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)
Salvatore Faia, President |
c/o U.S. Bancorp Fund Services, LLC 615 East Michigan Street Milwaukee, WI 53202 |
(Name and address of agent for service)
(414) 765-5366
Registrant's telephone number, including area code
Date of fiscal year end: August 31, 2021
Date of reporting period: August 31, 2021
Item 1. Reports to Stockholders.
(a)
ANNUAL REPORT
August 31, 2021
PENN CAPITAL FLOATING RATE INCOME FUND
(formerly, PENN CAPITAL DEFENSIVE FLOATING RATE INCOME FUND)
PENN CAPITAL MID CAP CORE FUND
(formerly, PENN CAPITAL MANAGED ALPHA SMID CAP EQUITY FUND)
PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND
(formerly, PENN CAPITAL MULTI-CREDIT HIGH INCOME FUND)
PENN CAPITAL SHORT DURATION HIGH INCOME FUND
(formerly, PENN CAPITAL DEFENSIVE SHORT DURATION HIGH INCOME FUND)
PENN CAPITAL SPECIAL SITUATIONS SMALL CAP EQUITY FUND
TABLE OF CONTENTS
Advisor’s Letter to Shareholders | 1 | |
Fund Summary | 5 | |
Disclosure of Fund Expenses | 10 | |
Fund | Schedule of Investments | |
Penn Capital Floating Rate Income Fund | 12 | |
Penn Capital Mid Cap Core Fund | 18 | |
Penn Capital Opportunistic High Income Fund | 21 | |
Penn Capital Short Duration High Income Fund | 28 | |
Penn Capital Special Situations Small Cap Equity Fund | 33 | |
Statements of Assets And Liabilities | 36 | |
Statements of Operations | 38 | |
Statements of Changes In Net Assets | 40 | |
Financial Highlights | 44 | |
Notes to the Financial Statements | 48 | |
Additional Information | 62 | |
Report of Independent Registered Public Accounting Firm | 64 | |
Trustees and Officers | 65 | |
Privacy Policy | 69 |
[THIS PAGE INTENTIONALLY LEFT BLANK.]
PENN CAPITAL FUNDS TRUST
Advisor’s Letter to Shareholders (Unaudited)
Dear Penn Capital Funds Shareholder:
Our investment strategies incorporate Penn Capital’s Complete Capital Structure Analysis®, an in-depth high yield (“HY”) and equity research philosophy used to identify a company’s optimal capital structure. Our investment professionals are capital structure generalists, meaning they are responsible for understanding the entire capital structure of the companies they follow. By following this philosophy, we believe that integrating credit and equity research allows us to construct a more comprehensive investment mosaic. Participating in both credit and equity markets, along with this integrated research process, provides Penn Capital’s investment team with what we believe is an informational advantage. Finding inefficiencies in the market can be challenging, but we remain committed to the pursuit of strong investment returns on behalf of our shareholders.
The following pages review the current market environment and provide additional insight into our funds and their performance over the past fiscal period beginning July 1, 2021 through August 31, 2021. Once again, I would like to thank you for your confidence in investing with us.
Overview
Capital markets experienced a strong recovery in the past 18 months with economic support from the Federal Reserve and the U.S. Treasury, as well as the three COVID-19 vaccine rollouts. Continuing jobless claims receded during the fiscal period. All these factors rallied the corporate credit market with HY credit spreads moving from an elevated status in mid-year 2020 to a tightening status in August 2021, signaling a low default outlook over the next 12-24 months. Over the past fiscal period, the equity market rallied as credit risk was reduced and economic prospects improved.
While the pandemic is an unprecedented event that caused disruption and business transformation, in our opinion, it has created three unique events: (1) some companies have benefitted from the pandemic with clear examples residing in the technology sector ranging from online meetings to online shopping. These beneficiaries will seek to lock in their gains by making the pandemic induced behavior changes permanent. Will behavior permanently change?; (2) most companies have successfully navigated the pandemic and have sales that are near pre-pandemic levels while enjoying solid margins due to reduced employee costs from reduced headcount and expense accounts. Can they lock in efficiency gains?; (3) certain industries were heavily impacted by the pandemic where recovery was delayed. Travel-related companies, such as cruise lines, are slowly ramping up operations as their customers have not enjoyed their services for at least 18 months. Is there pent-up demand or have customers found other forms of entertainment? As the pandemic recedes, investors are challenged with identifying which changes are sustainable versus transitory as they relate to business models.
We expect the COVID-19 pandemic to gradually recede over the next few months as vaccination rates rise and cases of severe disease subside. While a full economic reopening may not yet occur, we do see promise where individuals may gather with less health risk including workers returning to offices and children returning to schools. In the current environment, we believe cyclical companies have an opportunity to participate in a global recovery as such companies may also benefit from supportive credit markets and attractive valuations.
While we are optimistic today, risks remain to the ongoing recovery. Extended unemployment claim benefits are scheduled to roll off in September 2021 as the economy continues to slowly move toward normalization. A recent rise in COVID-19 cases associated with the Delta variant has delayed the expected return to the office; as such, to achieve fuller employment, children will also need to return to school. The unprecedented government support programs will need to slow down in the short term and cease in the intermediate term. The various stimulus packages have created the desired effect, but the potential pain of withdrawal is difficult to gauge. As always, and as the last 18 months have clearly demonstrated, unexpected events can radically shift the investing landscape in the future.
Performance
The following paragraphs provide more detailed information on the performance of our funds for the fiscal period July 1, 2021 through August 31, 2021, as well as selected holdings.
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Penn Capital Floating Rate Income Fund (formerly, Penn Capital Defensive Floating Rate Income Fund)
For the two-month fiscal period ended August 31, 2021, the Penn Capital Floating Rate Income Fund (the “Floating Rate Income Fund”) generated a +0.32% return versus +0.31% for its benchmark, the S&P/LSTA BB Ratings Loan Index. The Floating Rate Income Fund is a more conservative strategy emphasizing BB-rated loans* with no triple-C rated or 2nd lien loan exposure.
The bank debt market lagged the HY market for the period as interest rates fell. Robust demand continued for floating rate bank debt with year-to-date retail inflows surpassing $32 billion as of August month end, well in excess of last year’s $27 billion full year outflow.
Quarterly net new issuance slowed to the lightest pace of the year, complementing those positive asset class inflows to create healthy supply & demand dynamics. The primary market experienced an increase in issuance earmarked for equity dividend payouts, a sign that issuers are responding to demand by more aggressively testing the market. The Floating Rate Income Fund’s exposure to HY bonds (held for liquidity purposes) slightly hindered performance as bonds underperformed loans in the period. The Floating Rate Income Fund’s underweight exposure to large liquid loans (a proxy for exchange-traded funds (“ETFs”)) caused a modest drag to performance.
Performance benefitted from strong security selection within Information Technology and pandemic-related recovery sectors, airlines in particular. The Floating Rate Income Fund benefitted from the performance of new issue credits as well. Security selection within the Consumer sector was a detractor. The Floating Rate Income Fund’s best performing loan was a commercial filter and paper manufacturer whose loan rallied on favorable operating results.
Penn Capital Short Duration High Income Fund (formerly, Penn Capital Defensive Short Duration High Income Fund)
For the two-month fiscal period ended August 31, 2021, the Penn Capital Short Duration High Income Fund (the “Short Duration Fund”) generated a +0.41% return, slightly underperforming its benchmark, the ICE BofA 1-3 Year BB-Rated US Cash Pay HY Index, which returned +0.47%.
The Short Duration Fund maintains an average portfolio maturity of three years or less and excludes triple C-rated bonds. The Short Duration Fund has historically underperformed the broad short duration market, which includes triple C-rated bonds, during low quality rallies (2021), and has historically outperformed during low quality sell-offs (2020).
Strong security selection within Metals and Telecommunications and REITs sectors added value, whereas the Energy sector was a net neutral contributor. An overweight to Recreation and Travel sectors detracted due to COVID-19 Delta variant concerns. Off-index yield curve positioning added value, as the 3+ year maturity bucket outperformed the 0-1 year maturity bucket. The Short Duration Fund’s loan allocation and its single-B rated bond allocation detracted.
Penn Capital Opportunistic High Income Fund (formerly, Penn Capital Multi-Credit High Income Fund)
For the two-month fiscal period ended August 31, 2021, the Penn Capital Opportunistic High Income Fund (the “Opportunistic High Income Fund”) generated a +0.43% return, underperforming the +0.90% return of its benchmark, the ICE BofA US HY Constrained Index.
An overweight to Leisure and Transportation sectors detracted from performance as concerns related to COVID-19 Delta variant slowed reopening activity. While the Energy sector was a net detractor overall, an independent natural gas producer was acquired in a credit-friendly transaction and resulted in strong performance contribution from the credit.
The Opportunistic High Income Fund added value by avoiding weakness within the Utilities sector coupled with strong security selection within the Metals and Transports sectors. Duration and yield curve positioning were not significant contributors during the period.
* | Bond ratings are grades given to bonds that indicate their credit quality as determined by private independent rating services such as Standard & Poor’s, Moody’s and Fitch. These firms evaluate a bond issuer’s financial strength, or its ability to pay a bond’s principal and interest in a timely fashion. Ratings are expressed as letters ranging from `AAA’, which is the highest grade, to `D’, which is the lowest grade. Investment-Grade refers to a bond considered investment grade if its credit rating is BBB- or higher. Below Investment grade refers to a security that is rated below investment grade. |
2
Penn Capital Mid Cap Core Fund (formerly, Penn Capital Managed Alpha SMID Cap Equity Fund)
For the two-month fiscal period ended August 31, 2021, the Penn Capital Mid Cap Core Fund (the “Mid Cap Core Fund”) generated a +0.18% return slightly underperforming the +0.48% return of its benchmark, the Russell 2500™ Index. Best performing sectors during the period were the Healthcare and Consumer Discretionary sectors. Within the Healthcare sector, two biopharma processing companies continued to experience strong cash flows stemming from COVID-19 vaccine production. In the Materials sector, a lithium producer secured long term contracts to source high-end electric light vehicles. The sectors that hindered performance during the period were Information Technology and Consumer Staples. In the Information Technology sector, semiconductor suppliers were impacted due to iPhone 13 supply disruptions. In the Consumer Staples sector, a potato processor was impacted due to margin pressures as production and freight costs increased.
Penn Capital Special Situations Small Cap Equity Fund
For the two-month fiscal period ended August 31, 2021, the Penn Capital Special Situations Small Cap Equity Fund (the “Special Situations Fund”) generated a -0.86% return, outperforming the -1.45% return of its benchmark, the Russell 2000® Index. Top contributors in the period were the Information Technology and Communications Services sectors. Within the Information Technology sector, a provider of enterprise storage solutions reported stronger than expected 2nd quarter results as revenue growth accelerated and margins improved despite cost headwinds. In the Communications Services sector, a provider of in-flight internet connectivity systems raised its long-term revenue growth, operating margin, and free cash flow guidance amid record equipment sales that ultimately drove high margins via recurring services revenue.
The top detractors in the quarter were centered around the Industrials and Financial Services sectors. Within the Industrials sector, airlines and aerospace suppliers lagged as the Delta variant weighed on the air travel trends, particularly the recovery in business and international travel. In the Financial Services sector, a regional bank announced weaker core earnings power due to lower mortgage finance volumes and weak loan volumes.
Conclusion
We would like to take this opportunity to thank our shareholders for entrusting their investments with our firm. We do not take your faith in us for granted. Our team remains committed to focusing our efforts on behalf of our shareholders, and we value your continued confidence in our vision. We believe the Penn Capital Funds offer a product line-up that embodies our investment philosophy and dedicated research-driven process.
Looking Forward
This report contains performance data and financial information. Please keep in mind that all securities markets, as well as mutual fund prices, fluctuate in value. If you would like more frequent updates, http://www.penncapitalfunds.com provides daily NAV, monthly performance figures, portfolio holdings, and other valuable information. We encourage you to visit penncapitalfunds.com, through which you may access your account, buy and sell shares, and find other helpful tools.
At Penn Capital Funds, we believe that active management continues to serve as a critical element of investing in HY debt securities and equity securities of smaller and mid-sized companies. Although challenges remain, and markets may continue to be uneven, we are confident that investors with a well-diversified portfolio and a patient, long-term outlook should be well positioned for the years ahead.
We thank you for investing with us and look forward to continuing to serve your investment needs.
Sincerely,
Kirsten Hocker
President
Penn Capital Management Company, LLC
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Past performance is no guarantee of future results. Unusually favorable market conditions and high returns may not be sustainable or repeated in the future.
This letter reflects Penn Capital’s analysis and opinions as of the most recent fiscal period. The information is not a complete analysis of any market, country, industry, security, or fund and should not be considered as a recommendation to buy, sell or hold any specific security or securities. Portfolio holdings are subject to change at any time. Please see the Schedules of Investments provided in this report for the complete listing of each Fund’s holdings.
All investments involve risk, including possible loss of principal, and there is no guarantee the Funds will achieve their investment objectives. Investments made in small and mid-capitalization companies may be more volatile and less liquid due to limited resources or product lines and more sensitive to economic factors. Investments in ETFs are subject to the same risks as the underlying securities in which the ETF invests as well as entails higher expenses than if invested into the underlying ETF directly. Investments in foreign securities and ADRs involve certain risks such as currency volatility, political and social instability and reduced market liquidity. As interest rates rise the value of bond prices will decline. Credit risk refers to the loss in the value of a security based on a default in the payment of principle and/or interest of the security, or the perception of the market of such default. High-yield bonds have a higher risk of default or other adverse credit events, but have the potential to pay higher earnings over investment grade bonds. The value of convertible securities tends to decline as interest rates rise and, because of the conversion feature, tends to vary with fluctuations in the market value of the underlying securities. Bank loans in which the Fund may invest have similar risks to below investment grade fixed income securities. In the event of the insolvency of an agent bank, a loan could be subject to settlement risk as well as the risk of interruptions in the administrative duties performed in the day to day administration of the loan.
Index Definitions
The ICE BofA US High Yield Constrained Index contains all securities in the ICE BofA US High Yield Index but caps issuer exposure at 2%.
The ICE BofA 1-3 Year BB-Rated US Cash Pay High Yield Index is a subset of the ICE BofA US Cash Pay High Yield Index, which tracks the performance of non-investment-grade corporate bonds with a remaining term to final maturity less than three years and rated BB.
The S&P/LSTA BB Ratings Loan Index is a market value-weighted index designed to measure the performance of the US leveraged loan market and is comprised of loans whose rating is BB+, BB, BB-.
The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000 Index is constructed to provide a comprehensive and unbiased small-cap opportunity barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set.
The Russell 2500™ Index is composed of the bottom 500 stocks in the Russell 1000® Index and all the stocks in the Russell 2000® Index. The Russell 2500™ Index return reflect adjustments for income dividends and capital gains distributions reinvested as of the ex-dividend dates.
An investment cannot be made directly in an index.
4
PENN CAPITAL FLOATING RATE INCOME FUND
Fund Summary (UNAUDITED)
This chart assumes a hypothetical 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. Current performance may be lower or higher than that shown. To obtain performance current to the most recent month-end please call 844-302 PENN (7366) or visit www.penncapitalfunds.com. 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 August 31, 2021.
Average Annual Total Returns for the Periods Ended | Two Months | One Year | Three Years | Five Years | Since |
Penn Capital Floating Rate Income Fund | |||||
Institutional Class Shares | 0.32% | 5.16% | 2.79% | 3.43% | 3.62% |
S&P/LSTA BB Loan Index | 0.31% | 6.29% | 3.34% | 4.00% | 4.23%(2) |
(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. |
Gross Expense Ratio: 1.37%, Net Expense Ratio: 0.64%, per the most recent Prospectus dated October 31, 2020, as supplemented December 17, 2020, April 8, 2021, and April 30, 2021.
The Advisor has contractually agreed to waive management fees and/or pay certain Fund expenses through at least April 1, 2023.
5
PENN CAPITAL MID CAP CORE FUND
FUND SUMMARY (UNAUDITED)
This chart assumes a hypothetical 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. Current performance may be lower or higher than that shown. To obtain performance current to the most recent month-end please call 844-302 PENN (7366) or visit www.penncapitalfunds.com. 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 August 31, 2021.
Average Annual Total Returns for the Periods Ended | Two Months | One Year | Three Years | Five Years | Since |
Penn Capital Mid Cap Core Fund | |||||
Institutional Class Shares | 0.18% | 34.44%(2) | 10.34% | 13.86% | 12.58% |
Russell 2500TM Index | 0.48% | 45.87% | 13.09% | 15.10% | 14.11%(3) |
(1) | Inception date is 11/30/15. |
(2) | Unusually favorable market conditions and high returns may not be sustainable or repeated in the future. |
(3) | The return shown for the Russell 2500™ Index is from the inception date of the Institutional Class shares. |
Gross Expense Ratio: 2.14%, Net Expense Ratio: 1.06%, per the most recent Prospectus dated October 31, 2020, as supplemented December 17, 2020, April 8, 2021, and April 30, 2021.
The Advisor has contractually agreed to waive management fees and/or pay certain Fund expenses through at least April 1, 2023.
6
PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND
FUND SUMMARY (UNAUDITED)
This chart assumes a hypothetical 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. Current performance may be lower or higher than that shown. To obtain performance current to the most recent month-end please call 844-302 PENN (7366) or visit www.penncapitalfunds.com. 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 August 31, 2021.
Average Annual Total Returns for the Periods Ended | Two Months | One Year | Three Years | Five Years | Since |
Penn Capital Opportunistic High Income Fund | |||||
Institutional Class Shares | 0.43% | 12.79% | 5.38% | 6.07% | 6.53% |
ICE BofAML US High Yield Constrained Index | 0.90% | 10.26% | 6.78% | 6.47% | 7.64%(2) |
50% ICE BofAML High Yield Constrained Index -50% S&P/LSTA BB Loan Index | 0.60% | 7.58% | 4.83% | 4.91% | 5.69%(3) |
(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. |
Gross Expense Ratio: 2.19%, Net Expense Ratio: 0.72%, per the most recent Prospectus dated October 31, 2020, as supplemented December 17, 2020, April 8, 2021, and April 30, 2021.
The Advisor has contractually agreed to waive management fees and/or pay certain Fund expenses through at least April 1, 2023.
7
PENN CAPITAL SHORT DURATION HIGH INCOME FUND
FUND SUMMARY (UNAUDITED)
This chart assumes a hypothetical 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. Current performance may be lower or higher than that shown. To obtain performance current to the most recent month-end please call 844-302 PENN (7366) or visit www.penncapitalfunds.com. 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 Periods Ended August 31, 2021 | Two Months | One Year | Three Years | Since |
Penn Capital Short Duration High Income Fund | ||||
Institutional Class Shares | 0.41% | 5.63% | 3.25% | 2.88% |
ICE BofAML 1-3 Year BB-Rated US Cash Pay High Yield Index | 0.47% | 5.73% | 5.47% | 4.66%(2) |
ICE BofAML US High Yield Cash Pay BB-B Rated 1-3 Years Index | 0.51% | 7.21% | 4.72% | 4.47%(3) |
(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. The ICE BofAML US High Yield Cash Pay BB-B Rated 1-3 Years Imdex is comprised of bonds within the ICE BofA High Yield Index whose ratings are at or between B1 through BB3, with maturities between 1 and 3 years. |
Gross Expense Ratio: 1.17%, Net Expense Ratio: 0.54%, per the most recent Prospectus dated October 31, 2020, as supplemented December 17, 2020, April 8, 2021, and April 30, 2021.
The Advisor has contractually agreed to waive management fees and/or pay certain Fund expenses through at least April 1, 2023.
8
PENN CAPITAL SPECIAL SITUATIONS SMALL CAP EQUITY FUND
FUND SUMMARY (UNAUDITED)
This chart assumes a hypothetical 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. Current performance may be lower or higher than that shown. To obtain performance current to the most recent month-end please call 844-302 PENN (7366) or visit www.penncapitalfunds.com. 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 August 31, 2021.
Average Annual Total Returns for the Periods Ended | Two Months | One Year | Three Years | Five Years | Since |
Penn Capital Special Situations Small Cap Equity Fund | |||||
Institutional Class Shares | -0.86% | 87.57%(2) | 17.46% | 18.32% | 17.90% |
Russell 2000® Index | -1.45% | 47.08% | 10.75% | 14.38% | 14.46%(3) |
(1) | Inception date is 12/17/15. |
(2) | Unusually favorable market conditions and high returns may not be sustainable or repeated in the future. |
(3) | The return shown for the Russell 2000® Index is from the inception date of the Institutional Class shares. |
Gross Expense Ratio: 3.09%, Net Expense Ratio: 1.09%, per the most recent Prospectus dated October 31, 2020, as supplemented December 17, 2020, April 8, 2021, and April 30, 2021.
The Advisor has contractually agreed to waive management fees and/or pay certain Fund expenses through at least April 1, 2023.
9
PENN CAPITAL FUNDS TRUST
Disclosure of Fund Expenses (Unaudited)
FOR THE PERIOD FROM MARCH 1, 2021 TO AUGUST 31, 2021
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 March 1, 2021 to August 31, 2021, 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 March 1, 2021 to August 31, 2021.
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 six-month period ended August 31, 2021. 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 Floating Rate Income Fund | Actual | Hypothetical | |||
Share Class(1) | Beginning | Ending Account | Expenses Paid | Ending Account | Expenses Paid |
Institutional Class Shares | $1,000.00 | $1,012.00 | $3.25 | $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 August 31, 2021. |
(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. |
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Penn Capital Mid Cap Core Fund | Actual | Hypothetical | |||
Share Class(1) | Beginning | Ending Account | Expenses Paid | Ending Account | Expenses Paid |
Institutional Class Shares | $1,000.00 | $1,059.30 | $5.50 | $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 August 31, 2021. |
(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. |
Penn Capital Opportunistic High Income Fund | Actual | Hypothetical | |||
Share Class(1) | Beginning | Ending Account | Expenses Paid | Ending Account | Expenses Paid |
Institutional Class Shares | $1,000.00 | $1,040.10 | $3.70 | $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 August 31, 2021. |
(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 Short Duration High Income Fund | Actual | Hypothetical | |||
Share Class | Beginning | Ending Account | Expenses Paid | Ending Account | Expenses Paid |
Institutional Class Shares | $1,000.00 | $1,023.20 | $2.75 | $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 Special Situations | Actual | Hypothetical | |||
Share Class(1) | Beginning | Ending Account | Expenses Paid | Ending Account | Expenses Paid |
Institutional Class Shares | $1,000.00 | $1,131.50 | $5.86 | $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 August 31, 2021. |
(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. |
11
PENN CAPITAL FUNDS TRUST
Penn Capital Floating Rate Income Fund
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
Bank Loans: 87.1% (a)(b) | ||||||||
Advertising: 2.8% | ||||||||
Alchemy Copyrights LLC, 3.500% (1 Month US LIBOR + 3.000%), 3/10/28 | $ | 178,652 | $ | 178,206 | ||||
Clear Channel Outdoor Holdings, Inc., 3.628%, 8/21/26 | ||||||||
(3 Month US LIBOR + 3.500%) | 245,000 | 239,049 | ||||||
(1 Month US LIBOR + 3.500%) | 625 | 610 | ||||||
Terrier Media Buyer, Inc., 3.585% (1 Month US LIBOR + 3.500%), 12/17/26 | 197,010 | 195,747 | ||||||
Ziggo Financing Partnership, 2.595% (1 Month US LIBOR + 2.500%), 4/30/28 | 250,000 | 247,257 | ||||||
860,869 | ||||||||
Aerospace/Defense: 0.5% | ||||||||
Ducommun, Inc., 4.085%, 11/21/25 | ||||||||
(1 Month US LIBOR + 4.000%) | 124,977 | 125,914 | ||||||
(1 Month US LIBOR + 4.000%) | 30,487 | 30,716 | ||||||
156,630 | ||||||||
Air Transportation: 1.7% | ||||||||
Allegiant Travel Co., 3.124% (3 Month US LIBOR + 3.000%), 2/5/24 | 342,477 | 339,624 | ||||||
American Airlines, Inc., 5.500% (3 Month US LIBOR + 4.750%), 3/10/28 | 200,000 | 205,812 | ||||||
545,436 | ||||||||
Auto Parts & Equipment: 1.0% | ||||||||
Dealer Tire LLC, 4.335%, 12/12/25 | ||||||||
(1 Month US LIBOR + 4.250%) | 45,202 | 45,067 | ||||||
(1 Month US LIBOR + 4.250%) | 77,923 | 77,689 | ||||||
Truck Hero, Inc., 4.000% (1 Month US LIBOR + 3.250%), 1/19/28 | 199,500 | 198,552 | ||||||
321,308 | ||||||||
Brokerage: 0.5% | ||||||||
Victory Capital Holdings, Inc., 2.395% (3 Month US LIBOR + 2.250%), 7/1/26 | 158,792 | 157,039 | ||||||
Building Materials: 3.2% | ||||||||
CP Atlas Buyer, Inc., 4.250%, 11/23/27 | ||||||||
(1 Month US LIBOR + 3.750%) | 199,000 | 198,072 | ||||||
(1 Month US LIBOR + 3.750%) | 500 | 498 |
Principal | Value | |||||||
LBM Acquisition LLC, 4.500% (3 Month US LIBOR + 3.750%), 12/18/27 | $ | 174,563 | $ | 171,900 | ||||
LBM Acquisition LLC, 4.500% (1 Month US LIBOR + 3.750%), 12/18/27 (c) | 38,889 | 38,296 | ||||||
Quikrete Holdings, Inc., 2.585% (1 Month US LIBOR + 2.500%), 1/31/27 | 380,740 | 376,031 | ||||||
White Cap Buyer LLC, 4.500% (1 Month US LIBOR + 4.000%), 10/19/27 | 198,500 | 198,532 | ||||||
983,329 | ||||||||
Building Products: 0.7% | ||||||||
Foundation Building Materials, Inc., 3.750%, 1/29/28 | ||||||||
(1 Month US LIBOR + 3.250%) | 204,488 | 202,486 | ||||||
(1 Month US LIBOR + 3.250%) | 512 | 507 | ||||||
202,993 | ||||||||
Cable & Satellite TV: 3.6% | ||||||||
Altice France SA, 4.125% (3 Month US LIBOR + 4.000%), 8/14/26 | 237,465 | 236,574 | ||||||
Cogeco Communications USA II LP, 2.085% (1 Month US LIBOR + 2.000%), 1/4/25 | 242,997 | 240,287 | ||||||
DirecTV Financing LLC, 5.750% (1 Month US LIBOR + 5.000%), 7/22/27 (c) | 200,000 | 199,886 | ||||||
Radiate Holdco LLC, 4.250% (1 Month US LIBOR + 3.500%), 9/25/26 | 199,000 | 198,457 | ||||||
WideOpenWest Finance LLC, 4.250% (1 Month US LIBOR + 3.250%), 8/19/23 | 239,820 | 239,307 | ||||||
1,114,511 | ||||||||
Chemicals: 3.7% | ||||||||
Axalta Coating Systems US Holdings, Inc., 1.897% (3 Month US LIBOR + 1.750%), 6/1/24 | 176,857 | 175,702 | ||||||
Gemini HDPE LLC, 3.500% (3 Month US LIBOR + 3.000%), 12/31/27 | 195,418 | 194,929 | ||||||
Hexion, Inc., 3.650% (3 Month US LIBOR + 3.500%), 7/1/26 | 245,000 | 244,591 | ||||||
Lummus Technology Holdings V LLC, 3.585% (1 Month US LIBOR + 3.500%), 6/30/27 | 199,001 | 197,800 | ||||||
Trinseo Materials Operating SCA, 2.585% (1 Month US LIBOR + 2.500%), 3/18/28 | 200,000 | 198,200 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
12
PENN CAPITAL FUNDS TRUST
Penn Capital Floating Rate Income Fund
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
Univar USA, Inc., 2.085% (1 Month US LIBOR + 2.000%), 11/22/26 | $ | 147,750 | $ | 146,562 | ||||
1,157,784 | ||||||||
Diversified Capital Goods: 0.6% | ||||||||
EWT Holdings III Corp., 2.625% (1 Month US LIBOR + 2.500%), 3/10/28 | 200,000 | 198,312 | ||||||
Electric - Generation: 0.6% | ||||||||
Vistra Operations Co. LLC, 1.835%, 12/31/25 | ||||||||
(1 Month US LIBOR + 1.750%) | 38,518 | 38,009 | ||||||
(1 Month US LIBOR + 1.750%) | 158,195 | 156,106 | ||||||
194,115 | ||||||||
Electronics: 0.2% | ||||||||
Cohu, Inc., 3.172% (1 Month US LIBOR + 3.000%), 10/1/25 | 74,693 | 73,993 | ||||||
Environmental: 0.6% | ||||||||
GFL Environmental, Inc., 3.500% (3 Month US LIBOR + 3.000%), 5/31/25 | 199,000 | 199,072 | ||||||
Food - Wholesale: 2.6% | ||||||||
American Seafoods Group LLC, 3.750%, 8/21/23 | ||||||||
(1 Month US LIBOR + 2.750%) | 156,774 | 156,383 | ||||||
(1 Month US LIBOR + 2.750%) | 1,048 | 1,045 | ||||||
Bellring Brands LLC, 4.750% (1 Month US LIBOR + 4.000%), 10/21/24 | 243,061 | 243,707 | ||||||
Chobani LLC, 4.500% (1 Month US LIBOR + 3.500%), 10/23/27 | 198,500 | 198,625 | ||||||
Whole Earth Brands, Inc., 5.500% (3 Month US LIBOR + 4.500%), 6/25/25 | 199,500 | 198,379 | ||||||
798,139 | ||||||||
Forestry/Paper: 1.3% | ||||||||
Sabert Corp., 5.500% (1 Month US LIBOR + 4.500%), 12/10/26 | 191,925 | 191,445 | ||||||
Schweitzer-Mauduit International, Inc., 4.500% (1 Month US LIBOR + 3.750%), 2/23/28 | 200,000 | 199,500 | ||||||
390,945 | ||||||||
Gaming: 3.3% | ||||||||
Caesars Resort Collection LLC, 4.585% (1 Month US LIBOR + 4.500%), 7/20/25 | 198,500 | 198,768 |
Principal | Value | |||||||
CCM Merger, Inc., 4.500% (3 Month US LIBOR + 3.750%), 11/4/25 | $ | 173,818 | $ | 173,528 | ||||
Playtika Holding Corp., 2.835% (1 Month US LIBOR + 2.750%), 3/5/28 | 199,500 | 198,662 | ||||||
Scientific Games International, Inc., 2.835% (1 Month US LIBOR + 2.750%), 8/14/24 | 266,556 | 264,010 | ||||||
The Enterprise Development Authority, 5.000% (1 Month US LIBOR + 4.250%), 2/19/28 | 197,500 | 197,747 | ||||||
1,032,715 | ||||||||
Gas Distribution: 2.8% | ||||||||
BCP Raptor LLC, 5.250% (1 Month US LIBOR + 4.250%), 6/30/24 | 198,958 | 197,024 | ||||||
Centuri Group, Inc., 3.000% (1 Month US LIBOR + 2.500%), 8/18/28 (c) | 200,000 | 199,166 | ||||||
CQP Holdco LP, 4.250% (3 Month US LIBOR + 3.750%), 5/27/28 | 250,000 | 248,007 | ||||||
Stonepeak Lonestar Holdings LLC, 4.634% (3 Month US LIBOR + 4.500%), 10/19/26 | 230,026 | 230,553 | ||||||
874,750 | ||||||||
Health Care Providers & Services: 0.9% | ||||||||
Emerald TopCo, Inc., 3.628%, 7/25/26 | ||||||||
(3 Month US LIBOR + 3.500%) | 294,000 | 290,766 | ||||||
(1 Month US LIBOR + 3.500%) | 750 | 742 | ||||||
291,508 | ||||||||
Health Facilities: 1.3% | ||||||||
ADMI Corp., 3.625% (1 Month US LIBOR + 3.125%), 12/23/27 | 199,500 | 196,549 | ||||||
Select Medical Corp., 2.340% (1 Month US LIBOR + 2.250%), 3/6/25 | 212,163 | 210,572 | ||||||
407,121 | ||||||||
Health Services: 2.6% | ||||||||
FC Compassus LLC, 5.000% (1 Month US LIBOR + 4.250%), 12/31/26 | 197,010 | 196,862 | ||||||
Gentiva Health Services, Inc., 2.875% (1 Month US LIBOR + 2.750%), 7/2/25 | 187,855 | 187,385 | ||||||
Option Care Health, Inc., 3.835% (1 Month US LIBOR + 3.750%), 8/6/26 | 221,130 | 220,632 | ||||||
PPD, Inc., 2.500% (1 Month US LIBOR + 2.000%), 1/6/28 | 199,500 | 198,860 | ||||||
803,739 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
13
PENN CAPITAL FUNDS TRUST
Penn Capital Floating Rate Income Fund
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
Hotels: 1.3% | ||||||||
Hilton Grand Vacations LLC, 3.500% (1 Month US LIBOR + 3.000%), 5/20/28 | $ | 250,000 | $ | 249,437 | ||||
Marriott Ownership Resorts, Inc., 1.835% (1 Month US LIBOR + 1.750%), 8/31/25 | 174,951 | 171,015 | ||||||
420,452 | ||||||||
Industrial Conglomerates: 0.8% | ||||||||
Deliver Buyer, Inc., 5.147% (3 Month US LIBOR + 5.000%), 5/1/24 | 243,664 | 243,969 | ||||||
Insurance Brokerage: 0.6% | ||||||||
Alliant Holdings Intermediate LLC, 4.250% (1 Month US LIBOR + 3.750%), 11/6/27 | 198,275 | 198,252 | ||||||
Investments & Miscellaneous Financial Services: 4.2% | ||||||||
Hightower Holding LLC, 4.750% (3 Month US LIBOR + 4.000%), 4/16/28 | 160,000 | 159,960 | ||||||
Hightower Holding LLC, 4.750% (3 Month US LIBOR + 4.000%), 4/16/28 (c) | 40,000 | 39,990 | ||||||
Nexus Buyer LLC, 3.839% (1 Month US LIBOR + 3.750%), 11/8/26 | 246,250 | 245,546 | ||||||
Russell Investments US Institutional Holdco, Inc., 4.500%, 5/30/25 | ||||||||
(3 Month US LIBOR + 3.500%) | 139,876 | 139,658 | ||||||
(3 Month US LIBOR + 3.500%) | 60,124 | 60,030 | ||||||
The Edelman Financial Engines Center LLC, 4.250% (1 Month US LIBOR + 3.500%), 7/19/25 | 194,750 | 193,607 | ||||||
TransUnion LLC, 1.835% (1 Month US LIBOR + 1.750%), 11/13/26 | 240,185 | 237,671 | ||||||
VeriFone Systems, Inc., 4.129% (3 Month US LIBOR + 4.000%), 8/20/25 | 242,619 | 233,693 | ||||||
1,509,843 | ||||||||
IT Services: 0.8% | ||||||||
NAB Holdings LLC, 4.000% (3 Month US LIBOR + 2.750%), 6/30/24 | 240,666 | 240,466 | ||||||
Machinery: 0.6% | ||||||||
Gates Global LLC, 3.250% (1 Month US LIBOR + 2.500%), 3/31/24 | 199,813 | 198,794 |
Principal | Value | |||||||
Media Content: 3.2% | ||||||||
Arches Buyer, Inc., 3.750% (1 Month US LIBOR + 3.250%), 12/6/27 | $ | 199,000 | $ | 197,010 | ||||
CSC Holdings LLC, 2.345% (1 Month US LIBOR + 2.250%), 7/17/25 | 239,975 | 236,289 | ||||||
Cumulus Media New Holdings, Inc., 4.750% (3 Month US LIBOR + 3.750%), 3/31/26 | 151,358 | 150,818 | ||||||
The E.W. Scripps Co., 3.312% (1 Month US LIBOR + 2.563%), 5/1/26 | 244,642 | 243,609 | ||||||
The E.W. Scripps Co., 3.750% (1 Month US LIBOR + 3.000%), 12/15/27 | 180,250 | 179,924 | ||||||
1,007,650 | ||||||||
Metals/Mining Excluding Steel: 0.6% | ||||||||
American Rock Salt Co. LLC, 4.750%, (1 Month US LIBOR + 4.000%) 6/4/28 | 200,000 | 200,750 | ||||||
Multi-Line Insurance: 0.6% | ||||||||
HUB International Ltd., 2.875%, 4/25/25 | ||||||||
(3 Month US LIBOR + 2.750%) | 197,731 | 195,374 | ||||||
(1 Month US LIBOR + 2.750%) | 511 | 505 | ||||||
195,879 | ||||||||
Packaging: 1.6% | ||||||||
Graham Packaging Co., Inc., 3.750% (1 Month US LIBOR + 3.000%), 8/4/27 | 195,442 | 194,491 | ||||||
Reynolds Group Holdings, Inc., 3.335%, 2/16/26 | ||||||||
(1 Month US LIBOR + 3.250%) | 46,066 | 45,732 | ||||||
(1 Month US LIBOR + 3.250%) | 28,124 | 27,920 | ||||||
(1 Month US LIBOR + 3.250%) | 124,810 | 123,905 | ||||||
Reynolds Group Holdings, Inc., 2.835%, 2/5/23 | ||||||||
(1 Month US LIBOR + 2.750%) | 58,490 | 58,115 | ||||||
(1 Month US LIBOR + 2.750%) | 21,588 | 21,450 | ||||||
(1 Month US LIBOR + 2.750%) | 13,179 | 13,094 | ||||||
484,707 | ||||||||
Personal & Household Products: 2.5% | ||||||||
Canada Goose, Inc., 4.250% (3 Month US LIBOR + 3.500%), 10/7/27 | 199,001 | 199,085 | ||||||
Froneri US, Inc., 2.335%, 1/31/27 | ||||||||
(1 Month US LIBOR + 2.250%) | 136,079 | 133,906 | ||||||
(1 Month US LIBOR + 2.250%) | 61,921 | 60,932 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
14
PENN CAPITAL FUNDS TRUST
Penn Capital Floating Rate Income Fund
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
HLF Financing Sarl LLC, 2.585% (1 Month US LIBOR + 2.500%), 8/16/25 | $ | 223,125 | $ | 221,371 | ||||
Weber-Stephen Products LLC, 4.000%, 10/30/27 | ||||||||
(1 Month US LIBOR + 3.250%) | 159,000 | 158,967 | ||||||
(1 Month US LIBOR + 3.250%) | 4,784 | 4,783 | ||||||
779,044 | ||||||||
Pharmaceuticals: 2.9% | ||||||||
Agiliti Health, Inc., 2.875% (1 Month US LIBOR + 2.750%), 1/4/26 | 246,222 | 244,530 | ||||||
Bausch Health Americas, Inc., 3.085% (1 Month US LIBOR + 3.000%), 6/1/25 | 223,713 | 222,839 | ||||||
Cambrex Corp., 4.250% (1 Month US LIBOR + 3.500%), 12/4/26 | 246,884 | 246,391 | ||||||
Greatbatch Ltd., 3.500% (1 Month US LIBOR + 2.500%), 10/27/22 | 191,740 | 191,465 | ||||||
905,225 | ||||||||
Printing & Publishing: 1.3% | ||||||||
Meredith Corp., 2.585% (1 Month US LIBOR + 2.500%), 1/31/25 | 228,738 | 227,372 | ||||||
Nielsen Finance LLC, 2.096% (1 Month US LIBOR + 2.000%), 10/4/23 | 176,692 | 176,422 | ||||||
403,794 | ||||||||
Recreation & Travel: 1.8% | ||||||||
Carnival Corp., 3.750% (3 Month US LIBOR +3.000%), 6/30/25 | 249,370 | 247,687 | ||||||
Life Time Fitness, Inc., 5.750% (3 Month US LIBOR + 4.750%), 6/10/22 | 94,326 | 93,789 | ||||||
SkyMiles IP Ltd., 4.750% (3 Month US LIBOR + 3.750%), 10/20/27 | 200,000 | 211,962 | ||||||
553,438 | ||||||||
Restaurants: 1.4% | ||||||||
IRB Holding Corp., 3.750% (6 Month US LIBOR + 2.750%), 2/5/25 | 243,829 | 242,839 | ||||||
IRB Holding Corp., 4.250% (3 Month US LIBOR + 3.250%), 12/15/27 | 199,000 | 198,751 | ||||||
441,590 | ||||||||
Software: 0.5% | ||||||||
SCS Holdings I, Inc., 3.585% (1 Month US LIBOR + 3.500%), 7/1/26 | 147,011 | 146,223 | ||||||
Software/Services: 7.9% | ||||||||
Avaya, Inc., 4.095% (1 Month US LIBOR + 4.000%), 12/15/27 | 200,000 | 200,028 |
Principal | Value | |||||||
Castle US Holding Corp., 3.897% (3 Month US LIBOR + 3.750%), 1/31/27 | $ | 197,917 | $ | 195,003 | ||||
Cornerstone OnDemand, Inc., 3.338% (1 Month US LIBOR + 3.250%), 4/22/27 | 151,846 | 151,641 | ||||||
Endurance International Group Holdings, Inc., 4.250% (6 Month US LIBOR + 3.500%), 1/29/28 | 205,000 | 203,399 | ||||||
Fiserv Investment Solutions, Inc., 4.124% (3 Month US LIBOR + 4.000%), 2/18/27 | 198,000 | 197,753 | ||||||
Go Daddy Operating Co. LLC, 1.835%, 2/18/24 | ||||||||
(1 Month US LIBOR + 1.750%) | 51,116 | 50,637 | ||||||
(1 Month US LIBOR + 1.750%) | 163,793 | 162,258 | ||||||
LogMeIn, Inc., 4.846%, 8/31/27 | ||||||||
(1 Month US LIBOR + 4.750%) | 116,083 | 115,629 | ||||||
(1 Month US LIBOR + 4.750%) | 33,167 | 33,037 | ||||||
Match Group Holdings II LLC, 1.874% (3 Month US LIBOR + 1.750%), 2/13/27 | 200,000 | 197,950 | ||||||
PAE Holding Corp., 5.250% (3 Month US LIBOR + 4.500%), 10/19/27 | 195,272 | 194,930 | ||||||
Proofpoint, Inc., 3.750% (1 Month US LIBOR + 3.250%), 6/10/28 (c) | 200,000 | 198,722 | ||||||
Rackspace Technology Global, Inc., 3.500% (3 Month US LIBOR + 2.750%), 2/9/28 | 199,500 | 197,276 | ||||||
SS&C Technologies Holdings Europe Sarl, 1.835% (1 Month US LIBOR + 1.750%), 4/16/25 | 80,443 | 79,172 | ||||||
SS&C Technologies, Inc., 1.835% (1 Month US LIBOR + 1.750%), 4/16/25 | 92,659 | 91,195 | ||||||
The Ultimate Software Group, Inc., 4.000% (3 Month US LIBOR + 3.250%), 5/3/26 | 198,503 | 198,503 | ||||||
2,467,133 | ||||||||
Specialty Retail: 8.2% | ||||||||
BDF Acquisition Corp., 6.250% (1 Month US LIBOR + 5.250%), 8/8/23 | 291,141 | 289,686 | ||||||
BJ’s Wholesale Club, Inc., 2.097% (1 Month US LIBOR + 2.000%), 2/3/24 | 106,738 | 106,615 | ||||||
Calceus Acquisition, Inc., 5.621% (3 Month US LIBOR + 5.500%), 2/12/25 | 383,378 | 364,209 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
15
PENN CAPITAL FUNDS TRUST
Penn Capital Floating Rate Income Fund
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
CNT Holdings I Corp., 4.500% (6 Month US LIBOR + 3.750%), 11/8/27 | $ | 199,500 | $ | 199,278 | ||||
Jo-Ann Stores LLC, 5.500% (1 Month US LIBOR + 4.750%), 6/30/28 | 250,000 | 248,625 | ||||||
PetSmart, Inc., 4.500% (6 Month US LIBOR + 3.750%), 1/29/28 | 200,000 | 200,166 | ||||||
Savers, Inc., 6.500%, (3 Month US LIBOR + 5.750%) 3/26/28 | 200,000 | 201,916 | ||||||
Shutterfly LLC, 7.000% (1 Month US LIBOR + 5.000%), 10/1/26 (c) | 80,000 | 79,750 | ||||||
Shutterfly LLC, 5.750% (1 Month US LIBOR + 5.000%) 10/1/26 | 330,000 | 328,970 | ||||||
Staples, Inc., 4.626% (3 Month US LIBOR + 4.500%), 9/12/24 | 210,234 | 203,576 | ||||||
The Michael’s Companies, Inc., 5.000% (1 Month US LIBOR + 4.250%), 4/9/28 | 200,000 | 200,000 | ||||||
Waystar Technologies, Inc., 4.085% (1 Month US LIBOR + 4.000%), 10/23/26 | 148,871 | 148,407 | ||||||
2,571,198 | ||||||||
Support - Services: 4.0% | ||||||||
Buzz Merger Sub Ltd., 2.835% (1 Month US LIBOR + 2.750%), 1/29/27 | 246,875 | 245,641 | ||||||
PetVet Care Centers LLC, 2.835% (1 Month US LIBOR + 2.750%), 2/14/25 | 316,199 | 311,718 | ||||||
Pike Corp., 3.090% (1 Month US LIBOR + 3.000%), 12/21/27 | 196,575 | 195,620 | ||||||
Prime Security Services Borrower LLC, 3.500%, 9/23/26 | ||||||||
(6 Month US LIBOR + 2.750%) | 101,565 | 101,342 | ||||||
(12 Month US LIBOR + 2.750%) | 50,783 | 50,672 | ||||||
(12 Month US LIBOR + 2.750%) | 50,783 | 50,672 | ||||||
(1 Month US LIBOR + 2.750%) | 78,404 | 78,232 | ||||||
TruGreen LP, 4.750% (1 Month US LIBOR + 4.000%), 11/2/27 | 199,000 | 199,187 | ||||||
1,233,084 | ||||||||
Tech Hardware & Equipment: 3.7% | ||||||||
Asurion LLC, 3.335% (1 Month US LIBOR + 3.250%), 12/23/26 | 199,000 | 195,052 | ||||||
CommScope, Inc., 3.335% (1 Month US LIBOR + 3.250%), 4/4/26 | 195,758 | 193,360 | ||||||
Dell International LLC, 1.840% (1 Month US LIBOR + 1.750%), 3/13/24 | 213,312 | 213,046 |
Principal | Value | |||||||
Dell International LLC, 2.000% (1 Month US LIBOR + 1.750%), 9/19/25 | $ | 199,500 | $ | 198,908 | ||||
Plantronics, Inc., 2.585% (1 Month US LIBOR + 2.500%), 7/2/25 | 182,092 | 177,654 | ||||||
Xperi Holding Corp., 3.585% (1 Month US LIBOR + 3.500%), 6/1/25 | 163,929 | 162,494 | ||||||
1,140,514 | ||||||||
Telecom - Satellite: 0.6% | ||||||||
Gogo Intermediate Holdings LLC, 4.500% (1 Month US LIBOR + 3.750%), 4/21/28 (c) | 200,000 | 199,750 | ||||||
Telecom - Wireline Integrated & Services: 2.7% | ||||||||
CenturyLink, Inc., 2.335% (1 Month US LIBOR + 2.250%), 3/15/27 | 246,250 | 243,069 | ||||||
Cincinnati Bell, Inc., 4.250% (1 Month US LIBOR + 3.250%), 10/2/24 | 439,838 | 439,209 | ||||||
Consolidated Communications, Inc., 4.250% (1 Month US LIBOR + 3.500%), 10/2/27 | 142,801 | 142,775 | ||||||
825,053 | ||||||||
Theaters & Entertainment: 0.8% | ||||||||
Alterra Mountain Co., 2.835% (1 Month US LIBOR + 2.750%), 7/31/24 | 241,250 | 237,762 | ||||||
Total Bank Loans (cost $27,060,396) | 27,169,190 | |||||||
Corporate Bonds: 5.8% | ||||||||
Automakers: 0.7% | ||||||||
Ford Motor Credit Co. LLC, 3.096%, 5/4/23 | 200,000 | 204,440 | ||||||
Consumer/Commercial/Lease Financing: 0.6% | ||||||||
Home Point Capital, Inc., 5.000%, 2/1/26 (d) | 210,000 | 181,650 | ||||||
Food - Wholesale: 0.4% | ||||||||
KeHE Distributors LLC, 8.625%, 10/15/26 (d) | 121,000 | 131,436 | ||||||
Gas Distribution: 0.7% | ||||||||
New Fortress Energy, Inc., 6.500%, 9/30/26 (d) | 230,000 | 231,196 | ||||||
The Accompanying Footnotes are an Integral Part of these Financial Statements
16
PENN CAPITAL FUNDS TRUST
Penn Capital Floating Rate Income Fund
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
Media Content: 1.0% | ||||||||
Cumulus Media New Holdings, Inc., 6.750%, 7/1/26 (d) | $ | 155,000 | $ | 160,975 | ||||
Netflix, Inc., 5.875%, 11/15/28 | 114,000 | 141,360 | ||||||
302,335 | ||||||||
Oil Field Equipment & Services: 0.6% | ||||||||
Oceaneering International, Inc., 4.650%, 11/15/24 | 200,000 | 203,756 | ||||||
Real Estate Investment Trusts (REITs): 0.8% | ||||||||
Service Properties Trust, 4.950%, 10/1/29 | 240,000 | 237,600 | ||||||
Recreation & Travel: 1.0% | ||||||||
Carnival Corp., 7.625%, 3/1/26 (d) | 300,000 | 318,782 | ||||||
Total Corporate Bonds (cost $1,788,338) | 1,811,195 | |||||||
Short-Term Investment: 7.6% | ||||||||
U.S. Bank Money Market Deposit Account, 0.00% (e) | 2,357,545 | 2,357,545 | ||||||
Total Short-Term Investment (cost $2,357,545) | 2,357,545 | |||||||
Total Investments - 100.5% (cost $31,206,279) | 31,337,930 | |||||||
Other Assets & Liabilities (0.5)% | (145,144 | ) | ||||||
Net Assets: 100.0% | $ | 31,192,786 |
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) | All or a portion of this loan is unfunded. See Note 13. |
(d) | 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 August 31, 2021, the value of these investments was $1,024,039, or 3.3% of total net assets. |
(e) | The Money Market Deposit Account (“MMDA”) is a short-term investment vehicle in which the Fund holds cash balances. The MMDA will bear interest at a variable rate that is determined based on market conditions and may change daily and by any amount. The rate shown is as of August 31, 2021. |
Country Exposure (as a percentage of total investments) | |
United States | 99.0% |
Panama | 1.0% |
Asset Type (as a percentage of total investments) (Unaudited) |
The Accompanying Footnotes are an Integral Part of these Financial Statements
17
PENN CAPITAL FUNDS TRUST
Penn Capital Mid Cap Core Fund
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Shares | Value | |||||||
Common Stocks: 94.6% | ||||||||
Aerospace & Defense: 1.1% | ||||||||
Mercury Systems, Inc. (a) | 4,148 | $ | 208,976 | |||||
Air Freight & Logistics: 2.1% | ||||||||
GXO Logistics, Inc. (a) | 2,401 | 196,378 | ||||||
XPO Logistics, Inc. (a) | 2,401 | 208,671 | ||||||
405,049 | ||||||||
Banks: 6.4% | ||||||||
People’s United Financial, Inc. | 9,104 | 149,579 | ||||||
Pinnacle Financial Partners, Inc. | 5,168 | 500,882 | ||||||
Texas Capital Bancshares, Inc. (a) | 3,736 | 254,011 | ||||||
Western Alliance Bancorp | 3,090 | 301,460 | ||||||
1,205,932 | ||||||||
Biotechnology: 4.0% | ||||||||
Exelixis, Inc. (a) | 11,569 | 221,778 | ||||||
Halozyme Therapeutics, Inc. (a) | 6,727 | 282,467 | ||||||
United Therapeutics Corp. (a) | 1,132 | 243,244 | ||||||
747,489 | ||||||||
Building Products: 1.2% | ||||||||
Lennox International, Inc. | 659 | 220,884 | ||||||
Chemicals: 5.1% | ||||||||
Axalta Coating Systems Ltd. (a) | 9,751 | 297,795 | ||||||
CF Industries Holdings, Inc. | 7,461 | 338,879 | ||||||
Livent Corp. (a) | 13,184 | 327,886 | ||||||
964,560 | ||||||||
Commercial Services & Supplies: 2.0% | ||||||||
IAA, Inc. (a) | 3,449 | 183,211 | ||||||
Steelcase, Inc. - Class A | 14,181 | 199,810 | ||||||
383,021 | ||||||||
Construction Materials: 2.1% | ||||||||
Martin Marietta Materials, Inc. | 1,057 | 402,981 | ||||||
Consumer Finance: 1.3% | ||||||||
LendingTree, Inc. (a) | 1,429 | 238,114 | ||||||
Diversified Financial Services: 1.5% | ||||||||
Voya Financial, Inc. | 4,394 | 285,522 | ||||||
Electrical Equipment: 1.6% | ||||||||
nVent Electric PLC | 8,785 | 301,853 |
Shares | Value | |||||||
Energy Equipment & Services: 0.9% | ||||||||
TechnipFMC PLC (a) | 25,290 | $ | 167,673 | |||||
Food Products: 1.4% | ||||||||
Lamb Weston Holdings, Inc. | 4,016 | 261,642 | ||||||
Health Care Equipment & Supplies: 2.0% | ||||||||
CONMED Corp. | 2,884 | 378,785 | ||||||
Health Care Providers & Services: 1.0% | ||||||||
Quest Diagnostics, Inc. | 1,204 | 184,007 | ||||||
Hotels, Restaurants & Leisure: 9.0% | ||||||||
MGM Resorts International | 8,597 | 366,404 | ||||||
Norwegian Cruise Line Holdings Ltd. (a) | 14,987 | 387,264 | ||||||
Planet Fitness, Inc. - Class A (a) | 4,287 | 348,533 | ||||||
Six Flags Entertainment Corp. (a) | 8,080 | 341,299 | ||||||
Vail Resorts, Inc. (a) | 820 | 249,977 | ||||||
1,693,477 | ||||||||
Insurance: 6.5% | ||||||||
Arch Capital Group Ltd. (a) | 7,298 | 299,948 | ||||||
Fidelity National Financial, Inc. | 4,949 | 241,659 | ||||||
Lincoln National Corp. | 5,839 | 400,847 | ||||||
Primerica, Inc. | 1,822 | 278,657 | ||||||
1,221,111 | ||||||||
Interactive Media & Services: 2.4% | ||||||||
IAC/InterActiveCorp (a) | 1,670 | 220,523 | ||||||
TripAdvisor, Inc. (a) | 6,765 | 236,775 | ||||||
457,298 | ||||||||
IT Services: 4.6% | ||||||||
Alliance Data Systems Corp. | 2,762 | 270,980 | ||||||
GoDaddy, Inc. - Class A (a) | 3,714 | 272,273 | ||||||
Sabre Corp. (a) | 29,034 | 326,052 | ||||||
869,305 | ||||||||
Life Sciences Tools & Services: 2.4% | ||||||||
Avantor, Inc. (a) | 11,424 | 450,563 | ||||||
Machinery: 1.0% | ||||||||
Allison Transmission Holdings, Inc. | 5,093 | 188,339 | ||||||
Marine: 1.6% | ||||||||
Kirby Corp. (a) | 5,540 | 296,889 | ||||||
The Accompanying Footnotes are an Integral Part of these Financial Statements
18
PENN CAPITAL FUNDS TRUST
Penn Capital Mid Cap Core Fund
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Shares | Value | |||||||
Media: 3.2% | ||||||||
Fox Corp. - Class B | 6,976 | $ | 241,579 | |||||
Liberty Media Corp.-Liberty SiriusXM - Class A (a) | 7,315 | 362,092 | ||||||
603,671 | ||||||||
Metals & Mining: 1.9% | ||||||||
Steel Dynamics, Inc. | 5,339 | 360,329 | ||||||
Oil, Gas & Consumable Fuels: 3.3% | ||||||||
Diamondback Energy, Inc. | 4,896 | 377,678 | ||||||
HollyFrontier Corp. | 7,443 | 240,632 | ||||||
618,310 | ||||||||
Pharmaceuticals: 3.8% | ||||||||
Bausch Health Cos, Inc. (a) | 12,776 | 372,165 | ||||||
Catalent, Inc. (a) | 2,659 | 346,840 | ||||||
719,005 | ||||||||
Professional Services: 1.7% | ||||||||
TransUnion | 2,709 | 329,225 | ||||||
Semiconductors & Semiconductor Equipment: 6.3% | ||||||||
Allegro MicroSystems, Inc. (a) | 11,042 | 331,812 | ||||||
Skyworks Solutions, Inc. | 2,471 | 453,330 | ||||||
Teradyne, Inc. | 3,271 | 397,230 | ||||||
1,182,372 | ||||||||
Software: 2.9% | ||||||||
Five9, Inc. (a) | 1,251 | 197,946 | ||||||
Tyler Technologies, Inc. (a) | 707 | 343,390 | ||||||
541,336 | ||||||||
Specialty Retail: 4.8% | ||||||||
Burlington Stores, Inc. (a) | 900 | 269,541 | ||||||
Five Below, Inc. (a) | 1,624 | 345,604 | ||||||
Floor & Decor Holdings, Inc. - Class A (a) | 2,364 | 291,481 | ||||||
906,626 | ||||||||
Technology Hardware, Storage & Peripherals: 1.5% | ||||||||
Western Digital Corp. (a) | 4,657 | 294,322 | ||||||
Textiles, Apparel & Luxury Goods: 1.6% | ||||||||
PVH Corp. (a) | 2,899 | 303,786 |
Shares | Value | |||||||
Trading Companies & Distributors: 2.4% | ||||||||
United Rentals, Inc. (a) | 1,264 | $ | 445,750 | |||||
Total Common Stocks (cost $12,024,021) | 17,838,202 | |||||||
Real Estate Investment Trusts (REITs): 4.1% | ||||||||
Healthcare Trust of America, Inc. - Class A | 8,659 | 262,627 | ||||||
MGM Growth Properties LLC - Class A | 6,066 | 251,496 | ||||||
Pebblebrook Hotel Trust | 11,987 | 264,074 | ||||||
Total REITs (cost $666,380) | 778,197 | |||||||
Short-Term Investment: 1.5% | ||||||||
U.S. Bank Money Market Deposit Account, 0.00% (b) | 277,430 | 277,430 | ||||||
Total Short-Term Investment (cost $277,430) | 277,430 | |||||||
Total Investments - 100.2% (cost $12,967,831) | 18,893,829 | |||||||
Other Assets and Liabilities (0.2)% | (34,135 | ) | ||||||
Net Assets: 100.0% | $ | 18,859,694 |
Percentages are stated as a percent of net assets.
(a) | No distribution or dividend was made during the period ended August 31, 2021. As such, it is classified as a non-income producing security as of August 31, 2021. |
(b) | The Money Market Deposit Account (“MMDA”) is a short-term investment vehicle in which the Fund holds cash balances. The MMDA will bear interest at a variable rate that is determined based on market conditions and may change daily and by any amount. The rate shown is as of August 31, 2021. |
The Accompanying Footnotes are an Integral Part of these Financial Statements
19
PENN CAPITAL FUNDS TRUST
Penn Capital Mid Cap Core Fund
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Country Exposure (as a percentage of total investments) | |
United States | 90.3% |
Bermuda | 5.2% |
Canada | 2.0% |
Ireland | 1.6% |
United Kingdom | 0.9% |
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
20
PENN CAPITAL FUNDS TRUST
Penn Capital Opportunistic High Income Fund
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
Asset Backed Security: 0.3% | ||||||||
Air Transportation: 0.3% | ||||||||
American Airlines 2015-1 Class A Pass Through Trust, 3.375%, 11/1/28 | $ | 52,623 | $ | 51.959 | ||||
Total Asset Backed Security (cost $45,343) | 51.959 | |||||||
Convertible Bonds: 2.5% | ||||||||
Auto Parts & Equipment: 0.7% | ||||||||
Meritor, Inc., 3.250%, 10/15/37 | 120,000 | 127,800 | ||||||
Cable & Satellite TV: 0.8% | ||||||||
DISH Network Corp., 3.375%, 8/15/26 | 145,000 | 151,250 | ||||||
Gas Distribution: 0.5% | ||||||||
Golar LNG Ltd., 2.750%, 2/15/22 | 95,000 | 93,753 | ||||||
Personal & Household Products: 0.5% | ||||||||
Tilray, Inc., 5.000%, 10/1/23 | 100,000 | 97,792 | ||||||
Total Convertible Bonds (cost $462,996) | 470,595 | |||||||
Corporate Bonds: 90.8% | ||||||||
Advertising: 0.7% | ||||||||
Clear Channel Outdoor Holdings, Inc., 7.500%, 6/1/29 (a) | 65,000 | 67,275 | ||||||
Midas OpCo Holdings LLC, 5.625%, 8/15/29 (a) | 65,000 | 66,544 | ||||||
133,819 | ||||||||
Aerospace/Defense: 0.7% | ||||||||
Bombardier, Inc., 6.000%, 10/15/22 (a) | 49,000 | 49,059 | ||||||
Triumph Group, Inc., 7.750%, 8/15/25 | 90,000 | 90,033 | ||||||
139,092 | ||||||||
Air Transportation: 2.5% | ||||||||
American Airlines Group, Inc., 5.000%, 6/1/22 (a) | 130,000 | 131,137 | ||||||
American Airlines, Inc., 5.500%, 4/20/26 (a) | 25,000 | 26,350 | ||||||
American Airlines, Inc., 5.750%, 4/20/29 (a) | 25,000 | 26,997 | ||||||
American Airlines Group, Inc., 3.750%, 3/1/25 (a) | 70,000 | 62,650 |
Principal | Value | |||||||
United Airlines 2014-2 Class B Pass Through Trust, 4.625%, 3/3/24 | $ | 36,742 | $ | 37,472 | ||||
United Airlines Holdings, Inc., 6.500%, 6/20/27 (a) | 40,000 | 43,454 | ||||||
United Airlines, Inc., 4.625%, 4/15/29 (a) | 75,000 | 77,812 | ||||||
VistaJet Malta Finance PLC, 10.500%, 6/1/24 (a) | 55,000 | 59,675 | ||||||
465,547 | ||||||||
Auto Parts & Equipment: 2.0% | ||||||||
American Axle & Manufacturing, Inc., 6.875%, 7/1/28 | 85,000 | 91,839 | ||||||
American Axle & Manufacturing, Inc., 5.000%, 10/1/29 | 50,000 | 49,985 | ||||||
The Goodyear Tire & Rubber Co., 5.000%, 7/15/29 (a) | 20,000 | 21,147 | ||||||
The Goodyear Tire & Rubber Co., 5.250%, 7/15/31 (a) | 65,000 | 69,534 | ||||||
The Goodyear Tire & Rubber Co., 7.000%, 3/15/28 | 55,000 | 62,838 | ||||||
Wheel Pros, Inc., 6.500%, 5/15/29 (a) | 90,000 | 89,888 | ||||||
385,231 | ||||||||
Automakers: 1.1% | ||||||||
Jaguar Land Rover Automotive PLC, 5.875%, 1/15/28 (a) | 200,000 | 205,690 | ||||||
Building & Construction: 2.7% | ||||||||
Ashton Woods USA LLC, 4.625%, 8/1/29 (a) | 95,000 | 95,000 | ||||||
Ashton Woods USA LLC, 9.875%, 4/1/27 (a) | 85,000 | 94,137 | ||||||
Beazer Homes USA, Inc., 7.250%, 10/15/29 | 130,000 | 143,813 | ||||||
Brookfield Residential Properties, Inc., 5.000%, 6/15/29 (a) | 85,000 | 86,169 | ||||||
Taylor Morrison Communities, Inc., 5.125%, 8/1/30 (a) | 90,000 | 98,458 | ||||||
517,577 | ||||||||
Building Materials: 0.9% | ||||||||
Installed Building Products, Inc., 5.750%, 2/1/28 (a) | 90,000 | 94,725 | ||||||
White Cap Buyer LLC, 6.875%, 10/15/28 (a) | 80,000 | 85,100 | ||||||
179,825 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
21
PENN CAPITAL FUNDS TRUST
PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
Cable & Satellite TV: 4.9% | ||||||||
Altice France SA/France, 5.125%, 7/15/29 (a) | $ | 410,000 | $ | 414,518 | ||||
CCO Holdings LLC, 4.500%, 8/15/30 (a) | 135,000 | 141,056 | ||||||
CCO Holdings LLC, 4.500%, 5/1/32 | 135,000 | 141,055 | ||||||
DISH DBS Corp., 7.750%, 7/1/26 | 40,000 | 45,818 | ||||||
DISH DBS Corp., 5.125%, 6/1/29 (a) | 70,000 | 69,649 | ||||||
DIRECTV Holdings LLC, 5.875%, 8/15/27 (a) | 105,000 | 109,725 | ||||||
921,821 | ||||||||
Chemicals: 1.2% | ||||||||
Ashland LLC, 3.375%, 9/1/31 (a) | 50,000 | 51,389 | ||||||
Trinseo Materials Finance, Inc., 5.125%, 4/1/29 (a) | 65,000 | 65,637 | ||||||
Venator Finance Sarl, 5.750%, 7/15/25 (a) | 125,000 | 117,969 | ||||||
234,995 | ||||||||
Consumer/Commercial/Lease Financing: 2.6% | ||||||||
Enova International, Inc., 8.500%, 9/15/25 (a) | 125,000 | 129,062 | ||||||
Home Point Capital, Inc., 5.000%, 2/1/26 (a) | 100,000 | 86,500 | ||||||
Navient Corp., 6.750%, 6/25/25 | 45,000 | 50,175 | ||||||
Navient Corp., 4.875%, 3/15/28 | 60,000 | 61,050 | ||||||
OneMain Finance Corp., 6.625%, 1/15/28 | 25,000 | 28,856 | ||||||
Quicken Loans LLC, 3.875%, 3/1/31 (a) | 135,000 | 138,100 | ||||||
493,743 | ||||||||
Department Stores: 1.9% | ||||||||
Macy’s Retail Holdings, Inc., 5.875%, 4/1/29 (a) | 105,000 | 114,723 | ||||||
Neiman Marcus Group LLC, 7.125%, 4/1/26 (a) | 225,000 | 238,219 | ||||||
352,942 | ||||||||
Diversified Capital Goods: 1.0% | ||||||||
Madison IAQ LLC, 5.875%, 6/30/29 (a) | 130,000 | 133,088 | ||||||
Matthews International Corp., 5.250%, 12/1/25 (a) | 50,000 | 51,247 | ||||||
184,335 | ||||||||
Electric - Generation: 1.7% | ||||||||
NRG Energy, Inc., 3.875%, 2/15/32 (a) | 145,000 | 147,023 | ||||||
Talen Energy Supply LLC, 7.250%, 5/15/27 (a) | 100,000 | 86,592 |
Principal | Value | |||||||
Sunnova Energy Corp., 5.875%, 9/1/26 (a) | $ | 95,000 | $ | 95,684 | ||||
329,299 | ||||||||
Electric - Inegrated: 0.4% | ||||||||
Leeward Renewable Energy Operations LLC, 4.250%, 7/1/29 (a) | 70,000 | 71,432 | ||||||
Energy - Exploration & Production: 9.7% | ||||||||
Antero Resources Corp., 5.000%, 3/1/25 | 85,000 | 86,700 | ||||||
Antero Resources Corp., 8.375%, 7/15/26 (a) | 104,000 | 117,780 | ||||||
Antero Resources Corp., 7.625%, 2/1/29 (a) | 110,000 | 121,000 | ||||||
Antero Resources Corp., 5.375%, 3/1/30 (a) | 25,000 | 25,436 | ||||||
Chesapeake Energy Corp., 5.875%, 2/1/29 (a) | 90,000 | 96,075 | ||||||
Comstock Resources, Inc., 6.750%, 3/1/29 (a) | 90,000 | 94,455 | ||||||
Comstock Resources, Inc., 5.875%, 1/15/30 (a) | 65,000 | 65,175 | ||||||
Hess Corp., 7.300%, 8/15/31 | 220,000 | 299,185 | ||||||
Hilcorp Energy I LP, 6.250%, 11/1/28 (a) | 80,000 | 82,671 | ||||||
Northern Oil and Gas, Inc., 8.125%, 3/1/28 (a) | 205,000 | 212,944 | ||||||
Occidental Petroleum Corp., 5.550%, 3/15/26 | 140,000 | 156,100 | ||||||
Occidental Petroleum Corp., 6.450%, 9/15/36 | 100,000 | 125,000 | ||||||
Occidental Petroleum Corp., 5.875%, 9/1/25 | 60,000 | 67,504 | ||||||
Occidental Petroleum Corp., 5.500%, 12/1/25 | 45,000 | 50,175 | ||||||
SM Energy Co., 6.750%, 9/15/26 | 65,000 | 65,325 | ||||||
SM Energy Co., 6.500%, 7/15/28 | 35,000 | 35,170 | ||||||
Vine Energy Holdings LLC, 6.750%, 4/15/29 (a) | 125,000 | 135,000 | ||||||
1,835,695 | ||||||||
Food - Wholesale: 4.5% | ||||||||
HLF Financing Sarl LLC, 7.875%, 9/1/25 (a) | 45,000 | 48,834 | ||||||
HLF Financing Sarl LLC, 4.875%, 6/1/29 (a) | 55,000 | 55,137 | ||||||
JBS USA LUX SA, 6.750%, 2/15/28 (a) | 175,000 | 191,844 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
22
PENN CAPITAL FUNDS TRUST
PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
KeHE Distributors LLC, 8.625%, 10/15/26 (a) | $ | 108,000 | $ | 117,315 | ||||
Kraft Heinz Foods Co., 5.000%, 6/4/42 | 35,000 | 44,282 | ||||||
Kraft Heinz Foods Co., 5.500%, 6/1/50 | 160,000 | 213,397 | ||||||
Pilgrim’s Pride Corp., 4.250%, 4/15/31 (a) | 85,000 | 91,531 | ||||||
Pilgrim’s Pride Corp., 3.500%, 3/1/32 (a) | 35,000 | 35,747 | ||||||
Simmons Foods, Inc., 4.625%, 3/1/29 (a) | 60,000 | 61,059 | ||||||
859,146 | ||||||||
Food & Drug Retailers: 1.2% | ||||||||
Rite Aid Corp., 8.000%, 11/15/26 (a) | 100,000 | 103,115 | ||||||
SEG Holding LLC, 5.625%, 10/15/28 (a) | 120,000 | 126,000 | ||||||
229,115 | ||||||||
Forestry/Paper: 0.8% | ||||||||
Mercer International, Inc., 5.125%, 2/1/29 | 90,000 | 90,691 | ||||||
Rayonier AM Products, Inc., 7.625%, 1/15/26 (a) | 65,000 | 68,575 | ||||||
159,266 | ||||||||
Gaming: 3.2% | ||||||||
Affinity Gaming, 6.875%, 12/15/27 (a) | 65,000 | 69,050 | ||||||
Boyd Gaming Corp., 4.750%, 12/1/27 | 140,000 | 144,375 | ||||||
CCM Merger, Inc., 6.375%, 5/1/26 (a) | 65,000 | 68,575 | ||||||
Everi Holdings, Inc., 5.000%, 7/15/29 (a) | 100,000 | 102,350 | ||||||
Penn National Gaming, Inc., 4.125%, 7/1/29 (a) | 75,000 | 74,906 | ||||||
Scientific Games International, Inc., 8.625%, 7/1/25 (a) | 135,000 | 145,744 | ||||||
605,000 | ||||||||
Gas Distribution: 3.3% | ||||||||
Antero Midstream Partners LP, 5.375%, 6/15/29 (a) | 50,000 | 51,186 | ||||||
Blue Racer Midstream LLC, 6.625%, 7/15/26 (a) | 40,000 | 41,700 | ||||||
Blue Racer Midstream LLC, 7.625%, 12/15/25 (a) | 40,000 | 43,250 | ||||||
Crestwood Midstream Partners LP, 6.000%, 2/1/29 (a) | 65,000 | 66,300 | ||||||
DCP Midstream Operating LP, 5.125%, 5/15/29 | 70,000 | 77,700 |
Principal | Value | |||||||
EQM Midstream Partners LP, 5.500%, 7/15/28 | $ | 45,000 | $ | 49,105 | ||||
Harvest Midstream I LP, 7.500%, 9/1/28 (a) | 45,000 | 47,470 | ||||||
New Fortress Energy, Inc., 6.750%, 9/15/25 (a) | 125,000 | 126,875 | ||||||
New Fortress Energy, Inc., 6.500%, 9/30/26 (a) | 60,000 | 60,312 | ||||||
Western Midstream Operating LP, 5.300%, 2/1/30 | 60,000 | 67,237 | ||||||
631,135 | ||||||||
Health Facilities: 1.8% | ||||||||
Community Health Systems, Inc., 6.875%, 4/1/28 (a) | 125,000 | 123,994 | ||||||
Community Health Systems, Inc., 6.125%, 4/1/30 (a) | 60,000 | 60,477 | ||||||
Mednax, Inc., 6.250%, 1/15/27 (a) | 85,000 | 89,569 | ||||||
Tenet Healthcare Corp., 6.125%, 10/1/28 (a) | 65,000 | 68,617 | ||||||
342,657 | ||||||||
Health Services: 0.9% | ||||||||
DaVita, Inc., 4.625%, 6/1/30 (a) | 95,000 | 99,290 | ||||||
The Providence Service Corp., 5.875%, 11/15/25 (a) | 60,000 | 63,750 | ||||||
163,040 | ||||||||
Hotels: 0.6% | ||||||||
Hilton Grand Vacations, Inc., 5.000%, 6/1/29 (a) | 75,000 | 75,938 | ||||||
Hilton Grand Vacations, Inc., 4.875%, 7/1/31 (a) | 45,000 | 44,606 | ||||||
120,544 | ||||||||
Investments & Miscellaneous Financial Services: 1.8% | ||||||||
Icahn Enterprises LP, 4.375%, 2/1/29 | 55,000 | 55,206 | ||||||
Icahn Enterprises LP, 6.250%, 5/15/26 | 105,000 | 110,644 | ||||||
Icahn Enterprises LP, 5.250%, 5/15/27 | 65,000 | 67,515 | ||||||
StoneX Group, Inc., 8.625%, 6/15/25 (a) | 95,000 | 102,790 | ||||||
336,155 | ||||||||
Machinery: 0.6% | ||||||||
Titan International, Inc., 7.000%, 4/30/28 (a) | 115,000 | 120,199 | ||||||
Media Content: 5.0% | ||||||||
AMC Networks, Inc., 4.750%, 8/1/25 | 90,000 | 92,250 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
23
PENN CAPITAL FUNDS TRUST
PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
Audacy Capital Corp., 6.750%, 3/31/29 (a) | $ | 60,000 | $ | 60,556 | ||||
Cumulus Media New Holdings, Inc., 6.750%, 7/1/26 (a) | 96,000 | 99,701 | ||||||
Diamond Sports Group LLC, 5.375%, 8/15/26 (a) | 105,000 | 69,678 | ||||||
Diamond Sports Group LLC, 12.750%, 12/1/26 (a) | 28,000 | 19,600 | ||||||
Netflix, Inc., 5.875%, 11/15/28 | 136,000 | 168,640 | ||||||
Scripps Escrow II, Inc., 5.375%, 1/15/31 (a) | 125,000 | 123,717 | ||||||
Scripps Escrow, Inc., 5.875%, 7/15/27 (a) | 50,000 | 51,327 | ||||||
TEGNA, Inc., 5.000%, 9/15/29 | 90,000 | 95,279 | ||||||
Townsquare Media, Inc., 6.875%, 2/1/26 (a) | 70,000 | 74,200 | ||||||
Univision Communications, Inc., 6.625%, 6/1/27 (a) | 90,000 | 97,452 | ||||||
952,400 | ||||||||
Medical Products: 0.6% | ||||||||
AdaptHealth LLC, 6.125%, 8/1/28 (a) | 115,000 | 122,475 | ||||||
Metals/Mining Excluding Steel: 3.6% | ||||||||
Century Aluminum Co., 7.500%, 4/1/28 (a) | 145,000 | 153,700 | ||||||
Cleveland-Cliffs, Inc., 6.750%, 3/15/26 (a) | 45,000 | 48,263 | ||||||
Freeport-McMoRan, Inc., 4.625%, 8/1/30 | 70,000 | 77,175 | ||||||
Taseko Mines Ltd., 7.000%, 2/15/26 (a) | 120,000 | 123,427 | ||||||
Teck Resources Ltd., 6.250%, 7/15/41 | 130,000 | 173,081 | ||||||
Teck Resources Ltd., 5.200%, 3/1/42 | 85,000 | 102,083 | ||||||
677,729 | ||||||||
Oil Field Equipment & Services: 1.6% | ||||||||
Oceaneering International, Inc., 4.650%, 11/15/24 | 70,000 | 71,314 | ||||||
TechnipFMC PLC, 6.500%, 2/1/26 (a) | 95,000 | 100,920 | ||||||
Weatherford International Ltd., 11.000%, 12/1/24 (a) | 125,000 | 130,625 | ||||||
302,859 | ||||||||
Packaging: 0.7% | ||||||||
FXI Holdings, Inc., 12.250%, 11/15/26 (a) | 60,000 | 68,338 | ||||||
Pactiv LLC, 7.950%, 12/15/25 | 60,000 | 68,100 | ||||||
136,438 |
Principal | Value | |||||||
Personal & Household Products: 0.8% | ||||||||
CD&R Smokey Buyer, Inc., 6.750%, 7/15/25 (a) | $ | 90,000 | $ | 95,800 | ||||
Turning Point Brands, Inc., 5.625%, 2/15/26 (a) | 50,000 | 52,525 | ||||||
148,325 | ||||||||
Pharmaceuticals: 0.5% | ||||||||
Bausch Health Companies, Inc., 5.000%, 2/15/29 (a) | 100,000 | 93,378 | ||||||
Real Estate Development & Management: 1.3% | ||||||||
Kennedy-Wilson, Inc., 4.750%, 2/1/30 | 90,000 | 92,373 | ||||||
Realogy Group LLC, 5.750%, 1/15/29 (a) | 140,000 | 146,517 | ||||||
238,890 | ||||||||
Real Estate Investment Trusts (REITs): 4.2% | ||||||||
HAT Holdings I LLC, 3.375%, 6/15/26 (a) | 70,000 | 71,333 | ||||||
Hunt Cos, Inc., 5.250%, 4/15/29 (a) | 100,000 | 98,000 | ||||||
Iron Mountain, Inc., 4.875%, 9/15/29 (a) | 125,000 | 131,850 | ||||||
New Residential Investment Corp., 6.250%, 10/15/25 (a) | 155,000 | 155,388 | ||||||
Service Properties Trust, 5.250%, 2/15/26 | 35,000 | 35,875 | ||||||
Service Properties Trust, 4.375%, 2/15/30 | 55,000 | 52,831 | ||||||
Service Properties Trust, 4.350%, 10/1/24 | 110,000 | 111,512 | ||||||
Service Properties Trust, 4.750%, 10/1/26 | 30,000 | 30,000 | ||||||
Starwood Property Trust, Inc., 5.500%, 11/1/23 (a) | 100,000 | 104,875 | ||||||
791,664 | ||||||||
Recreation & Travel: 3.3% | ||||||||
Carnival Corp., 7.625%, 3/1/26 (a) | 100,000 | 106,260 | ||||||
Carnival Corp., 4.000%, 8/1/28 (a) | 50,000 | 50,260 | ||||||
Cedar Fair LP, 5.250%, 7/15/29 | 90,000 | 92,194 | ||||||
Life Time, Inc., 8.000%, 4/15/26 (a) | 90,000 | 94,275 | ||||||
Royal Caribbean Cruises Ltd., 5.250%, 11/15/22 | 50,000 | 51,188 | ||||||
SeaWorld Parks & Entertainment, Inc., 8.750%, 5/1/25 (a) | 140,000 | 151,375 | ||||||
Viking Cruises Ltd., 5.875%, 9/15/27 (a) | 50,000 | 48,375 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
24
PENN CAPITAL FUNDS TRUST
PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
Viking Cruises Ltd., 5.625%, 2/15/29 (a) | $ | 30,000 | $ | 29,850 | ||||
623,777 | ||||||||
Restaurants: 0.7% | ||||||||
Carrols Restaurant Group, Inc., 5.875%, 7/1/29 (a) | 135,000 | 130,275 | ||||||
Software/Services: 1.6% | ||||||||
Avaya, Inc., 6.125%, 9/15/28 (a) | 65,000 | 68,575 | ||||||
GoDaddy, Inc., 3.500%, 3/1/29 (a) | 60,000 | 59,250 | ||||||
Shift4 Payments LLC, 4.625%, 11/1/26 (a) | 65,000 | 67,420 | ||||||
Unisys Corp., 6.875%, 11/1/27 (a) | 105,000 | 114,581 | ||||||
309,826 | ||||||||
Specialty Retail: 1.9% | ||||||||
Bath & Body Works, Inc., 9.375%, 7/1/25 (a) | 30,000 | 38,813 | ||||||
Bath & Body Works, Inc., 6.625%, 10/1/30 (a) | 20,000 | 23,050 | ||||||
Guitar Center, Inc., 8.500%, 1/15/26 (a) | 95,000 | 101,175 | ||||||
Shutterfly, Inc., 8.500%, 10/1/26 (a) | 180,000 | 195,300 | ||||||
358,338 | ||||||||
Steel Producers/Products: 0.4% | ||||||||
Commercial Metals Co., 3.875%, 2/15/31 | 70,000 | 71,641 | ||||||
Support - Services: 5.2% | ||||||||
Avis Budget Car Rental LLC, 5.250%, 3/15/25 (a) | 71,000 | 72,242 | ||||||
Avis Budget Car Rental LLC, 5.375%, 3/1/29 (a) | 45,000 | 47,250 | ||||||
H&E Equipment Services, Inc., 3.875%, 12/15/28 (a) | 45,000 | 45,189 | ||||||
Pike Corp., 5.500%, 9/1/28 (a) | 65,000 | 66,056 | ||||||
Pitney Bowes, Inc., 7.250%, 3/15/29 (a) | 95,000 | 102,005 | ||||||
Sabre GLBL, Inc., 9.250%, 4/15/25 (a) | 100,000 | 115,250 | ||||||
Sabre GLBL, Inc., 7.375%, 9/1/25 (a) | 50,000 | 52,875 | ||||||
SRS Distribution, Inc., 6.125%, 7/1/29 (a) | 100,000 | 103,750 | ||||||
Staples, Inc., 7.500%, 4/15/26 (a) | 115,000 | 116,438 | ||||||
Staples, Inc., 10.750%, 4/15/27 (a) | 60,000 | 58,500 | ||||||
The ADT Security Corp., 4.125%, 8/1/29 (a) | 65,000 | 64,916 |
Principal | Value | |||||||
The ADT Security Corp., 4.875%, 7/15/32 (a) | $ | 45,000 | $ | 45,672 | ||||
United Rentals North America, Inc., 5.250%, 1/15/30 | 90,000 | 98,663 | ||||||
988,806 | ||||||||
Tech Hardware & Equipment: 2.8% | ||||||||
CommScope, Inc., 4.750%, 9/1/29 (a) | 35,000 | 35,443 | ||||||
CommScope Technologies LLC, 6.000%, 6/15/25 (a) | 102,000 | 103,734 | ||||||
Dell, Inc., 6.500%, 4/15/38 | 75,000 | 98,980 | ||||||
Dell International LLC, 8.100%, 7/15/36 | 55,000 | 84,354 | ||||||
Diebold Nixdorf, Inc., 8.500%, 4/15/24 | 60,000 | 61,275 | ||||||
Diebold Nixdorf, Inc., 9.375%, 7/15/25 (a) | 45,000 | 49,444 | ||||||
NCR Corp., 5.125%, 4/15/29 (a) | 95,000 | 98,499 | ||||||
531,729 | ||||||||
Telecom - Wireless: 0.4% | ||||||||
Sprint Capital Corp., 8.750%, 3/15/32 | 45,000 | 68,914 | ||||||
Telecom - Wireline Integrated & Services: 1.2% | ||||||||
Consolidated Communications, Inc., 6.500%, 10/1/28 (a) | 60,000 | 65,625 | ||||||
Level 3 Financing, Inc., 3.625%, 1/15/29 (a) | 75,000 | 72,750 | ||||||
Level 3 Financing, Inc., 3.750%, 7/15/29 (a) | 20,000 | 19,500 | ||||||
Lumen Technologies, Inc., 5.375%, 6/15/29 (a) | 70,000 | 71,878 | ||||||
229,753 | ||||||||
Transport Infrastructure/Services: 2.3% | ||||||||
Great Lakes Dredge & Dock Corp., 5.250%, 6/1/29 (a) | 70,000 | 72,275 | ||||||
Seaspan Corp., 5.500%, 8/1/29 (a) | 100,000 | 102,250 | ||||||
Teekay Corp., 9.250%, 11/15/22 (a) | 140,000 | 143,920 | ||||||
XPO CNW, Inc., 6.700%, 5/1/34 | 90,000 | 108,483 | ||||||
426,928 | ||||||||
Total Corporate Bonds (cost $16,624,389) | 17,221,445 | |||||||
The Accompanying Footnotes are an Integral Part of these Financial Statements
25
PENN CAPITAL FUNDS TRUST
PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
Bank Loans: 2.8% (b)(c) | ||||||||
Aerospace/Defense: 0.2% | ||||||||
Ducommun, Inc., 4.085%, 11/21/25 | ||||||||
(1 Month US LIBOR + 4.000%) | $ | 28,634 | $ | 28,710 | ||||
(1 Month US LIBOR + 4.000%) | 6,985 | 7,117 | ||||||
35,887 | ||||||||
Air Transportation: 0.3% | ||||||||
Allegiant Travel Co., 3.124% (3 Month US LIBOR + 3.000%), 2/5/24 | 49,242 | 48,832 | ||||||
Gas Distribution: 0.4% | ||||||||
Eagleclaw Midstream Ventures LLC, 5.250% (3 Month US LIBOR + 4.250%), 6/30/24 | 84,557 | 83,735 | ||||||
Specialty Retail: 1.4% | ||||||||
BDF Acquisition Corp., 6.250% (1 Month US LIBOR + 5.250%), 8/18/23 | 78,333 | 77,941 | ||||||
Calceus Acquisition, Inc., 5.621% (3 Month US LIBOR + 5.500%), 2/121/25 | 64,886 | 61,642 | ||||||
Gannett Holdings LLC, 7.750% (6 Month US LIBOR + 7.000%), 1/29/26 | 122,592 | 123,358 | ||||||
262,941 | ||||||||
Telecom - Satellite: 0.5% | ||||||||
Gogo Intermediate Holdings LLC, 4.500% (1 Month US LIBOR + 3.750%), 4/21/28 (d) | 90,000 | 89,888 | ||||||
Total Bank Loans (cost $520,946) | 521,283 |
Shares | Value | |||||||
Preferred Stock: 0.6% | ||||||||
Real Estate Investment Trusts (REITs) | ||||||||
Pebblebrook Hotel Trust | 4,225 | $ | 115,638 | |||||
Total Preferred Stock (cost $109,192) | 115,638 | |||||||
Short-Term Investment: 2.4% | ||||||||
U.S. Bank Money Market Deposit Account, 0.00% (e) | 459,788 | 459,788 | ||||||
Total Short-Term Investment (cost $459,788) | 459,788 | |||||||
Total Investments - 99.4% (cost $18,222,654) | 18,840,708 | |||||||
Other Assets and Liabilities 0.6% | 118,057 | |||||||
Net Assets: 100.0% | $ | 18,958,765 |
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 August 31, 2021, the value of these investments was $12,706,995, or 67.0% 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) | All or a portion of this loan is unfunded. See Note 13. |
(e) | The Money Market Deposit Account (“MMDA”) is a short-term investment vehicle in which the Fund holds cash balances. The MMDA will bear interest at a variable rate that is determined based on market conditions and may change daily and by any amount. The rate shown is as of August 31, 2021. |
The Accompanying Footnotes are an Integral Part of these Financial Statements
26
PENN CAPITAL FUNDS TRUST
PENN CAPITAL OPPORTUNISTIC HIGH INCOME FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Country Exposure (as a percentage of total investments) | |
United States | 85.5% |
Canada | 3.3% |
Luxembourg | 2.5% |
France | 2.2% |
United Kingdom | 1.6% |
Bermuda | 1.6% |
Marshall Islands | 1.3% |
Panama | 0.8% |
Cayman Islands | 0.6% |
Malta | 0.3% |
Liberia | 0.3% |
Asset Type (as a percentage of total investments) (Unaudited) |
The Accompanying Footnotes are an Integral Part of these Financial Statements
27
PENN CAPITAL FUNDS TRUST
Penn Capital Short Duration High Income Fund
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
Convertible Bond: 0.5% | ||||||||
Cable & Satellite TV: 0.5% | ||||||||
DISH Network Corp., 2.375%, 3/15/24 | $ | 235,000 | $ | 227,950 | ||||
Total Convertible Bond (cost $225,758) | 227,950 | |||||||
Corporate Bonds: 88.7% | ||||||||
Advertising: 0.5% | ||||||||
TripAdvisor, Inc., 7.000%, 7/15/25 (a) | 210,000 | 222,096 | ||||||
Aerospace/Defense: 0.8% | ||||||||
Howmet Aerospace, Inc., 6.875%, 5/1/25 | 185,000 | 218,648 | ||||||
Triumph Group, Inc., 8.875%, 6/1/24 (a) | 125,000 | 137,656 | ||||||
356,304 | ||||||||
Air Transportation: 1.8% | ||||||||
Allegiant Travel Co., 8.500%, 2/5/24 (a) | 215,000 | 231,663 | ||||||
Delta Air Lines, Inc., 7.000%, 5/1/25 (a) | 203,000 | 237,473 | ||||||
United Airlines, Inc., 4.375%, 4/15/26 (a) | 95,000 | 98,553 | ||||||
United Airlines Holdings, Inc., 5.000%, 2/1/24 | 230,000 | 238,050 | ||||||
805,739 | ||||||||
Auto Parts & Equipment: 0.5% | ||||||||
The Goodyear Tire & Rubber Co., 9.500%, 5/31/25 | 195,000 | 216,021 | ||||||
Automakers: 5.2% | ||||||||
Ford Motor Co., 8.500%, 4/21/23 | 245,000 | 270,878 | ||||||
Ford Motor Co., 9.000%, 4/22/25 | 1,515,000 | 1,850,876 | ||||||
Jaguar Land Rover Automotive PLC, 5.625%, 2/1/23 (a) | 150,000 | 150,750 | ||||||
2,272,504 | ||||||||
Building & Construction: 1.2% | ||||||||
KB Home, 7.500%, 9/15/22 | 485,000 | 514,706 | ||||||
Building Materials: 0.4% | ||||||||
WESCO Distribution, Inc., 7.125%, 6/15/25 (a) | 160,000 | 172,110 |
Principal | Value | |||||||
Cable & Satellite TV: 1.4% | ||||||||
CCO Holdings LLC, 5.750%, 2/15/26 (a) | $ | 134,000 | $ | 137,852 | ||||
CSC Holdings LLC, 5.250%, 6/1/24 | 193,000 | 208,199 | ||||||
DISH DBS Corp., 5.875%, 7/15/22 | 275,000 | 284,400 | ||||||
630,451 | ||||||||
Chemicals: 2.0% | ||||||||
Compass Minerals International, Inc., 4.875%, 7/15/24 (a) | 195,000 | 202,556 | ||||||
Koppers, Inc., 6.000%, 2/15/25 (a) | 125,000 | 128,125 | ||||||
Methanex Corp., 4.250%, 12/1/24 | 115,000 | 122,004 | ||||||
NOVA Chemicals Corp., 4.875%, 6/1/24 (a) | 405,000 | 428,288 | ||||||
880,973 | ||||||||
Consumer/Commercial/Lease Financing: 5.0% | ||||||||
Fortress Transportation and Infrastructure Investors LLC, 6.500%, 10/1/25 (a) | 240,000 | 247,200 | ||||||
Navient Corp., 7.250%, 9/25/23 | 205,000 | 225,219 | ||||||
Navient Corp., 6.125%, 3/25/24 | 550,000 | 596,062 | ||||||
OneMain Finance Corp., 5.625%, 3/15/23 | 266,000 | 280,963 | ||||||
OneMain Finance Corp., 6.125%, 3/15/24 | 700,000 | 752,500 | ||||||
SLM Corp., 5.125%, 4/5/22 | 85,000 | 86,062 | ||||||
2,188,006 | ||||||||
Department Stores: 0.8% | ||||||||
Macy’s Retail Holdings, Inc., 3.625%, 6/1/24 | 70,000 | 72,625 | ||||||
Macy’s Retail Holdings, Inc., 2.875%, 2/15/23 | 258,000 | 262,515 | ||||||
335,140 | ||||||||
Electric - Generation: 0.3% | ||||||||
TerraForm Power Operating LLC, 4.250%, 1/31/23 (a) | 110,000 | 113,025 | ||||||
Energy - Exploration & Production: 4.7% | ||||||||
Antero Resources Corp., 5.000%, 3/1/25 | 215,000 | 219,300 | ||||||
Continental Resources, Inc., 4.500%, 4/15/23 | 133,000 | 138,653 | ||||||
EQT Corp., 3.000%, 10/1/22 | 210,000 | 214,427 | ||||||
EQT Corp., 6.625%, 2/1/25 | 190,000 | 217,782 | ||||||
Occidental Petroleum Corp., 6.950%, 7/1/24 | 503,000 | 566,599 | ||||||
Ovintiv Exploration, Inc., 5.625%, 7/1/24 | 305,000 | 339,924 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
28
PENN CAPITAL FUNDS TRUST
PENN CAPITAL SHORT DURATION HIGH INCOME FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
Range Resources Corp., 5.000%, 3/15/23 | $ | 116,000 | $ | 118,967 | ||||
Southwestern Energy Co., 4.100%, 3/15/22 | 225,000 | 225,563 | ||||||
2,041,215 | ||||||||
Food - Wholesale: 1.0% | ||||||||
HLF Financing Sarl LLC, 7.875%, 9/1/25 (a) | 266,000 | 288,663 | ||||||
KeHE Distributors LLC, 8.625%, 10/15/26 (a) | 148,000 | 160,765 | ||||||
449,428 | ||||||||
Forestry/Paper: 0.5% | ||||||||
Clearwater Paper Corp., 5.375%, 2/1/25 (a) | 205,000 | 218,069 | ||||||
Gaming: 4.5% | ||||||||
MGM Growth Properties Operating Partnership, L.P., 5.625%, 5/1/24 | 455,000 | 495,950 | ||||||
MGM Resorts International, 7.750%, 3/15/22 | 1,210,000 | 1,250,837 | ||||||
Wynn Las Vegas LLC, 4.250%, 5/30/23 (a) | 230,000 | 235,987 | ||||||
1,982,774 | ||||||||
Gas Distribution: 3.6% | ||||||||
AmeriGas Partners LP, 5.625%, 5/20/24 | 165,000 | 180,469 | ||||||
Buckeye Partners LP, 4.350%, 10/15/24 | 155,000 | 162,678 | ||||||
DCP Midstream Operating LP, 4.950%, 4/1/22 | 350,000 | 353,500 | ||||||
DCP Midstream Operating LP, 5.375%, 7/15/25 | 95,000 | 104,619 | ||||||
EnLink Midstream Partners LP, 4.400%, 4/1/24 | 187,000 | 194,517 | ||||||
EQM Midstream Partners LP, 4.750%, 7/15/23 | 147,000 | 153,835 | ||||||
New Fortress Energy, Inc., 6.750%, 9/15/25 (a) | 220,000 | 223,300 | ||||||
Western Midstream Operating LP, 4.000%, 7/1/22 | 206,000 | 208,575 | ||||||
1,581,493 | ||||||||
Health Facilities: 1.9% | ||||||||
HCA, Inc., 5.375%, 2/1/25 | 200,000 | 225,250 | ||||||
Tenet Healthcare Corp., 4.625%, 7/15/24 | 110,000 | 111,513 | ||||||
Tenet Healthcare Corp., 7.500%, 4/1/25 (a) | 450,000 | 481,500 | ||||||
818,263 |
Principal | Value | |||||||
Health Services: 0.9% | ||||||||
Owens & Minor, Inc., 4.375%, 12/15/24 | $ | 390,000 | $ | 409,500 | ||||
Hotels: 2.7% | ||||||||
Hilton Grand Vacations Borrower, Inc., 6.125%, 12/1/24 | 210,000 | 217,980 | ||||||
Marriott Ownership Resorts, Inc., 6.125%, 9/15/25 (a) | 255,000 | 268,069 | ||||||
Travel + Leisure Co., 4.250%, 3/1/22 | 280,000 | 280,700 | ||||||
Travel + Leisure Co., 6.600%, 10/1/25 | 175,000 | 196,437 | ||||||
Travel + Leisure Co., 5.650%, 4/1/24 | 195,000 | 210,085 | ||||||
1,173,271 | ||||||||
Investments & Miscellaneous Financial Services: 2.4% | ||||||||
Icahn Enterprises LP, 6.750%, 2/1/24 | 92,000 | 93,725 | ||||||
Icahn Enterprises LP, 6.250%, 5/15/26 | 268,000 | 282,405 | ||||||
Icahn Enterprises LP, 4.750%, 9/15/24 | 430,000 | 445,840 | ||||||
Oppenheimer Holdings, Inc., 5.500%, 10/1/25 | 220,000 | 231,550 | ||||||
1,053,520 | ||||||||
Machinery: 0.2% | ||||||||
Hillenbrand, Inc., 5.750%, 6/15/25 | 100,000 | 105,750 | ||||||
Managed Care: 0.4% | ||||||||
Molina Healthcare, Inc., 5.375%, 11/15/22 | 170,000 | 176,248 | ||||||
Media Content: 1.5% | ||||||||
AMC Networks, Inc., 5.000%, 4/1/24 | 173,000 | 175,162 | ||||||
Netflix, Inc., 5.875%, 2/15/25 | 264,000 | 302,940 | ||||||
Sirius XM Radio, Inc., 3.125%, 9/1/26 (a) | 200,000 | 203,790 | ||||||
681,892 | ||||||||
Metals/Mining Excluding Steel: 1.6% | ||||||||
Allegheny Technologies, Inc., 7.875%, 8/15/23 | 590,000 | 635,725 | ||||||
Novelis Corp., 3.250%, 11/15/26 (a) | 70,000 | 71,764 | ||||||
707,489 | ||||||||
Monoline Insurance: 2.5% | ||||||||
MGIC Investment Corp., 5.750%, 8/15/23 | 200,000 | 215,500 | ||||||
NMI Holdings, Inc., 7.375%, 6/1/25 (a) | 375,000 | 424,219 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
29
PENN CAPITAL FUNDS TRUST
PENN CAPITAL SHORT DURATION HIGH INCOME FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
Radian Group, Inc., 4.500%, 10/1/24 | $ | 440,000 | $ | 475,750 | ||||
1,115,469 | ||||||||
Multi-Line Insurance: 0.5% | ||||||||
Enact Holdings, Inc., 6.500%, 8/15/25 (a) | 210,000 | 226,800 | ||||||
Packaging: 3.0% | ||||||||
Crown Cork & Seal Co., Inc., 7.375%, 12/15/26 | 525,000 | 648,375 | ||||||
FXI Holdings, Inc., 7.875%, 11/1/24 (a) | 185,000 | 190,071 | ||||||
OI European Group BV, 4.000%, 3/15/23 (a) | 210,000 | 217,308 | ||||||
Owens-Brockway Glass Container, Inc., 5.875%, 8/15/23 (a) | 165,000 | 175,312 | ||||||
Pactiv LLC, 7.950%, 12/15/25 | 90,000 | 102,150 | ||||||
1,333,216 | ||||||||
Personal & Household Products: 1.9% | ||||||||
Avon Products, Inc., 6.500%, 3/15/23 | 280,000 | 298,200 | ||||||
CD&R Smokey Buyer, Inc., 6.750%, 7/15/25 (a) | 160,000 | 170,310 | ||||||
Mattel, Inc., 3.150%, 3/15/23 | 102,000 | 104,040 | ||||||
Newell Brands, Inc., 3.850%, 4/1/23 | 108,000 | 113,921 | ||||||
Turning Point Brands, Inc., 5.625%, 2/15/26 (a) | 124,000 | 130,262 | ||||||
816,733 | ||||||||
Pharmaceuticals: 1.7% | ||||||||
Bausch Health Cos, Inc., 9.000%, 12/15/25 (a) | 210,000 | 223,387 | ||||||
Elanco Animal Health, Inc., 5.272%, 8/28/23 | 100,000 | 107,125 | ||||||
Teva Pharmaceutical Finance Netherlands III BV, 2.800%, 7/21/23 | 230,000 | 226,849 | ||||||
Teva Pharmaceutical Finance Netherlands III BV, 6.000%, 4/15/24 | 200,000 | 209,458 | ||||||
766,819 | ||||||||
Printing & Publishing: 0.5% | ||||||||
Meredith Corp., 6.500%, 7/1/25 (a) | 205,000 | 220,888 | ||||||
Real Estate Development & Management: 1.3% | ||||||||
Newmark Group, Inc., 6.125%, 11/15/23 | 310,000 | 336,350 | ||||||
Realogy Group LLC, 7.625%, 6/15/25 (a) | 210,000 | 226,107 | ||||||
562,457 |
Principal | Value | |||||||
Real Estate Investment Trusts (REITs): 5.7% | ||||||||
EPR Properties, 5.250%, 7/15/23 | $ | 355,000 | $ | 374,488 | ||||
HAT Holdings I LLC, 6.000%, 4/15/25 (a) | 210,000 | 221,287 | ||||||
HAT Holdings I LLC, 3.375%, 6/15/26 (a) | 140,000 | 142,667 | ||||||
iStar, Inc., 4.750%, 10/1/24 | 220,000 | 233,486 | ||||||
Park Intermediate Holdings LLC, 7.500%, 6/1/25 (a) | 192,000 | 205,440 | ||||||
RLJ Lodging Trust LP, 3.750%, 7/1/26 (a) | 160,000 | 161,400 | ||||||
Service Properties Trust, 5.000%, 8/15/22 | 175,000 | 176,750 | ||||||
Service Properties Trust, 4.500%, 6/15/23 | 465,000 | 475,462 | ||||||
Service Properties Trust, 7.500%, 9/15/25 | 155,000 | 175,045 | ||||||
Starwood Property Trust, Inc., 5.500%, 11/1/23 (a) | 310,000 | 325,113 | ||||||
2,491,138 | ||||||||
Recreation & Travel: 6.6% | ||||||||
Carnival Corp., 11.500%, 4/1/23 (a) | 1,395,000 | 1,566,271 | ||||||
NCL Corp., 12.250%, 5/15/24 (a) | 330,000 | 389,400 | ||||||
Royal Caribbean Cruises Ltd., 5.250%, 11/15/22 | 120,000 | 122,850 | ||||||
Royal Caribbean Cruises Ltd., 10.875%, 6/1/23 (a) | 600,000 | 675,250 | ||||||
Viking Cruises Ltd., 13.000%, 5/15/25(a) | 105,000 | 121,538 | ||||||
2,875,309 | ||||||||
Restaurants: 1.0% | ||||||||
Brinker International, Inc., 3.875%, 5/15/23 | 220,000 | 226,710 | ||||||
Yum! Brands, Inc., 7.750%, 4/1/25 (a) | 200,000 | 215,478 | ||||||
442,188 | ||||||||
Specialty Retail: 6.1% | ||||||||
Abercrombie & Fitch Management Co., 8.750%, 7/15/25 (a) | 175,000 | 192,500 | ||||||
Bath & Body Works, Inc., 9.375%, 7/1/25 (a) | 335,000 | 433,406 | ||||||
Caleres, Inc., 6.250%, 8/15/23 | 101,000 | 101,253 | ||||||
Foot Locker, Inc., 8.500%, 1/15/22 | 645,000 | 661,125 | ||||||
Hanesbrands, Inc., 4.625%, 5/15/24 (a) | 215,000 | 228,169 | ||||||
Michael Kors USA, Inc., 4.500%, 11/1/24 (a) | 200,000 | 211,934 | ||||||
QVC, Inc., 4.850%, 4/1/24 | 115,000 | 125,034 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
30
PENN CAPITAL FUNDS TRUST
PENN CAPITAL SHORT DURATION HIGH INCOME FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Principal | Value | |||||||
QVC, Inc., 4.450%, 2/15/25 | $ | 130,000 | $ | 139,090 | ||||
The Gap, Inc., 8.375%, 5/15/23 (a) | 510,000 | 571,583 | ||||||
2,664,094 | ||||||||
Steel Producers/Products: 0.5% | ||||||||
Commercial Metals Co., 4.875%, 5/15/23 | 201,000 | 211,804 | ||||||
Support - Services: 1.5% | ||||||||
Prime Security Services Borrower LLC, 5.250%, 4/15/24 (a) | 417,000 | 444,105 | ||||||
Sabre GLBL, Inc., 9.250%, 4/15/25 (a) | 170,000 | 195,925 | ||||||
640,030 | ||||||||
Tech Hardware & Equipment: 0.3% | ||||||||
Xerox Corp., 3.800%, 5/15/24 | 40,000 | 42,032 | ||||||
Xerox Corp., 4.375%, 3/15/23 | 100,000 | 104,720 | ||||||
146,752 | ||||||||
Telecom - Satellite: 0.8% | ||||||||
Hughes Satellite Systems Corp., 6.625%, 8/1/26 | 290,000 | 329,513 | ||||||
Telecom - Wireless: 4.9% | ||||||||
Sprint Communications, Inc., 11.500%, 11/15/21 | 100,000 | 102,060 | ||||||
Sprint Corp., 7.250%, 9/15/21 | 280,000 | 280,616 | ||||||
Sprint Corp., 7.875%, 9/15/23 | 575,000 | 651,446 | ||||||
Sprint Corp., 7.125%, 6/15/24 | 708,000 | 814,200 | ||||||
Sprint Corp., 7.625%, 2/15/25 | 240,000 | 284,100 | ||||||
2,132,422 | ||||||||
Telecom - Wireline Integrated & Services: 2.6% | ||||||||
CenturyLink, Inc., 7.500%, 4/1/24 | 200,000 | 222,500 | ||||||
Cogent Communications Group, Inc., 3.500%, 5/1/26 (a) | 175,000 | 179,060 | ||||||
Qwest Corp., 7.250%, 9/15/25 | 630,000 | 745,920 | ||||||
1,147,480 | ||||||||
Transport Infrastructure/Services: 1.5% | ||||||||
Teekay Corp., 9.250%, 11/15/22 (a) | 320,000 | 328,960 | ||||||
XPO Logistics, Inc., 6.250%, 5/1/25 (a) | 325,000 | 343,281 | ||||||
672,241 | ||||||||
Total Corporate Bonds (cost $38,140,866) | 38,901,340 |
Principal | Value | |||||||
Bank Loans: 1.3% (b)(c) | ||||||||
Cable & Satellite TV: 0.7% | ||||||||
WideOpenWest Finance LLC, 4.250% (1 Month US LIBOR + 3.250%), 8/19/23 | $ | 320,285 | $ | 319,600 | ||||
Packaging: 0.6% | ||||||||
Reynolds Group Holdings, Inc., 2.835%, 2/5/23 | ||||||||
(1 Month US LIBOR + 2.750%) | 153,447 | 152,463 | ||||||
(1 Month US LIBOR + 2.750%) | 56,636 | 56,273 | ||||||
(1 Month US LIBOR + 2.750%) | 34,576 | 34,354 | ||||||
243,090 | ||||||||
Total Bank Loans (cost $562,897) | 562,690 | |||||||
U.S. Government Note: 0.4% | ||||||||
United States Treasury Note, 1.375%, 1/31/22 | 200,000 | 201,086 | ||||||
Total U.S. Government Note (cost $201,088) | 201,086 | |||||||
Shares | ||||||||
Mutual Fund: 4.0% | ||||||||
Bank Loan Related: 4.0% | ||||||||
Penn Capital Floating Rate Income Fund - Institutional Class (d) | 176,071 | 1,704,366 | ||||||
Total Mutual Fund (cost $1,732,173) | ||||||||
Short-Term Investment: 2.8% | ||||||||
U.S. Bank Money Market Deposit Account, 0.00% (e) | 1,241,261 | 1,241,261 | ||||||
Total Short-Term Investment (cost $1,241,261) | 1,241,261 | |||||||
Total Investments - 97.7% (cost $42,104,043) | 42,838,693 | |||||||
Other Assets and Liabilities 2.3% | 1,032,289 | |||||||
Net Assets: 100.0% | $ | 43,870,982 |
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 August 31, 2021, the value of these investments was $14,016,685, or 31.9% 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 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
31
PENN CAPITAL FUNDS TRUST
PENN CAPITAL SHORT DURATION HIGH INCOME FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
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. |
(e) | The Money Market Deposit Account (“MMDA”) is a short-term |
Country Exposure (as a percentage of total investments) | |
United States | 88.0% |
Panama | 3.7% |
Liberia | 1.9% |
Canada | 1.8% |
Netherlands | 1.5% |
Bermuda | 1.2% |
Marshall Islands | 0.8% |
Cayman Islands | 0.7% |
United Kingdom | 0.4% |
Asset Type (as a percentage of total investments) (Unaudited) |
The Accompanying Footnotes are an Integral Part of these Financial Statements
32
PENN CAPITAL FUNDS TRUST
Penn Capital Special Situations Small Cap Equity Fund
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Shares | Value | |||||||
Common Stocks: 95.8% | ||||||||
Aerospace & Defense: 1.1% | ||||||||
Spirit AeroSystems Holdings, Inc. - Class A | 4,615 | $ | 181,093 | |||||
Airlines: 0.8% | ||||||||
Allegiant Travel Co. (a) | 681 | 131,052 | ||||||
Auto Components: 2.6% | ||||||||
American Axle & Manufacturing Holdings, Inc. (a) | 28,932 | 256,627 | ||||||
Dana, Inc. | 7,590 | 176,543 | ||||||
433,170 | ||||||||
Banks: 8.6% | ||||||||
Ameris Bancorp | 5,195 | 255,802 | ||||||
BankUnited, Inc. | 7,288 | 306,315 | ||||||
FB Financial Corp. | 5,061 | 208,462 | ||||||
First BanCorp | 17,175 | 218,638 | ||||||
South State Corp. | 2,746 | 188,321 | ||||||
Texas Capital Bancshares, Inc. (a) | 3,943 | 268,084 | ||||||
1,445,622 | ||||||||
Biotechnology: 1.3% | ||||||||
Halozyme Therapeutics, Inc. (a) | 5,248 | 220,363 | ||||||
Capital Markets: 1.7% | ||||||||
Focus Financial Partners, Inc. - Class A (a) | 3,295 | 170,945 | ||||||
Open Lending Corp. - Class A (a) | 2,959 | 109,394 | ||||||
280,339 | ||||||||
Chemicals: 2.0% | ||||||||
Livent Corp. (a) | 7,380 | 183,541 | ||||||
Tronox Holdings PLC - Class A | 7,126 | 150,572 | ||||||
334,113 | ||||||||
Commercial Services & Supplies: 3.8% | ||||||||
Harsco Corp. (a) | 11,823 | 215,652 | ||||||
Steelcase, Inc. - Class A | 18,981 | 267,442 | ||||||
Viad Corp. (a) | 3,864 | 166,886 | ||||||
649,980 | ||||||||
Containers & Packaging: 1.2% | ||||||||
O-I Glass, Inc. (a) | 12,998 | 196,660 | ||||||
Electrical Equipment: 1.3% | ||||||||
nVent Electric PLC | 6,207 | 213,272 |
Shares | Value | |||||||
Energy Equipment & Services: 3.5% | ||||||||
ChampionX Corp. (a) | 10,218 | $ | 238,386 | |||||
TechnipFMC PLC (a) | 28,342 | 187,907 | ||||||
Weatherford International PLC (a) | 10,906 | 171,879 | ||||||
598,172 | ||||||||
Food & Staples Retailing: 2.5% | ||||||||
BJ’s Wholesale Club Holdings, Inc. (a) | 3,050 | 172,813 | ||||||
Performance Food Group Co. (a) | 4,957 | 248,940 | ||||||
421,753 | ||||||||
Gaming: 0.2% | ||||||||
DoubleDown Interactive Co. Ltd. - ADS (a) | 2,377 | 42,192 | ||||||
Health Care Equipment & Supplies: 5.1% | ||||||||
Alphatec Holdings, Inc. (a) | 22,831 | 330,593 | ||||||
CONMED Corp. | 1,524 | 200,162 | ||||||
CryoLife, Inc. (a) | 6,825 | 179,088 | ||||||
SI-BONE, Inc. (a) | 6,519 | 159,129 | ||||||
868,972 | ||||||||
Health Care Providers & Services: 7.0% | ||||||||
Acadia Healthcare Co., Inc. (a) | 2,845 | 188,112 | ||||||
Community Health Systems, Inc. (a) | 23,671 | 291,390 | ||||||
ModivCare, Inc. (a) | 1,385 | 273,205 | ||||||
Option Care Health, Inc. (a) | 9,508 | 254,339 | ||||||
R1 RCM, Inc. (a) | 9,270 | 182,804 | ||||||
1,189,850 | ||||||||
Hotels, Restaurants & Leisure: 10.1% | ||||||||
Bally’s Corp. (a) | 6,441 | 323,596 | ||||||
Boyd Gaming Corp. (a) | 2,977 | 182,699 | ||||||
Golden Entertainment, Inc. (a) | 7,511 | 358,425 | ||||||
Papa John’s International, Inc. | 1,274 | 162,473 | ||||||
Planet Fitness, Inc. - Class A (a) | 2,724 | 221,461 | ||||||
Scientific Games Corp. (a) | 2,980 | 215,603 | ||||||
SeaWorld Entertainment, Inc. (a) | 4,992 | 245,556 | ||||||
1,709,813 | ||||||||
Household Durables: 1.0% | ||||||||
Installed Building Products, Inc. | 1,424 | 176,832 | ||||||
Interactive Media & Services: 0.9% | ||||||||
TripAdvisor, Inc. (a) | 4,556 | 159,460 | ||||||
Internet & Direct Marketing Retail: 0.8% | ||||||||
Overstock.com, Inc. (a) | 1,837 | 132,540 |
The Accompanying Footnotes are an Integral Part of these Financial Statements
33
PENN CAPITAL FUNDS TRUST
PENN CAPITAL SPECIAL SITUATIONS SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
Shares | Value | |||||||
IT Services: 2.6% | ||||||||
Alliance Data Systems Corp. | 2,327 | $ | 228,302 | |||||
Sabre Corp. (a) | 18,437 | 207,048 | ||||||
435,350 | ||||||||
Life Sciences Tools & Services: 1.7% | ||||||||
Syneos Health, Inc. (a) | 3,022 | 280,381 | ||||||
Machinery: 3.7% | ||||||||
Chart Industries, Inc. (a) | 1,502 | 282,947 | ||||||
Gates Industrial Corp. PLC (a) | 9,200 | 150,696 | ||||||
Hillman Solutions Corp. (a) | 15,253 | 187,307 | ||||||
620,950 | ||||||||
Marine: 1.1% | ||||||||
Kirby Corp. (a) | 3,539 | 189,655 | ||||||
Media: 6.0% | ||||||||
EW Scripps Co. - Class A | 12,488 | 231,528 | ||||||
Gray Television, Inc. | 11,991 | 272,675 | ||||||
Nexstar Media Group, Inc. - Class A | 1,783 | 267,004 | ||||||
WideOpenWest, Inc. (a) | 11,215 | 237,982 | ||||||
1,009,189 | ||||||||
Metals & Mining: 2.0% | ||||||||
Carpenter Technology Corp. | 4,860 | 162,081 | ||||||
Century Aluminum Co. (a) | 13,692 | 175,531 | ||||||
337,612 | ||||||||
Oil, Gas & Consumable Fuels: 3.9% | ||||||||
Denbury, Inc. (a) | 2,817 | 198,120 | ||||||
Northern Oil and Gas, Inc. | 7,475 | 124,085 | ||||||
PDC Energy, Inc. | 8,272 | 345,356 | ||||||
667,561 | ||||||||
Professional Services: 1.0% | ||||||||
Upwork, Inc. (a) | 3,859 | 172,536 | ||||||
Real Estate Management & Development: 1.4% | ||||||||
Newmark Group, Inc. - Class A | 16,926 | 230,532 | ||||||
Semiconductors & Semiconductor Equipment: 7.3% | ||||||||
Kulicke & Soffa Industries, Inc. | 4,875 | 342,176 | ||||||
Rambus, Inc. (a) | 7,268 | 172,978 | ||||||
Semtech Corp. (a) | 2,790 | 195,077 | ||||||
Silicon Motion Technology Corp. - ADR | 3,797 | 283,484 | ||||||
SkyWater Technology, Inc. (a) | 6,934 | 231,457 | ||||||
1,225,172 |
Shares | Value | |||||||
Software: 1.3% | ||||||||
Rapid7, Inc. (a) | 1,856 | $ | 225,541 | |||||
Specialty Retail: 2.9% | ||||||||
Caleres, Inc. | 12,967 | 318,859 | ||||||
National Vision Holdings, Inc. (a) | 2,879 | 172,682 | ||||||
491,541 | ||||||||
Technology Hardware, Storage & Peripherals: 1.5% | ||||||||
Pure Storage, Inc. - Class A (a) | 9,914 | 256,079 | ||||||
Textiles, Apparel & Luxury Goods: 1.2% | ||||||||
Canada Goose Holdings, Inc. (a) | 5,443 | 208,848 | ||||||
Trading Companies & Distributors: 1.5% | ||||||||
H&E Equipment Services, Inc. | 7,481 | 254,728 | ||||||
Wireless Telecommunication Services: 1.2% | ||||||||
Gogo, Inc. (a) | 14,482 | 194,783 | ||||||
Total Common Stocks (cost $11,802,388) | 16,185,706 | |||||||
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): 2.7% | ||||||||
Essential Properties Realty Trust, Inc. | 6,323 | 204,928 | ||||||
Ryman Hospitality Properties, Inc. (a) | 2,998 | 249,044 | ||||||
Total REITs (cost $297,303) | 453,972 | |||||||
Short-Term Investment: 1.5% | ||||||||
U.S. Bank Money Market Deposit Account, 0.00% (b) | 250,591 | 250,591 | ||||||
Total Short-Term Investment (cost $250,591) | 250,591 | |||||||
Total Investments - 100.0% (cost $12,350,282) | 16,890,288 | |||||||
Other Assets and Liabilities 0.0% | 3,506 | |||||||
Net Assets: 100.0% | $ | 16,893,794 |
Percentages are stated as a percent of net assets.
ADR - American Depositary Receipt
The Accompanying Footnotes are an Integral Part of these Financial Statements
34
PENN CAPITAL FUNDS TRUST
PENN CAPITAL SPECIAL SITUATIONS SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS
AUGUST 31, 2021
ADS - American Depositary Shares
(a) | No distribution or dividend was made during the period ended August 31, 2021. As such, it is classified as a non-income producing security as of August 31, 2021. |
(b) | The Money Market Deposit Account (“MMDA”) is a short-term investment vehicle in which the Fund holds cash balances. The MMDA will bear interest at a variable rate that is determined based on market conditions and may change daily and by any amount. The rate shown is as of August 31, 2021. |
Country Exposure (as a percentage of total investments) | |
United States | 90.6% |
United Kingdom | 2.9% |
Ireland | 2.3% |
Cayman Islands | 1.7% |
Puerto Rico | 1.3% |
Canada | 1.2% |
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
35
PENN Capital Funds Trust
Statements of Assets And Liabilities
AUGUST 31, 2021
Assets | Penn Capital | Penn Capital | Penn Capital | Penn Capital | Penn Capital | |||||||||||||||
Investments, at fair value(1) | ||||||||||||||||||||
Unaffiliated issuers | $ | 31,337,930 | $ | 18,893,829 | $ | 18,840,708 | $ | 41,134,327 | $ | 16,890,288 | ||||||||||
Affiliated mutual fund (see Note 7) | — | — | — | 1,704,366 | — | |||||||||||||||
Receivables: | ||||||||||||||||||||
Advisor reimbursement due | 20,312 | 6,172 | 50,243 | 22,453 | 28,078 | |||||||||||||||
Dividends and interest | 108,323 | 7,239 | 279,526 | 722,417 | 6,364 | |||||||||||||||
Investments sold | 670,160 | — | 89,475 | — | 270,546 | |||||||||||||||
Fund shares sold | — | — | — | 427,436 | 30,000 | |||||||||||||||
Other assets | 7,597 | 7,741 | 7,239 | 14,738 | 6,810 | |||||||||||||||
Total assets | 32,144,322 | 18,914,981 | 19,267,191 | 44,025,737 | 17,232,086 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Payables: | ||||||||||||||||||||
Investments purchased | 814,833 | — | 213,724 | — | 280,506 | |||||||||||||||
Fund shares redeemed | 30,394 | — | 9,004 | 60,802 | — | |||||||||||||||
Distribution payable | 34,146 | — | 18,019 | 11,459 | — | |||||||||||||||
Accrued expenses: | ||||||||||||||||||||
Professional fees | 29,371 | 25,371 | 28,371 | 28,371 | 25,371 | |||||||||||||||
Administration fees | 19,077 | 7,118 | 18,677 | 12,624 | 5,416 | |||||||||||||||
Custody fees | 600 | 1,700 | 1,400 | 1,200 | 1,800 | |||||||||||||||
Transfer agent fees and expenses | 3,555 | 3,184 | 3,120 | 3,814 | 2,868 | |||||||||||||||
Other accrued expenses | 19,560 | 17,914 | 16,111 | 36,485 | 22,331 | |||||||||||||||
Total liabilities | 951,536 | 55,287 | 308,426 | 154,755 | 338,292 | |||||||||||||||
Net assets | $ | 31,192,786 | $ | 18,859,694 | $ | 18,958,765 | $ | 43,870,982 | $ | 16,893,794 | ||||||||||
Composition of Net Assets | ||||||||||||||||||||
Paid-in capital | $ | 34,098,003 | $ | 11,370,752 | $ | 18,940,647 | $ | 44,979,925 | $ | 9,454,506 | ||||||||||
Total distributable earnings/accumulated loss | (2,905,217 | ) | 7,488,942 | 18,118 | (1,108,943 | ) | 7,439,288 | |||||||||||||
Net assets | $ | 31,192,786 | �� | $ | 18,859,694 | $ | 18,958,765 | $ | 43,870,982 | $ | 16,893,794 | |||||||||
Institutional Class | ||||||||||||||||||||
Net assets applicable to outstanding shares | $ | 31,192,786 | $ | 18,859,694 | $ | 18,958,765 | $ | 43,870,982 | $ | 16,893,794 | ||||||||||
Shares of beneficial interest outstanding, no par value, unlimited authorization | 3,223,084 | 1,123,311 | 1,903,117 | 4,508,593 | 861,208 | |||||||||||||||
Net asset value per share outstanding | $ | 9.68 | $ | 16.79 | $ | 9.96 | $ | 9.73 | $ | 19.62 |
(1) | Investment in securities at cost |
Unaffiliated issuers | $ | 31,206,279 | $ | 12,967,831 | $ | 18,222,654 | $ | 40,371,870 | $ | 12,350,282 | ||||||||||
Affiliated mutual fund (see Note 7) | — | — | — | 1,732,173 | — |
The Accompanying Footnotes are an Integral Part of these Financial Statements
36
[THIS PAGE INTENTIONALLY LEFT BLANK.]
PENN Capital Funds Trust
Statements of Operations
Penn Capital Floating | Penn Capital Mid | Penn Capital Opportunistic | ||||||||||||||||||||||
Investment Income (Loss) | Fiscal Period | Fiscal Year | Fiscal Period | Fiscal Year | Fiscal Period | Fiscal Year | ||||||||||||||||||
Income | ||||||||||||||||||||||||
Dividends* | ||||||||||||||||||||||||
Unaffiliated dividends | $ | — | $ | — | $ | 25,106 | $ | 239,001 | $ | — | $ | — | ||||||||||||
Dividend distributions from affiliated mutual fund (see Note 7) | — | — | — | — | — | 15,559 | ||||||||||||||||||
Interest | 197,408 | 1,340,979 | — | 31 | 176,876 | 1,172,335 | ||||||||||||||||||
Total income | 197,408 | 1,340,979 | 25,106 | 239,032 | 176,876 | 1,187,894 | ||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Investment advisory fees | 28,797 | 182,183 | 28,947 | 157,566 | 22,573 | 130,344 | ||||||||||||||||||
Professional fees | 11,607 | 38,210 | 7,860 | 38,210 | 10,691 | 38,210 | ||||||||||||||||||
Administration and accounting | 9,950 | 138,850 | 3,525 | 67,240 | 11,839 | 111,118 | ||||||||||||||||||
Registration | 4,322 | 31,487 | 4,211 | 23,274 | 4,283 | 29,224 | ||||||||||||||||||
Shareholder communication | 2,911 | 21,210 | 2,611 | 17,813 | 1,939 | 19,120 | ||||||||||||||||||
Shareholder servicing fees | 1,571 | 20,605 | — | 7,207 | — | 8,452 | ||||||||||||||||||
Transfer agent expense | 1,467 | 22,448 | 1,710 | 18,817 | 1,452 | 19,050 | ||||||||||||||||||
Custodian | 293 | 12,223 | 1,658 | 7,367 | 1,071 | 10,427 | ||||||||||||||||||
Compliance fees | — | 14,000 | — | 13,970 | — | 14,000 | ||||||||||||||||||
Miscellaneous | — | — | 4,098 | 21,735 | — | 386 | ||||||||||||||||||
Trustees | — | 7,880 | 108 | 4,148 | 67 | 4,424 | ||||||||||||||||||
Insurance | — | 13,962 | — | 6,842 | — | 7,432 | ||||||||||||||||||
Interest expense (see Note 9) | — | — | 78 | 78 | — | — | ||||||||||||||||||
Total expenses | 60,918 | 503,058 | 54,806 | 384,267 | 53,915 | 392,187 | ||||||||||||||||||
Expense waiver and reimbursement from Advisor | (27,409 | ) | (291,063 | ) | (20,635 | ) | (198,611 | ) | (30,361 | ) | (256,142 | ) | ||||||||||||
Net expenses | 33,509 | 211,995 | 34,171 | 185,656 | 23,554 | 136,045 | ||||||||||||||||||
Net investment income (loss) | 163,899 | 1,128,984 | (9,065 | ) | 53,376 | 153,322 | 1,051,849 | |||||||||||||||||
Realized and Unrealized Gain | ||||||||||||||||||||||||
Net realized gain (loss) on investments | ||||||||||||||||||||||||
Unaffiliated issuers | (17,851 | ) | 230,733 | 485,294 | 2,734,210 | 137,452 | 1,263,917 | |||||||||||||||||
Affiliated Mutual Fund (See Note 7) | — | — | — | — | — | (110,654 | ) | |||||||||||||||||
Net change in unrealized appreciation (depreciation) | ||||||||||||||||||||||||
Unaffiliated issuers | (69,256 | ) | 1,247,840 | (468,266 | ) | 3,642,695 | (206,077 | ) | 886,939 | |||||||||||||||
Affiliated Mutual Fund (See Note 7) | — | — | — | — | — | 169,544 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (87,107 | ) | 1,478,573 | 17,028 | 6,376,905 | (68,625 | ) | 2,209,746 | ||||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 76,792 | $ | 2,607,557 | $ | 7,963 | $ | 6,430,281 | $ | 84,697 | $ | 3,261,595 | ||||||||||||
* Net of foreign taxes withheld | $ | — | $ | — | $ | — | $ | 252 | $ | — | $ | — |
The Accompanying Footnotes are an Integral Part of these Financial Statements
38
PENN Capital Funds Trust
Statements of Operations
Penn Capital Short Duration | Penn Capital Special Situations | |||||||||||||
Fiscal Period | Fiscal Year | Fiscal Period | Fiscal Year | |||||||||||
$ | — | $ | — | $ | 17,276 | $ | 127,093 | |||||||
8,279 | 31,240 | — | — | |||||||||||
239,164 | 1,843,677 | — | 17 | |||||||||||
247,443 | 1,874,917 | 17,276 | 127,110 | |||||||||||
30,243 | 195,499 | 26,200 | 112,885 | |||||||||||
10,390 | 38,210 | 9,348 | 38,553 | |||||||||||
8,288 | 94,866 | 1,332 | 67,715 | |||||||||||
5,976 | 26,133 | 4,194 | 25,103 | |||||||||||
13,157 | 19,750 | 2,188 | 17,197 | |||||||||||
— | 55,560 | — | 16,850 | |||||||||||
1,387 | 25,203 | 1,493 | 17,412 | |||||||||||
364 | 7,616 | 1,768 | 11,069 | |||||||||||
— | 14,000 | — | 13,969 | |||||||||||
— | — | 538 | 24,634 | |||||||||||
— | 11,153 | 81 | 2,864 | |||||||||||
— | 17,840 | — | 4,251 | |||||||||||
— | — | — | 3 | |||||||||||
69,805 | 505,830 | 47,142 | 352,505 | |||||||||||
(31,724 | ) | (271,231 | ) | (17,080 | ) | (222,981 | ) | |||||||
38,081 | 234,599 | 30,062 | 129,524 | |||||||||||
209,362 | 1,640,318 | (12,786 | ) | (2,414 | ) | |||||||||
93,746 | 821,751 | 338,177 | 3,817,804 | |||||||||||
— | (13,916 | ) | — | — | ||||||||||
(122,208 | ) | 1,032,875 | (463,507 | ) | 4,502,499 | |||||||||
(4,492 | ) | 55,193 | — | — | ||||||||||
(32,954 | ) | 1,895,903 | (125,330 | ) | 8,320,303 | |||||||||
$ | 176,408 | $ | 3,536,221 | $ | (138,116 | ) | $ | 8,317,889 | ||||||
$ | — | $ | — | $ | — | $ | — |
The Accompanying Footnotes are an Integral Part of these Financial Statements
39
PENN Capital Funds Trust
Statements of Changes In Net Assets
Penn Capital Floating Rate Income Fund | Penn Capital Mid Cap Core Fund | |||||||||||||||||||||||
Increase (Decrease) in Net Assets | Fiscal Period | Fiscal Year | Fiscal Year | Fiscal Period | Fiscal Year | Fiscal Year | ||||||||||||||||||
Operations | ||||||||||||||||||||||||
Net investment income (loss) | $ | 163,899 | $ | 1,128,984 | $ | 1,823,878 | $ | (9,065 | ) | $ | 53,376 | $ | (6,037 | ) | ||||||||||
Net realized gain (loss) on investments: | (17,851 | ) | 230,733 | (2,928,732 | ) | 485,294 | 2,734,210 | (1,519,717 | ) | |||||||||||||||
Net change in unrealized appreciation (depreciation) | (69,256 | ) | 1,247,840 | (922,311 | ) | (468,266 | ) | 3,642,695 | 466,063 | |||||||||||||||
Net increase (decrease) in net assets resulting from operations | 76,792 | 2,607,557 | (2,027,165 | ) | 7,963 | 6,430,281 | (1,059,691 | ) | ||||||||||||||||
Dividends and distributions to shareholders | ||||||||||||||||||||||||
Net dividends and distributions from net investment income and realized gain - Institutional Class | (162,263 | ) | (1,132,139 | ) | (1,836,175 | ) | — | (1,241 | ) | (768,746 | ) | |||||||||||||
Total dividends and distributions to shareholders | (162,263 | ) | (1,132,139 | ) | (1,836,175 | ) | — | (1,241 | ) | (768,746 | ) | |||||||||||||
Capital share transactions | ||||||||||||||||||||||||
Net proceeds from sale of shares | 991,623 | 1,047,183 | 18,491,650 | 28,349 | 761,046 | 3,456,834 | ||||||||||||||||||
Dividends and distributions reinvested | 92,597 | 782,402 | 1,226,820 | — | 1,238 | 763,333 | ||||||||||||||||||
Cost of shares redeemed** | (491,776 | ) | (8,169,914 | ) | (17,788,929 | ) | (1,148,821 | ) | (3,185,190 | ) | (788,975 | ) | ||||||||||||
Net increase (decrease) in net assets resulting from capital share transactions | 592,444 | (6,340,329 | ) | 1,929,541 | (1,120,472 | ) | (2,422,906 | ) | 3,431,192 | |||||||||||||||
Net increase (decrease) in net assets | 506,973 | (4,864,911 | ) | (1,933,799 | ) | (1,112,509 | ) | 4,006,134 | 1,602,755 | |||||||||||||||
Net Assets | ||||||||||||||||||||||||
Beginning of period | 30,685,813 | 35,550,724 | 37,484,523 | 19,972,203 | 15,966,069 | 14,363,314 | ||||||||||||||||||
End of period | $ | 31,192,786 | $ | 30,685,813 | $ | 35,550,724 | $ | 18,859,694 | $ | 19,972,203 | $ | 15,966,069 | ||||||||||||
** Net redemption fees of: | $ | — | $ | — | $ | 670 | $ | — | $ | — | $ | — |
The Accompanying Footnotes are an Integral Part of these Financial Statements
40
PENN Capital Funds Trust
Statements of Changes in Net Assets
Penn Capital Opportunisitic High Income Fund | Penn Capital Short Duration High Income Fund | ||||||||||||||||||||||
Fiscal Period | Fiscal Year | Fiscal Year | Fiscal Period | Fiscal Year | Fiscal Year | ||||||||||||||||||
$ | 153,322 | $ | 1,051,849 | $ | 1,006,970 | $ | 209,362 | $ | 1,640,318 | $ | 1,644,978 | ||||||||||||
137,452 | 1,153,263 | (1,852,292 | ) | 93,746 | 807,835 | (2,697,916 | ) | ||||||||||||||||
(206,077 | ) | 1,056,483 | (256,451 | ) | (126,700 | ) | 1,088,068 | (410,224 | ) | ||||||||||||||
84,697 | 3,261,595 | (1,101,773 | ) | 176,408 | 3,536,221 | (1,463,162 | ) | ||||||||||||||||
(156,147 | ) | (1,055,682 | ) | (1,019,814 | ) | (213,906 | ) | (1,641,797 | ) | (1,650,678 | ) | ||||||||||||
(156,147 | ) | (1,055,682 | ) | (1,019,814 | ) | (213,906 | ) | (1,641,797 | ) | (1,650,678 | ) | ||||||||||||
2,753 | 1,355,922 | 4,414,934 | 4,619,400 | 3,314,698 | 16,771,927 | ||||||||||||||||||
120,747 | 1,034,753 | 1,017,853 | 190,157 | 1,493,984 | 1,505,063 | ||||||||||||||||||
(1,192,655 | ) | (2,316,469 | ) | (727,739 | ) | (1,081,292 | ) | (10,984,422 | ) | (5,625,205 | ) | ||||||||||||
(1,069,155 | ) | 74,206 | 4,705,048 | 3,728,265 | (6,175,740 | ) | 12,651,785 | ||||||||||||||||
(1,140,605 | ) | 2,280,119 | 2,583,461 | 3,690,767 | (4,281,316 | ) | 9,537,945 | ||||||||||||||||
20,099,370 | 17,819,251 | 15,235,790 | 40,180,215 | 44,461,531 | 34,923,586 | ||||||||||||||||||
$ | 18,958,765 | $ | 20,099,370 | $ | 17,819,251 | $ | 43,870,982 | $ | 40,180,215 | $ | 44,461,531 | ||||||||||||
$ | — | $ | — | $ | 929 | $ | — | $ | — | $ | — |
The Accompanying Footnotes are an Integral Part of these Financial Statements
41
PENN Capital Funds Trust
Statements of Changes In Net Assets
Penn Capital Special Situations | ||||||||||||
Increase (Decrease) in Net Assets | Fiscal Period | Fiscal Year | Fiscal Year | |||||||||
Operations | ||||||||||||
Net investment income (loss) | $ | (12,786 | ) | $ | (2,414 | ) | $ | (36,860 | ) | |||
Net realized gain (loss) on investments: | 338,177 | 3,817,804 | (799,718 | ) | ||||||||
Net change in unrealized appreciation (depreciation) | (463,507 | ) | 4,502,499 | (471,563 | ) | |||||||
Net increase (decrease) in net assets resulting from operations | (138,116 | ) | 8,317,889 | (1,308,141 | ) | |||||||
Dividends and distributions to shareholders | ||||||||||||
Net dividends and distributions from net investment income and realized gain - Institutional Class | — | — | — | |||||||||
Total dividends and distributions to shareholders | — | — | — | |||||||||
Capital share transactions | ||||||||||||
Net proceeds from sale of shares | 312,961 | 2,775,232 | 729,876 | |||||||||
Dividends and distributions reinvested | — | — | — | |||||||||
Cost of shares redeemed** | (203,662 | ) | (1,415,714 | ) | (2,374,092 | ) | ||||||
Net increase (decrease) in net assets resulting from capital share transactions | 109,299 | 1,359,518 | (1,644,216 | ) | ||||||||
Net increase (decrease) in net assets | (28,817 | ) | 9,677,407 | (2,952,357 | ) | |||||||
Net Assets | ||||||||||||
Beginning of period | 16,922,611 | 7,245,204 | 10,197,561 | |||||||||
End of period | $ | 16,893,794 | $ | 16,922,611 | $ | 7,245,204 | ||||||
** Net redemption fees of: | $ | — | $ | — | $ | — |
The Accompanying Footnotes are an Integral Part of these Financial Statements
42
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PENN Capital Funds Trust
Financial Highlights
Per Common Share Data(a) | ||||||||||||||||||||||||||||
Income from | Distributions | |||||||||||||||||||||||||||
Net asset | Net | Net | Total from | Dividends | Distributions | Total | ||||||||||||||||||||||
Penn Capital Floating Rate Income Fund | ||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||
7/1/21 to 8/31/21(e) | $ | 9.70 | 0.05 | (0.02 | ) | 0.03 | (0.05 | ) | — | (0.05 | ) | |||||||||||||||||
7/1/20 to 6/30/21 | $ | 9.30 | 0.33 | 0.40 | 0.73 | (0.33 | ) | — | (0.33 | ) | ||||||||||||||||||
7/1/19 to 6/30/20 | $ | 9.97 | 0.42 | (0.67 | ) | 0.25 | (g) | (0.42 | ) | — | (0.42 | ) | ||||||||||||||||
7/1/18 to 6/30/19 | $ | 10.09 | 0.48 | (0.09 | ) | 0.39 | (g) | (0.51 | ) | — | (0.51 | ) | ||||||||||||||||
7/1/17 to 6/30/18 | $ | 10.21 | 0.43 | (0.06 | ) | 0.37 | (0.43 | ) | (0.06 | ) | (0.49 | ) | ||||||||||||||||
7/1/16 to 6/30/17 | $ | 10.09 | 0.40 | 0.17 | 0.57 | (0.40 | ) | (0.05 | ) | (0.45 | ) | |||||||||||||||||
Penn Capital Mid Cap Core Fund | ||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||
7/1/21 to 8/31/21(e) | $ | 16.76 | (0.01 | ) | 0.04 | 0.03 | — | — | — | |||||||||||||||||||
7/1/20 to 6/30/21 | $ | 11.49 | 0.03 | 5.24 | 5.27 | (0.00 | )(i) | — | (0.00 | )(i) | ||||||||||||||||||
7/1/19 to 6/30/20 | $ | 12.68 | — | (i) | (0.60 | ) | (0.60 | ) | — | (0.59 | ) | (0.59 | ) | |||||||||||||||
7/1/18 to 6/30/19 | $ | 13.55 | (0.01 | ) | 0.37 | 0.36 | (g) | — | (1.23 | ) | (1.23 | ) | ||||||||||||||||
7/1/17 to 6/30/18 | $ | 11.73 | (0.04 | ) | 2.07 | 2.03 | — | (0.21 | ) | (0.21 | ) | |||||||||||||||||
7/1/16 to 6/30/17 | $ | 9.65 | (0.02 | ) | 2.10 | 2.08 | — | — | — | |||||||||||||||||||
Penn Capital Opportunisitic High Income Fund | ||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||
7/1/21 to 8/31/21(e) | $ | 10.00 | 0.08 | (0.04 | ) | 0.04 | (0.08 | ) | — | (0.08 | ) | |||||||||||||||||
7/1/20 to 6/30/21 | $ | 8.88 | 0.54 | 1.12 | 1.66 | (0.54 | ) | — | (0.54 | ) | ||||||||||||||||||
7/1/19 to 6/30/20 | $ | 9.99 | 0.53 | (1.10 | ) | (0.57 | )(g) | (0.54 | ) | — | (0.54 | ) | ||||||||||||||||
7/1/18 to 6/30/19 | $ | 10.06 | 0.59 | (0.02 | ) | 0.57 | (g) | (0.61 | ) | (0.03 | ) | (0.64 | ) | |||||||||||||||
7/1/17 to 6/30/18 | $ | 10.52 | 0.61 | (0.22 | ) | 0.39 | (g) | (0.63 | ) | (0.22 | ) | (0.85 | ) | |||||||||||||||
7/1/16 to 6/30/17 | $ | 9.95 | 0.73 | 0.56 | 1.29 | (0.72 | ) | — | (0.72 | ) | ||||||||||||||||||
Penn Capital Short Duration High Income Fund | ||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||
7/1/21 to 8/31/21(e) | $ | 9.74 | 0.05 | (0.01 | ) | 0.04 | (0.05 | ) | — | (0.05 | ) | |||||||||||||||||
7/1/20 to 6/30/21 | $ | 9.33 | 0.36 | 0.41 | 0.77 | (0.36 | ) | — | (0.36 | ) | ||||||||||||||||||
7/1/19 to 6/30/20 | $ | 9.93 | 0.37 | (0.59 | ) | (0.22 | ) | (0.38 | ) | — | (0.38 | ) | ||||||||||||||||
7/1/18 to 6/30/19 | $ | 9.85 | 0.35 | 0.10 | 0.45 | (g) | (0.37 | ) | — | (0.37 | ) | |||||||||||||||||
7/17/17(f) to 6/30/18 | $ | 10.00 | 0.27 | (0.17 | ) | 0.10 | (0.25 | ) | — | (0.25 | ) |
* | No information is provided for Investor Class shares because shares of that class had not yet been issued as of August 31, 2021. |
(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) | The Funds changed their fiscal year end to August 31. |
(f) | Commencement of operations. |
(g) | Total from investment operations per share includes redemption fees of less than $0.01 per share. |
(h) | Expense waiver of 0.64% was implemented on August 1, 2017. |
(i) | Amount is less than $0.005 per share. |
The Accompanying Footnotes are an Integral Part of these Financial Statements
44
PENN Capital Funds Trust
Financial Highlights
Per Common | Supplemental | ||||||||||||||||||||||||||||||
Net asset | Total | Net assets, | Ratio of | Ratio of | Ratio of net | Ratio of net | Portfolio | ||||||||||||||||||||||||
$ | 9.68 | 0.32 | % | $ | 31,193 | 0.64 | % | 1.16 | % | 3.13 | % | 2.61 | % | 3 | % | ||||||||||||||||
$ | 9.70 | 7.95 | % | $ | 30,685 | 0.64 | % | 1.52 | % | 3.41 | % | 2.53 | % | 46 | % | ||||||||||||||||
$ | 9.30 | (2.57 | )% | $ | 35,551 | 0.64 | % | 1.37 | % | 4.33 | % | 3.60 | % | 93 | % | ||||||||||||||||
$ | 9.97 | 4.04 | % | $ | 37,485 | 0.64 | % | 1.43 | % | 4.89 | % | 4.10 | % | 57 | % | ||||||||||||||||
$ | 10.09 | 3.71 | % | $ | 31,729 | 0.65 | %(h) | 1.64 | % | 4.31 | %(h) | 3.32 | % | 65 | % | ||||||||||||||||
$ | 10.21 | 5.66 | % | $ | 25,031 | 0.74 | % | 1.95 | % | 3.90 | % | 2.69 | % | 108 | % | ||||||||||||||||
$ | 16.79 | 0.18 | % | $ | 18,860 | 1.06 | % | 1.70 | % | (0.28 | )% | (0.92 | )% | 3 | % | ||||||||||||||||
$ | 16.76 | 45.88 | % | $ | 19,972 | 1.06 | % | 2.19 | % | 0.30 | % | (0.83 | )% | 59 | % | ||||||||||||||||
$ | 11.49 | (5.23 | )% | $ | 15,966 | 1.06 | % | 2.14 | % | (0.04 | )% | (1.12 | )% | 57 | % | ||||||||||||||||
$ | 12.68 | 3.64 | % | $ | 14,363 | 1.06 | % | 2.20 | % | (0.11 | )% | (1.25 | )% | 40 | % | ||||||||||||||||
$ | 13.55 | 17.41 | % | $ | 14,910 | 1.06 | % | 2.38 | % | (0.34 | )% | (1.66 | )% | 64 | % | ||||||||||||||||
$ | 11.73 | 21.55 | % | $ | 11,027 | 1.06 | % | 2.63 | % | (0.29 | )% | (1.86 | )% | 91 | % | ||||||||||||||||
$ | 9.96 | 0.43 | % | $ | 18,959 | 0.72 | % | 1.65 | % | 4.69 | % | 3.76 | % | 18 | % | ||||||||||||||||
$ | 10.00 | 19.08 | % | $ | 20,099 | 0.72 | % | 2.08 | % | 5.27 | % | 4.21 | % | 156 | % | ||||||||||||||||
$ | 8.88 | (5.86 | )% | $ | 17,819 | 0.72 | % | 2.08 | % | 5.66 | % | 4.30 | % | 149 | % | ||||||||||||||||
$ | 9.99 | 5.83 | % | $ | 15,236 | 0.72 | % | 2.26 | % | 5.90 | % | 4.36 | % | 85 | % | ||||||||||||||||
$ | 10.06 | 3.81 | % | $ | 13,814 | 0.72 | % | 2.80 | % | 5.89 | % | 3.81 | % | 66 | % | ||||||||||||||||
$ | 10.52 | 13.36 | % | $ | 8,772 | 0.72 | % | 3.25 | % | 7.01 | % | 4.48 | % | 79 | % | ||||||||||||||||
$ | 9.73 | 0.41 | % | $ | 43,871 | 0.54 | % | 0.99 | % | 2.97 | % | 2.52 | % | 11 | % | ||||||||||||||||
$ | 9.74 | 11.96 | % | $ | 40,180 | 0.54 | % | 1.16 | % | 3.77 | % | 3.15 | % | 104 | % | ||||||||||||||||
$ | 9.33 | (2.33 | )% | $ | 44,462 | 0.54 | % | 1.15 | % | 3.87 | % | 3.26 | % | 113 | % | ||||||||||||||||
$ | 9.93 | 4.65 | % | $ | 34,924 | 0.54 | % | 1.44 | % | 3.75 | % | 2.85 | % | 48 | % | ||||||||||||||||
$ | 9.85 | 1.03% | $ | 12,436 | 0.54 | % | 2.70 | % | 3.08 | % | 0.92 | % | 39 | % |
The Accompanying Footnotes are an Integral Part of these Financial Statements
45
PENN Capital Funds Trust
Financial Highlights
Per Common Share Data(a) | ||||||||||||||||||||||||||||
Income from | Distributions | |||||||||||||||||||||||||||
Net asset | Net | Net | Total from | Dividends | Distributions | Total | ||||||||||||||||||||||
Penn Capital Special Situations Small Cap Equity Fund | ||||||||||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||
7/1/21 to 8/31/21(e) | $ | 19.79 | (0.01 | ) | (0.16 | ) | (0.17 | ) | — | — | — | |||||||||||||||||
7/1/20 to 6/30/21 | $ | 9.33 | (0.01 | ) | 10.47 | 10.46 | — | — | — | |||||||||||||||||||
7/1/19 to 6/30/20 | $ | 10.67 | (0.03 | ) | (1.31 | ) | (1.34 | ) | — | — | — | |||||||||||||||||
7/1/18 to 6/30/19 | $ | 12.59 | (0.05 | ) | (0.98 | ) | (1.03 | )(f) | — | (0.89 | ) | (0.89 | ) | |||||||||||||||
7/1/17 to 6/30/18 | $ | 11.71 | (0.08 | ) | 2.36 | 2.28 | (f) | — | (1.40 | ) | (1.40 | ) | ||||||||||||||||
7/1/16 to 6/30/17 | $ | 10.32 | (0.04 | ) | 2.24 | 2.20 | (f) | — | (0.81 | ) | (0.81 | ) |
* | No information is provided for Investor Class shares because shares of that class had not yet been issued as of August 31, 2021. |
(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) | The Funds changed their fiscal year end to August 31. |
(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 Footnotes are an Integral Part of these Financial Statements
46
PENN Capital Funds Trust
Financial Highlights
Per Common | Supplemental | ||||||||||||||||||||||||||||||
Net asset | Total | Net assets, | Ratio of | Ratio of | Ratio of net | Ratio of net | Portfolio | ||||||||||||||||||||||||
$ | 19.62 | (0.86 | )% | $ | 16,894 | 1.09 | % | 1.71 | % | (0.46 | )% | (1.08 | )% | 11 | % | ||||||||||||||||
$ | 19.79 | 112.11 | % | $ | 16,923 | 1.09 | % | 2.97 | % | (0.02 | )% | (1.90 | )% | 132 | % | ||||||||||||||||
$ | 9.33 | (12.56 | )% | $ | 7,245 | 1.09 | % | 3.09 | % | (0.42 | )% | (2.42 | )% | 115 | % | ||||||||||||||||
$ | 10.67 | (7.91 | )% | $ | 10,198 | 1.09 | % | 2.38 | % | (0.35 | )% | (1.64 | )% | 97 | % | ||||||||||||||||
$ | 12.59 | 20.31 | % | $ | 21,289 | 1.09 | % | 2.09 | % | (0.64 | )% | (1.64 | )% | 105 | % | ||||||||||||||||
$ | 11.71 | 21.52 | % | $ | 21,867 | 1.09 | % | 2.19 | % | (0.54 | )% | (1.64 | )% | 101 | % |
The Accompanying Footnotes are an Integral Part of these Financial Statements
47
PENN CAPITAL FUNDS TRUST
Notes to the Financial Statements
AUGUST 31, 2021
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 Floating Rate Income Fund (formerly, the Penn Capital Defensive Floating Rate Income Fund), the Penn Capital Mid Cap Core Fund (formerly, the Penn Capital Managed Alpha SMID Cap Equity Fund), the Penn Capital Opportunistic High Income Fund (formerly, the Penn Capital Multi-Credit High Income Fund), the Penn Capital Short Duration High Income Fund (formerly, the Penn Capital Defensive Short Duration High Income Fund), and the Penn Capital Special Situations Small 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 Floating Rate Income Fund’s investment objective is to seek to provide current income. The Penn Capital Floating Rate Income Fund commenced operations on November 30, 2015.
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 Short Duration High Income Fund’s investment objective is to seek to provide a high level of current income. The Penn Capital Short Duration High Income Fund commenced operations on July 17, 2017.
The Penn Capital Mid Cap Core Fund and the Penn Capital Special Situations Small Cap Equity Fund’s investment objective is to seek to provide capital appreciation. The Penn Capital Mid Cap Core 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” or “Penn Capital”) serves as the investment advisor to the Funds.
The Trust offers two classes of shares for the Penn Capital Floating Rate Income Fund, the Penn Capital Mid Cap Core Fund, the Penn Capital Opportunistic High Income Fund and the Penn Capital Special Situations Small Cap Equity Fund: Institutional and Investor Class. The Trust offers Institutional Class shares for the Penn Capital 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 August 31, 2021. 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 August 31, 2021.
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.
48
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2021
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
49
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2021
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 August 31, 2021, in valuing each Fund’s investments:
Description | ||||||||||||||||
Penn Capital Floating Rate Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments in Securities(a) | ||||||||||||||||
Bank Loans | $ | — | $ | 27,169,190 | $ | — | $ | 27,169,190 | ||||||||
Corporate Bonds | — | 1,811,195 | — | 1,811,195 | ||||||||||||
Short-Term Investment | 2,357,545 | — | — | 2,357,545 | ||||||||||||
Total Investments in Securities | $ | 2,357,545 | $ | 28,980,385 | $ | — | $ | 31,337,930 |
Penn Capital Mid Cap Core Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments in Securities(a) | ||||||||||||||||
Common Stocks | $ | 17,838,202 | $ | — | $ | — | $ | 17,838,202 | ||||||||
Real Estate Investment Trusts (REITs) | 778,197 | — | — | 778,197 | ||||||||||||
Short-Term Investment | 277,430 | — | — | 277,430 | ||||||||||||
Total Investments in Securities | $ | 18,893,829 | $ | — | $ | — | $ | 18,893,829 |
Penn Capital Opportunistic High Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments in Securities(a) | ||||||||||||||||
Asset Backed Security | $ | — | $ | 51,959 | $ | — | $ | 51,959 | ||||||||
Bank Loans | — | 521,283 | — | 521,283 | ||||||||||||
Convertible Bonds | — | 470,595 | — | 470,595 | ||||||||||||
Corporate Bonds | — | 17,221,445 | — | 17,221,445 | ||||||||||||
Preferred Stock | 115,638 | — | — | 115,638 | ||||||||||||
Short-Term Investment | 459,788 | — | — | 459,788 | ||||||||||||
Total Investments in Securities | $ | 575,426 | $ | 18,265,282 | $ | — | $ | 18,840,708 |
50
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2021
Penn Capital Short Duration High Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments in Securities(a) | ||||||||||||||||
Convertible Bond | $ | — | $ | 227,950 | $ | — | $ | 227,950 | ||||||||
Corporate Bonds | — | 38,901,340 | — | 38,901,340 | ||||||||||||
Bank Loans | — | 562,690 | — | 562,690 | ||||||||||||
Mutual Fund | 1,704,366 | — | — | 1,704,366 | ||||||||||||
U.S. Government Note | — | 201,086 | — | 201,086 | ||||||||||||
Short-Term Investment | 1,241,261 | — | — | 1,241,261 | ||||||||||||
Total Investments in Securities | $ | 2,945,627 | $ | 39,893,066 | $ | — | $ | 42,838,693 |
Penn Capital Special Situations Small Cap Equity Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments in Securities(a) | ||||||||||||||||
Common Stocks | $ | 16,185,706 | $ | — | $ | — | $ | 16,185,706 | ||||||||
Contingent Value Right | — | — | 19 | 19 | ||||||||||||
Real Estate Investment Trusts (REITs) | 453,972 | — | — | 453,972 | ||||||||||||
Short-Term Investment | 250,591 | — | — | 250,591 | ||||||||||||
Total Investments in Securities | $ | 16,890,269 | $ | — | $ | 19 | $ | 16,890,288 |
(a) | All other industry classifications are identified in the Schedule of Investments for each Fund. |
The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.
Investments in Securities | ||||
Balance as of June 30, 2021 | $ | — | ||
Accrued discounts/premiums | — | |||
Realized losses | — | |||
Change in net unrealized appreciation/depreciation | — | |||
Net sales | — | |||
Transfers into and/or out of Level 3 | 19 | |||
Balance as of August 31, 2021 | $ | 19 | ||
Change in unrealized appreciation/depreciation during the period for Level 3 investments held at August 31, 2021 | $ | — |
It is the Funds’ policy to recognize transfers into and out of Levels at the end of the reporting period. The Level 3 investments, as of August 31, 2021, represented 0.0% of the Penn Capital Special Situations Small Cap Equity Fund’s net assets. Refer to the Schedule of Investments for further information on the classification of investments.
51
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2021
The following provides information regarding the valuation technique, unobservable input used, and other information related to the fair value of the Level 3 investment as of August 31, 2021:
Security | Fair Value as of | Valuation Technique | Unobservable Input (a) | Range/Weighted | ||||||||||||
Contingent Value Right | $19 | Broker Quote | Value of Final Exercise Price | $0.01-$0.01 |
(a) | A change to the unobservable input may result in a significant change to the value of the investment as follows: |
Unobservable | Impact to Value if | Impact to Value if |
Value of Final Exercise Price | Increases | Decreases |
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
Certain expenses are shared with The RBB Fund, Inc. (“RBB”), an affiliated fund. Expenses incurred on behalf of a specific class, fund or fund family of the Trust or RBB are charged directly to the class, fund or fund family (in proportion to net assets). Expenses incurred for all of the funds (such as trustee or professional fees) are charged to all funds in proportion to their average net assets of the Trust and RBB, or in such other manner as the Board deems fair or equitable.
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 Floating Rate Income Fund, Penn Capital Opportunistic High Income Fund and the Penn Capital Short Duration 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 Mid Cap Core Fund and the Penn Capital Special Situations Small 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.
52
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2021
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.
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 Floating Rate Income Fund | 0.55% |
Penn Capital Mid Cap Core Fund | 0.90% |
Penn Capital Opportunistic High Income Fund | 0.69% |
Penn Capital Short Duration High Income Fund | 0.45% |
Penn Capital Special Situations Small Cap Equity Fund | 0.95% |
With respect to each Fund other than the Penn Capital Opportunistic High Income Fund and the Penn Capital Short Duration 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 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 April 1, 2023. Thereafter, the expense limitation agreement for the Funds will be reviewed annually by the Advisor and the Board.
Institutional | Investor | |
Penn Capital Floating Rate Income Fund | 0.64% | 0.89% |
Penn Capital Mid Cap Core Fund | 1.06% | 1.31% |
Penn Capital Opportunistic High Income Fund | 0.72% | 0.97% |
Penn Capital Short Duration High Income Fund | 0.54% | N/A |
Penn Capital Special Situations Small Cap Equity Fund | 1.09% | 1.34% |
53
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2021
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 | Amount | Amount | Year of | ||||||||||||
Penn Capital Floating Rate Income Fund | ||||||||||||||||
June 30, 2019(1) | $ | 223,187 | $ | $ | 223,187 | 2022 | ||||||||||
June 30, 2020 | 308,125 | — | 308,125 | 2023 | ||||||||||||
June 30, 2021 | 291,063 | — | 291,063 | 2024 | ||||||||||||
August 31, 2021(2) | 27,409 | — | 27,409 | 2024 | ||||||||||||
Total | $ | 849,784 | $ | — | $ | 849,784 | ||||||||||
Penn Capital Mid Cap Core Fund | ||||||||||||||||
June 30, 2019(1) | $ | 130,593 | $ | $ | 130,593 | 2022 | ||||||||||
June 30, 2020 | 169,526 | — | 169,526 | 2023 | ||||||||||||
June 30, 2021 | 198,611 | — | 198,611 | 2024 | ||||||||||||
August 31, 2021(2) | 20,635 | — | 20,635 | 2024 | ||||||||||||
Total | $ | 519,365 | $ | — | $ | 519,365 | ||||||||||
Penn Capital Opportunistic High Income Fund | ||||||||||||||||
June 30, 2019(1) | $ | 178,420 | (3) | $ | $ | 166,730 | 2022 | |||||||||
June 30, 2020 | 241,623 | (3) | — | 221,552 | 2023 | |||||||||||
June 30, 2021 | 256,142 | (3) | 253,063 | 2024 | ||||||||||||
August 31, 2021(2) | 30,361 | — | 30,361 | 2024 | ||||||||||||
Total | $ | 706,546 | $ | — | $ | 671,706 | ||||||||||
Penn Capital Short Duration High Income Fund | ||||||||||||||||
June 30, 2019(1) | $ | 169,086 | (3) | $ | $ | 169,171 | 2022 | |||||||||
June 30, 2020 | 258,497 | (3) | — | 251,625 | 2023 | |||||||||||
June 30, 2021 | 271,231 | (3) | 265,384 | 2024 | ||||||||||||
August 31, 2021(2) | 33,215 | (3) | — | 31,724 | 2024 | |||||||||||
Total | $ | 732,029 | $ | — | $ | 717,904 | ||||||||||
Penn Capital Special Situations Small Cap Equity Fund | ||||||||||||||||
June 30, 2019(1) | $ | 152,823 | $ | $ | 152,823 | 2022 | ||||||||||
June 30, 2020 | 175,626 | — | 175,626 | 2023 | ||||||||||||
June 30, 2021 | 222,981 | 222,981 | 2024 | |||||||||||||
August 31, 2021(2) | 17,080 | — | 17,080 | 2024 | ||||||||||||
Total | $ | 568,510 | $ | — | $ | 568,510 |
(1) | Period from September 1, 2018 through June 30, 2021. |
(2) | Fiscal period from July 1, 2021 through August 31, 2021. |
(3) | Includes fees waived that are not subject to potential recoupment. |
54
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2021
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 fiscal period from July 1, 2021 through August 31, 2021 (the “fiscal period ended August 31, 2021”), there were no distribution fees paid under the plan because the Investor Class shares had not yet been issued as of August 31, 2021.
Agreements with the Administrator, Transfer Agent, and Custodian
U.S. Bancorp Fund Services, LLC (“Fund Services”), doing business as U.S. Bank Global Fund Services, serves as the Funds’ administrator. For providing administrative and accounting services, Fund Services is entitled to receive a monthly fee, subject to certain minimum and out of pocket expenses.
Fund Services serves as the Funds’ transfer and dividend disbursing agent. For providing transfer agent services, Fund Services is entitled to receive a monthly fee, subject to certain minimum and out of pocket expenses.
U.S. Bank, N.A. (the “Custodian”) provides certain custodial services to the Funds. The Custodian is entitled to receive a monthly fee, subject to certain minimum and out of pocket expenses.
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 fiscal period ended August 31, 2021, there were no service fees incurred by the Investor Class shares because the Investor Class shares had not yet been issued as of August 31, 2021. The amount actually incurred by the Institutional Class shares for fiscal period ended August 31, 2021, on an annualized basis was 0.03% for the Penn Capital Floating Rate Income Fund, 0.00% for the Penn Capital Mid Cap Core Fund, 0.00% for the Penn Capital Opportunistic High Income Fund, 0.00% for the Penn Capital Short Duration High Income Fund and 0.00% for the Penn Capital Special Situations Small Cap Equity Fund.
Other Related Party Transactions
The Advisor and its affiliates 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 the Funds’ 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.
55
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2021
The following information is provided on a tax basis as of August 31, 2021:
Penn Capital | Penn Capital | Penn Capital | Penn Capital | Penn Capital | ||||||||||||||||
Cost of investments | $ | 31,212,912 | $ | 13,000,582 | $ | 18,227,476 | $ | 42,107,038 | $ | 12,420,474 | ||||||||||
Gross unrealized appreciation | 274,060 | 6,302,448 | 695,308 | 796,823 | 4,805,622 | |||||||||||||||
Gross unrealized depreciation | (149,042 | ) | (409,201 | ) | (82,076 | ) | (65,168 | ) | (335,808 | ) | ||||||||||
Net unrealized appreciation (depreciation) | 125,018 | 5,893,247 | 613,232 | 731,655 | 4,469,814 | |||||||||||||||
Undistributed ordinary income | 36,458 | 114,662 | 18,039 | 13,681 | 1,940,765 | |||||||||||||||
Undistributed long-term capital gains | — | 1,481,033 | — | — | 1,028,709 | |||||||||||||||
Total distributable earnings | 36,458 | 1,595,695 | 18,039 | 13,681 | 2,969,474 | |||||||||||||||
Other accumulated losses | (3,066,693 | ) | — | (613,153 | ) | (1,854,279 | ) | — | ||||||||||||
Total accumulated earnings (losses) | $ | (2,905,217 | ) | $ | 7,488,942 | $ | 18,118 | $ | (1,108,943 | ) | $ | 7,439,288 |
Net investment income and net realized gains and losses for federal income tax purposes may differ from that reported on the financial statements because of permanent book-to-tax differences. GAAP requires that permanent differences between financial reporting and tax reporting be reclassified between various components of net assets. For the fiscal period ended August 31, 2021, no adjustments were made.
The Funds intend to utilize capital loss carryforwards to offset future realized gains. Capital loss carryforwards available for federal income tax purposes are as follows:
Capital Loss | Short-Term | Long-Term | ||||||||||
Penn Capital Floating Rate Income Fund | unlimited | $ | 1,847,642 | $ | 1,184,904 | |||||||
Penn Capital Opportunistic High Income Fund | unlimited | 266,174 | 328,960 | |||||||||
Penn Capital Short Duration High Income Fund | unlimited | 1,842,820 | — |
A regulated investment company may elect for any taxable year to treat any portion of the qualified late year loss as arising on the first day of the next taxable year. Qualified late year losses are certain capital and ordinary losses which occur during the portion of the taxable year subsequent to October 31 and December 31, respectively. For the fiscal period ended August 31, 2021, the Funds deferred no late year or Post-October losses.
The character of distributions for tax purposes paid during the fiscal period ended August 31, 2021, is as follows:
Ordinary | Long-Term | |||||||
Penn Capital Floating Rate Income Fund | $ | 162,263 | $ | — | ||||
Penn Capital Opportunistic High Income Fund | 156,147 | — | ||||||
Penn Capital Short Duration High Income Fund | 213,906 | — |
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PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2021
The character of distributions for tax purposes paid during the fiscal year ended June 30, 2021, is as follows:
Ordinary | Long-Term | |||||||
Penn Capital Floating Rate Income Fund | $ | 1,132,139 | $ | — | ||||
Penn Capital Mid Cap Core Fund | 1,241 | — | ||||||
Penn Capital Opportunistic High Income Fund | 1,055,682 | — | ||||||
Penn Capital Short Duration High Income Fund | 1,641,797 | — |
The character of distributions for tax purposes paid during the fiscal year ended June 30, 2020, is as follows:
Ordinary | Long-Term | |||||||
Penn Capital Floating Rate Income Fund | $ | 1,836,175 | $ | — | ||||
Penn Capital Mid Cap Core Fund | — | 768,746 | ||||||
Penn Capital Opportunistic High Income Fund | 1,019,814 | — | ||||||
Penn Capital Short Duration High Income Fund | 1,650,678 | — |
5. Investment Transactions
The cost of security purchases and the proceeds from security sales, other than short-term investments, for the fiscal period ended August 31, 2021, were as follows:
Non-U.S. Government | U.S. Government | |||||||||||||||
Purchases | Sales | Purchases | Sales | |||||||||||||
Penn Capital Floating Rate Income Fund | $ | 816,910 | $ | 1,682,225 | $ | — | $ | — | ||||||||
Penn Capital Mid Cap Core Fund | 516,862 | 1,639,587 | — | — | ||||||||||||
Penn Capital Opportunistic High Income Fund | 3,465,233 | 4,709,554 | — | — | ||||||||||||
Penn Capital Short Duration High Income Fund | 6,465,775 | 3,836,116 | — | 201,344 | ||||||||||||
Penn Capital Special Situations Small Cap Equity Fund | 1,791,312 | 1,752,308 | — | — |
6. Capital Share Transactions
Penn Capital | Penn Capital | Penn Capital | Penn Capital | Penn Capital | ||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||
Shares sold | 102,303 | 108,300 | 1,866,942 | 1,742 | 49,672 | |||||||||||||||
Shares issued in reinvestment of dividends | 9,571 | 81,454 | 126,658 | — | 87 | |||||||||||||||
Shares redeemed | (50,674 | ) | (849,017 | ) | (1,931,686 | ) | (70,041 | ) | (248,186 | ) | ||||||||||
Net increase (decrease) | 61,200 | (659,263 | ) | 61,914 | (68,299 | ) | (198,427 | ) |
57
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2021
Penn Capital | Penn Capital | Penn Capital | Penn Capital | Penn Capital | ||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||
Shares sold | 267,062 | 276 | 139,413 | 449,789 | 475,527 | |||||||||||||||
Shares issued in reinvestment of dividends | 58,899 | 12,129 | 107,641 | 107,761 | 19,543 | |||||||||||||||
Shares redeemed | (68,771 | ) | (120,099 | ) | (243,186 | ) | (76,311 | ) | (111,101 | ) | ||||||||||
Net increase (decrease) | 257,190 | (107,694 | ) | 3,878 | 481,239 | 383,969 |
Penn Capital | Penn Capital | Penn Capital | Penn Capital | Penn Capital | ||||||||||||||||
Institutional Class Shares | ||||||||||||||||||||
Shares sold | 343,875 | 1,693,122 | 16,594 | 169,601 | 68,570 | |||||||||||||||
Shares issued in reinvestment of dividends | 155,400 | 155,644 | — | — | — | |||||||||||||||
Shares redeemed | (1,137,745 | ) | (601,812 | ) | (10,687 | ) | (90,767 | ) | (247,422 | ) | ||||||||||
Net increase (decrease) | (638,470 | ) | 1,246,954 | 5,908 | 78,834 | (178,852 | ) |
7. Transactions with Affiliates
The following issuers are affiliated with the Funds; that is, the Advisor had control of 5% or more of the Funds’ outstanding voting securities as defined in Section 2(a)(3) of the 1940 Act, during the fiscal period ended August 31, 2021; such issuers are:
July 1, 2021 | Additions | Reductions | ||||||||||||||||||||||
Issuer Name | Share | Cost | Share | Cost | Share | Cost | ||||||||||||||||||
Penn Capital Short Duration High Income Fund | ||||||||||||||||||||||||
Penn Capital Floating Rate Income Fund | 108,656 | $ | 1,078,360 | 67,415 | $ | 653,813 | $ | — | ||||||||||||||||
$ | 1,078,360 | $ | 653,813 | $ | — |
58
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2021
August 31, 2021 | August 31, 2021 | |||||||||||||||||||||||||||
Issuer Name | Share | Dividend | Capital Gain | Unrealized | Realized | Value | Cost | |||||||||||||||||||||
Penn Capital Short Duration High Income Fund | ||||||||||||||||||||||||||||
Penn Capital Floating Rate Income Fund | 176,071 | $ | 8,279 | $ | — | $ | (4,492 | ) | $ | — | $ | 1,704,366 | $ | 1,732,173 | ||||||||||||||
$ | 8,279 | $ | — | $ | (4,492 | ) | $ | — | $ | 1,704,366 | $ | 1,732,173 |
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, announced plans to phase out the use of LIBOR by the end of 2021. The FCA and ICE Benchmark Administrator have since announced that most LIBOR settings will no longer be published after December 31, 2021 and a majority of U.S. dollar LIBOR settings will cease publication after June 30, 2023. The U.S. Federal Reserve, based on the recommendations of the New York Federal Reserve’s Alternative Reference Rate Committee (comprised of major derivative market participants and their regulators), has begun publishing SOFR that is intended to replace U.S. dollar LIBOR. Proposals for alternative reference rates for other currencies have also been announced or have already begun publication. Uncertainty related to the liquidity impact of the change in rates, and how to appropriately adjust these rates at the time of transition, poses risks for the Funds. The effect of any changes to, or discontinuation of, LIBOR on the Funds will depend on, among other things, (1) existing fallback or termination provisions in individual contracts and (2) whether, how, and when industry participants develop and adopt new reference rates and fallbacks for both legacy and new instruments and contracts. The expected discontinuation of LIBOR could have a significant impact on the financial markets in general and may also present heightened risk to market participants, including public companies, investment advisers, investment companies, and broker-dealers. The risks associated with this discontinuation and transition will be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. Accordingly, it is difficult to predict the full impact of the transition away from LIBOR on the Funds until new reference rates and fallbacks for both legacy and new instruments and contracts are commercially accepted and market practices become settled.
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PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2021
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 August 31, 2021 was 3.25%. During the fiscal period ended August 31, 2021, the Penn Capital Floating Rate Income Fund, the Penn Capital Opportunistic High Income Fund, the Penn Capital Short Duration High Income Fund, and the Penn Capital Special Situations Small Cap Equity Fund did not use the credit line.
During the fiscal period ended August 31, 2021, line of credit activity for the Penn Capital Mid Cap Core Fund was as follows:
Fund | Average Borrowings | Amount Outstanding as of August 31, 2021 | Interest Expense | Maximum Borrowing | ||||||||||||
Penn Capital Mid Cap Core Fund | $ | 14,000 | $ | — | $ | 78 | $ | 868,000 |
10. Recent Accounting Pronouncements and Regulatory Updates
In October 2020, the Securities and Exchange Commission (“SEC”) adopted new regulations governing the use of derivatives by registered investment companies (“Rule 18f-4”). Rule 18f-4 will impose limits on the amount of derivatives a Fund can enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, and require funds whose use of derivatives is greater than a limited specified amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. Funds will be required to comply with Rule 18f-4 by August 19, 2022. It is not currently clear what impact, if any, Rule 18f-4 will have on the availability, liquidity or performance of derivatives. Management is currently evaluating the potential impact of Rule 18f-4 on the Funds. When fully implemented, Rule 18f-4 may require changes in how a Fund uses derivatives, adversely affect the Fund’s performance and increase costs related to the Funds’ use of derivatives.
In December 2020, the Securities and Exchange Commission (“SEC”) adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5 establishes requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 will permit fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund investments. The Funds will be required to comply with the rules by September 8, 2022. Management is currently assessing the potential impact of the new rules on the Funds’ financial statements.
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 August 31, 2021. 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 Mid Cap Core Fund as of August 31, 2021. 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. Although vaccines for COVID-19 are becoming more widely available, 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,
60
PENN CAPITAL FUNDS TRUST
NOTES TO THE FINANCIAL STATEMENTS
AUGUST 31, 2021
including the duration and spread of the outbreak and the pace of recovery which may vary from market to market, 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. Unfunded Commitments
The Funds may enter into unfunded loan commitments. Unfunded loan commitments may be partially or wholly funded. During the contractual period, the Funds are obliged to provide funding to the borrower upon demand. Unfunded loan commitments are fair valued in accordance with the valuation policy described in Note 2(a) and unrealized appreciation or depreciation, if any, is recorded on the Statements of Assets and Liabilities. As of August 31, 2021, the total unfunded amount was 2.6% and 0.5% of the Penn Capital Floating Rate Income Fund’s and Penn Capital Opportunistic High Income Fund’s net assets, respectively.
As of August 31, 2021, the Penn Capital Floating Rate Income Fund had the following unfunded loan commitments outstanding:
Loan | Principal | Cost | Value | Unrealized | ||||||||||||
Centuri Group, Inc. | $ | 200,000 | $ | 198,019 | $ | 199,166 | $ | 1,147 | ||||||||
DirecTV Financing LLC | 60,000 | 60,618 | 59,966 | (652 | ) | |||||||||||
Gogo Intermediate Holdings LLC | 200,000 | 199,037 | 199,750 | 713 | ||||||||||||
Hightower Holding LLC | 40,000 | 39,619 | 39,990 | 371 | ||||||||||||
LBM Acquisition LLC | 38,889 | 38,519 | 38,296 | (223 | ) | |||||||||||
Proofpoint, Inc. | 200,000 | 199,022 | 198,722 | (300 | ) | |||||||||||
Shutterfly LLC | 80,000 | 80,019 | 79,750 | (269 | ) |
As of August 31, 2021, the Penn Capital Opportunistic High Income Fund had the following unfunded loan commitment outstanding:
Loan | Principal | Cost | Value | Unrealized | ||||||||||||
Gogo Intermediate Holdings LLC | $ | 90,000 | $ | 89,577 | $ | 89,888 | $ | 311 |
61
PENN CAPITAL FUNDS TRUST
Additional Information
AUGUST 31, 2021 (UNAUDITED)
Trustee and Officer Compensation
The Trustees of the Funds receive an annual retainer and meeting fees for meetings attended. An employee of Vigilant Compliance, LLC serves as President and Chief Compliance Officer of the Trust. Vigilant Compliance, LLC is compensated for the services provided to the Trust. Employees of the Trust serve as Treasurer, Secretary and Director of Marketing & Business Development of the Trust. They are compensated for services provided. Certain employees of U.S. Bancorp Fund Services, LLC serve as officers of the Trust. They are not compensated by the Funds or the Trust. For Trustee and Officer compensation amounts, please refer to the Statement of Operations.
Shareholder Notification of Federal Tax Status
For the fiscal period ended August 31, 2021, certain dividends paid by the Funds may be reported as qualified dividend income and may be eligible for taxation at capital gain rates. The percentage of dividends declared from ordinary income designated as qualified dividend income was as follows:
Penn Capital Floating Rate Income Fund | 0.00% |
Penn Capital Mid Cap Core Fund. | 0.00% |
Penn Capital Opportunistic High Income Fund | 0.00% |
Penn Capital Short Duration High Income Fund | 0.00% |
Penn Capital Special Situations Small Cap Equity Fund | 0.00% |
For corporate shareholders, the percentage of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal period ended August 31, 2021 was as follows:
Penn Capital Floating Rate Income Fund | 0.00% |
Penn Capital Mid Cap Core Fund | 0.00% |
Penn Capital Opportunistic High Income Fund | 0.00% |
Penn Capital Short Duration High Income Fund | 0.00% |
Penn Capital Special Situations Small Cap Equity Fund. | 0.00% |
The percentage of taxable ordinary income distributions designated as short-term capital gain distributions under Internal Revenue Section 871(k)(2)(c) for the fiscal period ended August 31, 2021 was as follows:
Penn Capital Floating Rate Income Fund | 0.00% |
Penn Capital Mid Cap Core Fund | 0.00% |
Penn Capital Opportunistic High Income Fund | 0.00% |
Penn Capital Short Duration High Income Fund | 0.00% |
Penn Capital Special Situations Small Cap Equity Fund. | 0.00% |
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 12 month period ended June 30, 2021 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.
62
PENN CAPITAL FUNDS TRUST
Additional Information
AUGUST 31, 2021 (UNAUDITED)
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.
63
PENN CAPITAL FUNDS TRUST
Report of Independent Registered Public Accounting Firm
To the Shareholders and Trustees of
PENN Capital Funds Trust
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of the Penn Capital Floating Rate Income Fund, the Penn Capital Mid Cap Core Fund, the Penn Capital Opportunistic High Income Fund, the Penn Capital Short Duration High Income Fund, and the Penn Capital Special Situations Small Cap Equity Fund (the “Funds”), each a series of PENN Capital Funds Trust (the “Trust”), including the schedules of investments, as of August 31, 2021, the related statements of operations, the statements of changes in net assets, and financial highlights for the two month period then ended and for the year ended June 30, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Funds as of August 31, 2021, the results of their operations, the changes in their net assets, and their financial highlights for the two month period then ended and for the year ended August 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
The statements of changes in net assets for the year ended June 30, 2020 and the financial highlights for each of the four years in the period ended June 30, 2020, except for Penn Capital Short Duration High Income Fund in which the financial highlights for each of the two years in the period ended June 30, 2020 and the period from July 17, 2017 (commencement of operations) though June 30, 2018 have been audited by other auditors, whose report dated August 28, 2020 expressed unqualified opinions on such statements of changes in net assets and financial highlights.
Basis for Opinion
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We have served as the auditor of one or more of the funds in the Trust since 2021.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of the Funds’ internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of August 31, 2021 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
TAIT, WELLER & BAKER LLP
Philadelphia, Pennsylvania
October 28, 2021
64
PENN CAPITAL FUNDS TRUST
Trustees and Officers (UNAUDITED)
The business and affairs of the Trust are managed under the direction of the Trust’s Board. The Trustees and executive officers of the Trust, their ages, business addresses and principal occupations during the past five years are set forth below.
Name, Address and Age | Position(s) | Term of | Principal Occupations | Other Directorships | Number of |
Independent Trustees | |||||
Julian A. Brodsky | Trustee | June 2021 to present | From 1969 to 2011, Director and Vice Chairman, Comcast Corporation (cable television and communications). | AMDOCS Limited (service provider to telecommunications companies). | 46 |
J. Richard Carnall 615 East Michigan Street | Trustee | June 2021 to present | Since 1984, Director of Haydon Bolts, Inc. (bolt manufacturer) and Parkway Real Estate Company (subsidiary of Haydon Bolts, Inc.); since 2004, Director of Cornerstone Bank. | None. | 46 |
Gregory P. Chandler | Trustee | June 2021 to present | Since 2020, Chief Financial Officer, Herspiegel Consulting LLC (life sciences consulting services); 2020, Chief Financial Officer, Avocado Systems Inc. (cyber security software provider); from 2009 - 2020, Chief Financial Officer, Emtec, Inc. (information technology consulting/services). | Emtec, Inc. (until December 2019); FS Investment Corporation (business development company) (until December 2018); FS Energy and Power Fund (business development company); Wilmington Funds (12 portfolios) (registered investment company). | 46 |
Nicholas A. Giordano | Trustee | June 2021 to present | Since 1997, Consultant, financial services organizations. | IntriCon Corporation (biomedical device manufacturer); Kalmar Pooled InvestmentTrust (registered investment company) (until September 2017); Wilmington Funds (12 portfolios) (registered investment company); Independence Blue Cross (healthcare insurance) (until March 2021). | 46 |
65
PENN CAPITAL FUNDS TRUST
TRUSTEES AND OFFICERS (UNAUDITED)
Name, Address and Age | Position(s) | Term of | Principal Occupations | Other Directorships | Number of |
Independent Trustees (continued) | |||||
Arnold M. Reichman | Trustee | June 2021 to present | Retired. | EIP Investment Trust (registered investment company). | 46 |
Brian T. Shea | Trustee | June 2021 to present | From 2014-2017, Chief Executive Officer, BNY Mellon Investment Services (fund services, global custodian and securities clearing firm); from 1983- 2014, Chief Executive Officer and various positions, Pershing LLC (broker dealer, clearing and custody firm). | WisdomTree Investments, Inc. (asset management company) (until March 2019); Fidelity National Information Services, Inc. (financial services technology company); Ameriprise Financial, Inc. (financial services company). | 46 |
Robert A. Straniere | Trustee | June 2021 to present | Since 2009, Administrative Law Judge, New York City; since 1980, Founding Partner, Straniere Law Group (law firm). | None. | 46 |
Interested Trustee2 | |||||
Robert Sablowsky | Trustee | June 2021 to present | Since 2002, Senior Director – Investments and, prior thereto, Executive Vice President, of Oppenheimer & Co., Inc. (a registered broker-dealer). | None. | 46 |
Officers | |||||
Salvatore Faia, JD, CPA, CFE Vigilant Compliance, LLC Age: 58 | President
Chief Compliance Officer | June 2021 to present | Since 2021, President and Chief Compliance Officer of Penn Capital Funds Trust; Since 2004, President, Vigilant Compliance, LLC (investment management services company); since 2005, Independent Trustee of EIP Investment Trust (registered investment company); President (since 2009) and Chief Compliance Officer (since 2004) of the RBB Fund, Inc. | N/A | N/A |
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PENN CAPITAL FUNDS TRUST
Trustees and Officers (UNAUDITED)
Name, Address and Age | Position(s) | Term of | Principal Occupations | Other Directorships | Number of |
Officers (continued) | |||||
James G. Shaw | Treasurer and Secretary | June 2021 to present | Treasurer and Secretary of The RBB Fund, Inc. (since 2016) and Penn Capital Funds Trust (since 2021); from 2005 to 2016, Assistant Treasurer of The RBB Fund, Inc.; from 1995 to 2016, Senior Director and Vice President of BNY Mellon Investment Servicing (US) Inc. (financial services company). | N/A | N/A |
Craig A. Urciuoli | Director of Marketing & Business Development | June 2021 to present | Director of Marketing & Business Development of The RBB Fund, Inc. (since 2019) and Penn Capital Funds Trust (since 2021); from 2000-2019, Managing Director, Third Avenue Management LLC (investment advisory firm). | N/A | N/A |
Jennifer Witt Milwaukee, WI 53202 Age: 38 | Assistant Treasurer | June 2021 to present | Since 2020, Vice President, U.S. Bank Global Fund Services (fund administrative services firm); from 2016 to 2020, Assistant Vice President, U.S. Bank Global Fund Services; from 2007 to 2016, Supervisor, Nuveen Investments (registered investment company). | N/A | N/A |
Edward Paz 615 East Michigan Street Milwaukee, WI 53202 Age: 50 | Assistant Secretary | June 2021 to present | Since 2007, Vice President and Counsel, U.S. Bancorp Fund Services, LLC (fund administrative services firm). | N/A | N/A |
Michael P. Malloy One Logan Square Ste. 2000 Philadelphia, PA 19103 Age: 62 | Assistant Secretary | June 2021 to present | Since 1993, Partner, Faegre Drinker Biddle & Reath LLP (law firm). | N/A | N/A |
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PENN CAPITAL FUNDS TRUST
TRUSTEES AND OFFICERS (UNAUDITED)
Name, Address and Age | Position(s) | Term of | Principal Occupations | Other Directorships | Number of |
Officers (continued) | |||||
Jillian L. Bosmann One Logan Square Ste. 2000 Philadelphia, PA 19103 Age: 42 | Assistant Secretary | June 2021 to present | Since 2017, Partner, Faegre Drinker Biddle & Reath LLP (law firm). | N/A | N/A |
* | Each Trustee oversees 46 portfolios of the fund complex, consisting of the series in the Trust and the RBB Fund, Inc. (39 portfolios). |
1 | Subject to the Trust’s Retirement Policy, each Trustee may continue to serve as a Trustee until the last day of the calendar year in which the applicable Trustee attains age 75 or until his or her successor is elected and qualified or his or her death, resignation or removal. The Board reserves the right to waive the requirements of the Policy with respect to an individual Trustee. The Board has approved waivers of the policy with respect to Messrs. Brodsky, Carnall, Giordano, Sablowsky and Straniere. Each officer holds office at the pleasure of the Board until the next special meeting of the Trust or until his or her successor is duly elected and qualified, or until he or she dies, resigns or is removed. |
2 | Mr. Sablowsky is considered an “interested person” of the Trust as that term is defined in the 1940 Act and is referred to as an “Interested Trustee.” Mr. Sablowsky is considered an “Interested Trustee” of the Trust by virtue of his position as an employee of Oppenheimer & Co., Inc., a registered broker-dealer that may execute portfolio transactions for the Funds or other accounts managed by the Advisor. |
Trustee Experience, Qualifications, Attributes and/or Skills
The information above includes each Trustee’s principal occupations during the past five years. Each Trustee possesses extensive additional experience, skills and attributes relevant to his qualifications to serve as a Trustee. The cumulative background of each Trustee led to the conclusion that each Trustee should serve as a Trustee of the Trust. Mr. Giordano has years of experience as a consultant to financial services organizations and also serves on the boards of other registered investment companies. Mr. Reichman brings decades of investment management experience to the Board, in addition to senior executive-level management experience. Mr. Straniere has been a practicing attorney for over 30 years and has served on the boards of an asset management company and another registered investment company. Mr. Brodsky has over 40 years of senior executive level management experience in the cable television and communications industry. Mr. Sablowsky has demonstrated leadership and management abilities as evidenced by his senior executive-level positions in the financial services industry. Mr. Carnall has decades of senior executive-level management experience in the banking and financial services industry and also serves on the boards of various corporations and a bank. Mr. Chandler has demonstrated leadership and management abilities as evidenced by his senior executive level positions in the investment technology consulting/services and investment banking/brokerage industries, and also serves on various boards. Mr. Shea has demonstrated leadership and management abilities as evidenced by his senior executive-level positions in the brokerage, clearing and investment services industry, including service on the boards of industry regulatory organizations and a university.
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PENN CAPITAL FUNDS TRUST
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 | |
For everyday business purposes - | Yes | No | |
For marketing purposes - | No | No | |
For joint marketing with other financial companies | No | No | |
For affiliates’ everyday business purposes - | Yes | No | |
For affiliates’ everyday business purposes - | No | No | |
For nonaffiliates to market to you | No | No |
Questions? | Call 215-302-1500 or go to www.penncapital.com |
69
PENN CAPITAL FUNDS TRUST
PRIVACY POLICY
What we do | |
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. |
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Investment Advisor
Penn Capital Management Company, LLC
Navy Yard Corporate Center
1200 Intrepid Avenue, Suite 400
Philadelphia, Pennsylvania 19112
Legal Counsel
Faegre Drinker Biddle & Reath LLP
One Logan Square, Suite 2000
Philadelphia, PA 19103
Independent Registered Public Accounting Firm
Tait, Weller & Baker LLP
50 South 16th Street, Suite 2900
Philadelphia, PA 19102
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 CAREFULLY CONSIDER THE FUNDS’ INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES. THIS AND OTHER RELEVANT INFORMATION CAN BE FOUND IN THE PROSPECTUS AND 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.
(b) Not applicable.
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer. The registrant has not made any substantive amendments to its code of ethics during the period covered by this report. The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report. A copy of the registrant’s Code of Ethics is filed herewith.
Item 3. Audit Committee Financial Expert.
The registrant’s board of trustees has determined that the registrant has at least one audit committee financial expert serving on its audit committee. Julian A. Brodsky, Gregory P. Chandler and Nicholas A. Giordano are the registrant’s audit committee financial experts and each of them is “independent.”
Item 4. Principal Accountant Fees and Services.
(a) – (d) The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the past two fiscal years. “Audit services” refer to performing an audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. “Audit-related services” refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. “Tax services” refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. There were no “Other services” provided by the principal accountant. The following table details the aggregate fees billed or expected to be billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant.
FYE 8/31/2021 | FYE 6/30/2021 | FYE 6/30/2020 | |
Audit Fees | $40,000 | $75,000 | $120,000 |
Audit-Related Fees | None | None | None |
Tax Fees | $15,000 | $15,000 | $25,000 |
All Other Fees | None | None | None |
(e) (1) The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre-approve all audit and non-audit services of the registrant, including services provided to any entity affiliated with the registrant.
(e) (2) The percentage of fees billed by KPMG during the fiscal year ended June 30, 2020 and the period ended June 24, 2021, and Tait Weller Baker LLP during the period from June 24, 2021 through the fiscal year ended June 30, 2021 and the fiscal period ended August 31, 2021, applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:
FYE 8/31/2021 | FYE 6/30/2021 | FYE 6/30/2020 | |
Audit-Related Fees | 0% | 0% | 0% |
Tax Fees | 0% | 0% | 0% |
All Other Fees | 0% | 0% | 0% |
(f) All of the principal accountant’s hours spent on auditing the registrant’s financial statements were attributed to work performed by full-time permanent employees of the principal accountant.
(g) – (h) The following table indicates the non-audit fees billed or expected to be billed by the registrant’s accountant for services to the registrant and to the registrant’s investment adviser (and any other controlling entity, etc.—not sub-adviser) for the last two years. The audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser is compatible with maintaining the principal accountant's independence and has concluded that the provision of such non-audit services by the accountant has not compromised the accountant’s independence.
Non-Audit Related Fees | FYE 8/31/2021 | FYE 6/30/2021 | FYE 6/30/2020 |
Registrant | None | None | None |
Registrant’s Investment Adviser | None | None | None |
(i) Not applicable.
(j) Not applicable.
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 the shareholders may recommend nominees to the registrant’s board of trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
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 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)(3) Not applicable to open-end investment companies.
(a)(4) There was no change in the registrant’s independent public accountant for the period covered by this report.
(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/ Salvatore Faia | |
Salvatore Faia, President | ||
Date | 11/3/2021 |
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/ Salvatore Faia | |
Salvatore Faia, President | ||
Date | 11/3/2021 | |
By (Signature and Title) | /s/ James G. Shaw | |
James G. Shaw, Treasurer | ||
Date | 11/3/2021 |