Penn Capital Defensive Short Duration High Income Fund

DAILY PRICING (as of 2/16/2018)

Ticker: PSHNX
CUSIP: 707269882
Inception Date: 7/17/2017

($ Value)
YTD: (%)
9.87 0.02 0.2 -0.18


For standardized performance, click here

The performance data quoted here represents past performance. Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. To obtain performance information current to the most recent month-end please call 844-302-PENN (7366).

A redemption fee of 2.00% will be imposed on redemptions or exchanges of shares you have owned for 90 days or less.

Objective:  The Penn Capital Defensive 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 (i.e. “junk” bonds and loans).

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.

Penn Capital’s initial universe consists of all U.S. dollar-denominated, non-investment grade corporate debt (over $1.5 trillion market; over 1,000 issuers)

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

Peter R. Duffy, CFA, Partner, Senior Portfolio Manager

Mr. Duffy began his career with Penn Capital in 2006. Prior to joining Penn Capital, Mr. Duffy was a Director for Deutsche Asset Management’s top-decile $5 billion global high yield debt team, and his investment experience included both leveraged loans and emerging markets debt. Previously, he worked on mergers & acquisitions at GE Capital and as a management consultant at Arthur Andersen LLP. Mr. Duffy serves as the Portfolio Manager for Penn Capital’s Defensive High Yield and Short Duration strategies and chairs the firm’s Credit Strategy Committee. He received a BS in Finance, Summa Cum Laude, from Villanova University and an MBA from The Wharton School of the University of Pennsylvania.

Richard A. Hocker, Founder, Chief Investment Officer

Richard founded Penn Capital in 1987 and serves as Chief Investment Officer & Chief Executive Officer, guiding overall portfolio strategy.  Richard’s investing and institutional non-investment grade corporate lending experience spans over forty years. While serving as a Partner for Delaware Investment Advisors (DIA) from 1977 to 1987, Richard was responsible for building the investment side of DIA’s fixed income operation.  During this period, Richard developed and managed one of the nation’s first high yield mutual funds, the Delchester High Yield Bond Fund. Richard also served as the first high yield bond manager for a number of institutional clients including General Motors, State of Vermont Teachers Retirement Association, and Colorado Fire and Police.  Prior to DIA, Richard trained as a corporate lender and supported key senior lenders at Provident National Bank, which is now PNC, a top 20 US Banking institution.  He later rose to serve as head of the investment division.  Richard also founded and served as CEO of Covenant Bank, a NJ based regional bank which grew to 16 branches and $500mm in deposits before being acquired by Wachovia Corporation in 1997.

Mr. Hocker and his wife, Marcia Hocker, are the founders of the Ethel Mae Hocker Foundation. The Ethel Mae Hocker Foundation provides educational opportunities to less fortunate, deserving Greater Philadelphia-area elementary and high school students. Richard received both his BS in accounting and MBA in finance from the Kogod School of Business at American University.

All investments involve risk, including possible loss of principal. The Fund invests in ETFs and is therefore subject to the same risks as  the underlying securities in which the ETF invests as well as entails higher expenses than if invested into the underlying ETF directly. As interest rates rise the value of bond prices will decline. Credit risk refers to the loss in the value of a security based on a default in the payment of principal and/or interest of the security, or the perception of the market of such default. High-yield bonds have a higher risk of default or other adverse credit events, but have the potential to pay higher earnings over investment grade bonds. The value of convertible securities tends to decline as interest rates rise and, because of the conversion feature, tends to vary with fluctuations in the market value of the underlying securities. Bank loans in which the Fund may invest have similar risks to below investment grade fixed income securities. In the event of the insolvency of an agent bank, a loan could be subject to settlement risk as well as the risk of interruptions in the administrative duties performed in the day to day administration of the loan. The Fund invests in foreign securities and ADRs, which involves certain risks such as currency volatility, political and social instability and reduced market liquidity.



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