- Overview
- Performance
- Characteristics
- Risks
- Portfolio Managers
- Literature
Objective
The Driehaus Select Credit Fund (the “Fund”) seeks to provide positive returns under a variety of market conditions. The Fund invests primarily in U.S. fixed income and floating rate securities. The Fund has no limit with respect to its portfolio maturity or duration. Duration is a measure of a debt security’s price sensitivity. Duration takes into account a debt security’s cash flows over time, including the possibility that a debt security might be prepaid by the issuer or redeemed by the holder prior to its stated maturity date. In contrast, maturity measures only the time until final payment is due. The Fund may invest in a relatively low number of issuers, making it a nondiversified fund.
Fund Facts
| Inception Date: | 9/30/2010 |
|---|---|
| Ticker: | DRSLX |
| Cusip: | 262028848 |
| Assets Under Management as of 4/30/2012: | $262 Million |
| Open to New Investors: | Yes |
| Minimum Initial Investment: | $25,000 |
| Minimum Subsequent Investment: | $5,000 |
| Minimum IRA Investment: | $2,000 |
| Minimum Subsequent IRA Investment: | $500 |
| Distributions: | Dividends are distributed quarterly Capital Gains are distributed annually |
| Investment Vehicles: | Mutual Fund |
Growth of $10,000 Since Inception (9/30/2010)
as of 3/31/2012:
Sources: Driehaus Capital Management LLC, Merrill Lynch, Citigroup
Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contains this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (877) 779-0079. Please read the prospectus and summary prospectus carefully before investing.
Performance Disclosure
The performance data shown above represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Principal value and investment returns will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost.
Performance data represents the rate that an investor would have earned (or lost), during the given month, on an investment in the Fund (assuming reinvestment of all dividends and distributions). Average annual total return reflects annualized change.
Since Fund performance is subject to change after the month-end, please call (877) 779-0079 or view our daily NAVs for more current performance information.
1The Citigroup 3-Month T-Bill Index is designed to mirror the performance of the 3-Month U.S. Treasury Bill. The Citigroup 3-Month T-Bill Index is unmanaged and its returns reflect reinvestment of all distributions and changes in market prices.
2The Merrill Lynch High-Yield Bond Master II Index is an unmanaged index that tracks the performance of below-investment-grade, U.S.-dollar-denominated corporate bonds publicly issued in the U.S. domestic market.
Driehaus Securities LLC, Distributor
Performance Disclosure
The performance data shown below represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Principal value and investment returns will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost.
Performance data represents the rate that an investor would have earned (or lost), during the given month, on an investment in the Fund (assuming reinvestment of all dividends and distributions). Average annual total return reflects annualized change.
Since Fund performance is subject to change after the month-end, please call (877) 779-0079 or view our daily NAVs for more current performance information.
Month-End Performance as of 4/30/2012
| Fund/Index | April | YTD | 1 Year | 3 Year† | 5 Year† | 10 Year† | Since Inception†* | 30-Day SEC Yield** (as of 4/30/2012) |
|---|---|---|---|---|---|---|---|---|
| Driehaus Select Credit Fund | -0.20% | 6.88% | 0.68% | n/a | n/a | n/a | 4.76% | 7.01% |
| Citigroup 3-Month T-Bill Index1 | 0.01% | 0.01% | 0.04% | n/a | n/a | n/a | 0.08% | n/a |
| BofA Merrill Lynch US High Yield Index2 | 1.02% | 6.22% | 5.12% | n/a | n/a | n/a | 8.81% | n/a |
Calendar Quarter-End Performance as of 3/31/2012
| Fund/Index | 1st QTR | YTD | 1 Year | 3 Year† | 5 Year† | 10 Year† | Since Inception†* | 30-Day SEC Yield** (as of 3/31/2012) |
|---|---|---|---|---|---|---|---|---|
| Driehaus Select Credit Fund | 7.10% | 7.10% | 1.74% | n/a | n/a | n/a | 5.16% | 7.17% |
| Citigroup 3-Month T-Bill Index1 | 0.01% | 0.01% | 0.05% | n/a | n/a | n/a | 0.08% | n/a |
| BofA Merrill Lynch US High Yield Index2 | 5.15% | 5.15% | 5.64% | n/a | n/a | n/a | 8.58% | n/a |
Annual Fund Operating Expenses3
| Management Fee | 0.80% |
| Other Expenses: |
|
| Other Expenses Excluding Dividends and Interest on Short Sales | 0.63% |
| Dividends and Interest on Short Sales | 0.44% |
| Total Annual Fund Operating Expenses | 1.87% |
Sources: Driehaus Capital Management LLC, SS&C Inc.
Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contains this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (877) 779-0079. Please read the prospectus and summary prospectus carefully before investing.
†Average Annual Total Return
*Inception Date: 9/30/2010
**SEC yield is an annualization of the Fund's total net investment income per share for the 30-day period ended on the last day of the month.
1The Citigroup 3-Month T-Bill Index is designed to mirror the performance of the 3-Month U.S. Treasury Bill. The Citigroup 3-Month T-Bill Index is unmanaged and its returns reflect reinvestment of all distributions and changes in market prices.
2BofA Merrill Lynch US High Yield Index is an unmanaged index that tracks the performance of below-investment-grade, U.S.-dollar-denominated corporate bonds publicly issued in the U.S. domestic market.
3 Represents the Annual Fund Operating Expenses for the year ended December 31, 2011, as disclosed in the current prospectus dated April 29, 2012. It is important to understand that a decline in the Fund’s average net assets due to unprecedented market volatility or other factors could cause the Fund’s expense ratio for the current fiscal year to be higher than the expense information presented. Driehaus Capital Management LLC (the “Adviser”) has entered into a contractual agreement to cap the Fund's annual operating expenses, excluding dividends and interest on short sales, at 1.75% of average daily net assets until the earlier of the termination of the investment advisory agreement or September 30, 2013. Pursuant to the agreement, and so long as the investment advisory agreement is in place, for a period of three years subsequent to the Fund's commencement of operations on September 30, 2010, the investment adviser is entitled to reimbursement for previously waived fees and reimbursed expenses to the extent that the Fund's expense ratio remains below the operating expense cap.
Driehaus Securities LLC, Distributor
Trading Strategy Type
| as of 3/31/2012 | updated quarterly | ||
|---|---|---|
| Gross Market Value | % of Gross Market Value | |
| Capital Structure Arbitrage1 | 41,236,162 | 13.60% |
| Cash Equivalent | 18,050,753 | 5.95% |
| Convertible Arbitrage2 | 35,471,128 | 11.70% |
| Directional Long3 | 144,767,798 | 47.74% |
| Directional Short3 | 5,500,323 | 1.81% |
| Event Driven4 | 29,063,384 | 9.58% |
| Interest Rate Hedge | 17,379,523 | 5.73% |
| Pairs Trading | 11,425,632 | 3.77% |
| Volatility Trading | 348,900 | 0.12% |
| Total | 303,243,602 | 100.00% |
Risk Summary
| as of 3/31/2012 | updated quarterly | |
|---|---|
| Effective Duration5 | 1.48Y |
| Spread Duration6 | 2.62Y |
| Stock Vega/+1%7 | 0.00% |
| Average Coupon8 | 7.04% |
| Average Yield9 | 8.79% |
| Equity Beta10 | 0.05% |
| Average % of Par-Longs11 | 97.73% |
| Average % of Par-Shorts12 | 103.65% |
Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contains this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (877) 779-0079. Please read the prospectus and summary prospectus carefully before investing.
Sources: Driehaus Capital Management LLC, Bloomberg
1 Capital Structure Arbitrage, where the Fund attempts to exploit a pricing inefficiency between two securities of the same company. Often times, the Fund may buy a debt instrument that it believes is undervalued, while simultaneously shorting a subordinated debt instrument of the same issuer that is believed to be overvalued.
2 Convertible Arbitrage, where the Fund attempts to profit from changes in a company's equity volatility or credit quality by purchasing a convertible bond and simultaneously shorting the same issuer's common stock.
3 Directional Trading, where the Fund takes long or short positions in equity or corporate debt instruments in anticipation of profiting from movements in the prices of these assets.
4 Event Driven, where the Fund invests in positions intending to profit from the consummation of a given event, e.g. a takeover, merger, reorganization or conclusion of material litigation, or based upon the perceptions of a potential pending corporate event.
5Effective Duration is a duration calculation for bonds with embedded options. Effective duration takes into account that expected cash flows will fluctuate as interest rates change.
6 Spread Duration is the sensitivity of the price of a bond to a 100 basis point change to its option-adjusted spread. As the rate of the Treasury security in the option-adjusted spread increases, the rate of the option-adjusted spread also increases.
7 Stock Vega is the change in the price of an option that results from a 1% change in volatility. Vega changes when there are large price movements in the underlying asset and Vega falls as the option gets closer to maturity. Vega can change even if there is no change in the price of the underlying asset (e.g., if there is a change in expected volatility).
8 Average Coupon is the weighted-average gross interest rates of the pool of mortgages that underlie a mortgage-backed security (MBS) at the time the securities were issued.
9 Average Yield is the average yield on an investment or a portfolio that results from adding all interest, dividends or other income generated from the investment, divided by the average of the investments for the year.
10 Equity Beta is a measure describing the relation of a portfolio's returns with that of the financial market as a whole. A portfolio with a beta of 0 means that its price is not at all correlated with the market. A positive beta means that the portfolio generally follows the market. A negative beta shows that the portfolio inversely follows the market; the portfolio generally decreases in value if the market goes up and vice versa.
11 Average % of Par-Longs is the average dollar price of a bond the Fund is long as a percentage of par.
12 Average % of Par-Shorts is the average dollar price of a bond the Fund is short as a percentage of par.
Source: Investopedia.com
Driehaus Securities LLC, Distributor
Principal Risks
Small- and Medium-Sized Company Risk
All investments, including those in mutual funds, have risks. No investment is suitable for all investors. The Fund is intended for long-term investors who can accept the risks involved in investing in foreign securities. Of course, there can be no assurance that the Fund will achieve its objective. You may lose money by investing in the Fund. Below are the main risks of investing in the Fund:
Market Risk
The Fund is subject to market risk, which is the possibility that stock prices overall will decline over short or even long periods. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. These fluctuations are expected to have a substantial influence on the value of the Fund's shares.
Credit Risk
Failure of an issuer or borrower (under a Senior Loan) to make timely interest or principal payments, or a decline or perception of a decline in the credit quality of a bond or creditworthiness of a borrower can cause a bond's or Senior Loan's price to fall, potentially lowering the Fund's share price. The Fund, in addition to investing in investment grade securities, may also invest in non-investment grade securities, which involve greater credit risk, including the risk of default. The prices of non-investment grade securities, including Senior Loans, are more sensitive to changing economic conditions and can fall dramatically in response to negative news about the issuer/borrower or its industry, or the economy in general.
Derivatives Risk
A small investment in derivatives could have a potentially large impact on the Fund's performance. The use of derivatives involves risks different from, and possibly greater than, the risks associated with investing directly in the underlying assets. Derivatives can be highly volatile, illiquid and difficult to value, and there is a risk that changes in the value of a derivative held by the Fund will not correlate with the Fund's other investments. Further, the Fund may invest in derivatives for speculative purposes. Gains or losses from speculative positions in a derivative may be much greater than the derivative's original cost and potential losses may be substantial.
High Yield Risk
Low-rated and comparable unrated securities ("junk bonds"), while generally offering higher yields than investment grade securities with similar maturities, involve greater risks, including the possibility of default or bankruptcy. They are regarded as speculative with respect to the issuer's capacity to pay interest and to repay principal. The market values of certain of these securities tend to be more sensitive to individual corporate development and changes in economic conditions than higher quality bonds. In addition, junk bonds tend to be less marketable than higher-quality debt securities because the market for them is not as broad or active. The lack of a liquid secondary market may have an adverse effect on market price and the Fund's ability to sell particular securities.
Small- and Medium-Sized Company Risk
The Fund invests in companies that are smaller, less established, with less liquid markets for their securities, and therefore may be riskier investments. While small- and medium-sized companies generally have the potential for rapid growth, the securities of these companies often involve greater risks than investments in larger, more established companies because small- and medium-sized companies may lack the management experience, financial resources, product diversification and competitive strengths of larger companies. In addition, in many instances the frequency and volume of trading in small- and medium-size companies is substantially less than is typical of larger companies. The value of securities of smaller, less well known issuers can be more volatile than that of larger issues.
Short Sale Risk
Short sales expose the Fund to the risk that it will be required to buy the security sold short (also known as "covering" the short position) at a time when the security has appreciated in value, thus resulting in a loss to the Fund. The amount the Fund could lose on a short sale is theoretically unlimited (as compared to a long position, where the maximum loss is the amount invested).
Nondiversification
Because the Fund may invest a greater percentage of assets in a particular issuer or a small number of issuers, it may be subject to greater risks and larger losses than diversified funds. The value of the Fund may vary more as a result of changes in the financial condition or the market's assessment of the issuers than a more diversified fund.
Focus Risk
The Fund may have significant weightings in a particular issuer, sector or industry, which may subject the Fund to greater risks than less focused fund.
High Rates of Turnover
The Fund may experience high rates of portfolio turnover, which may result in payment by the Fund of above-average transaction costs and could result in the payment by shareholders of taxes on above-average amounts of realized investment gains, including net short-term capital gains, which are taxed as ordinary income for federal income tax purposes.
Manager Risk
How the investment adviser manages the Fund will impact the Fund's performance. The Fund may lose money if the investment adviser's investment strategy does not achieve the Fund's objective or if the investment adviser does not implement the strategy properly.
Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contains this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (877) 779-0079. Please read the prospectus and summary prospectus carefully before investing
.Driehaus Securities LLC, Distributor
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K.C. NelsonPortfolio ManagerK.C. Nelson is the Portfolio Manager for the Driehaus Credit Strategies. As Portfolio Manager, he is responsible for the implementation of the investment philosophy, idea generation, portfolio construction and all buy/sell decisions of the Credit Strategies. Prior to joining Driehaus Capital Management LLC in 2009, Mr. Nelson was a Senior Portfolio Manager at Lotsoff Capital Management. While at Lotsoff, he managed an absolute return credit arbitrage hedge fund and a credit arbitrage mutual fund. Mr. Nelson has also held Assistant Portfolio Manager and Analyst positions at Akela Capital, Andersen Corporate Finance LLC and J.C. Bradford & Co. He received his B.A. degree in Economics from Vanderbilt University and an M.B.A. from Duke University’s Fuqua School of Business, where he was a Keller Scholar. |
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Mirsada DurakovicAssistant Portfolio ManagerMirsada Durakovic is an Assistant Portfolio Manager for the Driehaus Credit Strategies. As an Assistant Portfolio Manager, she is responsible for idea generation, portfolio construction, security selection and investment research. Prior to joining Driehaus Capital Management LLC in 2009, Mrs. Durakovic was formerly an Assistant Portfolio Manager at Lotsoff Capital Management. While at Lotsoff, Mrs. Durakovic worked with Portfolio Manager K.C. Nelson on an absolute return credit arbitrage hedge fund and a credit arbitrage mutual fund. Prior to Lotsoff, Mrs. Durakovic spent six years with JP Morgan Securities Corp., where she worked in their structured finance and corporate loan syndications group. She earned a B.A. degree in Finance from Loyola University and an M.B.A. from the University of Chicago. |
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Elizabeth CassidyAssistant Portfolio ManagerElizabeth Cassidy is an Assistant Portfolio Manager for the Driehaus Credit Strategies. As an Assistant Portfolio Manager, she is responsible for idea generation, portfolio construction, security selection and investment research. Prior to joining Driehaus Capital Management LLC in 2009, Ms. Cassidy was formerly a Vice President at Bank of America Merrill Lynch where she spent five years on their distressed debt proprietary trading desk. While at Merrill Lynch, Ms. Cassidy was responsible for taking both long and short positions in bonds, bank loans and derivatives of distressed issuers across a variety of industries. Prior to Merrill Lynch, Ms. Cassidy worked in the investment banking division of Credit Suisse First Boston. She earned a B.A. degree in Economics and French from Middlebury College and an M.B.A. from Duke University’s Fuqua School of Business, where she was a Keller Scholar. |
Driehaus Securities LLC, Distributor
Fund Literature
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Fund Commentary with Attribution April 30, 2012 |
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Portfolio Holdings March 31, 2012 |
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Prospectus April 29, 2012 |
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Summary Prospectus April 29, 2012 |
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Statement of Additional Information April 29, 2012 |
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Annual Shareholder Report December 31, 2011 |
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Semi-Annual Shareholder Report June 30, 2011 |
| XBRL File* April 29, 2012 |
*An XBRL Viewer is required to view this file.
Driehaus Securities LLC, Distributor