Income Plus is a tactical ‘total return’ strategy with the goal of providing stable and absolute returns, under all market conditions.

DETAILS as of 12/31/22

Morningstar Ticker F00000MKC3

Model Type Tactical Allocation

Inception Date 01/01/2009

Account Minimum None

Model Fee 0 bps*

Investment Vehicles Mutual Funds

Typical Number of Holdings 4

Documents Fact Sheet

Holdings

as of 12/31/22

%

CRDBX

%

CRTBX

%

CRMVX

%

CRTOX

Details

Morningstar Ticker

Model Type

Inception Date

Account Minimum

Model Fee

Investment Vehicles

Typical Number of Holdings

Documents

as of 12/31/22

F00000MKC3

Tactical Allocation

01/01/2009

None

0 bps*

Mutual Funds

4

Fact Sheet

Holdings

%

CRDBX

%

CRTBX

as of 12/31/22

%

CRMVX

%

CRTOX

Description

The strategy employs a “Core and Explore” investment philosophy using a suite of affiliated tactical mutual funds. Income Plus will hold a Core (70%-80%) position that will focus on absolute return and low daily volatility. Then the Explore (20%-30%) portion will use momentum, to rotate among a group of tactical funds.

The underlying funds utilize a combination of dynamic asset allocation and mechanical system trading. Additionally, they employ risk management techniques including the use of inverse and cash positions during adverse market conditions; cash positions could at times be 100%.

Connect with our Education Team about Potomac’s Income Plus Strategy.

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BONDS ARE OFTEN ASSOCIATED WITH LOW RISK, BUT THEY CAN EXPERIENCE QUITE A BIT OF VOLATILITY

There may be no other time in history that bonds pose a greater risk as they do now, with interest rates hovering around all-time lows. Although rates can stay low for a long time, the eventual path for long term rates will be rising. Every investor who owns bonds or bond funds in their portfolios should have a plan to address the risks of rising interest rates.

Conquer interest rate risk.

Potomac’s Income Plus Strategy

Although the Core fund used in Income Plus will primarily utilize fixed income positions, it can also use unique liquid alternative holdings such as long/short, managed futures, merger arbitrage, and market neutral.

In addition, the combination of technical analysis and the dynamic asset allocation gives Income Plus the unique advantage to counter a rising interest rate environment. Rather than create a static portfolio of bonds, the funds inside Income Plus can rotate through a wide variety of low volatility positions. This ability to rotate, even to cash, gives Potomac the ultimate flexibility in a rising rate environment.

The Danger of Chasing Yield

One of the largest High Yield bond funds in the market is the Blackrock High Yield fund. The current yield for this popular fund is 5.51%**. You could always increase the yield in your portfolio by purchasing this fund for the long-term.

However, you must keep in mind the effect capital depreciation has on your portfolio and your willingness to sit and take large drawdowns. In 2008, this fund declined -34.53%, a decline which most conservative investors in need of income cannot tolerate.

*Potomac is entitled to receive from each Conquer Risk Fund an annual advisory fee of up to 1.25% based on each Funds’ average daily net assets but may receive less due to waivers. For additional information about the Conquer Risk Funds, please see the funds’ Prospectus and Statement of Additional Information here.

**BHYIX 06/30/21

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