| | Principal | | | Value | |
Bank Loans: 86.6% (a)(b) | | | | | ||
Advertising: 2.6% | | | | | ||
Alchemy Copyrights LLC, 4.000% (1 Month US LIBOR + 3.250%), 8/14/27 | | | $179,550 | | | $179,999 |
Clear Channel Outdoor Holdings, Inc., 3.714% (3 Month US LIBOR + 3.500%), 8/21/26 | | | 246,875 | | | 237,175 |
Terrier Media Buyer, Inc., 4.397% (1 Month US LIBOR + 4.250%), 12/17/26 | | | 198,000 | | | 197,939 |
Ziggo Financing Partnership, 2.659% (1 Month US LIBOR + 2.500%), 4/30/28 | | | 250,000 | | | 248,202 |
| | | | 863,315 | ||
Aerospace/Defense: 0.5% | | | | | ||
Ducommun, Inc., 4.145%, 11/21/25 | | | | | ||
(1 Month US LIBOR + 4.000%) | | | 124,977 | | | 122,165 |
(1 Month US LIBOR + 4.000%) | | | 31,377 | | | 30,671 |
| | | | 152,836 | ||
Air Transportation: 1.4% | | | | | ||
Allegiant Travel Co., 3.214% (3 Month US LIBOR + 3.000%), 2/5/24 | | | 345,111 | | | 335,082 |
United Airlines, Inc., 1.895% (1 Month US LIBOR + 1.750%), 4/1/24 | | | 146,574 | | | 143,276 |
| | | | 478,358 | ||
Auto Parts & Equipment: 0.4% | | | | | ||
Dealer Tire LLC, 4.397%, 2/5/2027 | | | | | ||
(1 Month US LIBOR + 4.250%) | | | 45,202 | | | 44,787 |
(1 Month US LIBOR + 4.250%) | | | 78,548 | | | 77,828 |
| | | | 122,615 | ||
Brokerage: 0.6% | | | | | ||
Victory Capital Holdings, Inc., 2.734% (3 Month US LIBOR + 2.500%), 7/1/26 | | | 193,684 | | | 192,797 |
| | | | |||
Building Materials: 3.9% | | | | | ||
Beacon Roofing Supply, Inc., 2.397% (1 Month US LIBOR + 2.250%), 1/2/25 | | | 245,089 | | | 243,060 |
CP Atlas Buyer, Inc., 5.250% (3 Month US LIBOR + 4.500%), 11/23/27 | | | 150,000 | | | 150,187 |
CP Atlas Buyer, Inc., 5.250% (3 Month US LIBOR + 4.500%), 11/23/27 | | | 50,000 | | | 50,062 |
Foundation Building Materials Holding Co. LLC, 3.147% (1 Month US LIBOR + 3.000%), 8/13/25 | | | 80,708 | | | 80,620 |
LBM Acquisition LLC, 4.500% (1 Month US LIBOR + 3.750%), 12/18/27 | | | 175,000 | | | 174,818 |
LBM Acquisition LLC, 4.500% (1 Month US LIBOR + 3.750%) 12/18/27 | | | 38,889 | | | 38,849 |
Quikrete Holdings, Inc., 2.647% (1 Month US LIBOR + 2.500%), 1/31/27 | | | 382,673 | | | 381,001 |
White Cap Buyer LLC, 4.500% (3 Month US LIBOR + 4.000%), 10/19/27 | | | 200,000 | | | 199,750 |
| | | | 1,318,347 | ||
Building Products: 0.6% | | | | | ||
Atkore International, Inc., 3.750% (3 Month US LIBOR + 2.750%), 12/22/23 | | | 205,722 | | | 206,150 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-23011
PENN CAPITAL FUNDS TRUST
(Exact name of registrant as specified in charter)
Navy Yard Corporate Center
1200 Intrepid Ave., Suite 400
Philadelphia, Pennsylvania 19112
(Address of principal executive offices) (Zip code)
Richard A. Hocker
Navy Yard Corporate Center
1200 Intrepid Ave., Suite 400
Philadelphia, Pennsylvania 19112
(Name and address of agent for service)
With copies to:
Gerald McBride
Navy Yard Corporate Center
1200 Intrepid Ave., Suite 400
Philadelphia, Pennsylvania 19112
Michael P. O’Hare, Esq.
Stradley Ronon Stevens & Young, LLP
2005 Market Street, Suite 2600
Philadelphia, Pennsylvania 19103
(215) 302-1500
Registrant's telephone number, including area code
Date of fiscal year end: June 30, 2021
Date of reporting period: December 31, 2020
Item 1. Reports to Stockholders.
(a) Furnished herewith.
(b) Not applicable.
SEMIANNUAL REPORT
December 31, 2020
PENN CAPITAL DEFENSIVE FLOATING RATE INCOME FUND
PENN CAPITAL DEFENSIVE SHORT DURATION HIGH INCOME FUND
PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND
PENN CAPITAL SPECIAL SITUATIONS SMALL CAP EQUITY FUND
PENN CAPITAL MANAGED ALPHA SMID CAP EQUITY FUND
FUND SUMMARY (UNAUDITED)
This chart assumes an initial gross investment of $10,000 made on November 30, 2015, inception of the Institutional Class shares. Returns shown in the chart and table include the reinvestment of all dividends, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. In the absence of fee waivers and reimbursements, when they are necessary to keep expenses at the expense cap, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Index returns do not reflect the effects of fees, transaction costs or expenses. It is not possible to invest directly in an index. No information is provided for Investor Class shares because shares of that class had not yet been issued as of December 31, 2020.
Average Annual Total Returns for the Period Ended December 31, 2020 | | | One Year | | | Three Years | | | Five Years | | | Since Inception(1) |
Penn Capital Defensive Floating Rate Income Fund Institutional Class Shares | | | 0.62% | | | 2.94% | | | 3.88% | | | 3.65% |
S&P/LSTA BB Loan Index | | | 0.75% | | | 3.13% | | | 4.02% | | | 3.86% |
(1) | Inception date is 11/30/15. |
(2) | The return shown for the S&P/LSTA BB Loan Index is from the inception date of the Institutional Class shares. |
1
PENN CAPITAL DEFENSIVE SHORT DURATION HIGH INCOME FUND
FUND SUMMARY (UNAUDITED)
This chart assumes an initial gross investment of $10,000 made on July 17, 2017, inception of the Institutional Class shares. Returns shown in the chart and table include the reinvestment of all dividends, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. In the absence of fee waivers and reimbursements, when they are necessary to keep expenses at the expense cap, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Index returns do not reflect the effects of fees, transaction costs or expenses. It is not possible to invest directly in an index.
Average Annual Total Returns for the Period Ended December 31, 2020 | | | One Year | | | Three Years | | | Since Inception(1) |
Penn Capital Defensive Short Duration High Income Fund | | | | | | | |||
Institutional Class Shares | | | 0.98% | | | 2.92% | | | 2.63% |
ICE BofAML 1-3 Year BB-Rated US Cash Pay High Yield Index | | | 5.44% | | | 5.11% | | | 4.74% |
ICE BofAML US High Yield Cash Pay BB-B Rated 1-3 Years Index | | | 2.52% | | | 4.47% | | | 4.30% |
(1) | Inception date is 7/17/17. |
(2) | The return shown for the ICE BofAML 1-3 Year BB-Rated US Cash Pay High Yield Index is from the inception date of the Institutional Class shares. |
(3) | The return shown for the ICE BofAML US High Yield Cash Pay BB-B Rated 1-3 Years Index is from the inception date of the Institutional Class shares. |
2
PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND
FUND SUMMARY (UNAUDITED)
This chart assumes an initial gross investment of $10,000 made on November 30, 2015, inception of the Institutional Class shares. Returns shown in the chart and table include the reinvestment of all dividends, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. In the absence of fee waivers and reimbursements, when they are necessary to keep expenses at the expense cap, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Index returns do not reflect the effects of fees, transaction costs or expenses. It is not possible to invest directly in an index. No information is provided for Investor Class shares because shares of that class had not yet been issued as of December 31, 2020.
Average Annual Total Returns for the Period Ended December 31, 2020 | | | One Year | | | Three Years | | | Five Years | | | Since Inception(1) |
Penn Capital Opportunistic High Income Fund | | | | | | | | | ||||
Institutional Class Shares | | | 3.82% | | | 4.59% | | | 7.10% | | | 6.35% |
ICE BofAML US High Yield Constrained Index | | | 6.07% | | | 5.85% | | | 8.42% | | | 7.71% |
50% ICE BofAML High Yield Constrained Index -50% S&P/LSTA BB Loan Index | | | 3.41% | | | 4.50% | | | 6.21% | | | 5.79% |
(1) | Inception date is 11/30/15. |
(2) | The return shown for the ICE BofAML US High Yield Constrained Index is from the inception date of the Institutional Class shares. |
(3) | The return for the 50% ICE BofAML High Yield Constrained Index -50% S&P/LSTA BB Loan Index is from the inception date of the Institutional Class shares. |
3
PENN CAPITAL SPECIAL SITUATIONS SMALL CAP EQUITY FUND
FUND SUMMARY (UNAUDITED)
This chart assumes an initial gross investment of $10,000 made on December 17, 2015, inception of the Institutional Class shares. Returns shown in the chart and table include the reinvestment of all dividends, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. In the absence of fee waivers and reimbursements, when they are necessary to keep expenses at the expense cap, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Index returns do not reflect the effects of fees, transaction costs or expenses. It is not possible to invest directly in an index. No information is provided for Investor Class shares because shares of that class had not yet been issued as of December 31, 2020.
Average Annual Total Returns for the Period Ended December 31, 2020 | | | One Year | | | Three Years | | | Five Years | | | Since Inception(1) |
Penn Capital Special Situations Small Cap Equity Fund | | | | | | | | | ||||
Institutional Class Shares | | | 27.62% | | | 11.33% | | | 14.03% | | | 14.07% |
Russell 2000® Index | | | 19.96% | | | 10.25% | | | 13.26% | | | 13.18% |
(1) | Inception date is 12/17/15. |
(2) | The return shown for the Russell 2000® Index is from the inception date of the Institutional Class shares. |
4
PENN CAPITAL MANAGED ALPHA SMID CAP EQUITY FUND
FUND SUMMARY (UNAUDITED)
This chart assumes an initial gross investment of $10,000 made on November 30, 2015, inception of the Institutional Class shares. Returns shown in the chart and table include the reinvestment of all dividends, but do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. In the absence of fee waivers and reimbursements, when they are necessary to keep expenses at the expense cap, total return would be reduced. Past performance is not predictive of future performance. Investment return and principal value will fluctuate so that your shares, when redeemed, may be worth more or less than the original cost. Index returns do not reflect the effects of fees, transaction costs or expenses. It is not possible to invest directly in an index. No information is provided for Investor Class shares because shares of that class had not yet been issued as of December 31, 2020.
Average Annual Total Returns for the Period Ended December 31, 2020 | | | One Year | | | Three Years | | | Five Years | | | Since Inception(1) |
Penn Capital Managed Alpha SMID Cap Equity Fund | | | | | | | | | ||||
Institutional Class Shares | | | 9.17% | | | 8.74% | | | 12.53% | | | 11.14% |
Russell 2500TM Index | | | 19.99% | | | 11.33% | | | 13.64% | | | 12.47% |
(1) | Inception date is 11/30/15. |
(2) | The return shown for the Russell 2500™ Index is from the inception date of the Institutional Class shares. |
5
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
FOR THE PERIOD FROM JULY 1, 2020 TO DECEMBER 31, 2020
Cost in Dollars of a $1,000 Investment
The example below is intended to describe the fees and expenses borne by shareholders during the six-month period from July 1, 2020 to December 31, 2020, and the impact of those costs on your investment.
Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including redemption fees on sales (as applicable) and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses (as applicable). This example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the six-month period and held for the entire period from July 1, 2020 to December 31, 2020.
This example illustrates your Fund’s ongoing costs in two ways:
Actual Expenses
The second and third data columns in the table below provide information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid during the period ended December 31, 2020. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled Expenses Paid During Period to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The fourth and fifth data columns in the table below provide information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not a Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the six-month period shown. You may use this information to compare the ongoing costs of investing in a Fund with the ongoing costs of investing in other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the fourth and fifth data columns of the table are useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Penn Capital Defensive Floating Rate Income Fund | | | Actual | | | Hypothetical | |||||||||
Share Class(1) | | | Beginning Account Value 7/1/20 | | | Ending Account Value (Based on Actual Returns and Expenses) 12/31/20 | | | Expenses Paid During Period(2) | | | Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 12/31/20 | | | Expenses Paid During Period(2) |
Institutional Class Shares | | | $1,000.00 | | | $1,059.50 | | | $3.32 | | | $1,021.98 | | | $3.26 |
(1) | No information is provided for Investor Class shares because shares of that class had not yet been issued as of December 31, 2020. |
(2) | Expenses are equal to the Fund’s annualized expense ratio, net of waivers and excluding acquired fund fees and expenses, if any (0.64% for the Institutional Class), multiplied by the average account value over the period, divided by 365 and multiplied by 184 for the Institutional Class (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period. |
6
Penn Capital Defensive Short Duration High Income Fund | | | Actual | | | Hypothetical | |||||||||
Share Class | | | Beginning Account Value 7/1/20 | | | Ending Account Value (Based on Actual Returns and Expenses) 12/31/20 | | | Expenses Paid During Period(1) | | | Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 12/31/20 | | | Expenses Paid During Period(1) |
Institutional Class Shares | | | $1,000.00 | | | $1,059.30 | | | $2.80 | | | $1,022.48 | | | $2.75 |
(1) | Expenses are equal to the Fund’s annualized expense ratio, net of waivers and excluding acquired fund fees and expenses, if any (0.54% for the Institutional Class), multiplied by the average account value over the period, divided by 365 and multiplied by 184 for the Institutional Class (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period. |
Penn Capital Opportunistic High Income Fund | | | Actual | | | Hypothetical | |||||||||
Share Class(1) | | | Beginning Account Value 7/1/20 | | | Ending Account Value (Based on Actual Returns and Expenses) 12/31/20 | | | Expenses Paid During Period(2) | | | Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 12/31/20 | | | Expenses Paid During Period(2) |
Institutional Class Shares | | | $1,000.00 | | | $1,136.40 | | | $3.88 | | | $1,021.58 | | | $3.67 |
(1) | No information is provided for Investor Class shares because shares of that class had not yet been issued as of December 31, 2020. |
(2) | Expenses are equal to the Fund’s annualized expense ratio, net of waivers and excluding acquired fund fees and expenses, if any (0.72% for the Institutional Class), multiplied by the average account value over the period, divided by 365 and multiplied by 184 for the Institutional Class (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period. |
Penn Capital Special Situations Small Cap Equity Fund | | | Actual | | | Hypothetical | |||||||||
Share Class(1) | | | Beginning Account Value 7/1/20 | | | Ending Account Value (Based on Actual Returns and Expenses) 12/31/20 | | | Expenses Paid During Period(2) | | | Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 12/31/20 | | | Expenses Paid During Period(2) |
Institutional Class Shares | | | $1,000.00 | | | $1,594.90 | | | $7.13 | | | $1,019.71 | | | $5.55 |
(1) | No information is provided for Investor Class shares because shares of that class had not yet been issued as of December 31, 2020. |
(2) | Expenses are equal to the Fund’s annualized expense ratio, net of waivers and excluding acquired fund fees and expenses, if any (1.09% for the Institutional Class), multiplied by the average account value over the period, divided by 365 and multiplied by 184 for the Institutional Class (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period. |
Penn Capital Managed Alpha SMID Cap Equity Fund | | | Actual | | | Hypothetical | |||||||||
Share Class(1) | | | Beginning Account Value 7/1/20 | | | Ending Account Value (Based on Actual Returns and Expenses) 12/31/20 | | | Expenses Paid During Period(2) | | | Ending Account Value (Based on Hypothetical 5% Annualized Return and Actual Expenses) 12/31/20 | | | Expenses Paid During Period(2) |
Institutional Class Shares | | | $1,000.00 | | | $1,264.70 | | | $6.05 | | | $1,019.86 | | | $5.40 |
(1) | No information is provided for Investor Class shares because shares of that class had not yet been issued as of December 31, 2020. |
(2) | Expenses are equal to the Fund’s annualized expense ratio, net of waivers and excluding acquired fund fees and expenses, if any (1.06% for the Institutional Class), multiplied by the average account value over the period, divided by 365 and multiplied by 184 for the Institutional Class (to reflect the six-month period). The table above represents the actual expenses incurred during the six-month period. |
7
PENN CAPITAL FUNDS TRUST |
PENN CAPITAL DEFENSIVE FLOATING RATE INCOME FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Principal | | | Value | |
Cable & Satellite TV: 2.7% | | | | | ||
Altice France SA, 4.237% (3 Month US LIBOR + 4.000%), 8/14/26 | | | $239,296 | | | $237,901 |
Cogeco Communications USA II LP, 2.147% (1 Month US LIBOR + 2.000%), 1/4/25 | | | 244,921 | | | 241,553 |
Radiate Holdco LLC, 4.250% (1 Month US LIBOR + 3.500%), 9/25/26 | | | 200,000 | | | 200,094 |
WideOpenWest Finance LLC, 4.250% (1 Month US LIBOR + 3.250%), 8/19/23 | | | 241,366 | | | 240,092 |
| | | | 919,640 | ||
Chemicals: 3.3% | | | | | ||
Axalta Coating Systems US Holdings, Inc., 2.004% (3 Month US LIBOR + 1.750%), 6/1/24 | | | 177,905 | | | 176,348 |
Gemini HDPE LLC, 3.500% (1 Month US LIBOR + 3.000%), 12/31/27 | | | 200,000 | | | 198,500 |
Hexion, Inc., 3.730% (3 Month US LIBOR + 3.500%), 7/1/26 | | | 246,250 | | | 243,788 |
Lummus Technology Holdings V LLC, 4.147% (1 Month US LIBOR + 4.000%), 6/30/27 | | | 199,500 | | | 199,416 |
Univar USA, Inc., 2.397% (1 Month US LIBOR + 2.250%), 7/1/24 | | | 144,655 | | | 143,906 |
Univar USA, Inc., 2.147% (1 Month US LIBOR + 2.000%), 11/22/26 | | | 148,500 | | | 146,829 |
| | | | 1,108,787 | ||
Diversified Capital Goods: 0.7% | | | | | ||
EWT Holdings III Corp., 2.647% (1 Month US LIBOR + 2.750%), 12/20/24 | | | 223,821 | | | 223,076 |
| | | | |||
Electric - Generation: 0.6% | | | | | ||
Vistra Operations Co. LLC, 1.898%, 12/15/25 | | | | | ||
(1 Month US LIBOR + 1.750%) | | | 38,519 | | | 38,346 |
(1 Month US LIBOR + 1.750%) | | | 159,290 | | | 158,577 |
| | | | 196,923 | ||
Electronics: 0.6% | | | | | ||
Cohu, Inc., 3.147% (1 Month US LIBOR + 3.000%), 10/1/25 | | | 219,583 | | | 216,019 |
| | | | |||
Environmental: 0.6% | | | | | ||
GFL Environmental, Inc., 3.500% (3 Month US LIBOR + 3.000%), 5/31/25 | | | 200,000 | | | 200,166 |
| | | | |||
Food - Wholesale: 2.7% | | | | | ||
American Seafoods Group LLC, 3.750%, 8/21/23 | | | | | ||
(3 Month US LIBOR + 2.750%) | | | 167,540 | | | 166,283 |
(1 Month US LIBOR + 2.750%) | | | 1,120 | | | 1,112 |
Bellring Brands LLC, 6.000% (1 Month US LIBOR + 5.000%), 10/21/24 | | | 249,936 | | | 250,685 |
Chobani LLC, 4.500% (1 Month US LIBOR + 3.500%), 10/23/27 | | | 199,500 | | | 198,802 |
JBS USA LUX SA, 2.147% (1 Month US LIBOR + 2.000%), 5/1/26 | | | 295,860 | | | 293,271 |
| | | | 910,153 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
8
PENN CAPITAL FUNDS TRUST |
PENN CAPITAL DEFENSIVE FLOATING RATE INCOME FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Principal | | | Value | |
Forestry/Paper: 0.6% | | | | | ||
Sabert Corp., 5.500% (1 Month US LIBOR + 4.500%), 12/10/26 | | | $192,925 | | | $192,121 |
| | | | |||
Gaming: 2.0% | | | | | ||
Caesars Resort Collection LLC, 4.647% (1 Month US LIBOR + 4.500%), 7/20/25 | | | 199,500 | | | 199,562 |
CCM Merger, Inc., 4.500% (1 Month US LIBOR + 3.750%), 11/4/25 | | | 200,000 | | | 199,416 |
Scientific Games International, Inc., 2.897%, 8/14/24 | | | | | ||
(1 Month US LIBOR + 2.750%) | | | 215,136 | | | 209,811 |
(1 Month US LIBOR + 2.750%) | | | 52,798 | | | 51,491 |
| | | | 660,280 | ||
Gas Distribution: 0.8% | | | | | ||
Stonepeak Lonestar Holdings LLC, 4.718% (1 Month US LIBOR + 4.500%), 10/19/26 | | | 262,782 | | | 262,913 |
| �� | | | |||
Health Care Providers & Services: 0.9% | | | | | ||
Emerald TopCo, Inc., 3.714% (1 Month US LIBOR + 3.500%), 7/25/26 | | | 296,250 | | | 292,177 |
| | | | |||
Health Facilities: 1.8% | | | | | ||
ADMI Corp., 4.750% (1 Month US LIBOR + 4.000%), 12/23/27 | | | 200,000 | | | 199,950 |
Owens & Minor Distribution, Inc., 4.655% (1 Month US LIBOR + 4.500%), 4/30/25 | | | 200,000 | | | 199,150 |
Select Medical Corp., 2.530% (6 Month US LIBOR + 2.250%), 3/6/25 | | | 212,163 | | | 210,041 |
| | | | 609,141 | ||
Health Services: 3.0% | | | | | ||
American Renal Holdings, Inc., 5.147% (1 Month US LIBOR + 5.000%), 6/22/24 | | | 168,071 | | | 167,532 |
DaVita, Inc., 1.897% (1 Month US LIBOR + 1.750%), 8/12/26 | | | 198,000 | | | 196,109 |
FC Compassus LLC, 6.000% (6 Month US LIBOR + 5.000%), 12/31/26 | | | 198,000 | | | 196,515 |
Gentiva Health Services, Inc., 3.437% (1 Month US LIBOR + 3.250%), 7/2/25 | | | 221,091 | | | 219,572 |
Option Care Health, Inc., 4.397% (1 Month US LIBOR + 4.250%), 8/6/26 | | | 222,253 | | | 221,790 |
| | | | 1,001,518 | ||
Hotels: 0.6% | | | | | ||
Marriott Ownership Resorts, Inc., 1.897% (1 Month US LIBOR + 1.750%), 8/31/25 | | | 197,258 | | | 192,819 |
| | | | |||
Industrial Conglomerates: 0.7% | | | | | ||
Deliver Buyer, Inc., 5.254% (3 Month US LIBOR + 5.000%), 5/1/24 | | | 244,933 | | | 242,075 |
MTS Systems Corp., 4.000% (1 Month US LIBOR + 3.250%), 7/5/23 | | | 630 | | | 628 |
| | | | 242,703 |
| | Principal | | | Value | |
Insurance Brokerage: 0.6% | | | | | ||
Alliant Holdings Intermediate LLC, 4.250% (1 Month US LIBOR + 3.750%), 11/6/27 | | | $199,346 | | | $199,223 |
| | | | |||
Investments & Miscellaneous Financial Services: 5.3% | | | | | ||
Cardtronics USA, Inc., 5.000% (1 Month US LIBOR + 4.000%), 6/29/27 | | | 199,000 | | | 198,668 |
LPL Holdings, Inc., 1.898% (1 Month US LIBOR + 1.750%), 11/12/26 | | | 176,109 | | | 175,448 |
Nexus Buyer LLC, 3.902% (1 Month US LIBOR + 3.750%), 11/8//26 | | | 247,500 | | | 245,438 |
Russell Investments US Institutional Holdco, Inc., 3.750% (3 Month US LIBOR + 3.000%), 5/30/25 | | | 492,202 | | | 490,149 |
The Edelman Financial Center LLC, 3.147% (1 Month US LIBOR + 3.000%), 7/19/25 | | | 195,248 | | | 192,015 |
TransUnion LLC, 1.897% (1 Month US LIBOR + 1.750%), 11/13/26 | | | 250,642 | | | 249,442 |
VeriFone Systems, Inc., 4.224% (3 Month US LIBOR + 4.000%), 8/20/25 | | | 244,491 | | | 235,797 |
| | | | 1,786,957 | ||
IT Services: 1.4% | | | | | ||
NAB Holdings LLC, 4.000% (3 Month US LIBOR + 3.000%), 6/30/24 | | | 241,909 | | | 239,974 |
Paysafe Holdings US Corp., 4.500% (1 Month US LIBOR + 3.500%), 1/1/25 | | | 242,367 | | | 241,546 |
| | | | 481,520 | ||
Machinery: 0.6% | | | | | ||
Gates Global LLC, 3.750% (1 Month US LIBOR + 2.750%), 3/31/24 | | | 200,817 | | | 200,092 |
| | | | |||
Media: 0.4% | | | | | ||
Nexstar Broadcasting, Inc., 1.905% (3 Month US LIBOR + 1.750%), 10/26/23 | | | 149,837 | | | 148,151 |
| | | | |||
Media Content: 4.5% | | | | | ||
Arches Buyer, Inc., 4.500% (1 Month US LIBOR + 4.000%), 12/6/27 | | | 200,000 | | | 200,100 |
CSC Holdings LLC, 2.409% (1 Month US LIBOR + 2.250%), 7/17/25 | | | 241,855 | | | 237,881 |
Cumulus Media New Holdings, Inc., 4.750% (6 Month US LIBOR + 3.750%), 3/31/26 | | | 199,442 | | | 195,619 |
ION Media Networks, Inc., 5.250% (Prime Rate + 3.250%), 12/18/24 | | | 246,875 | | | 246,463 |
The E.W. Scripps Co., 2.647% (1 Month US LIBOR + 2.500%), 5/1/26 | | | 245,887 | | | 242,710 |
The E.W. Scripps Co., 3.750% (1 Month US LIBOR + 3.000%), 12/15/27 | | | 200,000 | | | 200,000 |
Townsquare Media, Inc., 4.000% (3 Month US LIBOR + 3.000%), 4/1/22 | | | 200,000 | | | 198,750 |
| | | | 1,521,523 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
9
PENN CAPITAL FUNDS TRUST |
PENN CAPITAL DEFENSIVE FLOATING RATE INCOME FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Principal | | | Value | |
Metals/Mining Excluding Steel: 0.6% | | | | | ||
American Rock Salt Co. LLC, 4.500% (1 Month US LIBOR + 3.500%), 3/21/25 | | | $187,542 | | | $187,261 |
| | | | |||
Multi-Line Insurance: 1.0% | | | | | ||
HUB International Ltd., 3.215% (3 Month US LIBOR + 2.750%), 4/25/25 | | | 342,735 | | | 336,202 |
| | | | |||
Packaging: 2.0% | | | | | ||
Graham Packaging Company, Inc., 4.500%, (1 Month US LIBOR + 3.750%), 8/4/27 | | | 195,932 | | | 196,398 |
Reynolds Consumer Products LLC, 1.897% (1 Month US LIBOR + 1.750%), 2/4/27 | | | 182,338 | | | 180,971 |
Reynolds Group Holdings, Inc., 2.897%, 2/5/23 | | | | | ||
(1 Month US LIBOR + 2.750%) | | | 58,490 | | | 58,198 |
(1 Month US LIBOR + 2.750%) | | | 21,588 | | | 21,480 |
(1 Month US LIBOR + 2.750%) | | | 13,179 | | | 13,113 |
Reynolds Group Holdings, Inc., 3.397%, 2/16/26 | | | | | ||
(1 Month US LIBOR + 3.250%) | | | 46,298 | | | 45,893 |
(1 Month US LIBOR + 3.250%) | | | 28,265 | | | 28,018 |
(1 Month US LIBOR + 3.250%) | | | 125,437 | | | 124,339 |
| | | | 668,410 | ||
Personal & Household Products: 2.5% | | | | | ||
Canada Goose, Inc., 5.000% (3 Month US LIBOR + 4.250%), 10/7/27 | | | 200,000 | | | 199,750 |
Froneri US, Inc., 2.397%, 1/31/27 | | | | | ||
(1 Month US LIBOR + 2.250%) | | | 136,766 | | | 135,262 |
(1 Month US LIBOR + 2.250%) | | | 62,234 | | | 61,549 |
HLF Financing Sarl LLC, 2.897% (1 Month US LIBOR + 2.750%), 8/16/25 | | | 244,375 | | | 243,713 |
Weber-Stephen Products LLC, 4.000% (1 Month US LIBOR + 3.250%), 10/30/27 | | | 200,000 | | | 200,100 |
| | | | 840,374 | ||
Pharmaceuticals: 3.7% | | | | | ||
Agiliti Health, Inc., 2.937% (1 Month US LIBOR + 2.750%), 1/4/26 | | | 247,481 | | | 244,387 |
Aldevron LLC, 5.250% (1 Month US LIBOR + 4.250%), 10/11/26 | | | 297,750 | | | 298,369 |
Bausch Health Americas, Inc., 3.148% (1 Month US LIBOR + 3.000%), 6/1/25 | | | 261,461 | | | 260,319 |
Cambrex Corp., 5.500% (1 Month US LIBOR + 4.500%), 12/4/26 | | | 248,125 | | | 249,986 |
Greatbatch Ltd., 3.500% (1 Month US LIBOR + 2.500%), 10/27/22 | | | 208,745 | | | 208,311 |
| | | | 1,261,372 | ||
Printing & Publishing: 1.4% | | | | | ||
Meredith Corp., 2.647% (1 Month US LIBOR + 2.500%), 1/31/25 | | | 228,738 | | | 226,036 |
Nielsen Finance LLC, 2.146% (1 Month US LIBOR + 2.000%), 10/4/23 | | | 247,436 | | | 246,439 |
| | | | 472,475 |
| | Principal | | | Value | |
Recreation & Travel: 1.3% | | | | | ||
Life Time, Inc., 3.750% (6 Month US LIBOR + 2.750%), 6/10/22 | | | $236,378 | | | $229,405 |
SkyMiles IP Ltd., 4.750% (3 Month US LIBOR + 3.750%), 10/20/27 | | | 200,000 | | | 207,068 |
| | | | 436,473 | ||
Restaurants: 2.3% | | | | | ||
IRB Holding Corp., 3.750% (3 Month US LIBOR + 2.750%), 2/5/25 | | | 245,089 | | | 242,722 |
IRB Holding Corp., 4.250% (3 Month US LIBOR + 3.250%), 12/15/27 | | | 200,000 | | | 200,062 |
Whatabrands LLC, 2.904% (1 Month US LIBOR + 2.750%), 8/3/26 | | | 238,106 | | | 235,687 |
Zaxby's Operating Co., 4.500% (1 Month US LIBOR + 3.750%), 12/9/27 | | | 100,000 | | | 100,000 |
| | | | 778,471 | ||
Software: 1.4% | | | | | ||
Omnitracs LLC, 2.898% (3 Month US LIBOR + 2.750%), 3/23/25 | | | 340,404 | | | 332,674 |
SCS Holdings I, Inc., 3.647% (1 Month US LIBOR + 3.500%), 7/1/26 | | | 147,758 | | | 146,887 |
| | | | 479,561 | ||
Software/Services: 8.8% | | | | | ||
Avaya, Inc., 4.409% (1 Month US LIBOR + 4.250%), 12/15/24 | | | 324,878 | | | 325,446 |
Blue Yonder Group, Inc., 4.000% (1 Month US LIBOR + 3.000%), 1/30/26 | | | 248,750 | | | 248,128 |
Castle US Holding Corp., 4.004% (3 Month US LIBOR + 3.750%), 1/31/27 | | | 198,750 | | | 194,588 |
Cornerstone OnDemand, Inc., 4.394% (1 Month US LIBOR + 4.250%), 4/22/27 | | | 170,592 | | | 171,171 |
Fiserv Investment Solutions, Inc., 4.970% (3 Month US LIBOR + 4.750%), 2/18/27 | | | 199,000 | | | 200,327 |
Go Daddy Operating Co. LLC, 1.897%, 2/15/24 | | | | | ||
(1 Month US LIBOR + 1.750%) | | | 51,758 | | | 51,693 |
(1 Month US LIBOR + 1.750%) | | | 164,646 | | | 164,441 |
LogMeIn, Inc., 4.903% (1 Month US LIBOR + 4.750%), 8/31/27 | | | 150,000 | | | 149,345 |
Match Group, Inc., 1.964% (3 Month US LIBOR + 1.750%), 2/13/27 | | | 200,000 | | | 197,626 |
PAE Holding Corp., 5.250% (3 Month US LIBOR + 4.500%), 10/19/27 | | | 196,170 | | | 196,415 |
Rackspace Hosting, Inc., 4.000% (3 Month US LIBOR + 3.000%), 11/3/23 | | | 463,123 | | | 462,081 |
SS&C Technologies Holdings Europe Sarl, 1.897% (1 Month US LIBOR + 1.750%), 4/16/25 | | | 91,386 | | | 90,106 |
SS&C Technologies, Inc., 1.897% (1 Month US LIBOR + 1.750%), 4/16/25 | | | 104,765 | | | 103,298 |
The Ultimate Software Group, Inc., 4.750% (3 Month US LIBOR + 4.000%), 5/3/26 | | | 199,500 | | | 200,384 |
Web.com Group, Inc., 3.898% (1 Month US LIBOR + 3.750%), 10/11/25 | | | 211,301 | | | 208,043 |
| | | | 2,963,092 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
10
PENN CAPITAL FUNDS TRUST |
PENN CAPITAL DEFENSIVE FLOATING RATE INCOME FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Principal | | | Value | |
Specialty Retail: 5.5% | | | | | ||
BDF Acquisition Corp., 6.250% (1 Month US LIBOR + 5.250%), 8/8/23 | | | $292,707 | | | $283,682 |
BJ's Wholesale Club, Inc., 2.139% (1 Month US LIBOR + 2.000%), 2/3/24 | | | 121,945 | | | 121,755 |
Calceus Acquisition, Inc., 5.733% (3 Month US LIBOR + 5.500%), 2/12/25 | | | 391,045 | | | 371,493 |
CNT Holdings I Corp., 4.500% (6 Month US LIBOR + 3.750%), 11/8/27 | | | 200,000 | | | 199,656 |
PetSmart, Inc., 4.500% (6 Month US LIBOR + 3.500%), 3/11/22 | | | 243,352 | | | 242,665 |
Shutterfly LLC, 7.000% (3 Month US LIBOR + 6.000%), 10/1/26 | | | 292,620 | | | 290,531 |
Staples, Inc., 4.714% (3 Month US LIBOR + 4.500%), 9/12/24 | | | 211,847 | | | 206,763 |
Waystar Technologies, Inc., 4.750% (1 Month US LIBOR + 4.000%), 10/23/26 | | | 149,625 | | | 149,251 |
| | | | 1,865,796 | ||
Support - Services: 3.7% | | | | | ||
Buzz Merger Sub Ltd., 2.897% (1 Month US LIBOR + 2.750%), 1/29/27 | | | 248,125 | | | 246,574 |
CTOS LLC, 4.398% (1 Month US LIBOR + 4.250%), 4/18/25 | | | 217,304 | | | 217,441 |
PetVet Care Centers LLC, 2.897% (1 Month US LIBOR + 2.750%), 2/14/25 | | | 317,832 | | | 310,284 |
Prime Security Services Borrower LLC, 4.250%, 9/23/26 | | | | | ||
(1 Month US LIBOR + 3.250%) | | | 79,109 | | | 79,306 |
(6 Month US LIBOR + 3.250%) | | | 50,783 | | | 50,910 |
(9 Month US LIBOR + 3.250%) | | | 50,783 | | | 50,910 |
(12 Month US LIBOR + 3.250%) | | | 101,566 | | | 101,820 |
TruGreen LP, 4.147% (1 Month US LIBOR + 4.000%), 11/2/27 | | | 200,000 | | | 200,750 |
| | | | 1,257,995 | ||
Tech Hardware & Equipment: 2.9% | | | | | ||
Asurion LLC, 3.398% (1 Month US LIBOR + 3.250%), 12/16/26 | | | 200,000 | | | 197,740 |
CommScope, Inc., 3.397% (1 Month US LIBOR + 3.250%), 4/4/26 | | | 196,754 | | | 195,032 |
Dell International LLC, 1.900% (1 Month US LIBOR + 1.750%), 3/13/24 | | | 213,312 | | | 212,672 |
Plantronics, Inc., 2.645% (1 Month US LIBOR + 2.500%), 7/2/25 | | | 200,000 | | | 195,312 |
Xperi Holding Corp., 4.147% (1 Month US LIBOR + 4.000%), 6/1/25 | | | 166,429 | | | 166,602 |
| | | | 967,358 | ||
Telecom - Wireline Integrated & Services: 3.3% | | | | | ||
CenturyLink, Inc., 2.397% (1 Month US LIBOR + 2.250%), 3/15/27 | | | 247,500 | | | 244,654 |
Cincinnati Bell, Inc., 4.250% (1 Month US LIBOR + 3.250%), 10/2/24 | | | 442,100 | | | 441,892 |
Consolidated Communications, Inc., 5.750% (1 Month US LIBOR + 4.750%), 10/2/27 | | | 199,500 | | | 200,134 |
| | Principal | | | Value | |
Telesat Canada LLC, 2.900% (1 Month US LIBOR + 2.750%), 12/6/26 | | | $244,089 | | | $241,421 |
| | | | 1,128,101 | ||
Theaters & Entertainment: 1.8% | | | | | ||
Alterra Mountain Co., 2.897% (1 Month US LIBOR + 2.750%), 7/31/24 | | | 242,500 | | | 238,761 |
Playtika Holding Corp., 7.000% (6 Month US LIBOR + 6.000%), 12/10/24 | | | 357,453 | | | 359,200 |
| | | | 597,961 | ||
Total Bank Loans (cost $29,028,024) | | | | | 29,141,222 | |
| | | | |||
| | | | |||
Corporate Bonds: 8.2% | | | | | ||
Aerospace/Defense: 0.3% | | | | | ||
Spirit AeroSystems, Inc., 7.500%, 4/15/25 (c) | | | 100,000 | | | 107,250 |
| | | | |||
Air Transportation: 0.3% | | | | | ||
Delta Air Lines, Inc., 7.000%, 5/1/25 (c) | | | 90,000 | | | 103,891 |
| | | | |||
Auto Parts & Equipment: 0.6% | | | | | ||
Adient Global Holdings Ltd., 4.875%, 8/15/26 (c) | | | 200,000 | | | 205,500 |
| | | | |||
Automakers: 1.0% | | | | | ||
Ford Motor Co., 8.500%, 4/21/23 | | | 120,000 | | | 135,310 |
Ford Motor Credit Co. LLC, 3.096%, 5/4/23 | | | 200,000 | | | 202,062 |
| | | | 337,372 | ||
Chemicals: 1.0% | | | | | ||
Blue Cube Spinco LLC, 9.750%, 10/15/23 | | | 160,000 | | | 164,400 |
Tronox, Inc., 6.500%, 5/1/25 (c) | | | 180,000 | | | 192,600 |
| | | | 357,000 | ||
Department Stores: 0.3% | | | | | ||
Macy's Retail Holdings, Inc., 2.875%, 2/15/23 | | | 95,000 | | | 90,962 |
| | | | |||
Diversified Capital Goods: 0.6% | | | | | ||
BCD Acquisition, Inc., 9.625%, 9/15/23 (c) | | | 110,000 | | | 112,612 |
Matthews International Corp., 5.250%, 12/1/25 (c) | | | 85,000 | | | 85,850 |
| | | | 198,462 | ||
Electric - Generation: 1.4% | | | | | ||
Calpine Corp., 4.500%, 2/15/28 (c) | | | 225,000 | | | 234,000 |
Talen Energy Supply LLC, 7.250%, 5/15/27 (c) | | | 220,000 | | | 234,300 |
| | | | 468,300 | ||
Food - Wholesale: 1.0% | | | | | ||
KeHE Distributors LLC, 8.625%, 10/15/26 (c) | | | 135,000 | | | 151,537 |
Simmons Foods, Inc., 7.750%, 1/15/24 (c) | | | 190,000 | | | 197,838 |
| | | | 349,375 | ||
Food & Drug Retailers: 0.3% | | | | | ||
Ingles Markets, Inc., 5.750%, 6/15/23 | | | 99,000 | | | 99,990 |
| | | | |||
Investments & Miscellaneous Financial Services: 0.3% | | | | | ||
Icahn Enterprises LP, 6.250%, 2/1/22 | | | 100,000 | | | 100,250 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
11
PENN CAPITAL FUNDS TRUST |
PENN CAPITAL DEFENSIVE FLOATING RATE INCOME FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Principal | | | Value | |
Specialty Retail: 0.3% | | | | | ||
QVC, Inc., 4.375%, 3/15/23 | | | $95,000 | | | $99,709 |
| | | | |||
Support - Services: 0.5% | | | | | ||
CoreCivic, Inc., 5.000%, 10/15/22 | | | 160,000 | | | 160,000 |
| | | | |||
Telecom - Satellite: 0.3% | | | | | ||
Hughes Satellite Systems Corp., 5.250%, 8/1/26 | | | 85,000 | | | 93,819 |
Total Corporate Bonds (cost $2,614,335) | | | | | 2,771,880 | |
| | | | |||
| | | | |||
Total Investments - 94.8% (cost $31,642,359) | | | | | 31,913,102 | |
Other Assets and Liabilities 5.2% | | | | | 1,753,034 | |
Net Assets: 100.0% | | | | | $33,666,136 |
Percentages are stated as a percent of net assets.
(a) | Bank Loans typically have rates of interest which are redetermined either daily, monthly, quarterly or semi-annually by reference to a base lending rate, plus a premium. These base lending rates are primarily the London Interbank Offered Rate (“LIBOR”) and secondarily, the prime rate offered by one or more major United States banks (the “Prime Rate”) and the certificate of deposit (“CD”) rate or other base lending rates used by commercial lenders. |
(b) | Senior floating-rate loans (Senior Loans) often require prepayments from excess cash flows or permit the borrowers to repay at their election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. However, Senior Loans will typically have an expected average life of approximately two to four years. |
(c) | Securities purchased pursuant to Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other “qualified institutional buyers.” As of December 31, 2020, the value of these investments was $1,625,378, or 4.8% of total net assets. |
Country Exposure (as a percentage of total investments) | |||
United States | | | 99.4% |
Jersey | | | 0.6% |
| | ||
Asset Type (as a percentage of total investments) (Unaudited) | |||
| |
The Accompanying Footnotes are an Integral Part of these Financial Statements
12
PENN CAPITAL FUNDS TRUST PENN CAPITAL DEFENSIVE SHORT DURATION HIGH INCOME FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Principal | | | Value | |
Convertible Bonds: 1.0% | | | | | ||
Cable & Satellite TV: 0.5% | | | | | ||
DISH Network Corp., 2.375%, 3/15/24 | | | $235,000 | | | $ 219,004 |
| | | | |||
Pharmaceuticals: 0.5% | | | | | ||
Teva Pharmaceutical Finance Co. LLC, 0.250%, 2/1/26 | | | 255,000 | | | 253,725 |
Total Convertible Bonds (cost $477,268) | | | | | 472,729 | |
| | | | |||
Corporate Bonds: 83.9% | | | | | ||
Advertising: 0.5% | | | | | ||
TripAdvisor, Inc., 7.000%, 7/15/25 (a) | | | 210,000 | | | 226,800 |
| | | | |||
Air Transportation: 1.3% | | | | | ||
Delta Air Lines, Inc., 3.625%, 3/15/22 | | | 177,000 | | | 182,095 |
Delta Air Lines, Inc., 7.000%, 5/1/25 (a) | | | 203,000 | | | 234,331 |
Spirit Loyalty Cayman Ltd., 8.000%, 9/20/25 (a) | | | 155,000 | | | 173,600 |
| | | | 590,026 | ||
Auto Parts & Equipment: 0.4% | | | | | ||
The Goodyear Tire & Rubber Co., 5.125%, 11/15/23 | | | 180,000 | | | 180,225 |
| | | | |||
Automakers: 5.1% | | | | | ||
Ford Motor Co., 8.500%, 4/21/23 | | | 245,000 | | | 276,257 |
Ford Motor Credit Co. LLC, 3.087%, 1/9/23 | | | 1,270,000 | | | 1,292,155 |
Ford Motor Credit Co. LLC, 5.750%, 2/1/21 | | | 300,000 | | | 300,750 |
Ford Motor Credit Co. LLC, 5.875%, 8/2/21 | | | 200,000 | | | 204,700 |
Ford Motor Credit Co. LLC, 1.044% (3 Month US LIBOR + 0.810%), 4/5/21 | | | 200,000 | | | 199,143 |
| | | | 2,273,005 | ||
Building & Construction: 1.9% | | | | | ||
KB Home, 7.500%, 9/15/22 | | | 485,000 | | | 529,863 |
KB Home, 7.000%, 12/15/21 | | | 170,000 | | | 175,950 |
Meritage Homes Corp., 7.000%, 4/1/22 | | | 150,000 | | | 159,375 |
| | | | 865,188 | ||
Building Materials: 0.4% | | | | | ||
WESCO Distribution, Inc., 7.125%, 6/15/25 (a) | | | 160,000 | | | 175,973 |
| | | | |||
Cable & Satellite TV: 3.6% | | | | | ||
CSC Holdings LLC, 5.250%, 6/1/24 | | | 193,000 | | | 208,903 |
DISH DBS Corp., 6.750%, 6/1/21 | | | 280,000 | | | 285,659 |
DISH DBS Corp., 5.875%, 7/15/22 | | | 625,000 | | | 653,125 |
Videotron Ltd., 5.000%, 7/15/22 | | | 426,000 | | | 447,837 |
| | | | 1,595,524 | ||
Chemicals: 0.7% | | | | | ||
Blue Cube Spinco LLC, 9.750%, 10/15/23 | | | 171,000 | | | 175,702 |
Methanex Corp., 4.250%, 12/1/24 | | | 115,000 | | | 121,072 |
| | | | 296,774 |
| | Principal | | | Value | |
Consumer/Commercial/Lease Financing: 3.6% | | | | | ||
Navient Corp., 7.250%, 9/25/23 | | | $205,000 | | | $224,676 |
Navient Corp., 7.250%, 1/25/22 | | | 662,000 | | | 691,790 |
OneMain Finance Corp., 7.750%, 10/1/21 | | | 285,000 | | | 299,962 |
OneMain Finance Corp., 5.625%, 3/15/23 | | | 266,000 | | | 285,285 |
Park Aerospace Holdings Ltd., 5.250%, 8/15/22 (a) | | | 20,000 | | | 20,990 |
SLM Corp., 5.125%, 4/5/22 | | | 85,000 | | | 86,912 |
| | | | 1,609,615 | ||
Department Stores: 1.8% | | | | | ||
Macy's Retail Holdings, Inc., 2.875%, 2/15/23 | | | 355,000 | | | 339,913 |
Macy's Retail Holdings, Inc., 3.450%, 1/15/21 | | | 460,000 | | | 457,700 |
| | | | 797,613 | ||
Diversified Capital Goods: 0.3% | | | | | ||
BCD Acquisition, Inc., 9.625%, 9/15/23 (a) | | | 153,000 | | | 156,634 |
| | | | |||
Electric - Generation: 0.3% | | | | | ||
TerraForm Power Operating LLC, 4.250%, 1/31/23 (a) | | | 110,000 | | | 113,713 |
| | | | |||
Electronics: 1.1% | | | | | ||
Advanced Micro Devices, Inc., 7.500%, 8/15/22 | | | 460,000 | | | 501,400 |
| | | | |||
Energy - Exploration & Production: 2.6% | | | | | ||
Antero Resources Corp., 5.125%, 12/1/22 | | | 245,000 | | | 244,363 |
EQT Corp., 3.000%, 10/1/22 | | | 210,000 | | | 211,575 |
Murphy Oil Corp., 4.950%, 12/1/22 | | | 115,000 | | | 116,725 |
Newfield Exploration Co., 5.750%, 1/30/22 | | | 214,000 | | | 222,267 |
QEP Resources, Inc., 5.375%, 10/1/22 | | | 235,000 | | | 244,743 |
Range Resources Corp., 5.000%, 3/15/23 | | | 116,000 | | | 113,100 |
| | | | 1,152,773 | ||
Food - Wholesale: 1.2% | | | | | ||
HLF Financing Sarl LLC, 7.875%, 9/1/25 (a) | | | 266,000 | | | 290,605 |
Simmons Foods, Inc., 7.750%, 1/15/24 (a) | | | 240,000 | | | 249,900 |
| | | | 540,505 | ||
Forestry/Paper: 1.2% | | | | | ||
Mercer International, Inc., 6.500%, 2/1/24 | | | 220,000 | | | 223,025 |
Norbord, Inc., 6.250%, 4/15/23 (a) | | | 280,000 | | | 303,800 |
| | | | 526,825 | ||
Gaming: 4.1% | | | | | ||
International Game Technology PLC, 6.250%, 2/15/22 (a) | | | 331,000 | | | 341,754 |
MGM Resorts International, 7.750%, 3/15/22 | | | 1,210,000 | | | 1,288,650 |
Wynn Las Vegas LLC, 4.250%, 5/30/23 (a) | | | 230,000 | | | 233,347 |
| | | | 1,863,751 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
13
PENN CAPITAL FUNDS TRUST PENN CAPITAL DEFENSIVE SHORT DURATION HIGH INCOME FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Principal | | | Value | |
Gas Distribution: 4.8% | | | | | ||
AmeriGas Partners LP, 5.625%, 5/20/24 | | | $210,000 | | | $226,275 |
Blue Racer Midstream LLC, 6.125%, 11/15/22 (a) | | | 110,000 | | | 110,022 |
Crestwood Midstream Partners LP, 6.250%, 4/1/23 | | | 110,000 | | | 110,275 |
Crown Cork & Seal Co., Inc., 7.375%, 12/15/26 | | | 90,000 | | | 109,575 |
DCP Midstream Operating LP, 4.950%, 4/1/22 | | | 350,000 | | | 360,500 |
EQM Midstream Partners LP, 4.750%, 7/15/23 | | | 435,000 | | | 457,394 |
New Fortress Energy, Inc., 6.750%, 9/15/25 (a) | | | 220,000 | | | 232,991 |
Western Midstream Operating LP, 5.375%, 6/1/21 | | | 329,000 | | | 330,645 |
Western Midstream Operating LP, 4.000%, 7/1/22 | | | 206,000 | | | 211,665 |
| | | | 2,149,342 | ||
Health Facilities: 2.2% | | | | | ||
MEDNAX, Inc., 5.250%, 12/1/23 (a) | | | 625,000 | | | 632,687 |
Tenet Healthcare Corp., 4.625%, 7/15/24 | | | 110,000 | | | 112,752 |
Tenet Healthcare Corp., 7.500%, 4/1/25 (a) | | | 205,000 | | | 223,963 |
| | | | 969,402 | ||
Hotels: 1.8% | | | | | ||
Hilton Grand Vacations Borrower, Inc., 6.125%, 12/1/24 | | | 210,000 | | | 219,975 |
Wyndham Destinations, Inc., 5.625%, 3/1/21 | | | 305,000 | | | 306,525 |
Wyndham Destinations, Inc., 4.250%, 3/1/22 | | | 280,000 | | | 286,300 |
| | | | 812,800 | ||
Investments & Miscellaneous Financial Services: 2.1% | | | | | ||
Icahn Enterprises LP, 6.250%, 2/1/22 | | | 618,000 | | | 619,545 |
Icahn Enterprises LP, 6.750%, 2/1/24 | | | 92,000 | | | 93,562 |
Oppenheimer Holdings, Inc., 5.500%, 10/1/25 | | | 220,000 | | | 222,750 |
| | | | 935,857 | ||
Machinery: 0.2% | | | | | ||
Hillenbrand, Inc., 5.750%, 6/15/25 | | | 100,000 | | | 108,000 |
| | | | |||
Managed Care: 0.4% | | | | | ||
Molina Healthcare, Inc., 5.375%, 11/15/22 | | | 170,000 | | | 179,987 |
| | | | |||
Media Content: 1.8% | | | | | ||
AMC Networks, Inc., 4.750%, 12/15/22 | | | 210,000 | | | 210,262 |
AMC Networks, Inc., 5.000%, 4/1/24 | | | 435,000 | | | 442,069 |
Netflix, Inc., 5.750%, 3/1/24 | | | 140,000 | | | 156,800 |
| | | | 809,131 | ||
Medical Products: 0.5% | | | | | ||
Owens & Minor, Inc., 4.375%, 12/15/24 | | | 230,000 | | | 235,750 |
| | | | |||
Metals/Mining Excluding Steel: 1.3% | | | | | ||
Allegheny Technologies, Inc., 7.875%, 8/15/23 | | | 145,000 | | | 158,679 |
Cleveland-Cliffs, Inc., 4.875%, 1/15/24 (a) | | | 100,000 | | | 101,750 |
Howmet Aerospace, Inc., 6.875%, 5/1/25 | | | 95,000 | | | 112,100 |
Kaiser Aluminum Corp., 6.500%, 5/1/25 (a) | | | 200,000 | | | 214,000 |
| | | | 586,529 |
| | Principal | | | Value | |
Monoline Insurance: 2.1% | | | | | ||
MGIC Investment Corp., 5.750%, 8/15/23 | | | $250,000 | | | $270,625 |
NMI Holdings, Inc., 7.375%, 6/1/25 (a) | | | 205,000 | | | 229,600 |
Radian Group, Inc., 4.500%, 10/1/24 | | | 440,000 | | | 464,200 |
| | | | 964,425 | ||
Multi-Line Insurance: 0.5% | | | | | ||
Genworth Mortgage Holdings, Inc., 6.500%, 8/15/25 (a) | | | 210,000 | | | 227,325 |
| | | | |||
Packaging: 0.9% | | | | | ||
OI European Group BV, 4.000%, 3/15/23 (a) | | | 210,000 | | | 214,200 |
Owens-Brockway Glass Container, Inc., 5.875%, 8/15/23 (a) | | | 165,000 | | | 176,756 |
Reynolds Group Issuer, Inc., 5.125%, 7/15/23 (a) | | | 6,000 | | | 6,074 |
| | | | 397,030 | ||
Personal & Household Products: 2.3% | | | | | ||
Avon Products, Inc., 7.000%, 3/15/23 | | | 205,000 | | | 221,646 |
Energizer Holdings, Inc., 7.750%, 1/15/27 (a) | | | 205,000 | | | 227,858 |
Mattel, Inc., 3.150%, 3/15/23 | | | 242,000 | | | 244,420 |
Newell Brands, Inc., 3.850%, 4/1/23 | | | 108,000 | | | 113,280 |
Vista Outdoor, Inc., 5.875%, 10/1/23 | | | 225,000 | | | 227,250 |
| | | | 1,034,454 | ||
Pharmaceuticals: 1.1% | | | | | ||
Elanco Animal Health, Inc., 5.272%, 8/28/23 | | | 100,000 | | | 109,250 |
Teva Pharmaceutical Finance Co. BV, 2.950%, 12/18/22 | | | 145,000 | | | 144,638 |
Teva Pharmaceutical Finance Netherlands III BV, 2.800%, 7/21/23 | | | 230,000 | | | 227,700 |
| | | | 481,588 | ||
Real Estate Development & Management: 1.4% | | | | | ||
Kennedy-Wilson, Inc., 5.875%, 4/1/24 | | | 393,000 | | | 398,895 |
Realogy Group LLC, 7.625%, 6/15/25 (a) | | | 210,000 | | | 228,001 |
| | | | 626,896 | ||
Real Estate Investment Trusts (REITs): 4.3% | | | | | ||
EPR Properties, 5.250%, 7/15/23 | | | 110,000 | | | 112,744 |
HAT Holdings I LLC, 5.250%, 7/15/24 (a) | | | 365,000 | | | 379,600 |
HAT Holdings I LLC, 6.000%, 4/15/25 (a) | | | 210,000 | | | 224,700 |
iStar, Inc., 4.750%, 10/1/24 | | | 220,000 | | | 222,750 |
RHP Hotel Properties LP, 5.000%, 4/15/23 | | | 115,000 | | | 115,288 |
Service Properties Trust, 5.000%, 8/15/22 | | | 175,000 | | | 178,062 |
Service Properties Trust, 4.500%, 6/15/23 | | | 465,000 | | | 467,325 |
Service Properties Trust, 7.500%, 9/15/25 | | | 105,000 | | | 120,971 |
Starwood Property Trust, Inc., 5.000%, 12/15/21 | | | 103,000 | | | 104,727 |
| | | | 1,926,167 | ||
Real Estate Management & Development: 0.7% | | | | | ||
Newmark Group, Inc., 6.125%, 11/15/23 | | | 310,000 | | | 336,779 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
14
PENN CAPITAL FUNDS TRUST PENN CAPITAL DEFENSIVE SHORT DURATION HIGH INCOME FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Principal | | | Value | |
Recreation & Travel: 4.2% | | | | | ||
Carnival Corp., 11.500%, 4/1/23 (a) | | | $945,000 | | | $1,092,723 |
Royal Caribbean Cruises Ltd., 5.250%, 11/15/22 | | | 120,000 | | | 120,495 |
Royal Caribbean Cruises Ltd., 10.875%, 6/1/23 (a) | | | 600,000 | | | 682,728 |
| | | | 1,895,946 | ||
Restaurants: 0.5% | | | | | ||
Brinker International, Inc., 3.875%, 5/15/23 | | | 220,000 | | | 220,275 |
| | | | |||
Specialty Retail: 5.0% | | | | | ||
Foot Locker, Inc., 8.500%, 1/15/22 | | | 645,000 | | | 686,119 |
Hanesbrands, Inc., 4.625%, 5/15/24 (a) | | | 215,000 | | | 225,212 |
L Brands, Inc., 6.875%, 7/1/25 (a) | | | 120,000 | | | 130,294 |
L Brands, Inc., 9.375%, 7/1/25 (a) | | | 185,000 | | | 227,550 |
QVC, Inc., 4.850%, 4/1/24 | | | 115,000 | | | 123,912 |
The Gap, Inc., 8.375%, 5/15/23 (a) | | | 510,000 | | | 578,212 |
WW International, Inc., 8.625%, 12/1/25 (a) | | | 285,000 | | | 296,685 |
| | | | 2,267,984 | ||
Steel Producers/Products: 0.5% | | | | | ||
Commercial Metals Co., 4.875%, 5/15/23 | | | 201,000 | | | 211,552 |
| | | | |||
Support - Services: 2.5% | | | | | ||
CoreCivic, Inc., 5.000%, 10/15/22 | | | 460,000 | | | 460,000 |
Prime Security Services Borrower LLC, 5.250%, 4/15/24 (a) | | | 417,000 | | | 445,147 |
Sabre GLBL, Inc., 5.250%, 11/15/23 (a) | | | 205,000 | | | 207,563 |
| | | | 1,112,710 | ||
Tech Hardware & Equipment: 1.3% | | | | | ||
CommScope, Inc., 5.500%, 3/1/24 (a) | | | 240,000 | | | 247,440 |
Plantronics, Inc., 5.500%, 5/31/23 (a) | | | 225,000 | | | 225,562 |
Xerox Corp., 4.375%, 3/15/23 | | | 100,000 | | | 105,000 |
| | | | 578,002 | ||
Telecom - Satellite: 2.2% | | | | | ||
Gogo Intermediate Holdings LLC, 9.875%, 5/1/24 (a) | | | 315,000 | | | 337,283 |
Hughes Satellite Systems Corp., 7.625%, 6/15/21 | | | 630,000 | | | 645,750 |
| | | | 983,033 | ||
Telecom - Wireless: 4.5% | | | | | ||
Sprint Communications, Inc., 11.500%, 11/15/21 | | | 100,000 | | | 108,500 |
Sprint Corp., 7.250%, 9/15/21 | | | 515,000 | | | 535,857 |
Sprint Corp., 7.875%, 9/15/23 | | | 575,000 | | | 665,735 |
Sprint Corp., 7.125%, 6/15/24 | | | 615,000 | | | 719,175 |
| | | | 2,029,267 | ||
Telecom - Wireline Integrated & Services: 2.2% | | | | | ||
CenturyLink, Inc., 7.500%, 4/1/24 | | | 200,000 | | | 226,500 |
Qwest Corp., 6.750%, 12/1/21 | | | 172,000 | | | 179,938 |
Qwest Corp., 7.250%, 9/15/25 | | | 500,000 | | | 591,250 |
| | | | 997,688 | ||
Tobacco: 0.4% | | | | | ||
Vector Group Ltd., 6.125%, 2/1/25 (a) | | | 185,000 | | | 188,102 |
| | Principal | | | Value | |
Transport Infrastructure/Services: 2.1% | | | | | ||
Global Ship Lease, Inc., 9.875%, 11/15/22 (a) | | | $150,000 | | | $153,750 |
Great Lakes Dredge & Dock Corp., 8.000%, 5/15/22 | | | 313,000 | | | 321,007 |
Teekay Corp., 9.250%, 11/15/22 (a) | | | 255,000 | | | 260,100 |
XPO Logistics, Inc., 6.125%, 9/1/23 (a) | | | 215,000 | | | 218,763 |
| | | | 953,620 | ||
Total Corporate Bonds (cost $36,752,939) | | | | | 37,685,985 | |
| | | | |||
Bank Loans: 4.8% (b)(c) | | | | | ||
Auto Parts & Equipment: 0.2% | | | | | ||
Aptiv Corp., 1.437% (1 Month US LIBOR + 1.250%), 8/17/21 | | | 107,143 | | | 106,339 |
| | | | |||
Cable & Satellite TV: 0.7% | | | | | ||
WideOpenWest Finance LLC, 4.250% (1 Month US LIBOR + 3.250%), 8/19/23 | | | 321,675 | | | 319,977 |
| | | | |||
Health Facilities: 0.6% | | | | | ||
Owens & Minor Distribution, Inc., 4.655% (1 Month US LIBOR + 4.500%), 4/30/25 | | | 250,000 | | | 248,938 |
| | | | |||
Investments & Miscellaneous Financial Services: 0.1% | | | | | ||
Russell Investments US Institutional Holdco, Inc., 3.750% (6 Month US LIBOR + 2.750%), 6/1/23 | | | 62,982 | | | 63,769 |
| | | | |||
Media: 0.3% | | | | | ||
Nexstar Broadcasting, Inc., 1.905% (1 Month US LIBOR + 1.750%), 10/26/23 | | | 149,837 | | | 148,151 |
| | | | |||
Media Content: 0.4% | | | | | ||
Townsquare Media, Inc., 4.000% (3 Month US LIBOR + 3.000%), 4/1/22 | | | 200,000 | | | 198,750 |
| | | | |||
Packaging: 0.5% | | | | | ||
Reynolds Group Holdings, Inc., 2.897%, 2/5/23 | | | | | ||
(1 Month US LIBOR + 2.750%) | | | 153,447 | | | 152,680 |
(1 Month US LIBOR + 2.750%) | | | 56,636 | | | 56,353 |
(1 Month US LIBOR + 2.750%) | | | 34,576 | | | 34,403 |
| | | | 243,436 | ||
Pharmaceuticals: 0.9% | | | | | ||
Jaguar Holding Co. II, 3.500% (1 Month US LIBOR + 2.500%), 8/18/22 | | | 391,842 | | | 391,501 |
| | | | |||
Software/Services: 0.6% | | | | | ||
Rackspace Hosting, Inc., 4.000% (3 Month US LIBOR + 3.000%), 11/3/23 | | | 246,803 | | | 246,248 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
15
PENN CAPITAL FUNDS TRUST PENN CAPITAL DEFENSIVE SHORT DURATION HIGH INCOME FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Principal | | | Value | |
Specialty Retail: 0.5% | | | | | ||
PetSmart, Inc., 4.500% (6 Month US LIBOR + 3.500%), 3/1/22 | | | $201,205 | | | $200,637 |
Total Bank Loans (cost $2,156,961) | | | | | 2,167,746 | |
| | | | |||
U.S. Government Note: 0.9% | | | | | ||
United States Treasury Note, 1.375%, 1/31/22 | | | 400,000 | | | 405,375 |
Total U.S. Government Note (cost $400,447) | | | | | 405,375 | |
| | | | |||
Mutual Fund: 1.9% | | | Shares | | | |
Bank Loan Related: 1.9% | | | | | ||
Penn Capital Defensive Floating Rate Income Fund - Institutional Class (d) | | | 86,450 | | | 835,973 |
Total Mutual Fund (cost $863,170) | | | | | 835,973 | |
| | | | |||
Total Investments - 92.5% (cost $40,650,785) | | | | | 41,567,808 | |
Other Assets and Liabilities 7.5% | | | | | 3,346,742 | |
Net Assets: 100.0% | | | | | $44,914,550 |
Percentages are stated as a percent of net assets.
(a) | Securities purchased pursuant to Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other “qualified institutional buyers.” As of December 31, 2020, the value of these investments was $11,468,088, or 25.5% of total net assets. |
(b) | Bank Loans typically have rates of interest which are redetermined either daily, monthly, quarterly or semi-annually by reference to a base lending rate, plus a premium. These base lending rates are primarily the London Interbank Offered Rate (“LIBOR”) and secondarily, the prime rate offered by one or more major United States banks (the “Prime Rate”) and the certificate of deposit (“CD”) rate or other base lending rates used by commercial lenders. |
(c) | Senior floating-rate loans (Senior Loans) often require prepayments from excess cash flows or permit the borrowers to repay at their election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. However, Senior Loans will typically have an expected average life of approximately two to four years. |
(d) | Affiliated company. See Note 7. |
Country Exposure (as a percentage of total investments) | |||
United States | | | 88.9% |
Panama | | | 2.6% |
Canada | | | 2.1% |
Liberia | | | 1.9% |
Cayman Islands | | | 1.2% |
Netherlands | | | 1.1% |
Marshall Islands | | | 1.0% |
United Kingdom | | | 0.8% |
Curacao | | | 0.4% |
| | ||
Asset Type (as a percentage of total investments) (Unaudited) | |||
The industry classifications presented in this report, present the Global Industry Classification Standard (GICS®). GICS® was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS® is a service mark of MSCI and S&P and has been licensed for use by U.S. Bank Global Fund Services.
The Accompanying Footnotes are an Integral Part of these Financial Statements
16
PENN CAPITAL FUNDS TRUST PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Principal | | | Value | |
Asset Backed Security: 0.3% | | | | | ||
Air Transportation: 0.3% | | | | | ||
American Airlines 2015-1 Class A Pass Through Trust, 3.375%, 5/1/27 | | | $54,521 | | | $51,104 |
Total Asset Backed Security (cost $46,421) | | | | | 51,104 | |
| | | | |||
Convertible Bonds: 0.8% | | | | | ||
Cable & Satellite TV: 0.5% | | | | | ||
DISH Network Corp., 2.375%, 3/15/24 | | | 100,000 | | | 93,193 |
| | | | |||
Gas Distribution: 0.3% | | | | | ||
Cheniere Energy, Inc., 4.250%, 3/15/45 | | | 75,000 | | | 58,595 |
Total Convertible Bonds (cost $144,507) | | | | | 151,788 | |
| | | | |||
Corporate Bonds: 91.8% | | | | | ||
Advertising: 1.3% | | | | | ||
Clear Channel Worldwide Holdings, Inc., 9.250%, 2/15/24 | | | 140,000 | | | 141,750 |
Nielsen Finance LLC, 5.875%, 10/1/30 (a) | | | 60,000 | | | 67,875 |
TripAdvisor, Inc., 7.000%, 7/15/25 (a) | | | 45,000 | | | 48,600 |
| | | | 258,225 | ||
Aerospace/Defense: 2.8% | | | | | ||
Bombardier, Inc., 5.750%, 3/15/22 (a) | | | 55,000 | | | 56,115 |
Bombardier, Inc., 8.750%, 12/1/21 (a) | | | 170,000 | | | 176,800 |
Spirit AeroSystems, Inc., 1.017% (3 Month US LIBOR + 0.800%), 6/15/21 | | | 80,000 | | | 78,989 |
Spirit AeroSystems, Inc., 7.500%, 4/15/25 (a) | | | 90,000 | | | 96,525 |
TransDigm, Inc., 6.500%, 7/15/24 | | | 65,000 | | | 66,152 |
TransDigm, Inc., 6.250%, 3/15/26 (a) | | | 40,000 | | | 42,600 |
TransDigm, Inc., 8.000%, 12/15/25 (a) | | | 25,000 | | | 27,664 |
| | | | 544,845 | ||
Air Transportation: 2.2% | | | | | ||
American Airlines Group, Inc., 5.000%, 6/1/22 (a) | | | 128,344 | | | 115,383 |
Spirit Loyalty Cayman Ltd., 8.000%, 9/20/25 (a) | | | 90,000 | | | 100,800 |
United Airlines 2014-2 Class B Pass Through Trust, 4.625%, 3/3/24 | | | 40,147 | | | 40,398 |
United Airlines Holdings, Inc., 6.500%, 6/20/27 (a) | | | 40,000 | | | 43,000 |
VistaJet Malta Finance PLC, 10.500%, 6/1/24 (a) | | | 120,000 | | | 123,000 |
| | | | 422,581 | ||
Auto Parts & Equipment: 0.5% | | | | | ||
American Axle & Manufacturing, Inc., 6.875%, 7/1/28 | | | 85,000 | | | 91,587 |
| | | | |||
Automakers: 3.0% | | | | | ||
Ford Motor Co., 6.625%, 10/1/28 | | | 160,000 | | | 187,992 |
Ford Motor Co., 7.450%, 7/16/31 | | | 150,000 | | | 192,375 |
McLaren Finance PLC, 5.750%, 8/1/22 (a) | | | 200,000 | | | 194,000 |
| | | | 574,367 | ||
Banking: 0.5% | | | | | ||
Ally Financial, Inc., 8.000%, 11/1/31 | | | 60,000 | | | 88,025 |
| | Principal | | | Value | |
Building & Construction: 2.0% | | | | | ||
Ashton Woods USA LLC, 9.875%, 4/1/27 (a) | | | $135,000 | | | $151,706 |
Century Communities, Inc., 5.875%, 7/15/25 | | | 85,000 | | | 88,400 |
Taylor Morrison Communities, Inc., 5.125%, 8/1/30 (a) | | | 45,000 | | | 50,400 |
TRI Pointe Group, Inc., 5.700%, 6/15/28 | | | 86,000 | | | 97,094 |
| | | | 387,600 | ||
Building Materials: 2.6% | | | | | ||
Beacon Roofing Supply, Inc., 4.875%, 11/1/25 (a) | | | 90,000 | | | 92,137 |
CD&R Smokey Buyer, Inc., 6.750%, 7/15/25 (a) | | | 90,000 | | | 96,188 |
Installed Building Products, Inc., 5.750%, 2/1/28 (a) | | | 90,000 | | | 95,850 |
LBM Acquisition LLC, 6.250%, 1/15/29 (a) | | | 65,000 | | | 67,621 |
US Concrete, Inc., 5.125%, 3/1/29 (a) | | | 65,000 | | | 66,950 |
White Cap Buyer LLC, 6.875%, 10/15/28 (a) | | | 80,000 | | | 85,300 |
| | | | 504,046 | ||
Cable & Satellite TV: 3.8% | | | | | ||
Altice France Holding SA, 10.500%, 5/15/27 (a) | | | 200,000 | | | 224,500 |
Altice France SA/France, 8.125%, 2/1/27 (a) | | | 200,000 | | | 220,502 |
CCO Holdings LLC, 4.500%, 8/15/30 (a) | | | 135,000 | | | 143,269 |
CCO Holdings LLC, 4.250%, 2/1/31 (a) | | | 100,000 | | | 105,386 |
DISH DBS Corp., 5.875%, 11/15/24 | | | 45,000 | | | 47,184 |
| | | | 740,841 | ||
Chemicals: 0.8% | | | | | ||
Valvoline, Inc., 3.625%, 6/15/31 (a) | | | 30,000 | | | 30,855 |
Venator Finance Sarl, 5.750%, 7/15/25 (a) | | | 125,000 | | | 116,875 |
| | | | 147,730 | ||
Consumer/Commercial/Lease Financing: 2.0% | | | | | ||
Avolon Holdings Funding Ltd., 4.375%, 5/1/26 (a) | | | 40,000 | | | 43,320 |
Avolon Holdings Funding Ltd., 3.250%, 2/15/27 (a) | | | 45,000 | | | 45,897 |
Global Aircraft Leasing Co. Ltd., 7.250% Cash or 0.000% PIK, 9/15/24 (a) | | | 65,000 | | | 58,013 |
Navient Corp., 7.250%, 9/25/23 | | | 130,000 | | | 142,477 |
Navient Corp., 6.750%, 6/25/25 | | | 45,000 | | | 48,938 |
OneMain Finance Corp., 6.125%, 3/15/24 | | | 45,000 | | | 49,163 |
Park Aerospace Holdings Ltd., 5.250%, 8/15/22 (a) | | | 5,000 | | | 5,247 |
| | | | 393,055 | ||
Department Stores: 1.2% | | | | | ||
Macy's Retail Holdings, Inc., 3.875%, 1/15/22 | | | 40,000 | | | 39,800 |
Macy's Retail Holdings, Inc., 2.875%, 2/15/23 | | | 125,000 | | | 119,688 |
Macy's Retail Holdings, Inc., 3.450%, 1/15/21 | | | 70,000 | | | 69,650 |
| | | | 229,138 | ||
Diversified Capital Goods: 0.6% | | | | | ||
BCD Acquisition, Inc., 9.625%, 9/15/23 (a) | | | 60,000 | | | 61,425 |
Matthews International Corp., 5.250%, 12/1/25 (a) | | | 50,000 | | | 50,500 |
| | | | 111,925 | ||
Electric - Generation: 1.0% | | | | | ||
Talen Energy Supply LLC, 4.600%, 12/15/21 | | | 45,000 | | | 43,512 |
Talen Energy Supply LLC, 6.500%, 6/1/25 | | | 95,000 | | | 77,425 |
Talen Energy Supply LLC, 6.625%, 1/15/28 (a) | | | 75,000 | | | 78,375 |
| | | | 199,312 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
17
PENN CAPITAL FUNDS TRUST PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Principal | | | Value | |
Energy - Exploration & Production: 9.1% | | | | | ||
Antero Resources Corp., 5.125%, 12/1/22 | | | $50,000 | | | $49,870 |
Antero Resources Corp., 5.000%, 3/1/25 | | | 85,000 | | | 80,750 |
Antero Resources Corp., 8.375%, 7/15/26 (a) | | | 160,000 | | | 163,310 |
Apache Corp., 4.750%, 4/15/43 | | | 135,000 | | | 139,977 |
Apache Corp., 4.875%, 11/15/27 | | | 60,000 | | | 63,600 |
Cimarex Energy Co., 4.375%, 3/15/29 | | | 85,000 | | | 96,778 |
Comstock Resources, Inc., 9.750%, 8/15/26 | | | 100,000 | | | 107,250 |
EQT Corp., 8.750%, 2/1/30 | | | 50,000 | | | 61,125 |
Hess Corp., 7.300%, 8/15/31 | | | 40,000 | | | 52,307 |
Hess Corp., 5.600%, 2/15/41 | | | 80,000 | | | 97,507 |
Hilcorp Energy I LP, 6.250%, 11/1/28 (a) | | | 80,000 | | | 81,800 |
Matador Resources Co., 5.875%, 9/15/26 | | | 110,000 | | | 107,800 |
Northern Oil and Gas, Inc., 8.500% Cash or 1.000% PIK, 5/15/23 | | | 110,000 | | | 97,350 |
Occidental Petroleum Corp., 5.550%, 3/15/26 | | | 140,000 | | | 146,152 |
Occidental Petroleum Corp., 6.450%, 9/15/36 | | | 55,000 | | | 57,585 |
Occidental Petroleum Corp., 5.875%, 9/1/25 | | | 60,000 | | | 63,900 |
Occidental Petroleum Corp., 5.500%, 12/1/25 | | | 45,000 | | | 46,917 |
Parsley Energy LLC, 4.125%, 2/15/28 (a) | | | 145,000 | | | 153,700 |
QEP Resources, Inc., 5.625%, 3/1/26 | | | 95,000 | | | 104,172 |
| | | | 1,771,850 | ||
Food - Wholesale: 4.3% | | | | | ||
Dole Food Co., Inc., 7.250%, 6/15/25 (a) | | | 65,000 | | | 66,300 |
HLF Financing Sarl LLC, 7.250%, 8/15/26 (a) | | | 55,000 | | | 58,351 |
HLF Financing Sarl LLC, 7.875%, 9/1/25 (a) | | | 45,000 | | | 49,162 |
JBS USA LUX SA, 6.750%, 2/15/28 (a) | | | 145,000 | | | 162,908 |
KeHE Distributors LLC, 8.625%, 10/15/26 (a) | | | 120,000 | | | 134,700 |
Kraft Heinz Foods Co., 4.375%, 6/1/46 | | | 150,000 | | | 162,047 |
Kraft Heinz Foods Co., 5.500%, 6/1/50 (a) | | | 160,000 | | | 201,247 |
| | | | 834,715 | ||
Food & Drug Retailers: 2.7% | | | | | ||
Albertsons Cos, Inc., 5.875%, 2/15/28 (a) | | | 85,000 | | | 92,496 |
Albertsons Cos, Inc., 4.625%, 1/15/27 (a) | | | 85,000 | | | 90,419 |
Rite Aid Corp., 8.000%, 11/15/26 (a) | | | 100,000 | | | 106,954 |
SEG Holding LLC, 5.625%, 10/15/28 (a) | | | 75,000 | | | 79,125 |
The Fresh Market, Inc., 9.750%, 5/1/23 (a) | | | 155,000 | | | 159,684 |
| | | | 528,678 | ||
Forestry/Paper: 1.1% | | | | | ||
Mercer International, Inc., 7.375%, 1/15/25 | | | 90,000 | | | 93,657 |
Rayonier AM Products, Inc., 5.500%, 6/1/24 (a) | | | 65,000 | | | 56,550 |
Rayonier AM Products, Inc., 7.625%, 1/15/26 (a) | | | 65,000 | | | 67,779 |
| | | | 217,986 | ||
Gaming: 2.7% | | | | | ||
Affinity Gaming, 6.875%, 12/15/27 (a) | | | 65,000 | | | 68,006 |
CCM Merger, Inc., 6.375%, 5/1/26 (a) | | | 65,000 | | | 68,250 |
Jacobs Entertainment, Inc., 7.875%, 2/1/24 (a) | | | 70,000 | | | 71,662 |
MGM Resorts International, 5.750%, 6/15/25 | | | 70,000 | | | 77,396 |
MGM Resorts International, 6.750%, 5/1/25 | | | 85,000 | | | 92,004 |
| | Principal | | | Value | |
Scientific Games International, Inc., 8.625%, 7/1/25 (a) | | | $135,000 | | | $147,825 |
| | | | 525,143 | ||
Gas Distribution: 5.1% | | | | | ||
Blue Racer Midstream LLC, 6.125%, 11/15/22 (a) | | | 70,000 | | | 70,014 |
Blue Racer Midstream LLC, 6.625%, 7/15/26 (a) | | | 40,000 | | | 40,300 |
Blue Racer Midstream LLC, 7.625%, 12/15/25 (a) | | | 40,000 | | | 42,600 |
Crestwood Midstream Partners LP, 5.750%, 4/1/25 | | | 45,000 | | | 45,787 |
DCP Midstream Operating LP, 6.750%, 9/15/37 (a) | | | 22,000 | | | 23,760 |
DCP Midstream Operating LP, 5.125%, 5/15/29 | | | 30,000 | | | 33,274 |
DCP Midstream Operating LP, 6.450%, 11/3/36 (a) | | | 40,000 | | | 42,800 |
Energy Transfer Operating LP, 5.150%, 3/15/45 | | | 35,000 | | | 37,877 |
Energy Transfer Operating LP, 5.000%, 5/15/50 | | | 25,000 | | | 27,031 |
EnLink Midstream Partners LP, 4.150%, 6/1/25 | | | 100,000 | | | 98,000 |
EQM Midstream Partners LP, 6.500%, 7/15/48 | | | 53,000 | | | 54,988 |
Harvest Midstream I LP, 7.500%, 9/1/28 (a) | | | 45,000 | | | 47,869 |
New Fortress Energy, Inc., 6.750%, 9/15/25 (a) | | | 125,000 | | | 132,381 |
NGPL PipeCo LLC, 7.768%, 12/15/37 (a) | | | 45,000 | | | 60,777 |
Western Midstream Operating LP, 5.450%, 4/1/44 | | | 125,000 | | | 126,409 |
Western Midstream Operating LP, 5.300%, 3/1/48 | | | 100,000 | | | 99,096 |
| | | | 982,963 | ||
Health Facilities: 1.3% | | | | | ||
Community Health Systems, Inc., 6.625%, 2/15/25 (a) | | | 90,000 | | | 94,723 |
Mednax, Inc., 6.250%, 1/15/27 (a) | | | 85,000 | | | 91,159 |
Tenet Healthcare Corp., 6.125%, 10/1/28 (a) | | | 65,000 | | | 67,838 |
| | | | 253,720 | ||
Health Services: 0.3% | | | | | ||
The Providence Service Corp., 5.875%, 11/15/25 (a) | | | 60,000 | | | 63,450 |
| | | | |||
Hotels: 1.1% | | | | | ||
Marriott Ownership Resorts, Inc., 4.750%, 1/15/28 | | | 145,000 | | | 147,175 |
Marriott Ownership Resorts, Inc., 6.500%, 9/15/26 | | | 60,000 | | | 62,700 |
| | | | 209,875 | ||
Investments & Miscellaneous Financial Services: 0.6% | | | | | ||
Icahn Enterprises LP, 6.250%, 5/15/26 | | | 105,000 | | | 111,185 |
| | | | |||
Machinery: 0.5% | | | | | ||
Titan International, Inc., 6.500%, 11/30/23 | | | 105,000 | | | 97,125 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
18
PENN CAPITAL FUNDS TRUST PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Principal | | | Value | |
Media Content: 5.9% | | | | | ||
AMC Networks, Inc., 4.750%, 8/1/25 | | | $90,000 | | | $92,943 |
Arches Buyer, Inc., 6.125%, 12/1/28 (a) | | | 65,000 | | | 67,125 |
Cumulus Media New Holdings, Inc., 6.750%, 7/1/26 (a) | | | 86,000 | | | 87,928 |
Diamond Sports Group LLC, 5.375%, 8/15/26 (a) | | | 105,000 | | | 85,312 |
Diamond Sports Group LLC, 6.625%, 8/15/27 (a) | | | 205,000 | | | 124,025 |
Diamond Sports Group LLC, 12.750%, 12/1/26 (a) | | | 28,000 | | | 25,200 |
Entercom Media Corp., 7.250%, 11/1/24 (a) | | | 110,000 | | | 109,725 |
Scripps Escrow II, Inc., 5.375%, 1/15/31 (a) | | | 125,000 | | | 131,451 |
Scripps Escrow, Inc., 5.875%, 7/15/27 (a) | | | 50,000 | | | 52,235 |
TEGNA, Inc., 5.000%, 9/15/29 | | | 90,000 | | | 95,078 |
Townsquare Media, Inc., 6.500%, 4/1/23 (a) | | | 100,000 | | | 101,760 |
Townsquare Media, Inc., 6.875%, 2/1/26 (a) | | | 70,000 | | | 73,388 |
Univision Communications, Inc., 6.625%, 6/1/27 (a) | | | 90,000 | | | 96,651 |
| | | | 1,142,821 | ||
Medical Products: 0.3% | | | | | ||
AdaptHealth LLC, 6.125%, 8/1/28 (a) | | | 60,000 | | | 64,425 |
| | | | |||
Metals/Mining Excluding Steel: 4.0% | | | | | ||
Cleveland-Cliffs, Inc., 6.750%, 3/15/26 (a) | | | 45,000 | | | 48,600 |
Cleveland-Cliffs, Inc., 6.250%, 10/1/40 | | | 60,000 | | | 54,376 |
Cleveland-Cliffs, Inc., 5.750%, 3/1/25 | | | 95,000 | | | 96,425 |
Eldorado Gold Corp., 9.500%, 6/1/24 (a) | | | 48,000 | | | 52,920 |
First Quantum Minerals Ltd., 6.875%, 3/1/26 (a) | | | 200,000 | | | 208,500 |
Freeport-McMoRan, Inc., 4.625%, 8/1/30 | | | 70,000 | | | 76,825 |
SunCoke Energy Partners LP, 7.500%, 6/15/25 (a) | | | 69,000 | | | 68,496 |
Teck Resources Ltd., 6.250%, 7/15/41 | | | 55,000 | | | 70,231 |
Teck Resources Ltd., 5.200%, 3/1/42 | | | 85,000 | | | 96,933 |
| | | | 773,306 | ||
Monoline Insurance: 0.5% | | | | | ||
MGIC Investment Corp., 5.250%, 8/15/28 | | | 90,000 | | | 96,300 |
| | | | |||
Multi-Line Insurance: 0.5% | | | | | ||
Genworth Mortgage Holdings, Inc., 6.500%, 8/15/25 (a) | | | 90,000 | | | 97,425 |
| | | | |||
Oil Field Equipment & Services: 0.3% | | | | | ||
Archrock Partners LP, 6.250%, 4/1/28 (a) | | | 65,000 | | | 67,662 |
| | | | |||
Packaging: 0.8% | | | | | ||
Owens-Brockway Glass Container, Inc., 5.875%, 8/15/23 (a) | | | 85,000 | | | 91,056 |
Pactiv LLC, 7.950%, 12/15/25 | | | 60,000 | | | 68,700 |
| | | | 159,756 | ||
Pharmaceuticals: 2.0% | | | | | ||
Bausch Health Companies, Inc., 5.000%, 2/15/29 (a) | | | 45,000 | | | 46,269 |
Bausch Health Companies, Inc., 9.250%, 4/1/26 (a) | | | 240,000 | | | 267,600 |
Par Pharmaceutical, Inc., 7.500%, 4/1/27 (a) | | | 65,000 | | | 70,525 |
| | | | 384,394 |
| | Principal | | | Value | |
Printing & Publishing: 0.8% | | | | | ||
Meredith Corp., 6.875%, 2/1/26 | | | $155,000 | | | $151,125 |
| | | | |||
Real Estate Development & Management: 0.9% | | | | | ||
Kennedy-Wilson, Inc., 5.875%, 4/1/24 | | | 85,000 | | | 86,275 |
Realogy Group LLC, 9.375%, 4/1/27 (a) | | | 85,000 | | | 94,138 |
| | | | 180,413 | ||
Real Estate Investment Trusts (REITs): 2.6% | | | | | ||
New Residential Investment Corp., 6.250%, 10/15/25 (a) | | | 155,000 | | | 155,775 |
Service Properties Trust, 4.950%, 2/15/27 | | | 50,000 | | | 50,250 |
Service Properties Trust, 4.350%, 10/1/24 | | | 150,000 | | | 148,125 |
Starwood Property Trust, Inc., 5.500%, 11/1/23 (a) | | | 100,000 | | | 104,500 |
XHR LP, 6.375%, 8/15/25 (a) | | | 45,000 | | | 47,475 |
| | | | 506,125 | ||
Recreation & Travel: 4.1% | | | | | ||
Carnival Corp., 11.500%, 4/1/23 (a) | | | 100,000 | | | 115,632 |
Carnival Corp., 10.500%, 2/1/26 (a) | | | 85,000 | | | 99,025 |
Carnival Corp., 7.625%, 3/1/26 (a) | | | 45,000 | | | 49,027 |
LTF Merger Sub, Inc., 8.500%, 6/15/23 (a) | | | 140,000 | | | 135,100 |
Powdr Corp., 6.000%, 8/1/25 (a) | | | 60,000 | | | 63,150 |
Royal Caribbean Cruises Ltd., 5.250%, 11/15/22 | | | 50,000 | | | 50,206 |
Royal Caribbean Cruises Ltd., 11.500%, 6/1/25 (a) | | | 80,000 | | | 93,524 |
SeaWorld Parks & Entertainment, Inc., 8.750%, 5/1/25 (a) | | | 85,000 | | | 91,800 |
VOC Escrow Ltd., 5.000%, 2/15/28 (a) | | | 105,000 | | | 104,213 |
| | | | 801,677 | ||
Software/Services: 1.4% | | | | | ||
Avaya, Inc., 6.125%, 9/15/28 (a) | | | 65,000 | | | 69,437 |
Rackspace Technology Global, Inc., 5.375%, 12/1/28 (a) | | | 65,000 | | | 68,100 |
Shift4 Payments LLC, 4.625%, 11/1/26 (a) | | | 65,000 | | | 67,600 |
Unisys Corp., 6.875%, 11/1/27 (a) | | | 65,000 | | | 71,013 |
| | | | 276,150 | ||
Specialty Retail: 3.5% | | | | | ||
Abercrombie & Fitch Management Co., 8.750%, 7/15/25 (a) | | | 116,000 | | | 128,905 |
Burlington Coat Factory Warehouse Corp., 6.250%, 4/15/25 (a) | | | 110,000 | | | 116,875 |
Guitar Center, Inc., 8.500%, 1/15/26 (a) | | | 95,000 | | | 98,800 |
L Brands, Inc., 5.250%, 2/1/28 | | | 85,000 | | | 88,612 |
L Brands, Inc., 9.375%, 7/1/25 (a) | | | 30,000 | | | 36,900 |
L Brands, Inc., 6.625%, 10/1/30 (a) | | | 20,000 | | | 22,250 |
Shutterfly, Inc., 8.500%, 10/1/26 (a) | | | 180,000 | | | 190,631 |
| | | | 682,973 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
19
PENN CAPITAL FUNDS TRUST PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Principal | | | Value | |
Support - Services: 3.6% | | | | | ||
Avis Budget Car Rental LLC., 5.250%, 3/15/25 (a) | | | $160,000 | | | $160,800 |
Pike Corp., 5.500%, 9/1/28 (a) | | | 65,000 | | | 68,656 |
Sabre GLBL, Inc., 9.250%, 4/15/25 (a) | | | 45,000 | | | 53,550 |
Sabre GLBL, Inc., 7.375%, 9/1/25 (a) | | | 50,000 | | | 54,250 |
Staples, Inc., 7.500%, 4/15/26 (a) | | | 55,000 | | | 57,435 |
Staples, Inc., 10.750%, 4/15/27 (a) | | | 115,000 | | | 114,425 |
The ADT Security Corp., 4.875%, 7/15/32 (a) | | | 170,000 | | | 183,600 |
| | | | 692,716 | ||
Tech Hardware & Equipment: 2.2% | | | | | ||
CommScope Technologies LLC, 6.000%, 6/15/25 (a) | | | 52,000 | | | 53,170 |
CommScope, Inc., 7.125%, 7/1/28 (a) | | | 65,000 | | | 69,251 |
CommScope, Inc., 5.500%, 3/1/24 (a) | | | 45,000 | | | 46,395 |
Dell International LLC, 8.100%, 7/15/36 (a) | | | 55,000 | | | 81,260 |
Diebold Nixdorf, Inc., 8.500%, 4/15/24 | | | 60,000 | | | 60,750 |
Diebold Nixdorf, Inc., 9.375%, 7/15/25 (a) | | | 45,000 | | | 50,400 |
NCR Corp., 8.125%, 4/15/25 (a) | | | 30,000 | | | 33,409 |
NCR Corp., 5.250%, 10/1/30 (a) | | | 30,000 | | | 32,175 |
| | | | 426,810 | ||
Telecom - Satellite: 0.6% | | | | | ||
Gogo Intermediate Holdings LLC, 9.875%, 5/1/24 (a) | | | 100,000 | | | 107,074 |
| | | | |||
Telecom - Wireless: 1.0% | | | | | ||
Sprint Capital Corp., 8.750%, 3/15/32 | | | 60,000 | | | 95,003 |
United States Cellular Corp., 6.700%, 12/15/33 | | | 80,000 | | | 103,800 |
| | | | 198,803 | ||
Telecom - Wireline Integrated & Services: 2.6% | | | | | ||
CenturyLink, Inc., 5.125%, 12/15/26 (a) | | | 30,000 | | | 31,679 |
Cincinnati Bell, Inc., 8.000%, 10/15/25 (a) | | | 100,000 | | | 106,625 |
Cincinnati Bell, Inc., 7.000%, 7/15/24 (a) | | | 85,000 | | | 88,400 |
Consolidated Communications, Inc., 6.500%, 10/1/28 (a) | | | 60,000 | | | 64,200 |
Embarq Corp., 7.995%, 6/1/36 | | | 115,000 | | | 141,847 |
Level 3 Financing, Inc., 3.625%, 1/15/29 (a) | | | 75,000 | | | 74,812 |
| | | | 507,563 | ||
Theaters & Entertainment: 0.3% | | | | | ||
Cedar Fair LP, 5.375%, 6/1/24 | | | 50,000 | | | 50,125 |
| | | | |||
Transport Infrastructure/Services: 0.8% | | | | | ||
Teekay Corp., 9.250%, 11/15/22 (a) | | | 50,000 | | | 51,000 |
XPO CNW, Inc., 6.700%, 5/1/34 | | | 70,000 | | | 83,254 |
| | | | 134,254 | ||
Total Corporate Bonds (cost $16,678,493) | | | | | 17,791,864 | |
| | | | |||
Bank Loans: 1.1% (c)(d) | | | | | ||
Aerospace/Defense: 0.2% | | | | | ||
Ducommun, Inc., 4.145%, 11/21/25 | | | | | ||
(1 Month US LIBOR + 4.000%) | | | 28,634 | | | 27,990 |
(1 Month US LIBOR + 4.000%) | | | 7,189 | | | 7,027 |
| | | | 35,017 |
| | Principal | | | Value | |
Air Transportation: 0.2% | | | | | ||
Allegiant Travel Co., 3.214% (3 Month US LIBOR + 3.000%), 2/5/24 | | | $49,621 | | | $48,179 |
| | | | |||
Specialty Retail: 0.7% | | | | | ||
BDF Acquisition Corp., 6.250% (1 Month US LIBOR + 5.250%), 8/8/23 | | | 78,754 | | | 76,326 |
Calceus Acquisition, Inc., 5.733% (3 Month US LIBOR + 5.500%), 2/12/25 | | | 66,184 | | | 62,875 |
| | | | 139,201 | ||
Total Bank Loans (cost $231,130) | | | | | 222,397 | |
| | | | |||
Preferred Stock: 0.2% | | | Shares | | | |
Telecom - Wireless: 0.2% | | | | | ||
United States Cellular Corp., 5.500% | | | 1,900 | | | 47,899 |
Total Preferred Stock (cost $47,687) | | | | | 47,899 | |
| | | | |||
Mutual Fund: 2.1% | | | | | ||
Bank Loan Related - 2.1% | | | | | ||
Penn Capital Defensive Floating Rate Income Fund - Institutional Class (e) | | | 41,271 | | | 399,088 |
Total Mutual Funds (cost $409,444) | | | | | 399,088 | |
| | | | |||
| | | | |||
Total Investments - 96.3% (cost $17,557,682) | | | | | 18,664,140 | |
Other Assets and Liabilities 3.7% | | | | | 710,187 | |
Net Assets: 100.0% | | | | | $19,374,327 |
Percentages are stated as a percent of net assets.
(a) | Securities purchased pursuant to Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program or other “qualified institutional buyers.” As of December 31, 2020, the value of these investments was $11,485,291, or 59.3% of total net assets. |
(b) | Payment-in-Kind (“PIK”) security which may pay interest/dividends in additional par/shares and/or in cash. As of December 31, 2020, the total PIK was $0, or 0.0% of total net assets. |
(c) | Bank Loans typically have rates of interest which are redetermined either daily, monthly, quarterly or semi-annually by reference to a base lending rate, plus a premium. These base lending rates are primarily the London Interbank Offered Rate (“LIBOR”) and secondarily, the prime rate offered by one or more major United States banks (the “Prime Rate”) and the certificate of deposit (“CD”) rate or other base lending rates used by commercial lenders. |
(d) | Senior floating-rate loans (“Senior Loans”) often require prepayments from excess cash flows or permit the borrowers to repay at their election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. However, Senior Loans will typically have an expected average life of approximately two to four years. |
(e) | Affiliated company. See Note 7. |
The Accompanying Footnotes are an Integral Part of these Financial Statements
20
PENN CAPITAL FUNDS TRUST PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
Country Exposure (as a percentage of total investments) | |||
United States | | | 84.5% |
Canada | | | 5.2% |
Luxembourg | | | 2.7% |
Cayman Islands | | | 1.6% |
Panama | | | 1.4% |
France | | | 1.2% |
United Kingdom | | | 1.0% |
Liberia | | | 0.8% |
Malta | | | 0.7% |
Bermuda | | | 0.6% |
Marshall Islands | | | 0.3% |
| | ||
Asset Type (as a percentage of total investments) (Unaudited) | |||
| |
The industry classifications presented in this report, present the Global Industry Classification Standard (GICS®). GICS® was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS® is a service mark of MSCI and S&P and has been licensed for use by U.S. Bank Global Fund Services.
The Accompanying Footnotes are an Integral Part of these Financial Statements
21
PENN CAPITAL FUNDS TRUST PENN CAPITAL SPECIAL SITUATIONS SMALL CAP EQUITY FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Shares | | | Value | |
Common Stocks: 93.7% | | | | | ||
Aerospace & Defense: 1.3% | | | | | ||
Spirit AeroSystems Holdings, Inc. - Class A | | | 3,772 | | | $147,447 |
| | | | |||
Air Freight & Logistics: 1.4% | | | | | ||
XPO Logistics, Inc. (a) | | | 1,356 | | | 161,635 |
| | | | |||
Auto Components: 3.5% | | | | | ||
American Axle & Manufacturing Holdings, Inc. (a) | | | 29,586 | | | 246,747 |
Dana, Inc. | | | 7,718 | | | 150,656 |
| | | | 397,403 | ||
Banks: 8.2% | | | | | ||
Ameris Bancorp | | | 5,267 | | | 200,515 |
BankUnited, Inc. | | | 6,366 | | | 221,409 |
FB Financial Corp. | | | 4,313 | | | 149,791 |
South State Corp. | | | 2,444 | | | 176,701 |
Western Alliance Bancorp | | | 3,300 | | | 197,835 |
| | | | 946,251 | ||
Biotechnology: 2.2% | | | | | ||
Exelixis, Inc. (a) | | | 5,444 | | | 109,261 |
Halozyme Therapeutics, Inc. (a) | | | 3,451 | | | 147,392 |
| | | | 256,653 | ||
Chemicals: 4.7% | | | | | ||
Axalta Coating Systems Ltd. (a) | | | 3,706 | | | 105,806 |
Huntsman Corp. | | | 5,013 | | | 126,027 |
Tronox Holdings PLC - Class A | | | 11,297 | | | 165,162 |
WR Grace & Co. | | | 2,537 | | | 139,079 |
| | | | 536,074 | ||
Commercial Services & Supplies: 2.4% | | | | | ||
Steelcase, Inc. - Class A | | | 9,711 | | | 131,584 |
The Brink's Co. | | | 2,018 | | | 145,296 |
| | | | 276,880 | ||
Consumer Finance: 0.9% | | | | | ||
LendingTree, Inc. (a) | | | 395 | | | 108,147 |
| | | | |||
Containers & Packaging: 1.3% | | | | | ||
O-I Glass, Inc. | | | 12,293 | | | 146,287 |
| | | | |||
Diversified Telecommunication Services: 0.9% | | | | | ||
Bandwidth, Inc. - Class A (a) | | | 678 | | | 104,188 |
| | | | |||
Electrical Equipment: 2.7% | | | | | ||
nVent Electric PLC | | | 6,548 | | | 152,503 |
TPI Composites, Inc. (a) | | | 3,011 | | | 158,921 |
| | | | 311,424 | ||
Energy Equipment & Services: 1.6% | | | | | ||
ChampionX Corp. (a) | | | 12,252 | | | 187,456 |
| | | |
| | Shares | | | Value | |
Food & Staples Retailing: 2.3% | | | | | ||
BJ's Wholesale Club Holdings, Inc. (a) | | | 3,157 | | | $117,693 |
Performance Food Group Co. (a) | | | 3,087 | | | 146,972 |
| | | | 264,665 | ||
Gas Utilities: 0.6% | | | | | ||
National Fuel Gas Co. | | | 1,624 | | | 66,795 |
| | | | |||
Health Care Equipment & Supplies: 6.1% | | | | | ||
Alphatec Holdings, Inc. (a) | | | 12,847 | | | 186,538 |
CONMED Corp. | | | 1,249 | | | 139,888 |
CryoLife, Inc. (a) | | | 6,045 | | | 142,722 |
Oxford Immunotec Global PLC (a) | | | 7,654 | | | 133,677 |
SI-BONE, Inc. (a) | | | 3,115 | | | 93,139 |
| | | | 695,964 | ||
Health Care Providers & Services: 5.8% | | | | | ||
Acadia Healthcare Co., Inc. (a) | | | 3,203 | | | 160,983 |
Option Care Health, Inc. (a) | | | 12,407 | | | 194,045 |
R1 RCM, Inc. (a) | | | 6,366 | | | 152,911 |
The Providence Service Corp. (a) | | | 1,120 | | | 155,266 |
| | | | 663,205 | ||
Hotels, Restaurants & Leisure: 10.4% | | | | | ||
Bally's Corp. | | | 3,747 | | | 188,212 |
Boyd Gaming Corp. (a) | | | 4,616 | | | 198,119 |
Golden Entertainment, Inc. (a) | | | 11,930 | | | 237,288 |
Papa John's International, Inc. | | | 1,252 | | | 106,232 |
Planet Fitness, Inc. - Class A (a) | | | 1,934 | | | 150,136 |
Scientific Games Corp. (a) | | | 3,616 | | | 150,028 |
SeaWorld Entertainment, Inc. (a) | | | 5,377 | | | 169,859 |
| | | | 1,199,874 | ||
Household Durables: 0.9% | | | | | ||
Installed Building Products, Inc. (a) | | | 1,068 | | | 108,861 |
| | | | |||
Insurance: 1.1% | | | | | ||
Stewart Information Services Corp. | | | 2,516 | | | 121,674 |
| | | | |||
Interactive Media & Services: 1.5% | | | | | ||
TripAdvisor, Inc. (a) | | | 5,839 | | | 168,046 |
| | | | |||
IT Services: 1.6% | | | | | ||
Sabre Corp. | | | 15,025 | | | 180,601 |
| | | | |||
Life Sciences Tools & Services: 1.8% | | | | | ||
Syneos Health, Inc. (a) | | | 3,048 | | | 207,660 |
| | | | |||
Machinery: 4.5% | | | | | ||
Chart Industries, Inc. (a) | | | 1,330 | | | 156,661 |
Colfax Corp. (a) | | | 5,074 | | | 194,030 |
Gates Industrial Corp. PLC (a) | | | 12,966 | | | 165,446 |
| | | | 516,137 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
22
PENN CAPITAL FUNDS TRUST PENN CAPITAL SPECIAL SITUATIONS SMALL CAP EQUITY FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Shares | | | Value | |
Media: 6.7% | | | | | ||
Cardlytics, Inc. (a) | | | 925 | | | $132,062 |
Gray Television, Inc. (a) | | | 12,768 | | | 228,420 |
Nexstar Media Group, Inc. - Class A | | | 1,791 | | | 195,559 |
The EW Scripps Co. - Class A | | | 14,324 | | | 219,014 |
| | | | 775,055 | ||
Metals & Mining: 1.9% | | | | | ||
Carpenter Technology Corp. | | | 4,618 | | | 134,476 |
SSR Mining, Inc. (a) | | | 4,094 | | | 82,331 |
| | | | 216,807 | ||
Oil, Gas & Consumable Fuels: 1.6% | | | | | ||
New Fortress Energy, Inc. | | | 3,553 | | | 190,405 |
| | | | |||
Professional Services: 1.1% | | | | | ||
Upwork, Inc. (a) | | | 3,577 | | | 123,478 |
| | | | |||
Real Estate Management & Development: 1.4% | | | | | ||
Newmark Group, Inc. | | | 21,808 | | | 158,980 |
| | | | |||
Semiconductors & Semiconductor Equipment: 4.6% | | | | | ||
Rambus, Inc. (a) | | | 8,861 | | | 154,713 |
Semtech Corp. (a) | | | 1,749 | | | 126,086 |
Silicon Motion Technology Corp. - ADR | | | 2,916 | | | 140,405 |
SiTime Corp. (a) | | | 1,004 | | | 112,378 |
| | | | 533,582 | ||
Software: 3.0% | | | | | ||
Rapid7, Inc. (a) | | | 2,285 | | | 206,016 |
Workiva, Inc. (a) | | | 1,520 | | | 139,262 |
| | | | 345,278 | ||
Specialty Retail: 0.8% | | | | | ||
National Vision Holdings, Inc. (a) | | | 1,931 | | | 87,455 |
| | | | |||
Technology Hardware, Storage & Peripherals: 1.6% | | | | | ||
Pure Storage, Inc. - Class A (a) | | | 7,964 | | | 180,066 |
| | | | |||
Textiles, Apparel & Luxury Goods: 1.0% | | | | | ||
Canada Goose Holdings, Inc. (a) | | | 3,824 | | | 113,840 |
| | | | |||
Wireless Telecommunication Services: 2.3% | | | | | ||
Boingo Wireless, Inc. (a) | | | 13,475 | | | 171,402 |
Gogo, Inc. (a) | | | 9,744 | | | 93,835 |
| | | | 265,237 | ||
| | | | |||
Total Common Stocks (cost $7,687,202) | | | | | 10,763,510 |
| | Shares | | | Value | |
Contingent Value Right: 0.0% | | | | | ||
Media - 0.0% | | | | | ||
Media General, Inc. (a) | | | 1,867 | | | $19 |
Total Contingent Value Right (cost $0) | | | | | 19 | |
| | | | |||
Real Estate Investment Trusts (REITs): 4.5% | | | | | ||
Essential Properties Realty Trust, Inc. | | | 5,265 | | | 111,618 |
Gaming & Leisure Properties, Inc. | | | 2,757 | | | 116,894 |
QTS Realty Trust, Inc. - Class A | | | 1,913 | | | 118,376 |
Ryman Hospitality Properties, Inc. | | | 2,498 | | | 169,265 |
Total REITs (cost $393,434) | | | | | 516,153 | |
| | | | |||
Total Investments - 98.2% (cost $8,080,636) | | | | | 11,279,682 | |
Other Assets and Liabilities - 1.8% | | | | | 210,050 | |
Net Assets: 100.0% | | | | | $11,489,732 |
Percentages are stated as a percent of net assets.
ADR - American Depositary Receipt
(a) | No distribution or dividend was made during the period ending December 31, 2020. As such, it is classified as a non-income producing security as of December 31, 2020. |
The Accompanying Footnotes are an Integral Part of these Financial Statements
23
PENN CAPITAL FUNDS TRUST PENN CAPITAL SPECIAL SITUATIONS SMALL CAP EQUITY FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
Country Exposure (as a percentage of total investments) | |||
United States | | | 90.7% |
United Kingdom | | | 4.1% |
Canada | | | 1.7% |
Ireland | | | 1.4% |
Cayman Islands | | | 1.2% |
Bermuda | | | 0.9% |
| | ||
Sector Allocation (as a percentage of total investments) (Unaudited) | |||
| |
The industry classifications presented in this report, present the Global Industry Classification Standard (GICS®). GICS® was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS® is a service mark of MSCI and S&P and has been licensed for use by U.S. Bank Global Fund Services.
The Accompanying Footnotes are an Integral Part of these Financial Statements
24
PENN CAPITAL FUNDS TRUST PENN CAPITAL MANAGED ALPHA SMID CAP EQUITY FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Shares | | | Value | |
Common Stocks: 93.8% | | | | | ||
Aerospace & Defense: 1.8% | | | | | ||
Mercury Systems, Inc. (a) | | | 3,558 | | | $ 313,318 |
| | | | |||
Air Freight & Logistics: 1.8% | | | | | ||
XPO Logistics, Inc. (a) | | | 2,599 | | | 309,801 |
| | | | |||
Banks: 6.5% | | | | | ||
M&T Bank Corp. | | | 1,976 | | | 251,545 |
People's United Financial, Inc. | | | 22,067 | | | 285,326 |
Pinnacle Financial Partners, Inc. | | | 6,360 | | | 409,584 |
Western Alliance Bancorp | | | 3,343 | | | 200,413 |
| | | | 1,146,868 | ||
Biotechnology: 2.9% | | | | | ||
Exelixis, Inc. (a) | | | 10,021 | | | 201,121 |
Halozyme Therapeutics, Inc. (a) | | | 7,277 | | | 310,801 |
| | | | 511,922 | ||
Building Products: 4.3% | | | | | ||
Allegion PLC | | | 2,224 | | | 258,829 |
Lennox International, Inc. | | | 906 | | | 248,217 |
Masco Corp. | | | 4,336 | | | 238,177 |
| | | | 745,223 | ||
Chemicals: 3.0% | | | | | ||
Axalta Coating Systems Ltd. (a) | | | 10,550 | | | 301,203 |
WR Grace & Co. | | | 3,955 | | | 216,813 |
| | | | 518,016 | ||
Commercial Services & Supplies: 1.4% | | | | | ||
IAA, Inc. (a) | | | 3,731 | | | 242,440 |
| | | | |||
Construction Materials: 1.9% | | | | | ||
Martin Marietta Materials, Inc. | | | 1,143 | | | 324,578 |
| | | | |||
Diversified Financial Services: 1.6% | | | | | ||
Voya Financial, Inc. | | | 4,753 | | | 279,524 |
| | | | |||
Electric Utilities: 1.2% | | | | | ||
Pinnacle West Capital Corp. | | | 2,731 | | | 218,343 |
| | | | |||
Food & Staples Retailing: 1.5% | | | | | ||
BJ's Wholesale Club Holdings, Inc. (a) | | | 6,869 | | | 256,076 |
| | | | |||
Food Products: 2.0% | | | | | ||
Lamb Weston Holdings, Inc. | | | 4,347 | | | 342,283 |
| | | | |||
Health Care Equipment & Supplies: 2.0% | | | | | ||
CONMED Corp. | | | 3,121 | | | 349,552 |
| | | | |||
Health Care Providers & Services: 1.5% | | | | | ||
Quest Diagnostics, Inc. | | | 2,173 | | | 258,956 |
| | Shares | | | Value | |
Hotels, Restaurants & Leisure: 5.9% | | | | | ||
MGM Resorts International | | | 9,300 | | | $293,043 |
Planet Fitness, Inc. - Class A (a) | | | 3,110 | | | 241,429 |
Six Flags Entertainment Corp. | | | 7,555 | | | 257,626 |
Vail Resorts, Inc. | | | 888 | | | 247,716 |
| | | | 1,039,814 | ||
Insurance: 6.8% | | | | | ||
Arch Capital Group Ltd. (a) | | | 7,896 | | | 284,809 |
Fidelity National Financial, Inc. | | | 8,381 | | | 327,613 |
Lincoln National Corp. | | | 6,317 | | | 317,808 |
Primerica, Inc. | | | 1,972 | | | 264,110 |
| | | | 1,194,340 | ||
Interactive Media & Services: 4.0% | | | | | ||
IAC/InterActiveCorp (a) | | | 2,051 | | | 388,357 |
TripAdvisor, Inc. (a) | | | 10,947 | | | 315,055 |
| | | | 703,412 | ||
IT Services: 4.6% | | | | | ||
Black Knight, Inc. (a) | | | 2,391 | | | 211,245 |
GoDaddy, Inc. - Class A (a) | | | 4,018 | | | 333,293 |
Sabre Corp. | | | 22,192 | | | 266,748 |
| | | | 811,286 | ||
Life Sciences Tools & Services: 3.9% | | | | | ||
Avantor, Inc. (a) | | | 12,361 | | | 347,962 |
PPD, Inc. (a) | | | 9,571 | | | 327,520 |
| | | | 675,482 | ||
Machinery: 1.7% | | | | | ||
Allison Transmission Holdings, Inc. | | | 6,964 | | | 300,357 |
| | | | |||
Marine: 1.5% | | | | | ||
Kirby Corp. (a) | | | 5,027 | | | 260,549 |
| | | | |||
Media: 3.3% | | | | | ||
Fox Corp. - Class B | | | 9,674 | | | 279,385 |
Liberty Media Corp.-Liberty SiriusXM - Class A (a) | | | 6,845 | | | 295,636 |
| | | | 575,021 | ||
Metals & Mining: 1.9% | | | | | ||
Steel Dynamics, Inc. | | | 9,019 | | | 332,531 |
| | | | |||
Pharmaceuticals: 3.0% | | | | | ||
Bausch Health Cos, Inc. (a) | | | 11,240 | | | 233,792 |
Catalent, Inc. (a) | | | 2,877 | | | 299,409 |
| | | | 533,201 | ||
Professional Services: 1.7% | | | | | ||
TransUnion | | | 2,921 | | | 289,822 |
| | | | |||
Road & Rail: 0.9% | | | | | ||
Schneider National, Inc. - Class B | | | 7,647 | | | 158,293 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
25
PENN CAPITAL FUNDS TRUST PENN CAPITAL MANAGED ALPHA SMID CAP EQUITY FUND |
SCHEDULE OF INVESTMENTS |
DECEMBER 31, 2020 (UNAUDITED) |
| | Shares | | | Value | |
Semiconductors & Semiconductor Equipment: 4.6% | | | | | ||
Skyworks Solutions, Inc. | | | 2,163 | | | $330,679 |
Teradyne, Inc. | | | 4,005 | | | 480,160 |
| | | | 810,839 | ||
Software: 4.8% | | | | | ||
Five9, Inc. (a) | | | 1,595 | | | 278,168 |
Nice Ltd. - ADR (a) | | | 862 | | | 244,411 |
Tyler Technologies, Inc. (a) | | | 748 | | | 326,517 |
| | | | 849,096 | ||
Specialty Retail: 4.8% | | | | | ||
Burlington Stores, Inc. (a) | | | 1,145 | | | 299,475 |
Five Below, Inc. (a) | | | 1,757 | | | 307,440 |
Floor & Decor Holdings, Inc. - Class A (a) | | | 2,559 | | | 237,603 |
| | | | 844,518 | ||
Technology Hardware, Storage & Peripherals: 2.2% | | | | | ||
Western Digital Corp. | | | 7,113 | | | 393,989 |
| | | | |||
Textiles, Apparel & Luxury Goods: 1.7% | | | | | ||
PVH Corp. | | | 3,136 | | | 294,439 |
| | | | |||
Trading Companies & Distributors: 1.8% | | | | | ||
United Rentals, Inc. (a) | | | 1,366 | | | 316,789 |
| | | | |||
Water Utilities: 1.3% | | | | | ||
Essential Utilities, Inc. | | | 4,825 | | | 228,174 |
Total Common Stocks (cost $11,492,374) | | | | | 16,428,852 | |
| | | | |||
Real Estate Investment Trusts (REITs): 5.6% | | | | | ||
Camden Property Trust | | | 2,612 | | | 260,991 |
Healthcare Trust of America, Inc. - Class A | | | 9,366 | | | 257,940 |
MGM Growth Properties LLC - Class A | | | 6,562 | | | 205,390 |
Sun Communities, Inc. | | | 1,641 | | | 249,350 |
Total REITs (cost $855,732) | | | | | 973,671 | |
| | | | |||
Total Investments - 99.4% (cost $12,348,106) | | | | | 17,402,523 | |
Other Assets and Liabilities - 0.6% | | | | | 105,450 | |
Net Assets: 100.0% | | | | | $17,507,973 |
Percentages are stated as a percent of net assets.
ADR - American Depositary Receipt
(a) | No distribution or dividend was made during the period ending December 31, 2020. As such, it is classified as a non-income producing security as of December 31, 2020. |
Country Exposure (as a percentage of total investments) | |||
United States | | | 92.4% |
Bermuda | | | 3.4% |
Ireland | | | 1.5% |
Israel | | | 1.4% |
Canada | | | 1.3% |
| | ||
Sector Allocation (as a percentage of total investments) (Unaudited) | |||
| |
The industry classifications presented in this report, present the Global Industry Classification Standard (GICS®). GICS® was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS® is a service mark of MSCI and S&P and has been licensed for use by U.S. Bank Global Fund Services.
The Accompanying Footnotes are an Integral Part of these Financial Statements
26
Statements of Assets and Liabilities
December 31, 2020 (Unaudited)
Assets | | | Penn Capital Defensive Floating Rate Income Fund | | | Penn Capital Defensive Short Duration High Income Fund | | | Penn Capital Opportunistic High Income Fund | | | Penn Capital Special Situations Small Cap Equity Fund | | | Penn Capital Managed Alpha SMID Cap Equity Fund |
Investments, at fair value(1) | | | | | | | | | | | |||||
Unaffiliated issuers | | | $31,913,102 | | | $40,731,835 | | | $18,265,052 | | | $11,279,682 | | | $17,402,523 |
Affiliated mutual fund (see Note 7) | | | — | | | 835,973 | | | 399,088 | | | — | | | — |
Receivables: | | | | | | | | | | | |||||
Advisor reimbursement due | | | 38,344 | | | 25,374 | | | 34,260 | | | 26,667 | | | 8,183 |
Dividends and interest | | | 159,456 | | | 623,871 | | | 306,244 | | | 4,628 | | | 10,913 |
Investments sold | | | 760,988 | | | 57,502 | | | 167,178 | | | — | | | — |
Fund shares sold | | | — | | | 8,000 | | | — | | | 1,820 | | | — |
Cash | | | 2,370,277 | | | 2,690,224 | | | 567,953 | | | 212,494 | | | 129,164 |
Other assets | | | 16,887 | | | 16,112 | | | 14,342 | | | 15,933 | | | 15,100 |
Total assets | | | 35,259,054 | | | 44,988,891 | | | 19,754,117 | | | 11,541,224 | | | 17,565,883 |
| | | | | | | | | | ||||||
Liabilities | | | | | | | | | | | |||||
Payables: | | | | | | | | | | | |||||
Investments purchased | | | 1,503,902 | | | — | | | 324,227 | | | — | | | — |
Fund shares redeemed | | | 2,239 | | | — | | | — | | | — | | | — |
Distribution payable | | | — | | | — | | | — | | | — | | | — |
Accrued expenses: | | | | | | | | | | | |||||
Professional fees | | | 7,544 | | | 7,544 | | | 7,481 | | | 620 | | | 2,504 |
Administration fees | | | 36,566 | | | 28,270 | | | 24,401 | | | 16,240 | | | 15,772 |
Custody fees | | | 2,557 | | | 1,817 | | | 2,082 | | | 2,334 | | | 2,059 |
Transfer agent fees and expenses | | | 6,818 | | | 6,144 | | | 4,855 | | | 4,636 | | | 3,664 |
Trustee fees and expenses | | | 3,048 | | | 2,763 | | | 1,279 | | | 526 | | | 1,126 |
Other accrued expenses | | | 30,244 | | | 27,803 | | | 15,465 | | | 27,136 | | | 32,785 |
Total liabilities | | | 1,592,918 | | | 74,341 | | | 379,790 | | | 51,492 | | | 57,910 |
Net assets | | | $33,666,136 | | | $44,914,550 | | | $19,374,327 | | | $11,489,732 | | | $17,507,973 |
| | | | | | | | | | ||||||
Composition of Net Assets | | | | | | | | | | | |||||
Paid-in capital | | | $36,598,237 | | | $46,268,989 | | | $19,668,694 | | | $7,843,004 | | | $12,685,048 |
Total distributable earnings/accumulated loss | | | (2,932,101) | | | (1,354,439) | | | (294,367) | | | 3,646,728 | | | 4,822,925 |
Net assets | | | $33,666,136 | | | $44,914,550 | | | $19,374,327 | | | $11,489,732 | | | $17,507,973 |
| | | | | | | | | | ||||||
Institutional Class | | | | | | | | | | | |||||
Net assets applicable to outstanding shares | | | $33,666,136 | | | $44,914,550 | | | $19,374,327 | | | $11,489,732 | | | $17,507,973 |
Shares of beneficial interest outstanding, no par value, unlimited authorization | | | 3,479,808 | | | 4,641,746 | | | 1,976,665 | | | 772,230 | | | 1,205,126 |
Net asset value per share outstanding | | | $9.67 | | | $9.68 | | | $9.80 | | | $14.88 | | | $14.53 |
| | | | | | | | | | ||||||
Investor Class(2) | | | | | | | | | | | |||||
Net assets applicable to outstanding shares | | | $— | | | $— | | | $— | | | $— | | | $— |
Shares of beneficial interest outstanding, no par value, unlimited authorization | | | — | | | — | | | — | | | — | | | — |
Net asset value per share outstanding | | | $— | | | $— | | | $— | | | $— | | | $— |
_________ | | | | | | | | | | | |||||
(1) Investment in securities at cost | | | | | | | | | | | |||||
Unaffiliated issuers | | | $31,642,359 | | | $39,787,615 | | | $17,148,239 | | | $8,080,636 | | | $12,348,106 |
Affiliated mutual fund (see Note 7) | | | — | | | 863,170 | | | 409,444 | | | — | | | — |
(2) No information is provided for Investor Share Class shares because shares of that Class had not yet been issued as of December 31, 2020. |
The accompanying notes are an integral part of the financial statements.
27
Statements of Operations
Six Months Ended December 31, 2020 (Unaudited)
| | Penn Capital Defensive Floating Rate Income Fund | | | Penn Capital Defensive Short Duration High Income Fund | | | Penn Capital Opportunistic High Income Fund | | | Penn Capital Special Situations Small Cap Equity Fund | | | Penn Capital Managed Alpha SMID Cap Equity Fund | |
Investment Income (Loss) | | ||||||||||||||
Income | | | | | | | | | | | |||||
Dividends* | | | | | | | | | | | |||||
Unaffiliated dividends | | | $— | | | $— | | | $— | | | $36,436 | | | $103,277 |
Dividend distributions from affiliated mutual fund (see Note 7) | | | — | | | 16,050 | | | 15,559 | | | — | | | — |
Interest (see Note 7) | | | 744,473 | | | 1,020,539 | | | 585,379 | | | 14 | | | 30 |
Total income | | | 744,473 | | | 1,036,589 | | | 600,938 | | | 36,450 | | | 103,307 |
| | | | | | | | | | ||||||
Investment advisory fees | | | 94,824 | | | 101,902 | | | 64,271 | | | 42,271 | | | 72,194 |
Administration and accounting | | | 80,449 | | | 50,838 | | | 54,250 | | | 33,346 | | | 32,944 |
Professional fees | | | 23,039 | | | 23,039 | | | 23,040 | | | 17,947 | | | 18,000 |
Shareholder servicing fees | | | 15,840 | | | 33,967 | | | 8,452 | | | 6,674 | | | 7,207 |
Registration | | | 15,653 | | | 9,365 | | | 10,762 | | | 11,253 | | | 11,062 |
Shareholder communication | | | 14,218 | | | 10,658 | | | 8,542 | | | 8,619 | | | 8,675 |
Transfer agent expense | | | 12,193 | | | 12,610 | | | 9,591 | | | 8,643 | | | 8,393 |
Compliance fees | | | 7,058 | | | 7,058 | | | 7,058 | | | 7,047 | | | 7,047 |
Custodian | | | 6,233 | | | 4,233 | | | 6,142 | | | 4,932 | | | 4,305 |
Insurance | | | 5,170 | | | 6,328 | | | 2,369 | | | 817 | | | 1,943 |
Trustees | | | 4,838 | | | 5,663 | | | 2,228 | | | 980 | | | 2,000 |
Miscellaneous | | | 2,835 | | | 711 | | | 386 | | | 6,277 | | | 6,138 |
Interest expense (See Note 9) | | | — | | | — | | | — | | | — | | | 73 |
Expense waiver and reimbursement from Advisor | | | (172,009) | | | (144,090) | | | (129,964) | | | (100,306) | | | (94,879) |
Net expenses | | | 110,341 | | | 122,282 | | | 67,127 | | | 48,500 | | | 85,102 |
Net investment income (loss) | | | 634,132 | | | 914,307 | | | 533,811 | | | (12,050) | | | 18,205 |
| | | | | | | | | | ||||||
Realized and Unrealized Gain (Loss) on Investments | | | | | | | | | | | |||||
Net realized gain (loss) on investments | | | | | | | | | | | |||||
Unaffiliated issuers | | | 46,570 | | | 499,231 | | | 595,668 | | | 1,603,541 | | | 1,451,175 |
Affiliated Mutual Fund (See Note 7) | | | — | | | (13,916) | | | (102,774) | | | — | | | — |
Net change in unrealized appreciation (depreciation) | | | | | | | | | | | |||||
Unaffiliated issuers | | | 1,317,676 | | | 1,092,430 | | | 1,179,622 | | | 2,698,032 | | | 2,302,848 |
Affiliated Mutual Fund (See Note 7) | | | — | | | 51,311 | | | 159,188 | | | — | | | — |
Net realized and unrealized gain on investments | | | 1,364,246 | | | 1,629,056 | | | 1,831,704 | | | 4,301,573 | | | 3,754,023 |
Net increase in net assets resulting from operations | | | $1,998,378 | | | $2,543,363 | | | $2,365,515 | | | $4,289,523 | | | $3,772,228 |
_________ | | | | | | | | | | | |||||
* Net of foreign taxes withheld | | | $— | | | $— | | | $— | | | $— | | | $252 |
The accompanying notes are an integral part of the financial statements.
28
Statements of Changes in Net Assets
| | Penn Capital Defensive Floating Rate Income Fund | | | Penn Capital Defensive Short Duration High Income Fund | | | Penn Capital Opportunistic High Income Fund | | | Penn Capital Special Situations Small Cap Equity Fund | | | Penn Capital Managed Alpha SMID Cap Equity Fund | ||||||||||||||||
Increase (Decrease) in Net Assets | | | Six Months Ended December 31, 2020 (Unaudited) | | | Year Ended June 30, 2020 | | | Six Months Ended December 31, 2020 (Unaudited) | | | Year Ended June 30, 2020 | | | Six Months Ended December 31, 2020 (Unaudited) | | | Year Ended June 30, 2020 | | | Six Months Ended December 31, 2020 (Unaudited) | | | Year Ended June 30, 2020 | | | Six Months Ended December 31, 2020 (Unaudited) | | | Year Ended June 30, 2020 |
Operations | | | | | | | | | | | | | | | | | | | | | ||||||||||
Net investment income (loss) | | | $634,132 | | | $1,823,878 | | | $914,307 | | | $1,644,978 | | | $533,811 | | | $1,006,970 | | | $(12,050) | | | $(36,860) | | | $18,205 | | | $(6,037) |
Net realized gain (loss) on investments: | | | 46,570 | | | (2,928,732) | | | 485,315 | | | (2,697,916) | | | 492,894 | | | (1,852,292) | | | 1,603,541 | | | (799,718) | | | 1,451,175 | | | (1,519,717) |
Net change in unrealized appreciation (depreciation) | | | 1,317,676 | | | (922,311) | | | 1,143,741 | | | (410,224) | | | 1,338,810 | | | (256,451) | | | 2,698,032 | | | (471,563) | | | 2,302,848 | | | 466,063 |
Net increase (decrease) in net assets resulting from operations | | | 1,998,378 | | | (2,027,165) | | | 2,543,363 | | | (1,463,162) | | | 2,365,515 | | | (1,101,773) | | | 4,289,523 | | | (1,308,141) | | | 3,772,228 | | | (1,059,691) |
| | | | | | | | | | | | | | | | | | | | |||||||||||
Dividends and distributions to shareholders | | | | | | | | | | | | | | | | | | | | | ||||||||||
Net dividends and distributions from net investment income and realized gain - Institutional Class | | | (635,315) | | | (1,836,175) | | | (931,933) | | | (1,650,678) | | | (543,536) | | | (1,019,814) | | | — | | | — | | | (1,241) | | | (768,746) |
Total dividends and distributions to shareholders | | | (635,315) | | | (1,836,175) | | | (931,933) | | | (1,650,678) | | | (543,536) | | | (1,019,814) | | | — | | | — | | | (1,241) | | | (768,746) |
| | | | | | | | | | | | | | | | | | | | |||||||||||
Capital share transactions | | | | | | | | | | | | | | | | | | | | | ||||||||||
Net proceeds from sale of shares | | | 323,587 | | | 18,491,650 | | | 1,699,663 | | | 16,771,927 | | | 285,113 | | | 4,414,934 | | | 283,114 | | | 729,876 | | | 264,719 | | | 3,456,834 |
Dividends and distributions reinvested | | | 410,964 | | | 1,226,820 | | | 830,672 | | | 1,505,063 | | | 542,176 | | | 1,017,853 | | | — | | | — | | | 1,238 | | | 763,333 |
Cost of shares redeemed** | | | (3,982,202) | | | (17,788,929) | | | (3,688,746) | | | (5,625,205) | | | (1,094,192) | | | (727,739) | | | (328,109) | | | (2,374,092) | | | (2,495,040) | | | (788,975) |
Net increase (decrease) in net assets resulting from capital share transactions | | | (3,247,651) | | | 1,929,541 | | | (1,158,411) | | | 12,651,785 | | | (266,903) | | | 4,705,048 | | | (44,995) | | | (1,644,216) | | | (2,229,083) | | | 3,431,192 |
| | | | | | | | | | | | | | | | | | | | |||||||||||
Net increase (decrease) in net assets | | | (1,884,588) | | | (1,933,799) | | | 453,019 | | | 9,537,945 | | | 1,555,076 | | | 2,583,461 | | | 4,244,528 | | | (2,952,357) | | | 1,541,904 | | | 1,602,755 |
| | | | | | | | | | | | | | | | | | | | |||||||||||
Net Assets | | | | | | | | | | | | | | | | | | | | | ||||||||||
Beginning of period | | | 35,550,724 | | | 37,484,523 | | | 44,461,531 | | | 34,923,586 | | | 17,819,251 | | | 15,235,790 | | | $7,245,204 | | | 10,197,561 | | | $15,966,069 | | | 14,363,314 |
| | | | | | | | | | | | | | | | | | | | |||||||||||
End of period | | | $33,666,136 | | | $35,550,724 | | | $44,914,550 | | | $44,461,531 | | | $19,374,327 | | | $17,819,251 | | | $11,489,732 | | | $7,245,204 | | | $17,507,973 | | | $15,966,069 |
| | | | | | | | | | | | | | | | | | | | |||||||||||
** Net of redemption fees of: | | | $— | | | $670 | | | $— | | | $— | | | $— | | | $929 | | | $— | | | $— | | | $— | | | $— |
The accompanying notes are an integral part of the financial statements.
29
Financial Highlights
| | Per Common Share Data(a) | | | Supplemental data and ratios | ||||||||||||||||||||||||||||||||||||||||
| | | | Income from investment operations | | | Distributions to shareholders | | | | | | | | | | | | | | | | | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||
Penn Capital Defensive Floating Rate Income Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Institutional Class | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
7/1/20 to 12/31/20 (Unaudited) | | | $9.30 | | | 0.15 | | | 0.40 | | | 0.55 | | | (0.18) | | | — | | | (0.18) | | | $9.67 | | | 5.95%(d) | | | $33,666 | | | 0.64% | | | 1.64% | | | 3.68% | | | 2.68% | | | 20%(d) |
7/1/19 to 6/30/20 | | | $9.97 | | | 0.42 | | | (0.67) | | | (0.25)(f) | | | (0.42) | | | — | | | (0.42) | | | $9.30 | | | (2.57)% | | | $35,551 | | | 0.64% | | | 1.37% | | | 4.33% | | | 3.60% | | | 93% |
7/1/18 to 6/30/19 | | | $10.09 | | | 0.48 | | | (0.09) | | | 0.39 (f) | | | (0.51) | | | — | | | (0.51) | | | $9.97 | | | 4.04% | | | $37,485 | | | 0.64% | | | 1.42% | | | 4.89% | | | 4.10% | | | 57% |
7/1/17 to 6/30/18 | | | $10.21 | | | 0.43 | | | (0.06) | | | 0.37 | | | (0.43) | | | (0.06) | | | (0.49) | | | $10.09 | | | 3.71% | | | $31,729 | | | 0.65%(g) | | | 1.64% | | | 4.31%(g) | | | 3.32% | | | 65% |
7/1/16 to 6/30/17 | | | $10.09 | | | 0.40 | | | 0.17 | | | 0.57 | | | (0.40) | | | (0.05) | | | (0.45) | | | $10.21 | | | 5.66% | | | $25,031 | | | 0.74% | | | 1.95% | | | 3.90% | | | 2.69% | | | 108% |
12/1/15(e) to 6/30/16 | | | $10.00 | | | 0.14 | | | 0.06 | | | 0.20 | | | (0.11) | | | — | | | (0.11) | | | $10.09 | | | 1.99%(d) | | | $18,625 | | | 0.74% | | | 2.77% | | | 2.56% | | | 0.53% | | | 43%(d) |
Penn Capital Defensive Short Duration High Income Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Institutional Class | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
7/1/20 to 12/31/20 (Unaudited) | | | $9.33 | | | 0.19 | | | 0.36 | | | 0.55 | | | (0.20) | | | — | | | (0.20) | | | $9.68 | | | 5.93%(d) | | | $44,915 | | | 0.54% | | | 1.18% | | | 4.04% | | | 3.40% | | | 57%(d) |
7/1/19 to 6/30/20 | | | $9.93 | | | 0.37 | | | (0.59) | | | (0.22) | | | (0.38) | | | — | | | (0.38) | | | $9.33 | | | (2.33)% | | | $44,462 | | | 0.54% | | | 1.15% | | | 3.87% | | | 3.26% | | | 113% |
7/1/18 to 6/30/19 | | | $9.85 | | | 0.35 | | | 0.10 | | | 0.45 (f) | | | (0.37) | | | — | | | (0.37) | | | $9.93 | | | 4.65% | | | $34,924 | | | 0.54% | | | 1.44% | | | 3.75% | | | 2.85% | | | 48% |
7/17/17(e) to 6/30/18 | | | $10.00 | | | 0.27 | | | (0.17) | | | 0.10 | | | (0.25) | | | — | | | (0.25) | | | $9.85 | | | 1.03%(d) | | | $12,436 | | | 0.54% | | | 2.70% | | | 3.08% | | | 0.92% | | | 39%(d) |
Penn Capital Opportunistic High Income Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Institutional Class | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
7/1/20 to 12/31/20 (Unaudited) | | | $8.88 | | | 0.27 | | | 0.93 | | | 1.20 | | | (0.28) | | | — | | | (0.28) | | | $9.80 | | | 13.64%(d) | | | $19,374 | | | 0.72% | | | 2.12% | | | 5.73% | | | 4.33% | | | 85%(d) |
7/1/19 to 6/30/20 | | | $9.99 | | | 0.53 | | | (1.10) | | | (0.57)(f) | | | (0.54) | | | — | | | (0.54) | | | $8.88 | | | (5.86)% | | | $17,819 | | | 0.72% | | | 2.08% | | | 5.66% | | | 4.30% | | | 149% |
7/1/18 to 6/30/19 | | | $10.06 | | | 0.59 | | | (0.02) | | | 0.57(f) | | | (0.61) | | | (0.03) | | | (0.64) | | | $9.99 | | | 5.83% | | | $15,236 | | | 0.72% | | | 2.26% | | | 5.90% | | | 4.36% | | | 85% |
7/1/17 to 6/30/18 | | | $10.52 | | | 0.61 | | | (0.22) | | | 0.39 (f) | | | (0.63) | | | (0.22) | | | (0.85) | | | $10.06 | | | 3.81% | | | $13,814 | | | 0.72% | | | 2.80% | | | 5.89% | | | 3.81% | | | 66% |
7/1/16 to 6/30/17 | | | $9.95 | | | 0.73 | | | 0.56 | | | 1.29 | | | (0.72) | | | — | | | (0.72) | | | $10.52 | | | 13.36% | | | $8,772 | | | 0.72% | | | 3.25% | | | 7.01% | | | 4.48% | | | 79% |
12/1/15(e) to 6/30/16 | | | $10.00 | | | 0.35 | | | (0.10) | | | 0.25 | | | (0.30) | | | — | | | (0.30) | | | $9.95 | | | 2.66%(d) | | | $7,843 | | | 0.72% | | | 5.14% | | | 6.34% | | | 1.92% | | | 62%(d) |
Penn Capital Special Situations Small Cap Equity Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Institutional Class | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
7/1/20 to 12/31/20 (Unaudited) | | | $9.33 | | | (0.02) | | | 5.57 | | | 5.55 | | | — | | | — | | | — | | | $14.88 | | | 59.49%(d) | | | $11,490 | | | 1.09% | | | 3.34% | | | (0.27)% | | | (2.52)% | | | 66%(d) |
7/1/19 to 6/30/20 | | | $10.67 | | | (0.03) | | | (1.31) | | | (1.34) | | | — | | | — | | | — | | | $9.33 | | | (12.56)% | | | $7,245 | | | 1.09% | | | 3.09% | | | (0.42)% | | | (2.42)% | | | 115% |
7/1/18 to 6/30/19 | | | $12.59 | | | (0.05) | | | (0.98) | | | (1.03) (f) | | | — | | | (0.89) | | | (0.89) | | | $10.67 | | | (7.91)% | | | $10,198 | | | 1.09% | | | 2.38% | | | (0.35)% | | | (1.64)% | | | 97% |
7/1/17 to 6/30/18 | | | $11.71 | | | (0.08) | | | 2.36 | | | 2.28 (f) | | | — | | | (1.40) | | | (1.40) | | | $12.59 | | | 20.31% | | | $21,289 | | | 1.09% | | | 2.09% | | | (0.64)% | | | (1.64)% | | | 105% |
7/1/16 to 6/30/17 | | | $10.32 | | | (0.04) | | | 2.24 | | | 2.20 (f) | | | — | | | (0.81) | | | (0.81) | | | $11.71 | | | 21.52% | | | $21,867 | | | 1.09% | | | 2.19% | | | (0.54)% | | | (1.64)% | | | 101% |
12/18/15(e) to 6/30/16 | | | $10.00 | | | (0.02) | | | 0.34 | | | 0.32 | | | — | | | — | | | — | | | $10.32 | | | 3.20%(d) | | | $8,554 | | | 1.09% | | | 5.63% | | | (0.48)% | | | (5.02)% | | | 102%(d) |
The accompanying notes are an integral part of the financial statements.
30
| | Per Common Share Data(a) | | | Supplemental data and ratios | ||||||||||||||||||||||||||||||||||||||||
| | | | Income from investment operations | | | Distributions to shareholders | | | | | | | | | | | | | | | | | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||
Penn Capital Managed Alpha SMID Cap Equity Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Institutional Class | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
7/1/20 to 12/31/20 (Unaudited) | | | $11.49 | | | 0.01 | | | 3.03 | | | 3.04 | | | —(h) | | | — | | | —(h) | | | $14.53 | | | 26.47%(d) | | | $17,508 | | | 1.06% | | | 2.24% | | | 0.23% | | | (0.95)% | | | 35%(d) |
7/1/19 to 6/30/20 | | | $12.68 | | | —(h) | | | (0.60) | | | (0.60) | | | — | | | (0.59) | | | (0.59) | | | $11.49 | | | (5.23)% | | | $15,966 | | | 1.06% | | | 2.14% | | | (0.04)% | | | (1.12)% | | | 57% |
7/1/18 to 6/30/19 | | | $13.55 | | | (0.01) | | | 0.37 | | | 0.36(f) | | | — | | | (1.23) | | | (1.23) | | | $12.68 | | | 3.64% | | | $14,363 | | | 1.06% | | | 2.20% | | | (0.11)% | | | (1.11)% | | | 40% |
7/1/17 to 6/30/18 | | | $11.73 | | | (0.04) | | | 2.07 | | | 2.03 | | | — | | | (0.21) | | | (0.21) | | | $13.55 | | | 17.41% | | | $14,910 | | | 1.06% | | | 2.38% | | | (0.34)% | | | (1.66)% | | | 64% |
7/1/16 to 6/30/17 | | | $9.65 | | | (0.02) | | | 2.10 | | | 2.08 | | | — | | | — | | | — | | | $11.73 | | | 21.55% | | | $11,027 | | | 1.06% | | | 2.63% | | | (0.29)% | | | (1.86)% | | | 91% |
12/1/15(e) to 6/30/16 | | | $10.00 | | | (0.03) | | | (0.32) | | | (0.35) | | | — | | | — | | | — | | | $9.65 | | | (3.50)%(d) | | | $9,462 | | | 1.06% | | | 3.74% | | | (0.53)% | | | (3.21)% | | | 70%(d) |
* | No information is provided for Investor Class shares because shares of that class had not yet been issued as of December 31, 2020. |
(a) | Information presented related to a share outstanding for the entire period. |
(b) | Annualized for periods less than one full year. |
(c) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. |
(d) | Not annualized. |
(e) | Commencement of operations. |
(f) | Total from investment operations per share includes redemption fees of less than $0.01 per share. |
(g) | Expense waiver of 0.64% was implemented on August 1, 2017. |
(h) | Amount is less than $0.005 per share. |
The accompanying notes are an integral part of the financial statements.
31
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2020 (Unaudited)
1. Organization
PENN Capital Funds Trust (the “Trust”) was organized as a Delaware statutory trust on August 29, 2014, and is registered under the Investment Company Act of 1940 (the “1940 Act”), as amended, as an open-end management investment company. The Trust consists of five series that are available for investment: the Penn Capital Defensive Floating Rate Income Fund, the Penn Capital Defensive Short Duration High Income Fund, the Penn Capital Opportunistic High Income Fund, the Penn Capital Special Situations Small Cap Equity Fund and the Penn Capital Managed Alpha SMID Cap Equity Fund (collectively referred to as the “Funds” and each individually referred to as a “Fund”). Two other series: the Penn Capital Micro Cap Equity Fund and the Penn Capital Enterprise Value Small Cap Equity Fund are not currently offered. The Funds follow the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 “Financial Services - Investment Companies”.
The Penn Capital Defensive Floating Rate Income Fund’s investment objective is to seek to provide current income. The Penn Capital Defensive Floating Rate Income Fund commenced operations on November 30, 2015.
The Penn Capital Defensive Short Duration High Income Fund’s investment objective is to seek to provide a high level of current income. The Penn Capital Defensive Short Duration High Income Fund commenced operations on July 17, 2017.
The Penn Capital Opportunistic High Income Fund’s investment objective is to seek to provide total return through interest income and capital appreciation. The Penn Capital Opportunistic High Income Fund commenced operations on November 30, 2015.
The Penn Capital Managed Alpha SMID Cap Equity Fund and the Penn Capital Special Situations Small Cap Equity Fund’s investment objective is to seek to provide capital appreciation. The Penn Capital Managed Alpha SMID Cap Equity Fund commenced operations on November 30, 2015. The Penn Capital Special Situations Small Cap Equity Fund commenced operations on December 17, 2015.
Each Fund’s investment objective is non-fundamental, and may be changed by the Trust’s Board of Trustees (the “Board” or “Trustees”) without shareholder approval. Unless otherwise noted, all of the other investment policies and strategies described in the Prospectus or hereafter are nonfundamental. The Penn Capital Management Company, LLC. (the “Advisor”) serves as the investment advisor to the Funds. The Advisor converted from a S corporation to a limited liability company in December 2020.
The Trust offers two classes of shares for the Penn Capital Defensive Floating Rate Income Fund, the Penn Capital Opportunistic High Income Fund, the Penn Capital Special Situations Small Cap Equity Fund and the Penn Capital Managed Alpha SMID Cap Equity Fund: Institutional and Investor Class. The Trust offers Institutional Class shares for the Penn Capital Defensive Short Duration High Income Fund. The Trust has also registered two other series, each with one class: the Penn Capital Micro Cap Equity Fund and the Penn Capital Enterprise Value Small Cap Equity Fund: Institutional Class. No information is provided in this report for Investor Class shares because shares of that class had not yet been issued as of December 31, 2020. Neither class has a front-end or back-end sales charge. The Penn Capital Micro Cap Equity Fund and Penn Capital Enterprise Value Small Cap Fund have not commenced operations as of December 31, 2020.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
A. Investment Valuation
The Funds use the following valuation methods to determine fair value as either fair value for investments for which market quotations are available, or if not available, the fair value, as determined in good faith pursuant to such policies and procedures as may be approved by the Trust’s Board from time to time. The valuation of the portfolio investments of the Funds currently includes the following processes:
Portfolio securities listed on a national or foreign securities exchange, except those listed on the NASDAQ® Stock Market and Small CapSM exchanges (“NASDAQ®”), for which market quotations are available, are valued at the official closing price of such exchange on each business day (defined as days on which the Funds are open for business (“Business Day”)). Portfolio securities traded on the NASDAQ® will be valued at the NASDAQ® Official Closing Price on each Business Day. If there is no such reported sale on an exchange or NASDAQ®, the portfolio security will be valued at the most recent quoted bid price. Price information on listed securities is taken from the exchange where the security is primarily traded.
32
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2020 (Unaudited)
Other assets and securities for which no quotations are readily available (such as for certain restricted or unlisted securities and private placements) or that may not be reliably priced (such as in the case of trade suspensions or halts, price movement limits set by certain foreign markets, and thinly traded or illiquid securities) will be valued in good faith at fair value using procedures and methods approved by the Board. Under the procedures adopted by the Board, the Board has delegated day-to-day responsibility for fair value determinations to a Valuation Committee comprised of representatives from the Advisor.
A Fund’s portfolio holdings may also consist of shares of other investment companies in which the Fund invests. The value of each such investment company will be its net asset value (“NAV”) at the time the Fund’s shares are priced. Each investment company calculates its NAV based on the current market value for its portfolio holdings. Each investment company values securities and other instruments in a manner as described in that investment company’s prospectus. The investment company’s prospectus explains the circumstances under which the company will use fair value pricing and the effects of using fair value pricing.
Because a Fund may invest in foreign securities, the Fund’s NAV may change on days when a shareholder will not be able to purchase or redeem Fund shares because foreign markets are open at times and on days when U.S. markets are not. Investments quoted in foreign currencies will be valued daily in U.S. dollars on the basis of the foreign currency exchange rates prevailing at the time such valuation is determined. Foreign currency exchange rates are generally determined as of the close of the New York Stock Exchange (“NYSE”) (generally 4:00 p.m. Eastern time). If an event that could materially affect the value of the Fund’s foreign securities has occurred between the time the securities were last traded and the time that the Fund calculates its NAV, the closing price of the Fund’s securities may no longer reflect their market value at the time the Fund calculates its NAV. In such a case, the Fund may use fair value methods to value such securities.
Fixed income securities shall be valued at the evaluated bid price supplied by the Fund’s pricing agent based on broker-dealer supplied valuations and other criteria, or directly by independent brokers when the pricing agent does not provide a price or the Valuation Committee does not believe that the pricing agent price reflects the current market value. If a price of a position is sought using independent brokers, the Advisor shall seek to obtain an evaluation bid price from at least two independent brokers who are knowledgeable about the position. The price of the position would be deemed to be an average of such bid prices. In the absence of sufficient broker dealer quotes, securities shall be valued at fair value pursuant to procedures adopted by the Board.
Bank loans are not listed on any securities exchange or board of trade. They are typically bought and sold by institutional investors in individually negotiated private transactions that function in many respects like an over-the-counter secondary market. This market generally has fewer trades and less liquidity than the secondary market for other types of securities. Some bank loans have few or no trades, or trade infrequently, and information regarding a specific bank loan may not be widely available or may be incomplete. Except as otherwise specified, bank loan securities shall be valued at the evaluated bid prices supplied by the Fund’s pricing agent based on broker-dealer supplied valuations and other criteria, such as, issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar assets, or directly by independent brokers when the pricing agent does not provide a price or the Valuation Committee does not believe that the pricing agent price reflects the current market value. If a price of a position is sought using independent brokers, the Advisor shall seek to obtain a bid price from at least two independent brokers who are knowledgeable about the position. The price of the position would be deemed to be an average of such bid prices. In the absence of sufficient broker dealer quotes, securities shall be valued at fair value pursuant to procedures adopted by the Board.
Occasionally, reliable market quotations are not readily available (such as for certain restricted or unlisted securities and private placements) or securities and other assets may not be reliably priced (such as in the case of trade suspensions or halts, price movement limits set by certain foreign markets, and thinly traded or illiquid securities), or there may be events affecting the value of foreign securities or other securities held by the Funds that occur when regular trading on foreign or other exchanges is closed, but before trading on the NYSE is closed. Fair value determinations are then made in good faith in accordance with procedures adopted by the Board. Under the procedures adopted by the Board, the Board has delegated the responsibility for making fair value determinations to a Valuation Committee, subject to the Board’s oversight. Generally, the fair value of a portfolio security or other asset shall be the amount that the owner of the security or asset might reasonably expect to receive upon its current sale. A three-tier hierarchy is utilized to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability and are developed based
33
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2020 (Unaudited)
on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability and are developed based on the best information available under the circumstances. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
Level 1 — unadjusted quoted prices in active markets for identical securities that the Funds have the ability to access
Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 — significant unobservable inputs (including a Fund’s own assumptions in determining the fair value of investments)
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The following table summarizes the inputs used as of December 31, 2020, in valuing each Fund’s investments:
Description | | | | | | | | | ||||
Penn Capital Defensive Floating Rate Income Fund | | | Level 1 | | | Level 2 | | | Level 3 | | | Total |
Investments in Securities(a) | | | | | | | | | ||||
Bank Loans | | | $ — | | | $29,141,222 | | | $ — | | | $29,141,222 |
Corporate Bonds | | | — | | | 2,771,880 | | | — | | | 2,771,880 |
Total Investments in Securities | | | $— | | | $31,913,102 | | | $— | | | $31,913,102 |
Penn Capital Defensive Short Duration High Income Fund | | | Level 1 | | | Level 2 | | | Level 3 | | | Total |
Investments in Securities(a) | | | | | | | | | ||||
Convertible Bonds | | | $ — | | | $472,729 | | | $ — | | | $472,729 |
Corporate Bonds | | | — | | | 37,685,985 | | | — | | | 37,685,985 |
Bank Loans | | | — | | | 2,167,746 | | | — | | | 2,167,746 |
Mutual Fund | | | 835,973 | | | — | | | — | | | 835,973 |
U.S. Government Note | | | — | | | 405,375 | | | — | | | 405,375 |
Total Investments in Securities | | | $835,973 | | | $40,731,835 | | | $— | | | $41,567,808 |
Penn Capital Opportunistic High Income Fund | | | Level 1 | | | Level 2 | | | Level 3 | | | Total |
Investments in Securities(a) | | | | | | | | | ||||
Asset Backed Security | | | $— | | | $51,104 | | | $— | | | $51,104 |
Bank Loans | | | — | | | 222,397 | | | — | | | 222,397 |
Convertible Bonds | | | — | | | 151,788 | | | — | | | 151,788 |
Corporate Bonds | | | — | | | 17,791,864 | | | — | | | 17,791,864 |
Mutual Fund | | | 399,088 | | | — | | | — | | | 399,088 |
Preferred Stock | | | 47,899 | | | — | | | — | | | 47,899 |
Total Investments in Securities | | | $446,987 | | | $18,217,153 | | | $— | | | $18,664,140 |
Penn Capital Special Situations Small Cap Equity Fund | | | Level 1 | | | Level 2 | | | Level 3 | | | Total |
Investments in Securities(a) | | | | | | | | | ||||
Common Stocks | | | $10,763,510 | | | $ — | | | $ — | | | $10,763,510 |
Contingent Value Right | | | — | | | 19 | | | — | | | 19 |
Real Estate Investment Trusts (REITs) | | | 516,153 | | | — | | | — | | | 516,153 |
Total Investments in Securities | | | $11,279,663 | | | $19 | | | $— | | | $11,279,682 |
34
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2020 (Unaudited)
Penn Capital Managed Alpha SMID Cap Equity Fund | | | Level 1 | | | Level 2 | | | Level 3 | | | Total |
Investments in Securities(a) | | | | | | | | | ||||
Common Stocks | | | $16,428,852 | | | $ — | | | $ — | | | $16,428,852 |
Real Estate Investment Trusts (REITs) | | | 973,671 | | | — | | | — | | | 973,671 |
Total Investments in Securities | | | $17,402,523 | | | $— | | | $— | | | $17,402,523 |
(a) | All other industry classifications are identified in the Schedule of Investments for each Fund. |
B. Investment Transactions and Related Investment Income
Investment transactions are accounted for on a trade-date basis. Interest income is recorded on the accrual basis, including the amortization of premiums and accretion of discounts on bonds held using the yield-to-maturity method. Dividend income is recognized on ex-dividend date.
Realized gains and losses on investment transactions and unrealized appreciation and depreciation of investments are reported for financial statement and Federal income tax purposes on the identified cost method.
C. Expenses
The Trust’s expenses are allocated to the individual Fund in proportion to the net assets of the respective Fund when the expenses were incurred, except where direct allocations of expenses can be made.
D. Use of Estimates
The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting year. Actual results could differ from those estimates.
E. Dividends and Distributions
Dividends and distributions to Shareholders are recorded on the ex-date. The Penn Capital Defensive Floating Rate Income Fund, the Penn Capital Defensive Short Duration High Income Fund, and the Penn Capital Opportunistic High Income Fund declare and distribute their net investment income, if any, monthly and make distributions of their net realized capital gains, if any, at least annually, usually in December. The Penn Capital Special Situations Small Cap Equity Fund and the Penn Capital Managed Alpha SMID Cap Equity Fund declare and distribute their net investment income, if any, annually and make distributions of net realized capital gains, if any, at least annually, usually in December.
The character of distributions made during the period from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. In addition, due to the timing of dividend distributions, the fiscal period in which the amounts are distributed may differ from the period that income or realized gains (losses) were recorded by each Fund.
F. Federal Income Taxes
Each Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. If so qualified, the Funds will not be subject to federal income tax to the extent they distribute all of their net investment income and capital gains to shareholders. Therefore, no federal income tax provision is required.
The Funds evaluate tax positions taken or expected to be taken in the course of preparing their tax returns to determine whether it is more-likely-than-not (i.e., greater than 50%) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. The Funds did not record any tax provision in the current period and have no provision for taxes in the financial statements. However, management’s conclusions regarding tax positions taken may be subject to review and adjustment at a later date based on factors including, but not limited to, examination by tax authorities (i.e., the last three open tax year ends, as applicable) and on-going analysis of and changes to tax laws, regulations and interpretations thereof.
35
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2020 (Unaudited)
G. Indemnifications
Under the Trust’s organizational documents, its officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust and each Fund. In addition, in the normal course of business, the Trust may enter into contracts that provide general indemnification to other parties. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred, and may not occur. However, the Trust has not had prior claims or losses pursuant to these contracts and considers the risk of loss to be remote.
3. Agreements and Related Party Transactions
Investment Advisory Agreement
The Trust has entered into an investment advisory agreement with the Advisor. Under the terms of the agreement, each Fund pays the Advisor a fee, payable at the end of each month, at an annual rate, set forth in the table below, of the respective Fund’s average daily net assets.
Penn Capital Defensive Floating Rate Income Fund | | | 0.55% |
Penn Capital Defensive Short Duration High Income Fund | | | 0.45% |
Penn Capital Opportunistic High Income Fund | | | 0.69% |
Penn Capital Special Situations Small Cap Equity Fund | | | 0.95% |
Penn Capital Managed Alpha SMID Cap Equity Fund | | | 0.90% |
With respect to each Fund other than the Penn Capital Defensive Short Duration High Income Fund and the Penn Capital Opportunistic High Income Fund, the Advisor has contractually agreed to waive its fees and/or pay Fund expenses so that the Funds’ total annual operating expenses (excluding any acquired fund fees and expenses, taxes, interest, brokerage fees, certain insurance costs, and extraordinary and other non-routine expenses) do not exceed the amounts shown below as a percentage of each Fund’s average daily net assets. With respect to the Penn Capital Opportunistic High Income Fund and the Penn Capital Defensive Short Duration High Income Fund, the Advisor has contractually agreed to waive its fees and/or pay Fund expenses so that the Fund’s total annual operating expenses (including any acquired fund fees and expenses incurred by the Fund as a result of its investments in other investment companies managed by the Advisor, but excluding any acquired fund fees and expenses incurred by the Fund as a result of its investments in unaffiliated investment companies, taxes, interest, brokerage fees, certain insurance costs, and extraordinary and other non-routine expenses) do not exceed the amounts shown below as a percentage of each Fund’s average daily net assets. The expense limitation agreement will remain in place through October 30, 2021. Thereafter, the expense limitation agreement for the Funds will be reviewed annually by the Advisor and the Board.
| | Institutional Class | | | Investor Class | |
Penn Capital Defensive Floating Rate Income Fund | | | 0.64% | | | 0.89% |
Penn Capital Defensive Short Duration High Income Fund | | | 0.54% | | | N/A |
Penn Capital Opportunistic High Income Fund | | | 0.72% | | | 0.97% |
Penn Capital Special Situations Small Cap Equity Fund | | | 1.09% | | | 1.34% |
Penn Capital Managed Alpha SMID Cap Equity Fund | | | 1.06% | | | 1.31% |
36
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2020 (Unaudited)
Any waived or reimbursed expenses by the Advisor to the Funds excluding any waivers related to acquired fund fees and expenses incurred by the Funds as a result of its investments in other investment companies managed by the Advisor, are subject to repayment by a Fund in the three years following the date the fees were waived or the expenses were paid, provided that the respective Fund is able to make the repayment without exceeding the Fund’s expense limitation in place when the fees were waived or expenses paid. The Advisor’s waived fees and paid expenses that are subject to potential recoupment are as follows:
Fiscal Period Incurred | | | Amount Waived/ Expense Assumed | | | Amount Recouped | | | Amount Subject to Potential Recoupment | | | Year of Expiration |
Penn Capital Defensive Floating Rate Income Fund | | | | | | | | | ||||
June 30, 2018 | | | $ 281,780 | | | $ — | | | $ 281,780 | | | 2021 |
June 30, 2019 | | | 291,034 | | | — | | | 291,034 | | | 2022 |
June 30, 2020 | | | 308,125 | | | — | | | 308,125 | | | 2023 |
June 30, 2021 | | | 172,009 | | | | | 172,009 | | | 2024 | |
Total | | | $1,052,948 | | | $— | | | $1,052,948 | | | |
Penn Capital Defensive Short Duration High Income Fund | | | | | | | | | ||||
June 30, 2018 | | | $164,748 | | | $— | | | $164,748 | | | 2021 |
June 30, 2019 | | | 200,969(1) | | | — | | | 198,460 | | | 2022 |
June 30, 2020 | | | 258,497(1) | | | — | | | 251,625 | | | 2023 |
June 30, 2021 | | | 144,090(1) | | | | | 141,250 | | | 2024 | |
Total | | | $768,304 | | | $— | | | $756,083 | | | |
Penn Capital Opportunistic High Income Fund | | | | | | | | | ||||
June 30, 2018 | | | $226,073 | | | $— | | | $226,073 | | | 2021 |
June 30, 2019 | | | 219,408(1) | | | — | | | 204,979 | | | 2022 |
June 30, 2020 | | | 241,623(1) | | | — | | | 221,552 | | | 2023 |
June 30, 2021 | | | 129,964(1) | | | | | 126,962 | | | 2024 | |
Total | | | $817,068 | | | $— | | | $779,566 | | | |
Penn Capital Special Situations Small Cap Equity Fund | | | | | | | | | ||||
June 30, 2018 | | | $208,947 | | | $— | | | $208,947 | | | 2021 |
June 30, 2019 | | | 187,190 | | | — | | | 187,190 | | | 2022 |
June 30, 2020 | | | 175,626 | | | — | | | 175,626 | | | 2023 |
June 30, 2021 | | | 100,306 | | | | | 100,306 | | | 2024 | |
Total | | | $672,069 | | | $— | | | $672,069 | | | |
Penn Capital Managed Alpha SMID Cap Equity Fund | | | | | | | | | ||||
June 30, 2018 | | | $175,125 | | | $— | | | $175,125 | | | 2021 |
June 30, 2019 | | | 160,750 | | | — | | | 160,750 | | | 2022 |
June 30, 2020 | | | 169,526 | | | — | | | 169,526 | | | 2023 |
June 30, 2021 | | | 94,879 | | | | | 94,879 | | | 2024 | |
Total | | | $600,280 | | | $— | | | $600,280 | | |
(1) | Includes fees waived that are not subject to potential recoupment. |
Certain Officers and Trustees of the Funds are also Officers of the Advisor.
The Trust has engaged Foreside Fund Officers Services, LLC to provide compliance services including the appointment of the Trust’s Chief Compliance Officer and Anti-Money Laundering Officer.
37
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2020 (Unaudited)
Distribution Agreement
Foreside Fund Services, LLC is the Trust’s distributor and principal underwriter (the “Distributor”). The Trust has adopted a plan of distribution under Rule 12b-1 of the 1940 Act applicable to the Investor Class. Under the plan, 12b-1 distribution fees at an annual rate of 0.25% of average daily net assets of Investor Class shares are paid to the Distributor or others for distribution and shareholder services. For the period ended December 31, 2020, there were no distribution fees paid under the plan because the Investor Class shares had not yet been issued as of December 31, 2020.
The Trust has engaged U.S. Bank Global Fund Services to serve as each Fund’s administrator, fund accountant, and transfer agent. The Trust has engaged U.S. Bank, N.A. to serve as each Fund’s custodian.
Shareholder Servicing Plan
The Trust has adopted a Shareholder Servicing Plan on behalf of each Fund’s Investor Class and Institutional Class. Under the plan, each Class can pay for non-distribution related shareholder support services (“service fees”) in an amount up to 0.15% of its average daily net assets. For the period ended December 31, 2020, there were no service fees incurred by the Investor Class shares because the Investor Class shares had not yet been issued as of December 31, 2020. The amount actually incurred by the Institutional Class shares for the period ended December 31, 2020, on an annualized basis was 0.09% for the Penn Capital Defensive Floating Rate Income Fund, 0.15% for the Penn Capital Defensive Short Duration High Income Fund, 0.10% for the Penn Capital Opportunistic High Income Fund, 0.15% for the Penn Capital Special Situations Small Cap Equity Fund and 0.09% for the Penn Capital Managed Alpha SMID Cap Equity Fund.
Other Related Party Transactions
The Advisor, affiliates of the Advisor and the officers of the Trust, have made investments in the Funds and accordingly, as shareholders of the Funds, pay a proportionate share of the Funds’ investment advisory fees and other expenses identified in each Fund’s Prospectus.
4. Federal Tax Information
It is each Fund’s intention to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code and distribute all of its taxable income. Accordingly, no provision for federal income taxes is required in the financial statements.
The amount and character of income and capital gain distributions to be paid, if any, are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differences in the timing of recognition of gains or losses on investments. Permanent book and tax basis differences, if any, may result in reclassifications to distributable earnings and additional paid-in capital.
The character of distributions for tax purposes paid during the period December 31, 2020, is as follows:
| | Ordinary Income Distributions | | | Long-Term Capital Gain Distributions | |
Penn Capital Defensive Floating Rate Income Fund | | | $635,315 | | | $ — |
Penn Capital Defensive Short Duration High Income Fund | | | 931,933 | | | — |
Penn Capital Opportunistic High Income Fund | | | 543,536 | | | — |
Penn Capital Special Situations Small Cap Equity Fund | | | — | | | — |
Penn Capital Managed Alpha SMID Cap Equity Fund | | | 1,241 | | | — |
The character of distributions for tax purposes paid during the fiscal year ended June 30, 2020, is as follows:
| | Ordinary Income Distributions | | | Long-Term Capital Gain Distributions | |
Penn Capital Defensive Floating Rate Income Fund | | | $1,836,175 | | | $— |
Penn Capital Defensive Short Duration High Income Fund | | | 1,650,678 | | | — |
Penn Capital Opportunistic High Income Fund | | | 1,019,814 | | | — |
Penn Capital Special Situations Small Cap Equity Fund | | | — | | | — |
Penn Capital Managed Alpha SMID Cap Equity Fund | | | — | | | 768,746 |
38
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2020 (Unaudited)
5. Investment Transactions
The cost of security purchases and the proceeds from security sales, other than short-term investments, for the period ended December 31, 2020, were as follows:
| | Non-U.S. Government | | | U.S. Government | |||||||
| | Purchases | | | Sales | | | Purchases | | | Sales | |
Penn Capital Defensive Floating Rate Income Fund | | | $6,486,817 | | | $9,765,754 | | | $ — | | | $ — |
Penn Capital Defensive Short Duration High Income Fund | | | 21,558,483 | | | 22,559,683 | | | — | | | — |
Penn Capital Opportunistic High Income Fund | | | 15,441,632 | | | 14,827,526 | | | — | | | — |
Penn Capital Special Situations Small Cap Equity Fund | | | 5,667,472 | | | 5,851,359 | | | — | | | — |
Penn Capital Managed Alpha SMID Cap Equity Fund | | | 5,433,219 | | | 7,431,711 | | | — | | | — |
6. Capital Share Transactions
| | Penn Capital Defensive Floating Rate Income Fund July 1, 2020 – December 31, 2020 | | | Penn Capital Defensive Short Duration High Income Fund July 1, 2020 – December 31, 2020 | | | Penn Capital Opportunistic High Income Fund July 1, 2020 – December 31, 2020 | | | Penn Capital Special Situations Small Cap Equity Fund July 1, 2020 – December 31, 2020 | | | Penn Capital Managed Alpha SMID Cap Equity Fund July 1, 2020 – December 31, 2020 | |
Institutional Class Shares | | | | | | | | | | | |||||
Shares sold | | | 33,803 | | | 177,507 | | | 31,018 | | | 24,118 | | | 18,827 |
Shares issued in reinvestment of dividends | | | 43,166 | | | 87,011 | | | 57,767 | | | — | | | 87 |
Shares redeemed | | | (418,308) | | | (385,866) | | | (119,052) | | | (28,354) | | | (203,825) |
Net increase (decrease) | | | (341,339) | | | (121,348) | | | (30,267) | | | (4,236) | | | (184,911) |
Institutional Amount | | | | | | | | | | | |||||
Shares sold | | | 323,587 | | | 1,699,663 | | | 285,113 | | | 283,114 | | | 264,719 |
Shares issued in reinvestment of dividends | | | 410,964 | | | 830,672 | | | 542,176 | | | — | | | 1,238 |
Shares redeemed | | | (3,982,202) | | | (3,688,746) | | | (1,094,192) | | | (328,109) | | | (2,495,040) |
Net increase (decrease) | | | (3,247,651) | | | (1,158,411) | | | (266,903) | | | (44,995) | | | (2,229,083) |
7. Transactions with Affiliates
The following issuers are affiliated with the Funds; that is, the Adviser had control of 5% or more of the outstanding voting securities during the period from July 1, 2020 through December 31, 2020. As defined in Section (2)(a)(3) of the Investment Company Act of 1940; such issuers are:
| | July 1, 2020 | | | Additions | | | Reductions | | | December 31, 2020 | | | Capital Gain Distribution | | | Unrealized Depreciation Change | | | Realized Loss | | | December 31, 2020 | ||||||||||||||||
Issuer Name | | | Share Balance | | | Cost | | | Share Balance | | | Cost | | | Share Balance | | | Cost | | | Share Balance | | | Dividend Income | | | Value | | | Cost | |||||||||
Penn Capital Opportunistic High Income Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
Penn Capital Defensive Floating Rate Income Fund | | | 223,346 | | | $2,246,658 | | | 1,638 | | | $15,560 | | | (183,713) | | | $(1,852,774) | | | 41,271 | | | $ 15,559 | | | $ — | | | $ 159,188 | | | $ (102,774) | | | $399,087 | | | $409,444 |
| | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
Penn Capital Defensive Short Duration High Income Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||
Penn Capital Defensive Floating Rate Income Fund | | | 111,025 | | | $1,111,036 | | | 1,686 | | | $16,050 | | | (26,261) | | | $(263,916) | | | 86,450 | | | $16,050 | | | $ — | | | $51,311 | | | $(13,916) | | | $835,973 | | | $863,170 |
39
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2020 (Unaudited)
8. Credit Risk, LIBOR and Asset Concentration
Small- and mid-capitalization companies may not have the size, resources and other assets of large capitalization companies. As a result, the securities of small- and mid-capitalization companies may be subject to greater market risks and fluctuations in value than large capitalization companies or may not correspond to changes in the stock market in general. In addition, small- and mid-capitalization companies may be particularly affected by interest rate increases, as they may find it more difficult to borrow money to continue or expand operations, or may have difficulty in repaying any loans.
High yield securities and unrated securities of similar credit quality have speculative characteristics and involve greater volatility of price and yield, greater of liquidity risk, and generally reflect a greater possibility of an adverse change in financial condition that could affect an issuer’s ability to honor its obligations.
There are a number of risks associated with an investment in bank loans, including credit risk, interest rate risk, liquidity risk and prepayment risk. Lack of an active trading market, restrictions on resale, irregular trading activity, wide bid/ask spreads and extended trade settlement periods may impair the Fund’s ability to sell bank loans within its desired time frame or at an acceptable price and its ability to accurately value existing and prospective investments. Extended trade settlement periods may result in cash not being immediately available to the Fund. As a result of such illiquidity, the Fund may have to sell other investments or engage in borrowing transactions to raise cash to meet its obligations.
A Fund may invest in certain instruments that rely in some fashion upon London Interbank Offered Rate (“LIBOR”). LIBOR is an average interest rate, determined by the ICE Benchmark Administration, that banks charge one another for the use of short-term money. The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced plans to phase out the use of LIBOR by the end of 2021. There remains uncertainty regarding future utilization of LIBOR and the nature of any replacement rate, and any potential effects of the transition away for LIBOR on a Fund or on certain instruments in which a Fund invests are not known.
9. Line of Credit
PENN Capital Funds Trust has a $10,000,000 uncommitted, unsecured, umbrella 364-day line of credit, for temporary purposes, including to meet redemption requests. The interest rate as of December 31, 2020 was 3.25%. During the period ended December 31, 2020, the Penn Capital Defensive Short Duration High Income Fund, the Penn Capital Opportunistic High Income Fund, and the Penn Capital Managed Alpha SMID Cap Equity Fund did not use the credit line.
During the period ended December 31, 2020, line of credit activity for the Penn Capital Managed Alpha SMID Cap Equity Fund was as follows:
Fund | | | Average Borrowings | | | Amount Outstanding as of December 31, 2020 | | | Interest Expense | | | Maximum Borrowing |
Penn Capital Managed Alpha SMIID Cap Equity Fund | | | $4,712 | | | $ — | | | $73 | | | $334,000 |
10. Recent Accounting Pronouncement
In August 2018, FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The primary focus of ASU 2018-13 is to improve the effectiveness of the disclosure requirements for fair value measurements. The changes affect all companies that are required to include fair value measurement disclosures. In general, the amendments in ASU 2018-13 are effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. An entity is permitted to early adopt the removed or modified disclosures upon the issuance of ASU 2018-13 and may delay adoption of the additional disclosures, which are required for public companies only, until their effective date. Management has chosen to adopt the modified disclosures for the year ended June 30, 2020.
In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). The amendments in ASU 2020-04 provide optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of LIBOR and other interbank-offered based reference rates as of the end of 2021. ASU 2020-04 is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management is currently evaluating the impact, if any of applying this ASU.
40
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2020 (Unaudited)
11. Concentration Risks
The Advisor and its employees collectively have beneficial ownership, either directly or indirectly, of more than 20% of each of the Funds as of December 31, 2020. In addition to the Advisor, one or more individual investors own more than 10% of the Penn Capital Special Situations Small Cap Equity Fund and the Penn Capital Managed Alpha SMID Cap Equity Fund as of December 31, 2020. To the extent multiple investors in the Funds rely on the advice of a common investment advisor the Funds may have the risk of a concentrated investor base.
12. COVID-19
The global outbreak of COVID-19 (commonly referred to as “coronavirus”) has disrupted economic markets and the prolonged economic impact is uncertain. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, are not known. The operational and financial performance of the issuers of securities in which the Funds invest depends on future developments, including the duration and spread of the outbreak, and such uncertainty may in turn adversely affect the value and liquidity of the Funds’ investments, impair the Funds’ ability to satisfy redemption requests, and negatively impact the Funds’ performance.
13. Subsequent Events
On December 10, 2020, Spouting Rock Asset Management, LLC announced that it signed a definitive agreement to acquire a majority investment in Penn Capital (the “Transaction”). The Transaction is expected to close on or about March 31, 2021. The Transaction is subject to certain conditions to closing. In connection with this announcement, the Funds' Board of Trustees (the “Board”) will meet to consider various matters related to the Transaction affecting the Funds. The Funds’ Prospectus will be further supplemented to announce the Board's determinations.
Except as disclosed above, as of the date the financial statements were available to be issued, Management has determined that no additional material events or transactions occurred that would require recognition or disclosure in the Funds’ financial statements.
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ADDITIONAL INFORMATION
DECEMBER 31, 2020 (UNAUDITED)
Trustee and Officer Compensation
The Trust does not compensate any of its Trustees who are interested persons nor any of its officers. For the period ended December 31, 2020, the aggregate compensation paid by the Trust to the independent Trustees was $15,000. The Trust did not pay any special compensation to any of its Trustees or officers. The Statement of Additional Information includes additional information about the Trustees and is available without charge, upon request, by calling 844-302-7366.
Proxy Voting Policies
A description of the policies and procedures that each Fund uses to determine how to vote proxies relating to portfolio securities owned by that Fund is available: (1) without charge, upon request, by calling 844-302-7366; (2) in the Statement of Additional Information on the Trust’s website www.penncapitalfunds.com; and (3) on the SEC’s website at www.sec.gov. Information about how the Funds voted proxies relating to portfolio securities during the most recent fiscal year ended June 30, 2020 may be obtained (1) without charge, upon request, by calling 844-302-7366 and (2) on the SEC’s website at www.sec.gov.
Form N-PORT
Each Fund will file its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Part F of Form N-PORT. The Funds’ Part F of Form N-PORT will be available on the EDGAR database on the SEC’s website at www.sec.gov. These Forms may also be reviewed and copied at the SEC’s Public Reference Room in Washington D.C. Information about the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Householding
In an effort to decrease costs, the Funds intend to reduce the number of duplicate prospectuses, annual and semi-annual reports, proxy statements and other similar documents you receive by sending only one copy of each to those addresses shared by two or more accounts and to shareholders that the transfer agent reasonably believes are from the same family or household. Once implemented, if you would like to discontinue householding for your accounts, please call (844) 302-7366 to request individual copies of these documents. The transfer agent will begin sending individual copies thirty days after receiving your request to stop householding. This policy does not apply to account statements.
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Board Approval of Investment Advisory Agreements
At the September 17, 2020 meeting (collectively, the “Meeting”) of the Board of Trustees (the “Board” or “Trustees”) of the PENN Capital Funds Trust (the “Trust”), the Board, including those Trustees who are not “interested persons” (as that term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”) of the Trust (the “Independent Trustees”), approved the renewal of the investment advisory agreement (the “Investment Advisory Agreement”) between Penn Capital Management Company, LLC. (the “Adviser” or “Penn Capital”) and the Trust, on behalf of the Penn Capital Defensive Floating Rate Income Fund, Penn Capital Defensive Short Duration High Income Fund, Penn Capital Multi-Credit High Income Fund, Penn Capital Special Situations Small Cap Equity Fund and Penn Capital Managed Alpha SMID Cap Equity Fund series of the Trust (each a “Fund” and collectively, the “Funds”).
In considering approval of the continuation of the Investment Advisory Agreement, the Board, including the Independent Trustees, reviewed the Meeting Materials and other information from counsel and from Penn Capital, including: (i) a copy of the Investment Advisory Agreement; (ii) information describing the nature, quality and extent of the services that Penn Capital provides and expects to provide to the Funds; (iii) information concerning Penn Capital’s financial condition, business, operations, portfolio management teams and compliance program; (iv) information describing each Fund’s advisory fee and operating expenses; (v) a copy of the current Form ADV for Penn Capital; and (vi) a memorandum from counsel on the responsibilities of trustees in considering investment advisory arrangements under the 1940 Act. The Board also considered presentations made by, and discussions held with, representatives of Penn Capital, as well as information presented at Board meetings throughout the year. The Board also received information comparing the advisory fee, expenses and performance of each Fund to other investment companies considered to be in the Funds’ peer group.
During its review of this information, the Board focused on and analyzed the factors that the Board deemed relevant, including: (i) the nature, quality and extent of the services provided and expected to be provided to each Fund by Penn Capital; (ii) Penn Capital’s personnel and operations; (iii) each Fund’s expense level; (iv) the profitability to Penn Capital under the Investment Advisory Agreement; (v) any “fall-out” benefits to Penn Capital and its affiliates (i.e., the ancillary benefits realized by Penn Capital and its affiliates from Penn Capital’s relationship with the Trust); (vi) the effect of asset growth on each Fund’s expenses; (vii) possible conflicts of interest; and (viii) the investment performance of the Funds.
The Board, including the Independent Trustees, considered the following in respect of each Fund:
(a) The nature, extent and quality of services provided and expected to be provided by Penn Capital to the Funds; Penn Capital’s personnel and operations. The Board reviewed the services that Penn Capital provides and expected to provide to each Fund. The Board noted the responsibilities that Penn Capital has as the Funds’ investment adviser, including: the responsibility for the management and investment of each Fund’s securities portfolio; executing portfolio security trades; monitoring compliance with each Fund’s investment objective, policies and limitations; the responsibility for quarterly reporting to the Board; the oversight of general portfolio compliance with relevant law; and the implementation of Board directives as they relate to each Fund.
The Board reviewed Penn Capital’s experience, resources and strengths in managing the Funds and other pooled investment vehicles, and Penn Capital’s personnel. Based on its consideration and review of the foregoing information, the Board determined that each Fund was likely to continue to benefit from the nature, quality and extent of these services, as well as Penn Capital’s ability to render such services based on their experience, personnel, operations, and resources.
(b) Comparison of services provided and fees paid to those under other investment advisory contracts. The Board compared both the services provided and the fees paid pursuant to the Investment Advisory Agreement to those under other contracts of Penn Capital, and under contracts of other investment advisers with respect to similar funds. In particular, the Board compared each Fund’s advisory fee and expense ratio to other investment companies considered to be in that Fund’s peer group. The Board noted that Penn Capital entered into an Expense Limitation Agreement whereby Penn Capital waives advisory fees and/or assumes expenses to keep the Funds’ expenses from exceeding certain levels. The Board also noted that Penn Capital has agreed to waive advisory fees and/or assume expenses with respect to the Penn Capital Multi-Credit High Income Fund and Penn Capital Defensive Short Duration High Income Fund to the extent of any AFFE incurred by the Funds as a result of their investment in other investment companies managed by Penn Capital. The Board received and considered information about the fee rates charged to other accounts and clients that are managed by Penn Capital, including information about the differences in services provided to the non-registered investment company clients.
Consideration was given to the advisory fees and expense ratios of the Institutional Class Shares of the Funds, the only share class with assets to date. With respect to the Penn Capital Defensive Floating Rate Income Fund, the Board considered that the Fund’s advisory fee was below both the median and average of its peer group, and the Fund’s total expenses (including the fee waiver) were below the median and average of its peer group. With respect to the Penn Capital Defensive Short Duration High Income Fund, the Board considered that the Fund’s advisory fee was below both the median and average of its expense peer group,
43
and the Fund’s total expenses (including the fee waiver) were below the median and average of its expense peer group. With respect to the Penn Capital Multi-Credit High Income Fund, the Board considered that the Fund’s advisory fee was above both the median and the average of its peer group, but the Fund’s total expenses (including the fee waiver) were below the median and average of its peer group. With respect to the Penn Capital Managed Alpha SMID Cap Equity Fund, the Board considered that the Fund’s advisory fee was above both the median and average of its peer group, and the Fund’s total expenses (including the fee waiver) were above the median and average of its peer group. With respect to the Penn Capital Special Situations Small Cap Equity Fund, the Board considered that the Fund’s advisory fee was above both the median and average of its peer group, and the Fund’s total expenses (including the fee waiver) were above the median and the average of its peer group. To the extent that a Fund’s advisory fee and/or total expenses (including the fee waiver) were above the median and average of its respective peer group, Penn Capital explained and the Board considered the reasons for the higher fees/expenses.
After comparing each Fund’s fees with those of other funds in the Fund’s peer group, and considering the information about fee rates Penn Capital charged to other accounts and clients, and in light of the nature, quality and extent of services provided by Penn Capital and the costs Penn Capital incurred by providing those services, the Board concluded that the level of fees paid to Penn Capital with respect to the Funds was fair and reasonable.
(c) The cost of the services provided and profits realized by Penn Capital from the relationship with the Funds; the extent to which economies of scale were realized as the Funds grew, and whether fee levels reflect such economies of scale; “fall-out” benefits; possible conflicts of interest. The Board discussed the costs, including operational costs, and Penn Capital’s profitability in connection with its serving as each Fund’s investment adviser. The Board considered that the Funds were still not yet of a sufficient size to be experiencing economies of scale. The Board concluded that the profitability of Penn Capital, and the extent to which economies of scale were reflected in the Funds’ advisory fees, were reasonable for the Funds in relation to the performance and asset sizes of the Funds.
The Board considered that Penn Capital may experience reputational “fall-out” benefits based on the success of the Funds, but that such benefits are not easily quantifiable. The Board noted that since the Trust’s service providers are not affiliated with Penn Capital, such services do not give rise to “fall-out” benefits for Penn Capital. The Board also noted Penn Capital’s procedures to manage potential conflicts of interest and Penn Capital’s belief that its management of the Funds does not present a material conflict of interest.
(d) Investment performance of the Funds. The Board considered the investment performance of the Funds. In particular, the Board considered the investment performance of the Funds relative to their stated investment objectives and strategies and the success of Penn Capital in reaching such objectives. The Board considered each Fund’s investment performance compared to the benchmark index that each Fund uses for comparison in its Prospectus and shareholder reports. The Board also considered each Fund’s investment performance compared to the Fund’s respective peer group. Consideration was given to the performance of the Institutional Class Shares of the Funds, the only share class with performance to date.
The Board considered that the Penn Capital Defensive Short Duration High Income Fund underperformed both its performance peer group and benchmark index for the one-year and since-inception periods ended June 30, 2020. The Board considered that the Penn Capital Multi-Credit High Income Fund underperformed both its peer group and benchmark index for the one-year, three-year and since-inception periods ended June 30, 2020. The Board considered that the Penn Capital Defensive Floating Rate Income Fund outperformed its peer group for the one-year and three-year periods ended June 30, 2020, but underperformed its peer group for the since-inception period and underperformed its benchmark index for the one-year, three-year and since-inception periods. The Board considered that the Penn Capital Special Situations Small Cap Equity Fund outperformed its peer group for the three-year and since-inception periods ended June 30, 2020, but underperformed its peer group for the one-year period and underperformed its benchmark index for the one-year, three-year and since-inception periods. The Board considered that the Penn Capital Managed Alpha SMID Cap Equity Fund outperformed its peer group for the one-year, three-year and since-inception periods and outperformed its benchmark index for the three-year and since-inception periods ended June 30, 2020, but underperformed its benchmark index for the one-year period. The Board discussed with Penn Capital the reasons for the relative underperformance of certain Funds for certain periods. The Board concluded that the performance of the Funds was reasonable in light of the respective investment objectives and policies of the Funds.
Conclusion. No single factor was determinative to the Board’s decision. Based on the foregoing and such other matters as were deemed relevant, such as the Expense Limitation Agreement, the Board concluded that the advisory fee rates and total expense ratios were reasonable in relation to the services provided, and to be provided, by Penn Capital to each Fund, as well as the costs incurred and benefits gained by Penn Capital in providing such services. The Board also found the advisory fees to be reasonable in comparison to the fees charged by advisers to other comparable funds of similar size. As a result, the Board concluded that the approval of the continuation of the Investment Advisory Agreement was in the best interests of each Fund.
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Statement Regarding Liquidity Risk Management Program (Unaudited)
Rule 22e-4 under the Investment Company Act of 1940, as amended (the “1940 Act”), requires open-end registered investment companies to establish written liquidity risk management programs. Rule 22e-4 (the "Liquidity Rule") seeks to promote effective liquidity risk management, thereby reducing the risk that open-end funds will be unable to meet their redemption obligations and mitigating dilution of the interests of fund shareholders.
Consistent with the Liquidity Rule, PENN Capital Funds Trust (the “Trust”) adopted a Liquidity Risk Management Program (“the Program”) on behalf of each series of the Trust. The Board has approved the designation of the Trust's Valuation Committee, and designated Portfolio Managers, together with the Trust's CCO, to serve as the Program Administrator (the “Trust Program Administrator”) for the Program. The responsibilities of the Trust Program Administrator include, among other things, administering day-to-day aspects of the Program and carrying out the specific responsibilities set forth in the Program.
At a meeting of the Board held on September 17, 2020, the Trust Program Administrator provided an annual written report (the “Report”) to the Board to address the operation of the Program and assess its adequacy and the effectiveness of its implementation during the period from the Program's inception on June 1, 2019 through June 30, 2020 (the “Reporting Period”). The Report noted that there were no material changes to the Program during the Reporting Period. Additionally, the Report noted that, during the Reporting Period: I) the Funds classified and reported liquidity classifications of portfolio holdings in accordance with the Program and the Liquidity Rule and no Fund was required to restate the liquidity classification reported on Form N-PORT of any portfolio investment; 2) no Fund breached the 15% limitation on illiquid investments; 3) no Fund designated as a primarily highly liquid fund as defined in the Program (each such Fund, a “PHLF”) failed to qualify as a PHLF causing the designation of such Fund to be changed (each of the Funds, except for the Penn Capital Defensive Floating Rate Income Fund, was designated as a PHLF); and 4) the Penn Capital Defensive Floating Rate Income Fund complied with its designated highly liquid investment minimum (“HLIM”). The Report further stated that the Trust Program Administrator concluded that the Program has been implemented effectively and is reasonably designed to assess and manage each Fund's liquidity risk and to comply with the requirements of the Liquidity Rule. The Report described the annual review and assessment of each Fund’s liquidity risk as set forth in the Program in accordance with the Liquidity Rule, including the key considerations and conclusions of the review and noted that it was determined each Fund’s strategy remains appropriate for an open-end structure.
Please refer to each Fund's prospectus for more information regarding the Fund's exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
45
PRIVACY POLICY
| FACTS | | | WHAT DOES THE PENN CAPITAL FUNDS TRUST DO WITH YOUR PERSONAL INFORMATION? | | ||||||
| Why? | | | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. | | ||||||
| What? | | | The types of personal information we collect and share depend on the product or service you have with us. The information can include: • Social Security number • Account balances and account transactions • Assets and transaction history When you are no longer our client, we continue to share your information as described in this notice. | | ||||||
| How? | | | All financial companies need to share clients’ personal information to run the everyday business. In the section below, we list the reasons financial companies can share their clients’ personal information; the reasons PENN chooses to share; and whether you can limit this sharing. | | ||||||
| Reasons we can share your personal information | | | Does Penn share? | | | Can you limit this sharing? | | |||
| For everyday business purposes - such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | | | Yes | | | No | | |||
| For marketing purposes - to offer our products and services to you | | | No | | | No | | |||
| For joint marketing with other financial companies | | | No | | | No | | |||
| For affiliates’ everyday business purposes - information about transaction(s) and experiences | | | Yes | | | No | | |||
| For affiliates’ everyday business purposes - information about your creditworthiness | | | No | | | No | | |||
| For nonaffiliates to market to you | | | No | | | No | |
| Questions? | | | Call 215-302-1500 or go to www.penncapital.com | |
46
PENN CAPITAL FUNDS TRUST
PRIVACY POLICY
| Who we are | | |||
| Who is providing this notice? | | | Penn Capital Management Company, Inc. and its affiliates (“Penn”) | |
| What we do | | |||
| How does Penn protect my personal information? | | | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer and secured files and buildings. | |
| How does Penn collect my personal information? | | | We collect your personal information, for example, when you • Open an account or deposit money • Provide information on client questionnaires | |
| Why can’t I limit all sharing? | | | Federal law gives you the right to limit only • sharing for affiliates everyday business purposes - information about your creditworthiness • affiliates from using your information to market to you • sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing. | |
| Definitions | | |||
| Affiliates | | | Companies related by common ownership or control. They can be financial or nonfinancial companies • PENN Capital Funds Group LLC • PENN Capital Funds Trust • Penn Capital Management Company, Inc. | |
| Nonaffiliates | | | Companies not related by common ownership or control. They can be financial or nonfinancial companies • Penn does not share information with nonaffiliates | |
| Joint marketing | | | A formal agreement between non affiliated companies that together market financial products or services to you • Penn does not have joint marketing partners | |
| Other important information | | |||
| This notice replaces all previous notices of our consumer privacy policy, and may be amended from time to time. Penn will inform you of updates or changes as required by law. | |
47
Board of Trustees
Dennis S. Hudson, III
John R. Schwab
Richard A. Hocker
Investment Advisor
Penn Capital Management Company, LLC.
Navy Yard Corporate Center
1200 Intrepid Avenue, Suite 400
Philadelphia, Pennsylvania 19112
Legal Counsel
Stradley Ronon Stevens & Young, LLP
2005 Market Street, Suite 2600
Philadelphia, Pennsylvania 19103
Custodian
U.S. Bank, N.A.
1555 N. Rivercenter Drive, Suite 302
Milwaukee, WI 53212
Distributor
Foreside Fund Services, LLC
Three Canal Plaza
Portland, ME 04101
Administrator, Transfer Agent
and Dividend Disbursing Agent
U.S. Bancorp Fund Services, LLC
doing business as U.S. Bank Global Fund Services
615 East Michigan Street
Milwaukee, WI 53202
Shareholder/Investor Information
1.844.302.PENN (7366)
www.penncapitalfunds.com
BEFORE INVESTING YOU SHOULD CAREFULLYCONSIDER THE FUND’S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES. THISAND OTHER RELEVANT INFORMATION CAN BE FOUND IN THE PROSPECTUSAND STATEMENT OF ADDITIONAL INFORMATION, COPIES OF WHICH MAY BE OBTAINED BY CALLING (844) 302-PENN (7366) OR BY VISITING WWW.PENNCAPITALFUNDS.COM. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST.
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).
Item 6. Investments.
(a) | Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form. |
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees.
Item 11. Controls and Procedures.
(a) | The Registrant’s President and Treasurer have reviewed the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d 15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider. |
(b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 13. Exhibits.
(a) | (1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Not applicable for semi-annual reports. |
|
| (3) Any written solicitation to purchase securities under Rule 23c 1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies. |
(b) | Certifications pursuant to Section 906 of the Sarbanes Oxley Act of 2002. Furnished herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | | | PENN Capital Funds Trust |
| | ||
By (Signature and Title) | | | /s/ Richard A. Hocker |
| | Richard A. Hocker, President | |
| | ||
Date | | | 2/22/2021 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) | | | /s/ Richard A. Hocker |
| | Richard A. Hocker, President | |
| | ||
Date | | | 2/22/2021 |
| | ||
By (Signature and Title) | | | /s/ Gerald McBride |
| | Gerald McBride, Treasurer | |
| | ||
Date | | | 2/22/2021 |