INSIGHTS
By
John Tabb,
Chief Operating Officer
Proud to mark 5 years for the Modern Capital Tactical Income Fund—now earning a 5-star Morningstar rating for the 5-year period. A milestone driven by active management and a disciplined process.
Long-term Proven Performance
Modern Capital’s Tactical Income Fund has reached its five-year track record with a 5-star Morningstar rating, underscoring the Fund’s long-term risk-adjusted performance in a market environment that has tested traditional income strategies.
For the five-year period ended April 30, 2026, the Modern Capital Tactical Income Fund ranked 3rd out of 202 funds in Morningstar’s Tactical Allocation category and received a 5-star Morningstar rating for the five-year period.
The milestone comes at a time when income investing has become more complex. Higher rate volatility, shifting credit conditions, liquidity events, and a broader range of income-producing vehicles have made traditional bond-and-dividend allocations less straightforward for advisors and investors.
Modern Capital launched the Tactical Income Fund to address that complexity through an actively managed, multi-asset income strategy with a particular focus on closed-end funds, or CEFs. The strategy seeks to generate monthly income while identifying relative value opportunities across a universe of more than 500 income-oriented vehicles.
A Five-Year Measure of Process
A five-year record is often viewed as a meaningful marker for active strategies because it captures performance through a broader range of market conditions than shorter trailing periods. For Modern Capital, the rating reflects not only returns, but the consistency of a process built around daily portfolio monitoring, tactical allocation, and risk management.
“The five-year milestone is important, but what matters more is how we got here,” said Brad Atkins, CEO of Modern Capital. “Our focus has always been on building a strategy that adapts — one that is actively seeking opportunities, managing risk, and delivering consistent income through changing markets.”
The Fund’s approach centers on active positioning across income sectors, with an emphasis on identifying dislocations between market price and net asset value. The portfolio team evaluates relative value across markets, monitors discounts and premiums, rotates exposures as conditions change, and seeks to upgrade holdings as new opportunities emerge.
Closed-End Funds as an Opportunity Set
Closed-end funds play a central role in the strategy because they can offer attractive income characteristics, monthly distributions, and the potential to purchase assets at discounts to their underlying value. But the structure also introduces risks, including leverage, discount volatility, and manager-specific considerations.
That complexity is one reason Modern Capital emphasizes active management in the category.
“Closed-end funds offer a compelling opportunity set in income investing, but only if you have the expertise and discipline to navigate them,” said Richard de Wet, Chief Investment Officer of Modern Capital. “Our approach is about systematically identifying inefficiencies and acting on them in real time.”
The Fund’s active process is designed to respond to inefficiencies that may appear and disappear quickly, particularly in periods of market stress or sector rotation. Rather than maintaining static exposure, the portfolio is continuously reviewed and repositioned as conditions warrant.
Role in Advisor Portfolios
For advisors, the Tactical Income Fund is designed to function as either a core income allocation or a satellite position alongside traditional fixed income and dividend-oriented strategies. Modern Capital says the Fund can also provide access to institutional-style active management in a specialized segment of the income market.
The strategy may be particularly relevant for advisors looking to outsource the day-to-day work of evaluating closed-end funds, monitoring discounts and premiums, assessing distribution quality, and managing tactical exposure across asset classes.
Based on Modern Capital’s internal analysis, incorporating the strategy into a traditional income portfolio has historically improved return potential while reducing drawdowns and volatility. As always, past performance does not guarantee future results.
Income Strategies in a Changing Market
Five years after launch, the Fund’s recognition comes as income markets continue to evolve. Rate expectations, credit spreads, equity volatility, and liquidity conditions remain key variables for advisors building income portfolios.
For Modern Capital, the message is that income strategies cannot remain static.
The Tactical Income Fund’s five-year rating provides an external marker of performance, but the firm frames the milestone as a reflection of its underlying process: an active, adaptive approach intended to pursue income and opportunity across changing market environments.
Disclosure:
© 2026 Morningstar, Inc. All rights reserved. The rating is not a recommendation to buy, sell, or hold the fund. Morningstar does not guarantee its accuracy or completeness and is not responsible for damages or losses arising from any use of this information. The Morningstar Rating™ for funds, commonly called the "star rating," is a measure of a fund’s risk-adjusted return, relative to similar funds. It is calculated using a Morningstar Risk-Adjusted Return measure that penalizes downward volatility and rewards consistent performance. Ratings are assigned based on a fund’s risk-adjusted performance relative to its Morningstar Category peers over the trailing three-, five-, and ten-year periods (if applicable), and are weighted accordingly.
Investors should consider the Fund’s investment objectives, risks, charges, and expenses before investing. The prospectus, containing this and other information about the Fund, should be read carefully before investing. The prospectus is available at the download icon below or by calling 800-711-9164. Current and future holdings are subject to change and risk.
Investments in the Fund are subject to investment risks, including the possible loss of some or all of the principal amount invested. There is no assurance that the Fund will be successful in meeting its investment objective. The Fund is subject to the following additional risks:
▪ Active Trading Risk: Active trading may result in added expenses, a lower return, and increased tax liability. Since the Fund’s advisor engages in high turnover trading strategies, the Fund will have high portfolio turnover rates.
▪ Closed-End Fund Risk: Closed-end funds (CEFs) are subject to investment advisory and other expenses, which will be indirectly paid by the Fund resulting in duplicative fees and expenses. CEFs are also subject to management risk because the advisor to the underlying CEF may be unsuccessful in meeting the fund’s investment objective.
▪ Equity Securities Risk: Equity securities are subject to changes in value, and their values may be more volatile than those of other asset classes. These changes in value may result from factors affecting individual issuers, industries, or the stock market.
More information about these risks can be found in the Fund's prospectus.
Vigilant Distributors, LLC., Member FINRA/SIPC. There is no affiliation between Modern Capital Management Co., including its principals, and Vigilant Distributors, LLC.
- No Bank Guarantee
- May Lose Value
- NOT FDIC-INSURED