Axonic Strategic Income Fund (AXSIX) Crosses $500M in AUM

The Axonic Strategic Income Fund, launched in late 2019 to capitalize on opportunities and potential market dislocations across structured credit, has crossed $500M in assets under management (AUM). The Fund is managed by Axonic Capital, LLC (Axonic), a New York-based structured credit specialist with $3.6B in assets under management and 50 professionals.

Since the official beginning of the COVID-19 pandemic on March 13th, Axonic has raised over $1B in new capital across all firm strategies, including $500M in AXSIX. “We believe the current market opportunity is ideally suited to our firm’s skillset of identifying and underwriting real assets and their cash flows at a granular level," says Axonic Founder and Chief Investment Officer, Clay DeGiacinto. He further added, “The fundamentals of structured credit assets have changed substantially and there is some real stress in the system. The market today and on a go forward basis will be much more centered around the credit profile of these assets, which plays to our experience and expertise. We could not be more excited about the current opportunity set.”

The fund is marketed by Atlanta-based Skypoint Capital (Skypoint). Founder and Managing Partner David Kalin added, “The advantages of constructing a structured credit portfolio with new capital gives the Axonic team the unique ability to patiently source securities for AXSIX that may offer tremendous relative value when compared to other segments of fixed income. We believe Axonic’s experience, disciplined approach to risk management and ability to invest across all sectors in structured credit further differentiates this fund in the daily mutual fund space.”

AXSIX is available for purchase at Fidelity, Pershing, Schwab and TD Ameritrade. For more information, please contact [email protected].

About the Fund:

The AXSIX fund seeks to maximize total return, through a combination of current income and capital appreciation. In pursuing its investment objective, the Fund seeks to maximize risk-adjusted total returns by investing primarily in income-producing instruments (i.e. under normal circumstances, the Fund will invest at least 60% of its net assets in income-producing instruments). These instruments may include: (i) mortgage-backed securities (“MBS”), including agency and non-agency residential mortgage-backed securities (“RMBS”) and commercial mortgage-backed securities (“CMBS”); (ii) other asset-backed securities (“ABS”) and structured credit instruments, including instruments representing the ownership and cashflows from or financing of various assets, including aircraft, collateralized debt obligations (“CDOs”), collateralized loan obligations (“CLOs”) and collateralized mortgage obligations (“CMOs”); and (iii) other income-producing investments, including corporate and bank-issued bonds, loans and participations, and instruments representing the ownership and cashflows from or financing of various assets, including aircraft and intellectual property royalties. The Fund also may invest in real estate investment trusts (“REIT”), equity securities of companies whose business is substantially related to the mortgage business (e.g., title, financial guaranty and other insurers and reinsurers; banks; marketplace and other lenders; mortgage originators; mortgage and other loan servicers; and homebuilders), and mortgage derivatives such as stripped RMBS and inverse floaters.

About Axonic Capital

Founded in 2010, Axonic Capital LLC also offers commercial and residential real estate strategies, systematic fixed income and commercial lending strategies along with its structure credit expertise.

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. To obtain a prospectus containing this and other information, please call (212) 259-0430 or download the file from www.AxonicFunds.com. Please read the prospectus carefully before you invest. Investing involves risks, including loss of principal. The fund is newly organized with limited operational history. For more information about the funds’ risks, please refer to the prospectuses which can be found at www.AxonicFunds.com.

ALPS Distributors, Inc. is the distributor of the Axonic Strategic Income Fund (ALPS Distributors, Inc. 1290 Broadway, Suite 1000, Denver, CO 80203). Axonic Capital LLC and ALPS are not affiliated.

Risk Factors:

Residential Mortgage-Backed Securities Risks. Collateral underlying RMBS generally consists of mortgage loans secured by residential real estate or other RMBS. In addition to the risks associated with other asset-backed securities as described above, mortgage-backed securities are subject to the general risks associated with investing in real estate securities; that is, they may lose value if the value of the underlying real estate to which a pool of mortgages relates declines. In addition, the rate of prepayments on underlying mortgages affects the price and volatility of a mortgage-backed security, and may have the effect of shortening or extending the effective maturity beyond what was anticipated.

REIT Risk. Investments in REITS and in securities of other companies principally engaged in the real estate industry subject the Fund to, among other things, risks similar to those of direct investments in real estate and the real estate industry in general. These include risks related to general and local economic conditions, possible lack of availability of financing and changes in interest rates or property values.

Commercial Mortgage-Backed Securities Risks. Collateral underlying CMBS generally consists of mortgage loans secured by income-producing property or other CMBS. Performance of a commercial mortgage loan and the market value of a commercial property both depend primarily on the net income generated by the underlying mortgaged property and performance of the related business (including property management). As a result, income generation will affect both the likelihood of default and the severity of losses with respect to a commercial mortgage loan. Issues associated with managing a commercial property may impact both performance and market value. The value of commercial real estate is also subject to limitations on remedies imposed by bankruptcy laws and state laws regarding foreclosure and rights of redemption. In addition, the unavailability of real estate financing may lead to default of mortgage loans on commercial properties, and there is no recourse against the borrower’s assets other than the collateral except in the case of borrowers acting fraudulently or otherwise illegally. As a result, payments on the CMBS may be adversely affected in such cases.

Derivatives Risks. Credit derivatives are contracts that transfer price, spread and/or default risks of debt and other instruments from one party to another. Such instruments may be illiquid or less liquid, volatile, difficult to price and leveraged so that small changes in the value of the underlying instruments may produce disproportionate losses to the Fund. In addition, the Fund is subject to the credit risk associated with the underlying assets of a derivatives contract as well as the risk of counterparty default. As a result, the Fund’s use of derivatives could result in losses, which could be significant.

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