The fund’s performance since inception (12/31/11) surpassed the results of the Index both at net asset value, 7.70% to 2.80%, and at the fund’s maximum 4.50% sales charge, 2.87% to 2.80%, respectively.
Additionally, the fund declared a dividend of 4.81% on an annualized basis (4.59% after the sales charge of 4.50%) ending September 28 as well. The fund (VCAPX) trades on NASDAQ and is available for a minimum investment of $5,000, or $1,000 for retirement accounts.
Addressing Vertical Capital Income Fund’s outperformance, Bayard Closser, president of Vertical Capital Markets Group, said, “Selecting good deeds of trust and whole mortgage notes played a primary role. Fund total return also benefited from the market's renewed recognition of the intrinsic value in residential mortgage notes.”
Designed to pursue income, the fund does not use leverage in its portfolio, he added.
The performance data quoted here represents past performance. Current performance may be lower or higher than the performance data quoted above. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that investor’s shares, when redeemed, may be worth more or less than their original cost.
The fund’s investment adviser has contractually agreed to reduce its fees and/or absorb expenses of the fund, at least until 10/31/2012, to ensure that the net annual fund operating expenses will not exceed 1.85%, subject to possible recoupment from the fund in future years. Without these waivers, the fund’s total annual operating expenses would be 2.27%. Mutual funds involve risk including the possible loss of principal that issuers and counterparties will not make payments on securities and other investments held by the fund, resulting in losses to the fund. Please review the fund’s prospectus for more information regarding the fund’s fees and expenses. For performance information current to the most recent month-end, please call toll-free 866-224-8867.
Founded in 2004, Vertical Capital Markets Group underwrites, monitors, and services the mortgages the firm purchases. The principals have more than 60 years of combined experience in the mortgage banking industry. With its network of relationships, Vertical strives to provide moderate, non-correlated products to investors. Vertical believes managing mortgage note portfolios requires sophisticated expertise and that to succeed in this arena; experts like Vertical are needed in this highly specialized marketplace. The company’s wide network of contacts within the banking industry allows the firm to uncover mortgage note opportunities that other buyers might not find. As mortgage servicer, Vertical also has access to information not readily available to most institutional investors.
The Barclays Capital U.S. MBS index measures the performance of investment grade fixed-rate mortgage-backed pass-through securities of GNMA, FNMA, and FHLMC. You cannot invest directly in an index and unmanaged index returns do not reflect any fees, expenses or sales charges.
Mutual Funds involve risk including the possible loss of principal. There is a risk that issuers and counterparties will not make payments on securities and other investments held by the Fund, resulting in losses to the Fund. In general, the price of a fixed income security falls when interest rates rise. A specific security can perform differently from the market as a whole for reasons related to the issuer, such as an individual's economic situation, the Fund's net asset value may be more volatile because it invests in notes of individuals. The Fund is a closed-end investment company with no history of operations. Securities may be subject to prepayment risk because issuers are typically able to prepay principal. The Fund will not invest in real estate directly, but, because the Fund will invest the majority of its assets in securities secured by real estate, its portfolio will be significantly impacted by the performance of the real estate market and may experience more volatility and be exposed to greater risk than a more diversified portfolio. Quarterly repurchases by the Fund of its shares typically will be funded from available cash or sales of portfolio securities. The sale of securities to fund repurchases could reduce the market price of those securities, which in turn would reduce the Fund's net asset value.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Vertical Capital Income Fund. This and other important information about the Fund is contained in the Prospectus, which can be obtained by calling 1-866-277-VCIF (866-277-8243)