|
|
|
|
| |
Less
distributions paid: |
|
|
|
| |
From
net investment income |
(0.71) |
(0.52) |
(0.42) |
(0.48) |
(0.43) |
From
net realized gains |
— |
— |
— |
— |
— |
Total
distributions paid |
(0.71) |
(0.52) |
(0.42) |
(0.48) |
(0.43) |
Net
Asset Value, End of Year |
$8.54 |
$8.71 |
$9.33 |
$8.60 |
$9.10 |
Total
Return(3) |
6.55% |
(1.27%) |
13.59% |
(0.10%) |
1.17% |
|
|
|
|
| |
Supplemental
Data and Ratios: |
|
|
|
| |
Net
assets, end of year (000’s) |
$352,180 |
$168,885 |
$195,997 |
$177,850 |
$281,043 |
Ratio
of expenses to average net assets: |
|
|
|
| |
Before
waivers and reimbursements of expenses |
0.98%(4) |
1.10%(4) |
1.18%(5) |
1.05%(6) |
1.12%(7) |
After
waivers and reimbursements of expenses |
0.98%(4) |
1.10%(4) |
1.18%(5) |
1.05%(6) |
1.12%(7) |
Ratio
of net investment income to average net assets: |
|
|
|
| |
Before
waivers and reimbursements of expenses |
7.92% |
4.93% |
4.94% |
5.58% |
4.41% |
After
waivers and reimbursements of expenses |
7.92% |
4.93% |
4.94% |
5.58% |
4.41% |
Portfolio
turnover rate(8) |
104.44% |
72.00% |
89.00% |
109.00% |
39.00% |
(1) Per
share net investment income was calculated using average shares outstanding
method.
(2) Net
realized and unrealized gain (loss) per share in the caption are balancing
amounts necessary to reconcile the change in net asset value per share for the
period and may not reconcile with the aggregate gains and losses in the
Statements of Operations included in the annual report to
shareholders.
(3) Total
return represents the rate that investor would have earned or lost on an
investment in the Fund, assuming reinvestment of dividends.
(4) This
ratio includes dividend expense and interest expense. If these expenses were
excluded, this ratio would have been 0.94%.
(5) This
ratio includes dividend expense and interest expense. If these expenses were
excluded, this ratio would have been 0.92%.
(6) This
ratio includes dividend expense and interest expense. If these expenses were
excluded, this ratio would have been 0.91%.
(7) This
ratio includes dividend expense and interest expense. If these expenses were
excluded, this ratio would have been 0.90%.
(8) Short-term
securities with maturities less than or equal to 365 days are excluded from the
portfolio turnover calculation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
RIVERPARK
STRATEGIC INCOME FUND |
Retail
Class |
|
|
|
|
| |
Per
Share Data for a Share Outstanding Throughout Each Year |
|
| |
| Year
Ended September 30, |
| 2023 |
2022 |
2021 |
2020 |
2019 |
Net
Asset Value, Beginning of Year |
$8.72 |
$9.33 |
$8.60 |
$9.09 |
$9.40 |
|
|
|
|
| |
Income
from investment operations: |
|
|
|
| |
Net
investment income(1) |
0.66 |
0.44 |
0.44 |
0.47 |
0.39 |
Net
realized and unrealized gain (loss) on investments(2) |
(0.13) |
(0.56) |
0.68 |
(0.50) |
(0.30) |
Total
from investment operations |
0.53 |
(0.12) |
1.12 |
(0.03) |
0.09 |
|
|
|
|
| |
Less
distributions paid: |
|
|
|
| |
From
net investment income |
(0.69) |
(0.49) |
(0.39) |
(0.46) |
(0.40) |
From
net realized gains |
— |
— |
— |
— |
— |
Total
distributions paid |
(0.69) |
(0.49) |
(0.39) |
(0.46) |
(0.40) |
Net
Asset Value, End of Year |
$8.56 |
$8.72 |
$9.33 |
$8.60 |
$9.09 |
Total
Return(3) |
6.30% |
(1.41%) |
13.44% |
(0.36%) |
1.02% |
|
|
|
|
| |
Supplemental
Data and Ratios: |
|
|
|
| |
Net
assets, end of year (000’s) |
$19,781 |
$19,581 |
$13,070 |
$10,479 |
$18,367 |
Ratio
of expenses to average net assets: |
|
|
|
| |
Before
waivers and reimbursements of expenses |
1.23%(4) |
1.27%(5) |
1.33%(6) |
1.22%(7) |
1.33%(8) |
After
waivers and reimbursements of expenses |
1.23%(4) |
1.27%(5) |
1.33%(6) |
1.22%(7) |
1.33%(8) |
Ratio
of net investment income to average net assets: |
|
|
|
| |
Before
waivers and reimbursements of expenses |
7.65% |
4.84% |
4.80% |
5.40% |
4.20% |
After
waivers and reimbursements of expenses |
7.65% |
4.84% |
4.80% |
5.40% |
4.20% |
Portfolio
turnover rate(9) |
104.44% |
72.00% |
89.00% |
109.00% |
39.00% |
(1) Per
share net investment income was calculated using average shares outstanding
method.
(2) Net
realized and unrealized gain (loss) per share in the caption are balancing
amounts necessary to reconcile the change in net asset value per share for the
period and may not reconcile with the aggregate gains and losses in the
Statements of Operations included in the annual report to
shareholders.
(3) Total
return represents the rate that investor would have earned or lost on an
investment in the Fund, assuming reinvestment of dividends.
(4) This
ratio includes dividend expense and interest expense. If these expenses were
excluded, this ratio would have been 1.19%.
(5) This
ratio includes dividend expense and interest expense. If these expenses were
excluded, this ratio would have been 1.11%.
(6) This
ratio includes dividend expense and interest expense. If these expenses were
excluded, this ratio would have been 1.07%.
(7) This
ratio includes dividend expense and interest expense. If these expenses were
excluded, this ratio would have been 1.08%.
(8) This
ratio includes dividend expense and interest expense. If these expenses were
excluded, this ratio would have been 1.11%.
(9) Short-term
securities with maturities less than or equal to 365 days are excluded from the
portfolio turnover calculation.
The
Funds collect non-public personal information about you from the following
sources:
•information
the Funds receive about you on applications or other forms;
•information
you give the Funds orally; and/or
•information
about your transactions with the Funds or others.
The
types of non-public personal information we collect and share can
include:
•social
security numbers;
•account
balances;
•account
transactions;
•transaction
history;
•wire
transfer instructions; and
•checking
account information.
What
Information We Disclose
The
Funds do not disclose any non-public personal information about their
shareholders or former shareholders without the shareholder’s authorization,
except as permitted by law or in response to inquiries from governmental
authorities. The Funds may share information with affiliated parties and
unaffiliated third parties with whom they have contracts for servicing the
Funds. The Funds will provide unaffiliated third parties with only the
information necessary to carry out their assigned responsibility.
How
We Protect Your Information
All
shareholder records will be disposed of in accordance with applicable law. The
Funds maintain physical, electronic and procedural safeguards to protect your
non-public personal information and require third parties to treat your
non-public personal information with the same high degree of
confidentiality.
In
the event that you hold shares of the Funds through a financial intermediary,
including, but not limited to, a broker-dealer, bank or trust company, the
privacy policy of your financial intermediary governs how your non-public
personal information is shared with unaffiliated third parties.
Investment
Adviser
CrossingBridge
Advisors, LLC
427
Bedford Road, Suite 220
Pleasantville,
NY 10570
Independent
Registered Public Accounting Firm
Cohen
& Company, Ltd.
342
North Water Street, Suite 830
Milwaukee,
WI 53202
Legal
Counsel
Godfrey
& Kahn, S.C.
833
East Michigan Street, Suite 1800
Milwaukee,
WI 53202
Custodian
U.S.
Bank, N.A.
Custody
Operations
1555
North River Center Drive, Suite 302
Milwaukee,
WI 53212
Transfer
Agent, Fund Accountant and Fund Administrator
U.S.
Bancorp Fund Services, LLC
615
East Michigan Street
Milwaukee,
WI 53202
Distributor
Quasar
Distributors, LLC
Three
Canal Plaza, Suite 100
Portland,
Maine 04104
CrossingBridge
Low Duration High Yield Fund
CrossingBridge
Ultra-Short Duration Fund
CrossingBridge
Responsible Credit Fund
RiverPark
Strategic Income Fund
Each
a series of Trust for Professional Managers
You
can find more information about the Funds in the following
documents:
Statement
of Additional Information
The
Funds’ SAI provides additional details about the investments and techniques of
the Funds and certain other additional information. A current SAI is on file
with the SEC and is incorporated into this Prospectus by reference. This means
that the Funds’ SAI is legally considered a part of this Prospectus even though
it is not physically within this Prospectus.
Annual
and Semi-Annual Reports
The
Funds’ annual and semi-annual reports provide the most recent financial reports
and portfolio holdings. The Funds’ annual reports contain a discussion of the
market conditions and investment strategies that affected each Fund’s
performance during the Fund’s prior fiscal year/period.
You
can obtain a free copy of these documents, request other information, or make
general inquiries about the Funds by calling the Funds (toll-free) at
888-898-2780, by visiting the Funds’ website at
www.crossingbridgefunds.com
or
by writing to:
CrossingBridge
Low Duration High Yield Fund
CrossingBridge
Ultra-Short Duration Fund
CrossingBridge
Responsible Credit Fund
RiverPark
Strtategic Income Fund
c/o
U.S. Bancorp Fund Services, LLC
P.O.
Box 701
Milwaukee,
WI 53201-0701
Shareholder
reports and other information about the Funds are also available:
•free
of charge from the SEC’s EDGAR database on the SEC’s Internet website at
http://www.sec.gov; or
•for
a fee, by electronic request at the following e-mail address:
[email protected].
|
| |
(The
Trust’s SEC Investment Company Act of 1940 file number is
811-10401) |