The Fund seeks to preserve capital and attain long-term total returns through a combination of current income and moderate capital appreciation.
The Strategic Income Fund invests primarily in income bearing securities. We will adjust the allocation of the Fund’s assets among these securities as dictated by changes in interest rates as well as the overall economic environment.
- Strategic top-down asset allocation based on macroeconomic conditions
- Bottom-up security selection based on rigorous fundamental and credit analysis
- Unconstrained, risk-aware strategy
- Experienced investment team
- Adviser is majority-owned by its employees
- $5,000 initial investment for regular accounts
- $1,500 initial investment for IRA or other tax-deferred accounts
- $100 for subsequent investments
NAV as of 10/6/22
(as of 9/30/22)
Fiscal Year Turnover
(as of 3/31/22)
Gross Expense Ratio
(as of 3/31/22)
We believe that by avoiding the “style box” trap and having the flexibility to invest in multiple classes of bonds, we can manage each portfolio in such a way as to emphasize the most attractive sector at any given time. By strategically shifting out of overvalued assets, we strive to minimize potential risk and produce better returns over time.
Furthermore, our research has shown that the various sectors of the bond market behave differently under different economic conditions. For instance, during periods of economic expansion, high yield and convertible bonds tend to perform well as rising corporate profits lead to improved credit profiles. Conversely, they tend to perform very poorly during periods of economic contraction as credit profiles deteriorate. During such recessionary periods, investment grade bonds generally prove to be better performers because of their responsiveness to declining interest rates.
Within particular sectors we choose individual securities based on rigorous fundamental and credit analysis. We emphasize a thorough understanding of each company’s balance sheet by determining the company’s ability to generate recurring free cash flow from its operations. As a result, we do a significant amount of work to determine the company’s business prospects as well as the positive and negative levers in its financial model, which influence the company’s ability to generate cash flow. We believe that we find our best investments in companies that have great products, a competitive advantage that gives them pricing power in the market, a consistent operating history, and management that operate the company as if they own it. Finally, we determine what we believe to be the appreciation potential versus the downside risk to gauge the attractiveness of the security versus other available investment opportunities.
Over time, we expect the maturity structure, credit quality, and sector concentration of the portfolio will differ during periods of economic contraction versus economic expansion. In short, we will employ a strategy based on the belief that over the long term positive returns can be achieved, and losses minimized, through careful security selection and by shifting the allocation among fixed income sectors.
The Fund was rated 4 Stars against 630 funds Overall, 5 Stars against 630 funds over 3 Years, 4 Stars against 576 funds over 5 Years, 4 Stars against 395 funds over 10 Years in the High Yield Bond category based on risk-adjusted returns as of 9/30/22.
The Morningstar Rating™ for funds, or “star rating,” is calculated for mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period has the greatest impact because it is included in all three rating periods.
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The Osterweis Funds are available by prospectus only. The Funds’ investment objectives, risks, charges and expenses must be considered carefully before investing. The summary and statutory prospectuses contain this and other important information about the Funds. You may obtain a summary or statutory prospectus by calling toll free at (866) 236-0050, or by visiting www.osterweis.com/statpro. Please read the prospectus carefully before investing to ensure the Fund is appropriate for your goals and risk tolerance.
Mutual fund investing involves risk. Principal loss is possible.
The Osterweis Strategic Income Fund may invest in debt securities that are un-rated or rated below investment grade. Lower-rated securities may present an increased possibility of default, price volatility or illiquidity compared to higher-rated securities. The Fund may invest in foreign and emerging market securities, which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks may increase for emerging markets. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Small- and mid-capitalization companies tend to have limited liquidity and greater price volatility than large-capitalization companies. Higher turnover rates may result in increased transaction costs, which could impact performance. From time to time, the Fund may have concentrated positions in one or more sectors subjecting the Fund to sector emphasis risk. The Fund may invest in municipal securities which are subject to the risk of default.
While the fund is no-load, management fees and other expenses still apply. Please refer to the prospectus for more information.
Osterweis Capital Management is the adviser to the Osterweis Funds, which are distributed by Quasar Distributors, LLC.