Rational Special Situations Income Fund
Tickers: RFXIX | RFXCX | RFXAX
Fund Objective
The Fund’s objective is to seek total return consisting of capital appreciation and income.
Investment Strategy
Identification
The investment strategy seeks to identify “special situations” particularly within the NARMBS markets where the Fund will make opportunistic investments in securities that may be mispriced due to structural or market driven factors.
Opportunity
The managers seek to identify inefficiencies or flaws in the underlying legal and technical structures of certain debt issuances, and then exploit these opportunities while seeking to limit downside exposure.
Remediation
The managers will seek to remedy issues it has identified in a security through activist strategies, including (i) bringing the technical issue to the attention of indenture trustees or servicers; (ii) negotiating with the applicable parties to compensate the Fund for the issue; or (iii) through litigation or the threat of litigation. The opportunities may come in the form of flaws of logic or interpretation in a debt security’s pooling and servicing agreements or bond indentures.
Portfolio Manager Insights
Fund Management
ESM Management LLC
ESM Management LLC provides investment advisory services. The Company offers advice on acquiring, analyzing, and liquidating portfolios of non-agency residential mortgage backed securities.
William R. Van de Water
William has been working in finance since 2005. Mr. Van de Water joined ESM as a RMBS analyst and trader in June 2009 and became a managing director in December 2009.
Dr. Eric S. Meyer
Dr. Meyer has been working in finance since 1995 and he founded ESM Management LLC in January 2009. From 1997 through 2008, Dr. Meyer worked at Susquehanna International Group.
Growth of $10,000 Investment: Ending 2024-09-30T00:00:00
Performance (%) Ending2024-09-30T00:00:00
Annualized if greater than 1 Year
Annualized if greater than 1 Year
| YTD | 1 Year | 3 Years | 5 Years | 10 Years | Inception* | |
|---|---|---|---|---|---|---|
| Class I | 7.53 | 8.84 | 3.80 | 4.09 | 6.41 | 12.20 |
| Bloomberg US Agg TR Index | 4.45 | 11.57 | -1.39 | 0.33 | 1.84 | 2.91 |
| Bloomberg MBS TR Index | 4.50 | 12.32 | -1.20 | 0.04 | 1.41 | 2.33 |
| Class A | 7.28 | 8.53 | 3.53 | 3.84 | 6.14 | 11.92 |
| Class C | 6.72 | 7.75 | 2.78 | 3.07 | 5.35 | 11.09 |
| Class A w/ Load | 2.20 | 3.36 | 1.86 | 2.83 | 5.62 | 11.57 |
*Inception: 02/01/2009 (I Share) & 07/17/2019 (A & C Shares). The performance shown prior to July 17, 2019 is that of the Predecessor Fund, which reflects all of the Predecessor Fund’s actual fees and expenses adjusted to include any fees of each share class.
Maximum sales charge for Class A shares is 4.75%. Total annual fund operating expenses are 1.78%, 2.04%, and 2.75% for Class I, A, and C shares respectively. A maximum deferred sales charge of 1.00% on Class C shares applies to shares sold within 12 months of purchase. The performance data quoted here represents past performance. Current performance may be lower or higher than the performance data quoted above. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Past performance is no guarantee of future results. Results shown reflect the waiver, without which the results could have been lower. A fund’s performance, especially for very short periods of time, should not be the sole factor in making your investment decisions. To obtain the most recent month end performance information or the funds prospectus please call 800-253-0412 or visit www.RationalMF.com.
Performance & Risk Statistics: Ending2024-09-30T00:00:00
| Performance & Risk Statistics | RFXIX | Agg | BB MBS |
|---|---|---|---|
| Cumulative Return | 506.43% | 56.68% | 43.47% |
| Annualized Return | 12.20% | 2.91% | 2.33% |
| Standard Deviation | 6.80% | 4.29% | 4.12% |
| Sharpe Ratio | 1.72 | 0.56 | 0.44 |
| Alpha (vs. Agg) | 11.19% | - | -0.31% |
| Beta (vs. Agg) | 0.21 | - | 0.89 |
| Correlation (vs. Agg) | 0.13 | - | 0.93 |
| % of Positive Months | 84.0% | 60.6% | 63.3% |
| Maximum Drawdown | -9.76% | -17.18% | -16.53% |
Monthly Returns: Ending2024-09-30T00:00:00
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | YTD | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 1.02% | 1.05% | 1.41% | -0.01% | 1.11% | 0.46% | 1.20% | 0.02% | 1.02% | 7.53% | |||
| 2023 | 1.18% | 0.20% | -0.21% | 0.80% | 0.33% | 0.34% | 0.09% | 0.45% | -0.39% | -0.11% | 0.43% | 0.90% | 4.08% |
| 2022 | 0.01% | 0.01% | -1.90% | -1.26% | -1.03% | -0.51% | 0.69% | 0.58% | -0.62% | 2.07% | 0.26% | 0.90% | -0.85% |
| 2021 | 0.93% | 0.82% | -0.14% | 0.52% | 0.22% | 0.67% | 0.62% | 0.27% | 0.47% | 0.22% | 0.06% | 0.52% | 5.30% |
| 2020 | 2.62% | 0.42% | -9.76% | 2.81% | 2.59% | 1.30% | 0.94% | 0.37% | 0.47% | 0.52% | 0.68% | 0.47% | 2.83% |
| 2019 | 0.59% | 0.57% | 0.58% | 1.21% | 2.43% | 0.40% | 0.07% | 0.28% | 0.02% | 0.71% | 0.54% | 0.45% | 8.11% |
| 2018 | 2.61% | 1.31% | 1.63% | 0.36% | 0.56% | 0.51% | 2.86% | 0.56% | 0.31% | 0.86% | -0.25% | -0.53% | 11.28% |
| 2017 | 0.64% | 0.69% | 1.39% | 3.33% | 1.01% | 1.05% | 0.52% | 1.54% | 0.68% | 1.29% | 1.21% | 1.57% | 15.95% |
| 2016 | -0.47% | -0.78% | 0.24% | 0.47% | 0.20% | 0.30% | 0.44% | 0.32% | 2.24% | 0.43% | 0.44% | 0.21% | 4.08% |
| 2015 | -0.02% | 0.86% | 0.58% | 0.10% | 0.21% | 0.64% | 0.43% | 0.02% | 0.18% | 0.47% | 0.29% | 0.06% | 3.87% |
| 2014 | 2.42% | 0.58% | 0.11% | 0.74% | 1.26% | 0.68% | 0.52% | 0.57% | 0.27% | 0.05% | 1.90% | 0.71% | 10.22% |
| 2013 | 8.76% | 2.45% | 1.02% | 1.48% | 2.51% | -2.96% | -0.54% | 0.41% | 1.47% | 1.97% | 0.85% | 0.49% | 18.97% |
| 2012 | 2.07% | 1.92% | 3.53% | 0.00% | 0.37% | 0.82% | 4.55% | 1.00% | 4.40% | 1.05% | 2.90% | 5.74% | 32.10% |
| 2011 | 6.27% | -0.56% | 0.13% | 0.46% | -0.45% | -1.39% | 0.76% | -2.09% | -1.91% | -1.91% | -0.52% | 5.22% | 3.68% |
| 2010 | 4.53% | 0.81% | 1.30% | 5.85% | -5.23% | 4.18% | 1.82% | 3.87% | 2.32% | -0.06% | 2.83% | 2.16% | 26.74% |
| 2009 | -1.41% | -1.29% | 5.16% | 5.33% | 6.35% | 5.33% | 4.61% | 4.37% | 5.97% | -0.88% | 6.19% | 47.03% |
Rational Special Situations Income Fund Distributions
| Ticker | Record Date | Payable Date | Monthly Distribution Amount | Reinvest Price | SEC Yield | Unsubsidized Yield |
|---|---|---|---|---|---|---|
| RFXAX | 10/29/2024 | 10/30/2024 | 0.1058 | 18.07 | ||
| RFXAX | 9/26/2024 | 9/27/2024 | 0.1017 | 18.15 | 4.58% | 4.51% |
| RFXAX | 8/28/2024 | 8/29/2024 | 0.1005 | 18.08 | 4.71% | 4.64% |
| RFXAX | 7/29/2024 | 7/30/2024 | 0.0934 | 18.17 | 4.81% | 4.74% |
| RFXAX | 6/26/2024 | 6/27/2024 | 0.09 | 18.06 | 4.89% | 4.83% |
| RFXAX | 5/29/2024 | 5/30/2024 | 0.0963 | 18.04 | 5.13% | 5.07% |
| RFXAX | 4/26/2024 | 4/29/2024 | 0.094 | 17.95 | 5.01% | 4.95% |
| RFXAX | 3/26/2024 | 3/27/2024 | 0.0891 | 18.05 | 4.86% | 4.81% |
| RFXAX | 2/27/2024 | 2/28/2024 | 0.0939 | 17.88 | 5.10% | 5.05% |
| RFXAX | 1/29/2024 | 1/30/2024 | 0.0775 | 17.76 | 5.13% | 5.07% |
| RFXAX | 12/27/2023 | 12/28/2023 | 0.1858 | 17.71 | 5.05% | 4.95% |
| RFXAX | 11/28/2022 | 11/29/2022 | 0.2028 | 17.75 | 5.23% | 5.16% |
| Ticker | Record Date | Payable Date | Monthly Distribution Amount | Reinvest Price | SEC Yield | Unsubsidized Yield |
|---|---|---|---|---|---|---|
| RFXIX | 10/29/2024 | 10/30/2024 | 0.1099 | 18.09 | ||
| RFXIX | 9/26/2024 | 9/27/2024 | 0.1053 | 18.17 | 5.06% | 5.00% |
| RFXIX | 8/28/2024 | 8/29/2024 | 0.1045 | 18.1 | 5.19% | 5.13% |
| RFXIX | 7/29/2024 | 7/30/2024 | 0.0972 | 18.19 | 5.31% | 5.25% |
| RFXIX | 6/26/2024 | 6/27/2024 | 0.0934 | 18.08 | 5.39% | 5.34% |
| RFXIX | 5/29/2024 | 5/30/2024 | 0.1003 | 18.07 | 5.62% | 5.57% |
| RFXIX | 4/26/2024 | 4/29/2024 | 0.0978 | 17.98 | 5.57% | 5.53% |
| RFXIX | 3/26/2024 | 3/27/2024 | 0.0925 | 18.08 | 5.34% | 5.29% |
| RFXIX | 2/27/2024 | 2/28/2024 | 0.0978 | 17.9 | 5.52% | 5.48% |
| RFXIX | 1/29/2024 | 1/30/2024 | 0.0807 | 17.79 | 5.60% | 5.55% |
| RFXIX | 12/27/2023 | 12/28/2023 | 0.19 | 17.73 | 5.59% | 5.48% |
| RFXIX | 11/28/2022 | 11/29/2022 | 0.2067 | 17.77 | 5.75% | 5.70% |
| Ticker | Record Date | Payable Date | Monthly Distribution Amount | Reinvest Price | SEC Yield | Unsubsidized Yield |
|---|---|---|---|---|---|---|
| RFXCX | 10/29/2024 | 10/30/2024 | 0.0938 | 18.02 | ||
| RFXCX | 9/26/2024 | 9/27/2024 | 0.0913 | 18.1 | 4.05% | 4.05% |
| RFXCX | 8/28/2024 | 8/29/2024 | 0.0887 | 18.02 | 4.19% | 4.19% |
| RFXCX | 7/29/2024 | 7/30/2024 | 0.0819 | 18.11 | 4.32% | 4.32% |
| RFXCX | 6/26/2024 | 6/27/2024 | 0.0796 | 18.01 | 4.40% | 4.40% |
| RFXCX | 5/29/2024 | 5/30/2024 | 0.0841 | 17.99 | 4.65% | 4.65% |
| RFXCX | 4/26/2024 | 4/29/2024 | 0.0823 | 17.9 | 4.58% | 4.58% |
| RFXCX | 3/26/2024 | 3/27/2024 | 0.0787 | 18 | 4.34% | 4.34% |
| RFXCX | 2/27/2024 | 2/28/2024 | 0.0826 | 17.83 | 4.51% | 4.51% |
| RFXCX | 1/29/2024 | 1/30/2024 | 0.0681 | 17.71 | 4.66% | 4.66% |
| RFXCX | 12/27/2023 | 12/28/2023 | 0.1735 | 17.66 | 4.54% | 4.54% |
| RFXCX | 11/28/2022 | 11/29/2022 | 0.1912 | 17.7 | 4.73% | 4.73% |
Fund Overview
Data as of: 2024-11-19T00:00:00
| Ticker | RFXAX | RFXCX | RFXIX | RFXAX |
| Share Class | Class A | Class C | Class I | Class A w/ Sales Load |
| CUSIP | 628255457 | 628255440 | 628255432 | 628255457 |
| Inception Date | 2009-02-01T00:00:00 | 2009-02-01T00:00:00 | 2009-02-01T00:00:00 | 2009-02-01T00:00:00 |
| As of Date | 2024-11-19T00:00:00 | 2024-11-19T00:00:00 | 2024-08-20T00:00:00 | 2024-11-19T00:00:00 |
| Daily NAV | 18.18 | 18.12 | 18.25 | 18.18 |
| NAV Change | 0.01 | 0.01 | 0.02 | 0.01 |
| % NAV Change | 0.06% | 0.06% | 0.11% | 0.06% |
Current Fund Performance
Data as of: 2024-11-19T00:00:00
| Share Class | 1 Month | 3 Months | 6 Months | YTD | 1 Year | 3 Years Annualized | 5 Years Annualized | 10 Years Annualized | Since Inception Annualized |
| Class A | 0.75% | 1.54% | 3.46% | 8.15% | 9.48% | 3.66% | 3.83% | N/A | 11.87% |
| Class C | 0.69% | 1.41% | 3.08% | 7.45% | 8.69% | 2.89% | 3.05% | N/A | 11.04% |
| Class I | 0.98% | 2.06% | 5.21% | 6.76% | 8.01% | 3.74% | 3.96% | N/A | 12.24% |
| Class A w/Sales Load | -4.06% | -3.29% | -1.48% | 3.03% | 4.29% | 1.98% | 2.82% | N/A | 11.52% |
Time periods with missing data for current performance are due to the pre-converted hedge fund only reporting returns on a monthly basis.
*Inception: 02/01/2009. The performance shown prior to July 17, 2019 is that of the Predecessor Fund, which reflects all of the Predecessor Fund’s actual fees and expenses adjusted to include any fees of each share class.
Quarterly Fund Performance
Data as of Quarter End: 2024-09-30T00:00:00
| Share Class | 1 Month | 3 Months | 6 Months | YTD | 1 Year | 3 Years Annualized | 5 Years Annualized | 10 Years Annualized | Since Inception Annualized |
| Class A | 0.95% | 2.15% | 3.74% | 7.28% | 8.53% | 3.53% | 3.84% | 6.14% | 11.92% |
| Class C | 0.95% | 1.96% | 3.37% | 6.72% | 7.75% | 2.78% | 3.07% | 5.35% | 11.09% |
| Class I | 0.46% | 1.57% | 5.15% | 5.15% | 6.59% | 3.50% | 3.70% | 6.31% | 12.25% |
| Class A w/Sales Load | -3.84% | -2.71% | -1.18% | 2.20% | 3.36% | 1.86% | 2.83% | 5.62% | 11.57% |
*Inception: 02/01/2009 (I Share) & 07/17/2019 (A & C Shares. The performance shown prior to July 17, 2019 is that of the Predecessor Fund, which reflects all of the Predecessor Fund’s actual fees and expenses adjusted to include any fees of each share class.
Maximum sales charge for Class A is 4.75%. Maximum Deferred Sales Charge of 1.00% on Class C Shares applies to shares sold within 12 months of purchase. The performance data quoted here represents past performance. Current performance may be lower or higher than the performance data quoted above. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Past performance is no guarantee of future results. Results shown reflect the waiver, without which the results could have been lower. A fund’s performance, especially for very short periods of time, should not be the sole factor in making your investment decisions. To obtain the most recent month end performance information or the Fund’s prospectus please call 800-253-0412 or visit www.RationalMF.com.
Fund Expenses
Data as of: 2024-11-19T00:00:00
| Share Class | Class I | Class A | Class C | Class A w/ Sales Load |
| Prospectus Gross Expense Ratio (May 1, 2024) | 1.81% | 2.07% | 2.76% | 2.07% |
| Prospectus Net Expense Ratio* (May 1, 2024) | 1.76% | 2.01% | 2.76% | 2.01% |
* Rational Advisors, Inc. has contractually agreed to waive all or a portion of its management fee and/or reimburse certain operating expenses of the Fund to the extent necessary in order to limit the Total Annual Fund Operating Expenses (but excluding (i) acquired fund fees and expenses, (ii) brokerage commissions and trading costs, (iii) interest (including borrowing costs and overdraft charges), (iv) taxes, (v) short sale dividends and interest expenses, (vi) non-routine or extraordinary expenses (such as litigation or reorganizational costs), and (vii) costs and expenses of litigation or claims on behalf of the Fund regarding portfolio investments initiated (or threatened) by the investment adviser or sub-advisor) to not more than 1.75%, 2.00% and 2.75% of the daily net assets of the Fund’s Institutional, Class A, and Class C shares, respectively, through April 30, 2025.
Past performance is not a guarantee of future results.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Rational Funds. This and other important information about the Fund is contained in the prospectus, which can be obtained by calling (800) 253-0412 or at www.RationalMF.com. The prospectus should be read carefully before investing. The Rational Funds are distributed by Northern Lights Distributors, LLC member FINRA/SIPC. Rational Advisors, Inc. is not affiliated with Northern Lights Distributors, LLC.
Investing in the Fund carries certain risks. The value of the Fund may decrease in response to the activities and financial prospects of an individual security in the Fund’s portfolio. Investors in the Fund bear the risk that the Fund may not be successful in implementing its investment strategies. The Fund is non-diversified and may invest a greater percentage of its assets in a particular issue and may own fewer securities than other mutual funds; the Fund is subject to concentration risk. When the Fund invests in asset-backed securities and mortgage-backed securities, the Fund is subject to the risk that, if the underlying borrowers fail to pay interest or repay principal, the assets backing these securities may not be sufficient to support payments on the securities. Interest rate risk is the risk that bond prices overall, including the prices of securities held by the Fund, will decline over short or even long periods of time due to rising interest rates. Bonds with longer maturities tend to be more sensitive to interest rates than bonds with shorter maturities. Lower-quality bonds, known as "high yield" or "junk" bonds, present greater risk than bonds of higher quality, including an increased risk of default. Credit risk is the risk that the issuer of a security will not be able to make principal and interest payments when due. These factors may affect the value of your investment.
The Fund commenced operations by acquiring all of the assets and liabilities of ESM Fund I, L.P. (the “Predecessor Fund”) in a tax-free reorganization on July 17, 2019 (the “Reorganization”). In connection with the Reorganization, investors in the Predecessor Fund received Institutional Shares of the Fund. The Fund’s investment objectives, policies, guidelines and restrictions are, in all material respects, equivalent to those of the Predecessor Fund. However, the Predecessor Fund was not registered under the 1940 Act and, therefore, was not subject to certain investment restrictions, limitations and diversification requirements that are imposed by the 1940 Act or Subchapter M of the Internal Revenue Code, which, if they had been applicable, might have adversely affected the Predecessor Fund’s performance. The Fund’s Sub-Advisor was the investment adviser to the Predecessor Fund. The Fund’s fees and expenses are expected to be higher than those of the Predecessor Fund, so if the Fund’s expenses were applied to the Predecessor Fund’s performance, the performance would have been lower.
Awards Methodology
All funds reporting to Allocator.com are considered for the awards.
There are two types of awards:
- The Top Performer Awards — these are granted to the select few funds, which have outperformed their wider peer group in each category. Winners are determined purely based on quantitative risk adjusted returns. For 2020 we have extended the time period under consideration to evaluate how managers navigated both 2019 and the Covid-19 related market turbulence in early 2020. The 2020 Top Performer award winners will be chosen based on absolute returns from January 1, 2019 to April 30, 2020. The Long-Term categories consider returns from January 2017 to April 2020.
- The Investors Choice’ Awards —For each category, the fund, which receives the highest qualitative scoring by the judges receives the prestigious award. Institutional investors from around the world score the Top Performers on a range of qualitative criteria including investment processes, risk framework, transparency, team, and ability to generate alpha. The judges review manager profiles on the Allocator.com portal and independently assign a score from 1 to 10 in each of the qualitative assessment areas for each fund.
4772-NLD-7/23/2020
