Robinson Tax Advantaged Income Fund
ROBAX, ROBCX, ROBNX
|As of 6/30/2020||% of Net Assets (Excluding Cash)|
|Nuveen AMT-Free Municipal Credit Income Fund||5.22%|
|BlackRock MuniVest Fund Inc||4.86%|
|Western Asset Managed Municipals Fund Inc||4.49%|
|Nuveen Municipal Credit Income Fund||4.26%|
|Invesco Value Municipal Income Trust||4.13%|
The Fund’s objective is to seek total return with an emphasis on providing current income, a substantial portion of which will be exempt from federal income taxes.
The Robinson Tax Advantaged Income Fund (the “Fund”) is an open-end mutual fund investing primarily in Closed-End Funds (“CEF”) which invest primarily in municipal bonds (“Municipal CEFs”). A substantial portion of the income generated to the Fund is expected to consist primarily of tax advantaged income by way of the underlying CEFs’ investments in municipal bonds. Robinson Capital Management, LLC (“Robinson” or the “Sub-advisor”), the Fund’s sub-advisor, provides an experienced professional investment team with extensive knowledge of the CEF and municipal bond markets. The investment strategy first identifies a portfolio of Municipal CEFs to generate tax advantaged income to the Fund. Robinson seeks to identify CEFs that trade at discounts to the true market value of the CEFs’ municipal bond holdings, and utilizes a number of trading techniques to unlock its estimate of the value of the premiums/discounts in the CEFs. In addition, when, in the opinion of the Sub-advisor, the risk/reward profile for CEFs appears unfavorable, or when CEF price valuations are not attractive, the Fund may purchase shares of open-end registered investment companies (“Mutual Funds”) or Exchange-Traded Funds (“ETFs”) that invest primarily in municipal bonds. Seeking to hedge against interest rate risk and mitigate the Fund’s exposure to duration risk, Robinson may use short positions – primarily in U.S. Treasury Futures contracts of various maturities.
Why Municipal Closed-end Funds?
- Access to a diversified portfolio of municipal bonds which potentially minimizes the impact of issue-specific credit problems such as Detroit and Puerto Rico
- Municipal Closed-End Funds are frequently more liquid than individual municipal bonds. Most Municipal CEFs trade throughout the day on the NYSE
- Opportunity for investors to pursue an attractive level of income that is largely exempt from federal income tax (“tax advantaged income”)
- Closed-end funds have the ability to utilize financial leverage in seeking to enhance the level of their returns. With interest rates currently at historically low levels, CEFs have the potential to obtain leverage at favorable borrowing rates
IMPORTANT RISKS & DISCLOSURES
Effective October 25, 2019, changes were made to the Fund’s principal investment strategy. The Sub-advisor may, but is not required to, purchase shares of open-end registered investment companies (“Mutual Funds”) or Exchange-Traded Funds (“ETFs”) that invest primarily in municipal bonds.
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus and summary prospectus, a copy of which may be obtained on this website or by calling (800) 207-7108. Please read the prospectus or summary prospectus carefully before you invest.
An investment in the Fund is subject to risk, including the possible loss of principal amount invested and including, but not limited to, the following risks, which are more fully described in the prospectus:
Market Turbulence Resulting from COVID-19. the outbreak of COVID-19 has negatively affected the worldwide economy, including the U.S. The future impact of COVID-19 is currently unknown, and it may exacerbate other risks that apply to the Fund. Market Risk: the market price of a security may decline, sometimes rapidly or unpredictably, due to general market conditions that are not specifically related to a particular issuer, company, or asset class. Local, regional or global events such as the spread of infectious illness or other events could have a significant impact on a security or instrument. Municipal Bond risk: The underlying funds in which the Fund invests will invest primarily in municipal bonds. Litigation, legislation or other political events, local business or economic conditions or the bankruptcy of the issuer could have a significant effect on the ability of an issuer of municipal bonds to make payments of principal and/or interest. Changes related to taxation, legislation or the rights of municipal security holders can significantly affect municipal bonds and may cause them to decline in value. Closed-end fund (CEF), exchange-traded fund (ETF) and open-end fund (Mutual Fund) Risk: The Fund’s investments in CEFs, ETFs and Mutual Funds (“underlying funds”) are subject to various risks, including reliance on management’s ability to manage the underlying fund’s portfolio, risks associated with the underlying securities held by the underlying fund, fluctuation in the market value of the underlying fund’s shares, and the Fund bearing a pro rata share of the fees and expenses of each underlying fund in which the Fund invests. U.S. Treasury Futures Contracts Hedge Risk: To the extent the Fund holds short positions in U.S. Treasury futures contracts, should market conditions cause U.S. Treasury prices to rise, the Fund’s portfolio could experience a loss; and should U.S. Treasury prices rise at the same time municipal bond prices fall, these losses will be greater than if the hedging strategy not been in place. Management and Strategy. The evaluation and selection of the Fund’s investments depend on the judgment of the Fund’s Sub-Advisor about the quality, relative yield, value or market trends affecting a particular security, industry, sector or region, which may prove to be incorrect. Leveraging risk: The underlying Funds in which the Fund invests may be leveraged as a result of borrowing or other investment techniques. As a result, the Fund will be exposed indirectly to leverage through its investment in an underlying fund that utilizes leverage, which may expose the Fund to higher volatility and possible diminishment of long-term returns. Certain Fund transactions, including taking short positions in financial instruments, will give rise to a form of leverage. The use of leverage, such as entering into futures contracts, options, and short sales, may magnify the Fund’s gains or losses and make the Fund more volatile. Fixed income/interest rate risk: A rise in interest rates could negatively impact the value of the Fund’s shares. Generally, fixed income securities decrease in value if interest rates rise, and increase in value if interest rates fall, with longer-term securities being more sensitive than shorter-term securities. Tax Risk: There is no guarantee that the Fund’s income will be exempt from regular federal income taxes. Events occurring after the date of issuance of a municipal bond or after an underlying fund’s acquisition of a municipal bond may result in a determination that interest on that bond is subject to federal income tax. The Fund’s opportunistic trading strategies may also result in a portion of the Fund’s distributions to shareholders being characterized as capital gains. Portfolio Turnover Risk: The Fund’s turnover rate may be high. A high turnover rate may lead to higher transaction costs, a greater number of taxable transactions, and negatively affect the Fund’s performance. High Yield (“Junk”) Bond risk: The underlying funds in which the Fund invests may invest in high yield (“junk”) bonds which involve greater risks of default, downgrade, or price declines and are more volatile and tend to be less liquid than investment-grade securities. Liquidity Risk: There can be no guarantee that an active market in shares of CEFs and ETFs held by the Fund will exist. The Fund may not be able to sell some or all of the investments it holds due to a lack of demand in the marketplace or other factors such as market turmoil, or if the Fund is forced to sell an asset to meet redemption requests, it may only be able to sell those investments at a loss. Liquid investments may become illiquid or less liquid after purchase by the Fund, particularly during periods of market turmoil. Derivatives Risk: The Fund and the underlying funds may use futures contracts, options, swap agreements, and/or sell securities short. Futures contracts may cause the value of the Fund’s shares to be more volatile and expose the Fund to leverage and tracking risks; the Fund may not fully benefit from or may lose money on option or shorting strategies; swaps may be leveraged, are subject to counterparty risk and may be difficult to value or liquidate.
Diversification does not assure a profit or protect against a loss.
The Fund may not be suitable for all investors. We encourage you to consult with appropriate tax and financial professionals before considering an investment in the Fund.