Ticker: 
PHYNX
  |  CUSIP: 
707269502
AS OF 

Penn Capital Opportunistic High Income Fund (formerly, Penn Capital Multi-Credit High Income Fund)

Nav Daily $ Change Daily % Change Year To Date Inception Date Share Class
$9.75
-$0.05
-0.51%
3.79%
Institutional

Overview

The Opportunistic High Income Fund seeks to provide total return through interest income, capital appreciation, and duration management with durability through down markets. Residual returns are generated through tactical allocation of capital toward the optimal risk-return opportunities available in the market.

Differentiated profile characteristics of the Opportunistic High Income Fund:

  • Well diversified portfolio of credit instruments
  • Focus on Single-B and above credit quality rated bonds with tactical investing in sub B-rated, stressed, distressed, and convertible bonds and loans
  • Identify relative value and upgrade candidates where return opportunity exceeds risk of downside loss
  • Duration risk management
  • Downside sell discipline with detailed covenant review, including change of control

Objective

The Penn Capital Opportunistic High Income Fund seeks to provide total return through interest income and capital appreciation. 

Strategy

The Fund seeks to maintain a well-diversified portfolio of credit instruments with dual objectives of interest income and total return opportunities.

Investment Type Examples

High yield securities including bonds, notes, debentures, payment-in-kind bonds, debt obligations used by real estate investment trusts (REITs), and convertible securities.

Industry Examples

Aerospace & Defense, Consumer Products, Food & Drug Retail, Financials, Healthcare, Media/Broadcasting, Metals and Mining, Printing/Publishing, Telecommunications, and Utilities.

Performance

AS OF 10/31/2021
Ticker: PHYNX | CUSIP: 707269502
MTD QTD YTD 1 Year 3 Year 5 Year 10 Year Since Inception
Penn Capital Opportunistic High Income Fund
-0.25%
-0.25%
4.97%
12.67%
5.47%
5.69%
n/a
6.30%
ICE BofA US HY Constrained Index
-0.20%
-0.20%
4.47%
10.73%
7.11%
6.23%
n/a
7.38%
50% ICE BofA US HY Constrained Index / 50% S&P-LSTA BB Ratings Loan Index
0.01%
0.01%
3.57%
8.11%
5.04%
4.77%
n/a
5.58%
AS OF 10/31/2021
Ticker: PHYNX | CUSIP: 707269502
Penn Capital Opportunistic High Income Fund
MTD -0.25
QTD -0.25
YTD 4.97
1 Year 12.67
3 Year 5.47
5 Year 5.69
10 Year n/a
Since Inception
6.30
ICE BofA US HY Constrained Index
MTD -0.20
QTD -0.20
YTD 4.47
1 Year 10.73
3 Year 7.11
5 Year 6.23
10 Year n/a
Since Inception
7.38
50% ICE BofA US HY Constrained Index / 50% S&P-LSTA BB Ratings Loan Index
MTD 0.01
QTD 0.01
YTD 3.57
1 Year 8.11
3 Year 5.04
5 Year 4.77
10 Year n/a
Since Inception
5.58

Investment Process

Step 1
Economic Outlook

Penn Capital’s team determines industries with potential relative value: the economic cycle, business environment, industry/sector analysis, and interest rates.

Step 2
Quantitative Screening

Penn Capital’s analysts and portfolio managers screen industries for companies with higher spreads to treasury relative to: comparable companies, industry averages, and historical averages.

Step 3
Other Proprietary Sources

Penn Capital’s analysts and portfolio managers source ideas from leveraging our equity relationships: equity investment styles & conferences, IPO & competitive intelligence, management meetings and road shows, industry experts, ex-government officials.

Step 4
Improving Fundamentals

Penn Capital's analysts and portfolio managers further screen for companies with improving financial metrics such as Debt/EBITDA, EBITDA/interest expense, free cash flow/debt.

Step 5
Liquidity Outlook

Penn Capital's analysts and portfolio managers screen for liquidity issues and perform research such as covenant analysis, bank loan availability, and asset value analysis.

Step 6
Qualitative Research

Penn Capital's analysts and portfolio managers then perform qualitative research such as company management, strong fundamentals, positive catalysts, suppliers/customers /competitors, and industry experts.

Step 7
Penn Capital Risk Rating (PRR)

Primary and secondary analysts and portfolio managers assign the proprietary Penn Capital Risk Rating (PRR) which includes forward looking estimates of credit quality, quantitative/qualitative factors, and rating agencies.

Step 8
Team Review and Approval

The investment team consists of all portfolio managers and analysts; daily team meetings are primary forums for discussion and a consensus at team level is required prior to moving a recommendation on to High Yield Credit Committee.

Step 9
High Yield Credit Committee Approval*

Committee confirms PRR and relative value: review of ideas approved by investment team, considers impact of credit on portfolio construction.

 

*After Step 9, an idea is either approved for portfolio inclusion or dismissed to the company watch list with further due diligence required

Fees & Expenses

Total Fund annual net operating expenses (after fee waiver/expense reimbursement) are: Institutional Class 0.72%

Total Fund annual gross operating expenses (before fee waiver/expense reimbursement) are: Institutional Class 1.65%.

The Fund's advisor has contractually agreed to waive its fees and/or pay for operating expenses of the Fund to ensure that total annual fund operating expenses do not exceed 0.72% of the average daily net assets for the Institutional Class shares of the Fund. This agreement is in effect until April 1, 2023. The Fund’s advisor is permitted to seek reimbursement from the Fund of fees waived for a period of three years from the date of the waiver or payment to the extent it does exceed the expenses limits.

Portfolio Managers

David Jackson, CFA

Senior Portfolio Manager, Senior Partner

Mr. Jackson began his career with Penn Capital in 2008. Mr. Jackson chairs the Credit Risk Committee and serves as a Portfolio Manager for Penn Capital’s Defensive Floating Rate Income and Opportunistic High Yield strategies. Prior to joining Penn Capital, Mr. Jackson was an Associate Director with the Financial Institutions Group at Fitch Ratings in New York City, where he assisted with rating coverage of the specialty finance sector. He also gained experience working for the Federal Reserve Bank of Philadelphia on the bank supervision and regulation team. He received a BS in Finance from Rutgers University School of Business.