Focused Investing

INCOME

A3 Alternative Income Fund (AAACX)

As of August 31, 2021

Past performance is not indicative of future results.

Overview

The A3 Alternative Income Fund, a closed-end interval fund, offers investors efficient access to a portfolio of non-traditional income-generating assets. The Fund’s investment objective is to seek total return through investments that offer regular income or the potential for price appreciation. A3 Financial Investments is led by an investment team with decades of experience investing in capital markets. Interval funds provide investors such features as daily pricing, 1099 tax reporting, and quarterly repurchase offers with a fund-level redemption of 5-25% of NAV. The interval fund structure allows non accredited investors the opportunity to access less liquid, potentially higher yielding alternative investments.

Performance Summary

Monthly Return
1.15%

Year to Date
(1.76)%

Since Inception
+6.66%

30 Day SEC Yield
+6.19%
+3.25%

US Agency Exposure
54.36%

Fact Sheet

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Monthly Net Total Returns

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	YTD
2021	(0.89)	(0.70)	1.40	0.50	(0.20)	(1.64)	(1.34)	1.15					(1.76)
2020	5.11	(1.68)	1.05	(1.24)	0.96	1.08	(1.06)	1.65	(0.97)	(5.37)	6.29	(0.53)	4.88
2019										0.60	0.40	2.49	3.52

Inception date is September 30, 2019. Returns are net total returns.
U.S. Government Agency securities are considered to have an "implied AAA rating". Government National Mortgage Association issued securities carry the full faith and credit guarantee of the U.S. Government.
"30-Day SEC Yield (subsidized)" is an annualization of the Fund's total net investment income per share for the 30 day period ended on the last day of the month and reflects any net fees waivers and reimbursements in effect during the yield calculations period.
"30-Day SEC Yield (unsubsidized)" reflects the 30-day yield if the investment adviser were not reimbursing the fund for part of its expenses or waiving all or part of its fee.

Correlation

Correlation is a statistic that measures the strength of the relationship between two securities. The correlation coefficient ranges from +1.0 and -1.0 which indicate perfect positive and negative linear relationships. A value of 0 indicates no linear relationship between the two securities corresponding to no correlation.

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LEGATRUU is the Bloomberg Barclays Global Fixed Income Aggregate Index Unhedged is the flagship measure of global investment grade debt from twenty- four local currency markets.
LF98TRUU is the Bloomberg Barclays US Corporate High Yield Bond Index measure the USD-denominated, high yield, fixed-rate corporate bond market.
SPX is the S&P 500 large-cap US Equity Index of the 500 large companies listed on the stock exchanges in the US.
I00078US is the Bloomberg Barclays US Treasury Bill 1-3 Month Index designed to measure the performance of public obligations of the US Treasury that have a remaining maturity of greater tan or equal to 1 month and less than 3 months .
LUMSTRUU is the Bloomberg Barclays US MBS Index tracking fixed rate agency mortgage backed securities.
LUCMTRUU is the Bloomberg Barclays US CMBS Index tracking investment grade agency and non-agency commercial mortgage backed securities that are ERISA eligible.
SPBDAL is the S&P/LSTA Leveraged Loan Index tracking US Leveraged Loans.
SPBDCUT is the S&P Business Development Company Index.
BABUTRUU is the US aggregate Asset Backed Securities AAA index.
RMZ is the Morgan Stanley US Real Estate Investment Trust price-only index.

Fund Highlights

Fund Structure

Interval closed-end fund

Share class

Institutional

Administrator

UMB Fund Services

Qualifications

Non Accredited Investor

Ticker

AAACX

Counsel

Thompson Hines LLP

Subscriptions/ NAV

Daily

Inception Date

September 30, 2019

Auditor

BBD LLP

Redemptions

Q3 2021 15% of fund NAV

Management Fee

1.50%

Distributor

Foreside Financial Services, LLC

Distributions

Quarterly

Expense Limitation

1.95%

Net Expense Ratio / Gross Expense Ratio

1.95%/7.99%

The Adviser has entered into an expense limitation agreement to pay the ordinary operating expenses of the Fund that exceed 1.95% per annum.
The Net expense ratio reflects the reduction of expenses from fee waivers and reimbursements. Elimination of these reductions will result in higher expenses and lower performance. These reductions are contractual and will continue until at least 01/31/2022.
The Gross Expense Ratio reflects additional expenses embedded in the Fund's performance, such as the indirect costs of investing in other investment companies.
Based on the volume of repurchase requests, there is no guarantee that all repurchase requests will be honored each quarter.

Portfolio Characteristics & Composition

Year-to-Date Total Return

- 1.76%

Current Distribution Rate

6.79%

30-Day SEC Yield (subsidized)

6.19%

30 Day SEC Yield (unsubsidized)

3.25%

# of Positions

Largest Position

5.30

Leverage

0.00%

Long Term Capital Gains - Year 2020

0.00%

Short Term Capital Gains - Year 2020

0.00%

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Credit Rating Exposure

US Govt Agency Securities

54.36%

AAA

15.28%

0.00%

BBB

5.30%

Non-Investment Grade

0.00%

Not Rated

25.06

Current Distribution Rate is expressed as a percentage equal to the projected annualized distribution amount which is calculated by annualizing the current cash distribution per share without compounding), divided by the current net asset value and does not reflect any return of capital.
U.S. Government Agency securities are considered to have an "implied AAA rating". Government National Mortgage Association issued securities carry the full faith and credit of the U.S. Government. Credit Rating Exposure reflects the underlying securities nationally recognized statistical ratings organization's credit rating.