RiverNorth/Oaktree High Income Fund
Class I: RNHIX
Class R: RNOTX
Literature
Investment Objective & Philosophy
Investment Strategy
Investment Rationale
Fund Information
Portfolio Detail
Portfolio Statistics
Performance
Fund Expenses
Risk-Return Tradeoff
Portfolio Managers
Distributions
Disclosures & Definitions
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RiverNorth/Oaktree High Income Fund

Class I: RNHIX
Class R: RNOTX
Net Asset Value (NAV)
Literature
Investment Objective & Philosophy
Investment Strategy
Investment Rationale
Fund Information
Portfolio Detail
Portfolio Statistics
Performance
Fund Expenses
Risk/Return Tradeoff
Portfolio Managers
Distributions
Disclosures & Definitions

Net Asset Value (NAV) as of 6.27.2017

Share Class Current NAV Daily Change % YTD Change %
Class I: RNHIX $9.72 -0.10% 3.55%
Class R: RNOTX $9.71 -0.10% 3.43%

Literature


Investment Objective & Philosophy

The RiverNorth/Oaktree High Income Fund seeks to provide investors with overall total return consisting of long-term capital appreciation and income.

While RiverNorth Capital Management, LLC ("RiverNorth") believes markets are generally efficient, closed-end funds offer a unique structure whereby investors can purchase a diversified fund and potentially generate additional return through the change in the relationship between the closed-end fund's market price and Net Asset Value (NAV)1. RiverNorth also believes combining a closed-end fund strategy with a proven credit manager such as Oaktree Capital Management, L.P. ("Oaktree") provides an attractive investment vehicle for investors.

Diversification does not ensure a profit or guarantee against loss.


Investment Strategy

RiverNorth allocates the Fund's assets among three principal strategies:

  • Tactical Closed-End Fund
  • High Yield Bond
  • Senior Loan

RiverNorth manages the Tactical Closed-End Fund Strategy and Oaktree manages the High Yield Bond and Senior Loan Strategies. Oaktree tactically manages the allocation between the High Yield Bond and Senior Loan Strategies based on both market opportunities and the risk-reward trade-offs between the two asset classes.

The Fund provides investors unique market access to managers who are experts in their respective asset classes. The Fund also offers first time access in the U.S. to both Oaktree's Senior Loan and High Yield Bond Strategies in a daily priced vehicle.

Senior Loans

  • Description
    • Corporate loans
    • Floating tate
    • Secured
  • Participants: Institutional
  • Price Fluctuations: Historically stable when rates rise
  • Yield: Attractive vs. government and investment grade bonds2
  • Other Features: Little to no duration

High Yield Bonds

  • Description
    • Global corporate bonds
    • Fixed rate
    • Unsecured
  • Participants: Institutional
  • Price Fluctuations: Sensitive to rising rates and the economy
  • Yield: Attractive vs. government and investment grade corporate bonds2
  • Other Features: Generally intermediate duration

Closed-End Funds

  • Description
    • Diversified asset mix
    • Fixed number of shares
    • Brought to market via IPO
  • Participants: Retail/limited institutional
  • Price Fluctuations: Price relative to NAV fluctuates due to supply & demand
  • Yield:
    • Buying assets at discount to NAV enhances yield
    • Typically utilize leverage to enhance yield
  • Other Features: Opportunity to buy assets at a discount to liquidation value
Senior Loans High Yield Bonds Closed-End Funds
Description • Corporate loans
• Floating rate
• Secured
• Global corporate bonds
• Fixed rate
• Unsecured
• Diversified asset mix
• Fixed number of shares
• Brought to market via IPO
Participants Institutional Institutional Retail/limited institutional
Price fluctuations Historically stable when rates rise Sensitive to rising rates and the economy Price relative to NAV fluctuates due to supply and demand
Yield Attractive vs. government and investment grade bonds2 Attractive vs. government and investment grade corporate bonds • Buying assets at discount to NAV enhances yield
• Typically utilize leverage to enhance yield
Other Features Little to no duration Generally intermediate duration Opportunity to buy assets at a discount to liquidation value

Investment Rationale

  • High income portfolio focused on high yield bonds and senior loans with a tactical closed-end fund overlay
  • RiverNorth's strategy seeks to capitalize on inefficiencies within the closed-end fund space
  • The Oaktree strategies provide a value-oriented and risk-controlled approach to investing in high yield bonds and senior loans
  • Flexibility to respond to market dynamics

Fund Information

  • No sales load
  • Income Distributions: Monthly
  • Capital Gains Distributions: Annually
  • Fund Assets: $84.6M as of 5.31.2017
  • Inception Date: 12.28.2012
Fund Information Class I (Institutional) Class R (Retail)
NASDAQ Symbol RNHIX RNOTX
CUSIP Number 76881N806 76881N707
Minimum Initial Investment $100,000 $5,000
Minimum IRA Investment $100,000 $1,000

Portfolio Detail as of 5.31.2017

Portfolio asset allocations are estimates made by the adviser and are subject to change.

Strategy Weights
Credit Quality Distribution
Oaktree 73%
RiverNorth 27%
Oaktree 73%
RiverNorth 27%
Credit Quality Distribution
Credit Quality Distribution
Below IG 81%
Cash & Cash Equivalents 8%
Investment Grade (IG) 7%
Not Rated 4%
Below IG 81%
Cash & Cash Equivalents 8%
Investment Grade (IG) 7%
Not Rated 4%
Sector Breakdown
Sector Weighting
Bank Loan 44%
High Yield 36%
Developed Foreign 8%
Cash 8%
Emerging Market Debt 5%
Non-Agency MBS 2%
Other 2%
IG/Corporates 1%
CMBS 1%
Agency MBS 1%
Government 1%
Bank Loan 44%
High Yield 36%
Developed Foreign 8%
Cash 8%
Emerging Market Debt 5%
Non-Agency MBS 2%
Other 2%
IG/Corporates 1%
CMBS 1%
Agency MBS 1%
Government 1%

The allocation does not add up to 100% as it reflects the leverage utilized by the underlying funds.

High Yield & Bank Loan Geographic Breakdown
Type Exposure
Oaktree Sleeve U.S. High Yield 26%
Oaktree Sleeve U.S. Bank Loan 25%
Oaktree Sleeve Europe Bank Loan 16%
RiverNorth Sleeve High Yield 11%
Oaktree Sleeve Europe High Yield 9%
RiverNorth Sleeve Bank Loan 6%
RiverNorth Sleeve Other Bonds 5%
Oaktree Sleeve Canada Bank Loan 1%
Oaktree Sleeve Canada High Yield 1%
Oaktree Sleeve U.S. High Yield 26%
Oaktree Sleeve U.S. Bank Loan 25%
Oaktree Sleeve Europe Bank Loan 16%
RiverNorth Sleeve High Yield 11%
Oaktree Sleeve Europe High Yield 9%
RiverNorth Sleeve Bank Loan 6%
RiverNorth Sleeve Other Bonds 5%
Oaktree Sleeve Canada Bank Loan 1%
Oaktree Sleeve Canada High Yield 1%

Portfolio Statistics as of 5.31.2017

RNHIX RNOTX
Estimated Duration3 1.9 years 1.9 years
30-Day SEC Yield (net)6 3.86% 3.64%
30-Day SEC Yield (unsubsidized)6 3.86% 3.61%

Performance

Total Returns for the Period Ending 3.31.2017

  Q1 2017 1 Year 3 Year Since Inception†*
RiverNorth/Oaktree High Income Fund, Class I 2.00% 12.55% 3.54% 4.69%
RiverNorth/Oaktree High Income Fund, Class R 1.93% 12.27% 3.24% 4.41%
BofA ML Non-Financial Developed HY Constrained Index4 2.83% 14.20% 2.89% 4.70%
CS Leveraged Loan Index5 1.20% 9.71% 3.72% 4.38%

Total Returns for the Period Ending 5.31.2017

  May 1 Year 3 Year Since Inception†*
RiverNorth/Oaktree High Income Fund, Class I 0.54% 10.82% 3.64% 4.91%
RiverNorth/Oaktree High Income Fund, Class R 0.52% 10.56% 3.37% 4.63%
BofA ML Non-Financial Developed HY Constrained Index4 1.41% 12.97% 3.38% 5.20%
CS Leveraged Loan Index5 0.38% 7.56% 3.71% 4.40%

Performance data quoted represents past performance, which is not a guarantee of future results. Current performance may be lower or higher than the performance quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. You can obtain performance data current to the most recent month end by calling (888) 848-7569. Total return measures net investment income and capital gain or loss from portfolio investments. All performance shown assumes reinvestment of dividends and capital gains distributions.

* Inception Date: 12.28.2012

Average Annual


Fund Expenses

Fund Expenses RNHIX RNOTX
Annual Report Expense Ratio 1.34% 1.60%
Total Expense Ratio7 1.44% 1.72%

The expense ratio as disclosed in the Fund's annual report dated 9.30.2016 only includes the direct expenses paid by shareholders from their investment. The expense ratio as disclosed in the Fund's prospectus dated 1.28.2017 is required to include the indirect expenses of investing in underlying funds.


Risk/Return Tradeoff

As of 3.31.2017 (Since Inception*)

* Inception date: 12.28.2012
Past performance does not guarantee future results. Source: RiverNorth Capital Management, LLC.


Portfolio Managers

Patrick Galley, CFA - RiverNorth

Patrick joined RiverNorth in 2004 and serves as Chief Investment Officer and Portfolio Manager. Patrick heads the firm's investment team and oversees all portfolio management activities at RiverNorth.

Read full bio »

Steve O'Neill, CFA - RiverNorth

Steve joined RiverNorth in 2007 and serves as Portfolio Manager. Steve co-manages the firm's closed-end fund trading strategies and helps to oversee the firm's closed-end fund investment analysts.

Read full bio »

Sheldon Stone, Principal & Portfolio Manager - Oaktree

Mr. Stone is the head of Oaktree's high yield bond area. In this capacity, he serves as co-portfolio manager of Oaktree's U.S. High Yield Bond and Global High Yield Bond strategies and has supervisory responsibility for European High Yield Bonds. Mr. Stone, a co-founding member of Oaktree in 1995, established TCW's High Yield Bond department with Howard Marks in 1985 and ran the department for ten years. Prior to joining TCW, Mr. Stone worked with Mr. Marks at Citibank for two years where he performed credit analysis and managed high yield bond portfolios. From 1978 to 1983, Mr. Stone worked at The Prudential Insurance Company where he was a director of corporate finance, managing a fixed income portfolio exceeding $1 billion. Mr. Stone holds a B.A. degree from Bowdoin College and an M.B.A. in accounting and finance from Columbia University. Mr. Stone serves as a Trustee of Colonial Williamsburg Foundation and Bowdoin College.

Armen Panossian, Managing Director & Co-Portfolio Manager - Oaktree

Mr. Panossian joined Oaktree in 2007 as a senior member of its Distressed Debt investment team where he contributed to the analysis and portfolio construction of its funds. In 2014, he joined the U.S. Senior Loan strategy as a co-portfolio manager. Mr. Panossian joined Oaktree from Pequot Capital Management, where he spent three years, most recently as a Vice President, working on their distressed debt strategy. Prior experience includes two years as a financial analyst in the mergers and acquisitions department at Morgan Stanley Dean Witter. Mr. Panossian received a B.A. degree in Economics with Honors and Distinction from Stanford University, where he was elected to Phi Beta Kappa. He then went on to receive an M.S. degree in Health Service Research from Stanford Medical School and J.D. and M.B.A. degrees from Harvard Law School and Harvard Business School, respectively. He is a member of the State Bar of California.

David Rosenberg, Managing Director & Co-Portfolio Manager - Oaktree

Mr. Rosenberg serves as co-portfolio manager for Oaktree's U.S. High Yield Bond and Global High Yield Bond strategies. He joined Oaktree in 2004 following graduation from the University of Southern California with an M.B.A. in business administration. Before attending graduate school, Mr. Rosenberg served as an associate in the Franchise Systems Finance Group at J.P. Morgan. Mr. Rosenberg holds an M.P.A. in professional accounting with a concentration in finance and a B.A. degree in business administration from the University of Texas at Austin. He is a Certified Public Accountant (inactive).

James Turner, ACA, Managing Director and Co-Portfolio Manager - Oaktree

Mr. Turner joined Oaktree in 2001 and serves as co-portfolio manager for the European and Global High Yield Bond strategies. Over the years he has covered a wide range of sectors and invested through a number of financial cycles. Previously, he was employed by Schroder Salomon Smith Barney as an associate in both the Mergers & Acquisitions and Financial Sponsors divisions, working on a number of high profile public transactions. He qualified as a Chartered Accountant with Deloitte & Touche and is an honours graduate of the University of Nottingham, England.


Distributions

Class I: RNHIX
Record Date Ex-Date Payable
Date
Income Short Term
Gains
Long Term
Gains
Total Distributions
01.27.16 01.28.16 01.29.16 $0.04733 $0.00000 $0.00000 $0.04733
02.25.16 02.26.16 02.29.16 $0.03775 $0.00000 $0.00000 $0.03775
03.29.16 03.30.16 03.31.16 $0.03944 $0.00000 $0.00000 $0.03944
04.27.16 04.28.16 04.29.16 $0.03994 $0.00000 $0.00000 $0.03994
05.26.16 05.27.16 05.31.16 $0.03693 $0.00000 $0.00000 $0.03693
06.28.16 06.29.16 06.30.16 $0.03697 $0.00000 $0.00000 $0.03697
07.27.16 07.28.16 07.29.16 $0.03801 $0.00000 $0.00000 $0.03801
08.29.16 08.30.16 08.31.16 $0.03369 $0.00000 $0.00000 $0.03369
09.28.16 09.29.16 09.30.16 $0.03070 $0.00000 $0.00000 $0.03070
10.27.16 10.28.16 10.31.16 $0.03167 $0.00000 $0.00000 $0.03167
11.28.16 11.29.16 11.30.16 $0.03338 $0.00000 $0.00000 $0.03338
12.28.16 12.29.16 12.30.16 $0.06518 $0.00000 $0.00000 $0.06518
01.27.17 01.30.17 01.31.17 $0.03044 $0.00000 $0.00000 $0.03044
02.24.17 02.27.17 02.28.17 $0.03723 $0.00000 $0.00000 $0.03723
03.29.17 03.30.17 03.31.17 $0.03372 $0.00000 $0.00000 $0.03372
04.26.17 04.27.17 04.28.17 $0.03303 $0.00000 $0.00000 $0.03303
05.26.17 05.30.17 05.31.17 $0.03257 $0.00000 $0.00000 $0.03257
06.28.17 06.29.17 06.30.17 - - - - - - - -
07.27.17 07.28.17 07.31.17 - - - - - - - -
08.29.17 08.30.17 08.31.17 - - - - - - - -
09.27.17 09.28.17 09.29.17 - - - - - - - -
10.27.17 10.30.17 10.31.17 - - - - - - - -
11.28.17 11.29.17 11.30.17 - - - - - - - -
12.27.17 12.28.17 12.29.17 - - - - - - - -
Class R: RNOTX
Record Date Ex-Date Payable
Date
Income Short Term
Gains
Long Term
Gains
Total Distributions
01.27.16 01.28.16 01.29.16 $0.04534 $0.00000 $0.00000 $0.04534
02.25.16 02.26.16 02.29.16 $0.03675 $0.00000 $0.00000 $0.03675
03.29.16 03.30.16 03.31.16 $0.03786 $0.00000 $0.00000 $0.03786
04.27.16 04.28.16 04.29.16 $0.03730 $0.00000 $0.00000 $0.03730
05.26.16 05.27.16 05.31.16 $0.03480 $0.00000 $0.00000 $0.03480
06.28.16 06.29.16 06.30.16 $0.03496 $0.00000 $0.00000 $0.03496
07.27.16 07.28.16 07.29.16 $0.03712 $0.00000 $0.00000 $0.03712
08.29.16 08.30.16 08.31.16 $0.03181 $0.00000 $0.00000 $0.03181
09.28.16 09.29.16 09.30.16 $0.02947 $0.00000 $0.00000 $0.02947
10.27.16 10.28.16 10.31.16 $0.02970 $0.00000 $0.00000 $0.02970
11.28.16 11.29.16 11.30.16 $0.03135 $0.00000 $0.00000 $0.03135
12.28.16 12.29.16 12.30.16 $0.06297 $0.00000 $0.00000 $0.06297
01.27.17 01.30.17 01.31.17 $0.02781 $0.00000 $0.00000 $0.02781
02.24.17 02.27.17 02.28.17 $0.03570 $0.00000 $0.00000 $0.03570
03.29.17 03.30.17 03.31.17 $0.03044 $0.00000 $0.00000 $0.03044
04.26.17 04.27.17 04.28.17 $0.03129 $0.00000 $0.00000 $0.03129
05.26.17 05.30.17 05.31.17 $0.03078 $0.00000 $0.00000 $0.03078
06.28.17 06.29.17 06.30.17 - - - - - - - -
07.27.17 07.28.17 07.31.17 - - - - - - - -
08.29.17 08.30.17 08.31.17 - - - - - - - -
09.27.17 09.28.17 09.29.17 - - - - - - - -
10.27.17 10.30.17 10.31.17 - - - - - - - -
11.28.17 11.29.17 11.30.17 - - - - - - - -
12.27.17 12.28.17 12.29.17 - - - - - - - -

Disclosures & Definitions

More detailed information regarding these risks can be found in the Fund's prospectus.

Fund Risks: Borrowing Risk – borrowings increase fund expenses and are subject to repayment, possibly at inopportune times. Closed-End Fund Risk – closed-end funds are exchange traded, may trade at a discount to their net asset values and may deploy leverage. Convertible Security Risk – the market value of convertible securities adjusts with interest rates and the value of the underlying stock. Credit Derivatives Risk – the use of credit derivatives is highly specialized, involves default, counterparty and liquidity risks and may not perfectly correlate to the underlying asset or liability being hedged. Currency Risk – foreign currencies will rise or decline relative to the U.S. dollar. Derivatives Risk – derivatives are subject to counterparty risk. Distressed and Defaulted Securities Risk – defaulted securities carry the risk of uncertainty of repayment. Equity Risk – equity securities may experience volatility and the value of equity securities may move in opposite directions from each other and from other equity markets generally. Exchange Traded Note Risk – exchange traded notes represent unsecured debt of the issuer and may be influenced by interest rates, credit ratings of the issuer or changes in value of the reference index. Fixed Income Risk – the market value of fixed income securities adjusts with interest rates and the securities are subject to issuer default. Foreign/Emerging Market Risk – foreign securities may be subject to inefficient or volatile markets, different regulatory regimes or different tax policies. These risks may be enhanced in emerging markets. Floating Interest Rate Risk – loans pay interest based on the London Interbank Offered Rate (LIBOR) and a decline in LIBOR could negatively impact the Fund's return. Investment Style Risk – investment strategies may come in and out of favor with investors and may underperform or outperform at times. Large Shareholder Purchase and Redemption Risk – The Fund may experience adverse effects when certain large shareholders purchase or redeem large amounts of shares of the Fund. Liquidity Risk – illiquid investments may be difficult or impossible to sell. Loans Risk – loans may be unrated or rated below investment grade and the pledged collateral may lose value. Secondary trading in loans is not fully-developed and may result in illiquidity. Management Risk – there is no guarantee that the adviser's or sub-adviser's investment decisions will produce the desired results. Market Risk – economic conditions, interest rates and political events may affect the securities markets. Preferred Stock Risk – preferred stocks generally pay dividends, but may be less liquid than common stocks, have less priority than debt instruments and may be subject to redemption by the issuer. Security Risk – the value of the Fund may increase or decrease in response to the prospects of the issuers of securities and loans held in the Fund. Swap Risk – swap agreements are subject to counterparty default risk and may not perform as intended. Tax Risk – new federal or state governmental action could adversely affect the tax-exempt status of securities held by the Fund, resulting in higher tax liability for shareholders and potentially hurting Fund performance as well. Underlying Fund Risk – underlying funds have additional fees, may utilize leverage, may not correlate to an intended index and may trade at a discount to their net asset values. Valuation Risk – Loans and fixed-income securities are traded "over the counter" and because there is no centralized information regarding trading, the valuation of loans and fixed-income securities may vary.

Past performance is no guarantee of future results.

High yield bonds are subject to interest rate risk. If rates increase, the value generally declines.

ALPS Distributors, Inc. is not affiliated with RiverNorth Capital Management, LLC or Oaktree Capital Management, L.P.

CFA® is a trademark owned by the CFA Institute.

1 The price at which a closed-end fund trades often varies from its NAV. Some funds have market prices below their net asset values - referred to as a discount. Conversely, some funds have market prices above their net asset values - referred to as a premium.

2 Investment grade is a rating that indicates that a municipal or corporate bond has a relatively low risk of default.

3 Estimated duration is a measure of the sensitivity of the price of a fixed income investment to a change in interest rates. Duration is expressed as a number of years. Duration is estimated by the adviser based on certain assumptions by third-party data and is subject to change.

4 The BofA Merrill Lynch Developed Markets High Yield Constrained Index contains all securities in the BofA Merrill Lynch Global High Yield index from developed markets countries but cap issuer exposure at 2%. Developed markets is defined as an FX-G10 member, a Western European nation, or a territory of the U.S. or a Western European nation. The index tracks the performance of USD, CAD, GBP and EUR denominated below investment grade corporate debt publicly issued in the major domestic or Eurobond markets. Qualifying securities must have a below investment grade rating (based on an average of Moody's, S&P and Fitch). The index cannot be invested in directly and does not reflect fees and expenses.

5 CS Leveraged Loan Index tracks the investable market of the U.S. dollar denominated leveraged loan market. It consists of issues rated "5B" or lower, meaning that the highest rated issues included in this index are Moody's/S&P ratings of Baa1/BB+ or Ba1/BBB+. All loans are funded term loans with a tenor of at least one year and are made by issuers domiciled in developed countries. The index cannot be invested in directly and does not reflect fees and expenses.

6 30-Day SEC Yield: The yield figure reflects the dividends and interest earned during the period, after the deduction of the Funds' expenses. Unsubsidized SEC Yield: The yield excludes contractual expense reimbursements, resulting in a lower yield.

7 As of prospectus dated 1.28.2017. The adviser has contractually agreed to defer the collection of fees and/or reimburse expenses, but only to the extent necessary to limit Total Annual Fund Operating Expenses (excluding brokerage fees and commissions; borrowing costs, such as (a) interest and (b) dividends on securities sold short; taxes; indirect expenses incurred by the underlying funds in which the Fund invests; and extraordinary expenses) to 1.35% (RNHIX) and 1.60% (RNOTX) of the average daily net assets of the Fund through 1.31.2018.

8 Standard Deviation is a measure of the volatility of a fund's returns. Beta reflects the sensitivity of a fund's return to fluctuations in the market index. A beta of 0.5 reflects half of the market's volatility as represented by the Fund's primary benchmark, while a beta of 2.0 reflects twice the volatility. Alpha is a measure of performance on a risk-adjusted basis. The excess return of a fund relative to the return of the benchmark index is a fund's alpha.

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