Holdun Income Fund

Executive Summary Q1 2020

Fund Update

Markets are currently experiencing extreme liquidity strains as a result of this economic shutdown put in place to contain the spread of CoVID-19. These liquidity constraints have led to a significant reduction in valuations in the secondary market compared to where valuations would be if not for the pandemic. As a result, the Fund Management team has made the decision to mark down the “net asset value” (NAV) of the fund in an effort to be more closely aligned with the current unprecedented market valuations. As a result, the March 2020 NAV has been reduced by 23.5%. While the March NAV movement may seem drastic, we feel this is in the best interests of the entire investor base.

We recognize that the redemption values must be such that it reflects the current discounted valuation available in the market. This approach avoids suspending redemptions and provides fund liquidity for those whose redemption requests are not driven solely by solvency concerns and, at the same time, ensures the remaining investor pool, that those redeeming immediately receive a share price that reflects the current environment valuation.

It is important to understand that the creditworthiness of the assets held by the fund remain AAA or AAA implied and the underlying bonds themselves are backed by the full faith and credit of the US government. The reduction of the NAV is not due to realized losses from liquidations or any issues with the underlying loans. The reduction is being implemented solely as a preemptive measure in order to reflect to the current discounted price being offered for these bonds on the secondary market as a result of temporary liquidity constraints. As the pandemic winds down and the economy ramps back up, we anticipate the liquidity to reemerge and with it, the Funds performance.

Return Analysis

Portfolio Benchmark
Compound Return -2.49% 4.08%
Compound Growth of $100,000 $91,169 $115,811
Volatility 14.85% 5.76%
Percentage Month Positive 95.5% 54.5%

Fund Performance:

*Since Inception returns as of the 31st of July 2016.

Trailing Returns (Net) 1-month 3-month 1-Yr 3-Yr Since Inception
Portfolio (-23.47%) (-23.66%) (-22.70%) (-4.19%) (-2.49%)
Barclays 7-10 Year Treasury 3.45% 10.15% 16.17% 7.00% 4.08%
HOLDUN