Penn Capital Opportunistic High Income Fund Institutional Class (PHYNX)

Overview

The fund is designed to achieve its investment objective by primarily focusing on high yield debt instruments. It operates with an investment strategy that dedicates at least 80% of its net assets towards investing in such securities. The goal is to capitalize on the potential higher returns offered by high yield investments, which typically involve a greater risk compared to investment-grade securities. These instruments primarily include fixed income securities and senior floating rate bank loans that, at the time of purchase, are usually rated below investment grade. This strategy positions the fund in a specific niche of the financial market, targeting investors seeking higher income returns and who are willing to accept the associated risk levels of high yield investments.

Products and Services

• High Yield Fixed Income Securities

These are bonds, notes, debentures, preferred stocks, payment-in-kind bonds, and other fixed income investments that are rated below investment grade. High yield fixed income securities are sought for their potential to offer higher returns than investment-grade bonds. They are a key component of the fund's portfolio, targeting assets that promise higher income in exchange for a higher risk of default.

• Senior Floating Rate Bank Loans

These are loans that have a variable interest rate and are ranked senior in the event of the borrower's bankruptcy or liquidation, which typically offers a measure of protection to the investor. Senior floating rate bank loans are generally extended to corporations and are below investment grade. They adjust interest rates based on market conditions, providing the fund with a tool to manage interest rate risk while seeking to earn higher yields.

• Real Estate Investment Trusts (REITs) Debt Obligations

These are specific debt instruments issued by REITs. Including REIT debt obligations in the portfolio allows the fund to invest in the real estate sector indirectly, leveraging the potential high yield returns from real estate investments. These instruments typically offer an attractive income component and diversification within the high yield bond market.

• Convertible Securities

These are fixed-income securities that can be converted into a predetermined number of shares of the issuing company, usually at the discretion of the investor. Convertible securities blend the features of bonds and stocks, offering the potential for income through fixed interest payments, along with the opportunity for capital appreciation through conversion into equity. This type of investment allows the fund to participate in the equity upside of the issuing company while seeking to generate income.