TFS CAPITAL INVESTMENT TRUST
April 8, 2009
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: TFS Capital Investment Trust (the "Trust")
File Nos. 333-113652; 811-21531
Ladies and Gentlemen:
Mr. Kevin Rupert of the Commission's staff recently contacted us by
telephone to provide comments on the Trust's Form N-CSR for the fiscal period
ended October 31, 2008. The following are the comments provided and the Trust's
response to each:
1. COMMENT: The TFS Market Neutral Fund had approximately 50% of its
assets invested in other investment companies as of October 31,
2008. In light of the large percentage of assets invested in other
investment companies, confirm that the disclosure in the Trust's
prospectus, dated February 28, 2009, listing "Acquired Fund Fees and
Expenses" at 0.21%, is computed correctly. Also confirm that the
0.21% is based on the four month period covered by the October 31,
2008 Annual Report.
RESPONSE: Acquired Fund Fees and Expenses of 0.21% is based on the
TFS Market Neutral Fund's investments in other investment companies
during the period covered by the October 31, 2008 Annual Report
(i.e., July 1, 2008 through October 31, 2008). We have confirmed
that Acquired Fund Fees and Expenses has been computed correctly and
has been annualized.
2. COMMENT: The Statement of Additional Information ("SAI") dated
February 28, 2009, regarding the TFS Market Neutral Fund's
investments in other investment companies, states as follows - "The
TFS Market Neutral Fund does not presently intend to invest more
than 25% of the value of its total assets in other investment
companies...." Is such disclosure accurate given that the TFS Market
Neutral Fund had approximately 50% of its assets invested in other
investment companies as of October 31, 2008?
RESPONSE: It should be noted that of the 51.2% of the TFS Market
Neutral Fund's net assets invested in other investment companies as
of October 31, 2008, 35.2% of net assets was invested in money
market mutual funds and only 16% of net assets was invested in
closed-end investment companies. As of that date, the TFS Market
Neutral Fund was maintaining a large cash position due to market
conditions and the expectation that shareholder redemptions might
increase during this period of extreme market volatility. In
essence, the Market Neutral Fund was operating in a "temporary
defensive position". It is our position that the referenced
disclosure in the SAI is accurate because it is intended to discuss
the TFS Market Neutral Fund's general investment policy under normal
investment conditions with regards to investments in other
investment companies. However, to address your concerns we will make
the following change to the disclosure in the SAI:
The TFS Market Neutral Fund does not presently intend to invest more
than 25% of the value of its total assets in other investment
companies and the TFS Small Cap Fund does not presently intend to
invest more than 10% of the value of its total assets in other
investment companies. ALTHOUGH THE PERCENTAGE LIMITATIONS DISCUSSED
ABOVE GENERALLY APPLY, DURING PERIODS WHEN A FUND IS TAKING A
"TEMPORARY DEFENSIVE POSITION", THE FUND MAY INVEST UP TO ITS
APPLICABLE LIMIT IN NON-MONEY MARKET FUNDS AND ALSO INVEST WITHOUT
LIMITATION IN MONEY MARKET FUNDS.
3. COMMENT: Confirm that the TFS Market Neutral Fund has sufficient
assets segregated to cover the market value of its short positions.
RESPONSE: The TFS Market Neutral Fund has adopted procedures to
monitor for and ensure compliance with the relevant asset coverage
requirements. TFS Capital, LLC, the adviser for the TFS Market
Neutral Fund, monitors the short portfolio on a daily basis and
verifies that sufficient assets are present at the Fund's custodian
(i.e., that unencumbered and qualified assets are equal to at least
100% of the current value of the securities sold short). In
calculating the amount of assets required for coverage purposes, the
investment adviser may take into account the cash collateral
maintained at the broker (excluding the cash proceeds from the short
sales).
4. COMMENT: Confirm that the Funds did not hold any Level 3 securities,
as defined FASB 157, at any time during the four month period
covered by the Annual Report.
RESPONSE: Neither Fund held any Level 3 securities during the
period. The Trust recognizes that, if a Level 3 security is held at
any time during a reporting period, the Fund or Funds will be
required to provide a rollforward, showing the beginning balance,
activity (i.e., purchases and sales), and ending balance.
We acknowledge that:
o The Trust is responsible for the adequacy and accuracy of the disclosure
in Trust filings;
o Staff comments or changes to disclosure in response to staff comments in
the filings reviewed by the staff do not foreclose the Commission from
taking any action with respect to such filings; and
o The Trust may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
Thank you for your comments. Please contact the undersigned at
513/587-3406 if you have any questions.
Very truly yours,
/s/ Wade Bridge
Wade Bridge
Assistant Secretary