Ticker: 
PSHNX
  |  CUSIP: 
707269882
AS OF 

Penn Capital Short Duration High Income Fund

Nav Daily $ Change Daily % Change Year To Date Inception Date Share Class
$9.48
^$0.01
^0.11%
0.65%
Institutional

Overview

The Short Duration High Income Fund seeks to combine the downside protection of investment grade bonds with the upside return potential of high yield bonds while minimizing interest rate risk.

Differentiated profile characteristics of the Short Duration High Income Fund:

  • Seek to take advantage of inefficiency in the BBB/crossover investment grade market from forced selling on downgrade fears
  • Focus on Single-B and above credit quality rated bonds that are typically senior in a company’s capital structure
  • Fill void created by total-return strategies selling lowest yielding securities
  • Detailed covenant reviews that help identify bonds with higher probability of a successful refinance

Objective

The Penn Capital Short Duration High Income Fund seeks to provide a high level of current income.

Strategy

The Fund seeks to achieve its investment objective by investing, under normal circumstances, primarily in short-term fixed income securities and senior floating rate loans that are rated below investment grade.

Investment Type Examples

Fixed income securities in which the Fund may invest include debt securities such as bonds, notes and debentures.

Industry Examples

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

Performance

AS OF 12/31/2023
Ticker: PSHNX | CUSIP: 707269882
MTD QTD YTD 1 Year 3 Year 5 Year 10 Year Since Inception
Penn Capital Short Duration High Income Fund
1.59%
3.91%
8.71%
8.71%
3.20%
3.55%
n/a
2.89%
ICE BofA 1-3 Year BB US Cash Pay HY Index
1.63%
4.01%
8.86%
8.86%
2.89%
4.54%
n/a
3.87%
ICE BofA 1-3 Year BB/B US Cash Pay HY Index
1.88%
4.04%
10.45%
10.45%
3.92%
4.60%
n/a
4.11%
AS OF 12/31/2023
Ticker: PSHNX | CUSIP: 707269882
Penn Capital Short Duration High Income Fund
MTD 1.59
QTD 3.91
YTD 8.71
1 Year 8.71
3 Year 3.20
5 Year 3.55
10 Year n/a
Since Inception
2.89
ICE BofA 1-3 Year BB US Cash Pay HY Index
MTD 1.63
QTD 4.01
YTD 8.86
1 Year 8.86
3 Year 2.89
5 Year 4.54
10 Year n/a
Since Inception
3.87
ICE BofA 1-3 Year BB/B US Cash Pay HY Index
MTD 1.88
QTD 4.04
YTD 10.45
1 Year 10.45
3 Year 3.92
5 Year 4.60
10 Year n/a
Since Inception
4.11

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 0.54%.

Total Fund annual gross operating expenses (before fee waiver/expense reimbursement) are: Institutional Class 1.25%.

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 0.54% of the average daily net assets for Institutional Class shares of the Fund. This agreement is in effect until December 31, 2024. 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 not exceed the expenses limits.

Portfolio Managers

Joseph Maguire, CFA

Director of Research, Senior Portfolio Manager, Senior Partner

Mr. Maguire has been with Penn Capital since 2005. As Director of Research, he is responsible for guiding the firm’s day-to-day global investment research process. Mr. Maguire chairs the Credit Risk Committee and serves as a Senior Portfolio Manager for Penn Capital’s Short Duration, Defensive High Yield and Opportunistic High Yield strategies.

Prior to joining Penn Capital, he conducted private equity research for AMS Inc. and was a senior audit associate for PricewaterhouseCoopers LLP. He received a BBA in Accounting from The College of William & Mary and an MBA from the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill.