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5 Minute Portfolio Strategy Update, as of Sept 30th, 2020

A3 Alternative Credit Fund (AAACX)

 

 

As of September 30, 2020

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Past performance is not indicative of future results.

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Overview 

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The A3 Alternative Credit Fund, a closed-end interval fund, offers investors efficient access to a portfolio of 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

+1.42% 

1

Year to Date

+8.48%

1

Since Inception

+12.30%

1

30 Day SEC Yield

+5.45%

+1.74%

4

3

AAA Rating Exposure

89.48%

2

September 2020
 Fact Sheet
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Monthly Returns

1

1 Inception date is September 30, 2019. Returns are net total returns. Results are unaudited.

2 "Rating Exposure" reflects the underlying securities nationally recognized statistical ratings organization's credit rating.

3 "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.

4 "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 

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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.

 

Fund Highlights

4

Fund Structure

Interval closed-end fund

Qualifications

Non Accredited Investor

Subscriptions/ NAV

Daily

Redemptions

Q4 2020 15% of fund NAV

Distributions

Quarterly

1

Share class

Institutional

Ticker

AAACX

Inception Date

September 30, 2019

Management Fee

1.50%

Expense Limitation

1.95%

Administrator

UMB Fund Services

Counsel

Thompson Hines LLP

Auditor

Cohen & Company

Distributor

Foreside Fund Partners, LLC

2

3

Net Expense Ratio / Gross Expense Ratio

3.30%/3.40%

 1. The Adviser has entered into an expense limitation agreement to pay the ordinary operating expenses of the Fund that exceed 1.95% per annum.

 2. 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.

 3. The Gross Expense Ratio reflects additional expenses embedded in the Fund's performance, such as the indirect costs of investing in other investment companies.

 4. Based on the volume of repurchase requests, there is no guarantee that all repurchase requests will be honored each quarter.

 

Portfolio Characteristics & Rating Exposure

YTD Total Return:  8.48%

Current Distribution Rate: 4.89%

30-Day SEC Yield (subsidized): 5.45%

30-Day SEC Yield (unsubsidized): 1.74%

# of Positions: 63

Largest Position: 6.16%

Leverage: 0.00%

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AAA: 89.48%

AA: 0.00%

A: 0.00%

BBB: 0.00%

Non-IG: 0.00%

Not Rated: 10.52%

 

Fund Materials

Q4 2020
 Presentation
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Semi Annual Report March 31, 2020
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September 2020
 Fact Sheet
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Prospectus
Prospectus.png
September Correlation
 2020 Repurchase Dates
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Statement of 
Information
SAI.png
Q3 2020 Repurchase Offer
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Fund Account Opening Documents
Account Application
AAACX Taxable Account Opening Doc.png
Account Application - IRA
AAACX IRA Account Doc.png
IRA Conversion & 
Transfer Form
AAACX IRA Conversion.png

Fund Account Disclosures

IRA Disclosure
Traditional IRA Disclosure.png
ROTH IRA Disclosure
Roth IRA Disclosure.png

Contact Us

90 Madison Street, Suite 303 

Denver, CO 80206

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Tel: 1 (303) 997-9010

 

© 2020 A3 FINANCIAL INVESTMENTS LLC

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ABOUT    JOBS 

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The A3 Alternative Credit Fund is a continuously-offered, non-diversified, registered closed-end fund with limited liquidity. There is no guarantee the Fund will achieve its objective.  An investment in the Fund should only be made by investors who understand the risks involved, who are able to withstand the loss of the entire amount invested and who can bear the risks associated with the limited liquidity of Shares.  

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Important Risks: Shares are an illiquid investment. You should generally not expect to be able to sell your Shares (other than through the repurchase process), regardless of how the Fund performs. Although the Fund is required to implement a Share repurchase program only a limited number of Shares will be eligible for repurchase by the Fund.

 

An investment in the Fund is speculative, involves substantial risks, including the risk that the entire amount invested may be lost, and should not constitute a complete investment program. The Fund may leverage its investments by borrowing, use of swap agreements, options or other derivative instruments. The Fund is a newly-organized closed-end management investment company that has limited operating history and no public trading of its shares. The Fund is a non-diversified management investment company, meaning it may be more susceptible to any single economic or regulatory occurrence than a diversified investment company. In addition, the fund is subject to investment related risks of the underlying funds, general economic and market condition risk.

 

Alternative investments provide limited liquidity and include, among other things, the risks inherent in investing in securities, futures, commodities and derivatives, using leverage and engaging in short sales.  The Fund’s investment performance depends, at least in part, on how its assets are allocated and reallocated among asset classes and strategies. Such allocation could result in the Fund holding asset classes or investments that perform poorly or underperform.  Investments and investment transactions are subject to various counterparty risks. The counterparties to transactions in over the-counter or “inter-dealer” markets are typically subject to lesser credit evaluation and regulatory oversight compared to members of “exchange-based” markets. This may increase the risk that a counterparty will not settle a transaction because of a credit or liquidity problem, thus causing the Fund to suffer losses.  The Fund and its service providers may be prone to operational and information security risks resulting from breaches in cyber security.  A breach in cyber security refers to both intentional and unintentional events that may cause the Fund to lose proprietary information, suffer data corruption, or lose operational capacity.

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The Adviser and the Fund have entered into an operating expenses limitation agreement under which the Adviser has agreed, until at least one year after the effective date of the Fund’s registration statement, to pay or absorb the ordinary operating expenses of the Fund (excluding (i) interest expenses and dividends on short sales, and any fees and expenses incurred in connection with credit facilities including any commitment fees on borrowings, if any, obtained by the Fund; (ii) transaction costs and other expenses incurred in connection with the acquisition, financing, maintenance, and disposition of the Fund’s investments and prospective investments, including without limitation bank and custody fees, brokerage commissions, legal, data, consulting and due diligence costs, servicing and property management costs, collateral valuations, liquidation and custody costs; (iii) acquired fund fees and expenses; (iv) taxes; and (v) extraordinary expenses including but not limited to litigation costs), to the extent that its management fees plus applicable distribution and shareholder servicing fees and the Fund’s ordinary operating expenses would otherwise exceed, on a year-to-date basis, 1.95% per annum of the Fund’s average daily net assets. The Expense Limitation Agreement may not be terminated by the Adviser, but it may be terminated by the Board, on 60 days written notice to the Adviser. Any waiver or reimbursement by the Adviser is subject to repayment by the Fund within the three years from the date the Adviser waived any payment or reimbursed any expense, if (after taking the repayment into account) the Fund is able to make the repayment without exceeding the expense limitation in place at the time of the waiver and at the time of the reimbursement payment. See “Management of the Fund.”

 

BEFORE INVESTING YOU SHOULD CAREFULLY CONSIDER THE FUND’S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES.  THIS AND OTHER INFORMATION IS IN THE PROSPECTUS, A COPY OF WHICH MAY BE OBTAINED FROM (877) 774-7724 or click here.  PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST.

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Check the background of this firm on FINRA's BrokerCheck.

 

Foreside Fund Partners, LLC, distributor.