Modern Capital
Mutual Funds

Income Never Goes Out of Style

The Modern Capital Tactical Opportunities Fund

MCTOX (A) MCTDX (ADV)

INVESTMENT RATIONALE

Seek to provide quarterly cash distributions to shareholders without abandoning capital appreciation.

Provide exposure to both equity and fixed income asset classes.

Utilize Cash as a tactical asset class without limitations.

Invests opportunistically to capitalize on potential inefficiencies in the Closed End Fund (CEF) market.

Can respond quickly to changes in market dynamics with active management.

Invests in professionally managed CEFs in addition to ETFs, ADRs, Debt & Equity instruments.

Manages asset allocation tactically to ensure fund health and attempt to maximize cash distributions for shareholders.

Can potentially generate additional alpha through changes in CEF pricing to NAV.

INVESTMENT PROCESS

Modern Capital's core values are reflected in its investment process.

SOURCING AND EVALUATION

A broad scope of market factors are considered, and may vary from time to time, depending upon the portfolio's current composition. The team seeks to:

Establish a general market outlook.
Evaluate and constantly monitor all closed-end fund market segments.
Assess the capital markets, geo-political and macroeconomic environment.
Identify closed-end fund classifications that display significant pricing inefficiencies.

RESEARCH & ANALYSIS

Once a thesis is established, the in-house research team evaluates targeted ideas, based on the critical characteristics, including:

Liquidity
Underlying securities
Historical performance
Fund management
Gap between share price and NAV
Source of discount
Leverage percentage
Expenses/fees
Tax considerations
Dividends & Dividend date
Comparables with ETFs and open-end funds

TRADING & EXECUTION

The team trades across all sectors and market capitalizations

Portfolio typically contains 40 to 80 total long positions in CEFs, ETFs, ADRs and Equity & debt instruments.
Average time horizon is less than one year.
Actively managed averaging over 300 trades per month.
Utilize cash as a tactical allocation.
CIO controls final decisions regarding significant position changes and/or portfolio rebalancing.
Tactical trading ensures optimal positioning, attractive entry and exit points and takes advantage of market volatility.

PORTFOLIO MONITORING

The portfolio team convenes for a formal discussion to:

Challenge research assumptions.
Assess the thesis through the filter of the firm's daily and longer-view trading strategies.
Optimize return profile by daily trading against core positions.
Determine if holdings maintain risk efficiency.