Catalyst/SMH High Income Fund Class I (HIIIX)

Overview

The fund is focused on investing in a non-diversified portfolio of low-quality, high-yield corporate bonds and convertible securities. Specifically targeting investments in bonds rated Baa or lower by Moody's and BBB or lower by S&P, which are typically referred to as "junk" bonds, it takes a more risk-tolerant approach to fixed income investments. This strategy embraces the higher risk associated with non-investment grade corporate bonds and even includes corporate issues that have defaulted. The fund does not adhere to limitations regarding the maturity of the bonds within its portfolio, albeit the average maturity of these bonds tends to be less than ten years. This investment vehicle is non-diversified, focusing its investments more narrowly compared to diversified funds, which can lead to higher volatility and risk.

Products and Services

• High-Yield Corporate Bonds

Bonds that are rated Baa or lower by Moody's or BBB or lower by S&P fall into this category. These bonds offer higher yields than more highly rated securities due to the increased risk of default.

• Convertible Securities

This fund invests in securities that can be converted into a predetermined number of the issuer's equity shares at certain times during their lifespan, usually at the discretion of the bondholder. These provide the potential for capital appreciation.

• Non-Investment Grade Corporate Bonds

Also known as "junk" bonds, these are bonds rated Baa or lower by Moody's and BBB or lower by S&P. The fund can invest without limitation in these papers, accepting a higher risk in exchange for potentially higher yields.

• Defaulted Corporate Issues

The fund also considers investments in corporate bonds that have defaulted. These are high-risk investments, but they can offer significant returns if the companies recover.