https://www.sec.gov/Archives/edgar/data/1766436/000138713123003557/lft_497-031723.htm
497 1 lft_497-031723.htm SUPPLEMENT
Leader High Quality Floating Rate Fund
Institutional Shares: LCTIX
Investor Shares: LCTRX
Supplement dated March 17, 2023
to the Prospectus and Statement of Additional Information (“SAI”) dated September 30, 2022,
each as may be amended from time to time
The Board of Trustees of Leader Funds Trust approved various changes to the Leader High Quality Floating Rate Fund (the “Fund”). These changes include changing the Fund’s name and adding Class A shares. Because the Fund’s name change impacts its 80% investment policy, the Fund is providing shareholders with at least 60 days’ notice of the name change and revised 80% investment policy.
Name Change
Effective May 16, 2023, the Leader High Quality Floating Rate Fund is renamed the “Leader Capital High Quality Income Fund.”
Revised 80% Investment Policy
As stated in the Fund’s prospectus, the Fund may change its 80% investment policy without shareholder approval upon 60 days’ written notice. This supplement notifies shareholders that, effective May 16, 2023, the Fund’s Principal Investment Strategies on page 2 of the summary prospectus, including its 80% investment policy, are revised as follows.
Principal Investment Strategies: Under normal circumstances, the Fund invests at least 80% of its net assets, plus any amount of borrowings for investment purposes, in high-quality debt securities. For the purposes of the Fund’s 80% investment policy, the Fund defines high-quality as being rated at the time of purchase as no lower than the A category by Standard & Poor’s Ratings Group, Moody’s Investors Service, or Fitch Ratings, Inc. The debt securities in which the Fund invests include the following U.S. dollar-denominated domestic and foreign securities:
· bonds and corporate debt;
· agency and non-agency commercial mortgage-backed securities (“CMBS”) and residential mortgage-backed securities (“RMBS”);
· collateralized loan obligations (“CLOs”) that are backed by domestic and foreign debt obligations;
· collateralized debt obligations (“CDOs”) that are backed by domestic and foreign debt obligations; and
· U.S government securities.
The Fund normally invests in debt securities with an interest rate that resets quarterly based London Inter-Bank Offered Rate (“LIBOR”) or indexes designed to replace LIBOR such as the Secured Overnight Financing Rate (“SOFR”), Effective Federal Funds Rate (“EFFR”), or Overnight Bank Fund Rate (“OBFR”). The Fund allocates assets across debt security types without restriction, subject to its 80% investment policy.
While the Fund invests without restriction as to the maturity of any single debt security, the Fund’s portfolio average effective duration (a measure of a security’s sensitivity to changes in prevailing interest rates) will be up to 15. The Fund’s average effective duration will change depending on market conditions. The Fund uses effective duration to measure interest rate risk.

On rather short notice, Cohanzick invited people to listen to David Sherman talk about the significance of “recent developments.” Reportedly, 90 people called in. No slides, just David at his desk talking through two topics and fielding questions.
Highlights:
1. none of his funds have exposure to banks or thrifts. Early in his career, at Leucadia, he was taught that this additional financial sector focus offered “incremental gains that were not worth the risk.”
2. in a “moral hazard” sort of way, institituions worldwide have “adopted an umbrella policy: avoid any failure at all cost.”
3. Sherman’s policy preference would be a 1-2 bps / year charge for insurance on accounts over $250k with an opt-out provision and some sort of preferential payments scheme (akin, I think, to what happens in a bankruptcy liquidation) to avoid runs on the bank. (James Mackintosh, in Friday's WSJ, speculates on investment regulations to pursue the same end; he suggests requiring banks to invest only in short-term Treasuries as backing for regular deposits, with greater flexibility for special high-yield accounts.)
4. He believes interest rates will remain higher for longer than commonly expected, unless the fed has to accommodate a systemic risk. A fed “pivot” now would be “ a bad sign regarding speculation and future inflation.”
5. the commercial real estate market, which is reliant on floating rate securities, is a major and generally unrecognized risk. High quality lenders like BlackRock “are handing the keys back to the bank.” Eventually the government will need to pursue a solution like the Resolution Trust (1989-1995) to work to resolve the savings & loan crisis.
6. Q: is the banking system close to melt-down? A: No. With the exception of a few incidents involving insolvent micro banks, there are no “FDIC-regulated banks where uninsured depositors didn’t get their money back.”
7. Q: are you positive on high yield this yield? A: we don’t speculate but “In general, active HY will outperform stocks over the next couple years based on valuations.”
8. Q: has the risk-return equation become more compelling? Are you playing offense or defense now? A: “I love this question. Compliance hates it. We love markets like this, even if they’re frustrating, difficult or stressful because they create volatility and volatility creates opportunity. Things were more shaky a year ago ... we’ve become more offensive over the past several months Dry powder not diminished but new money is getting invested at substantially higher returns. Dry powder (at year’s end his funds were 30% and 70% “dry powder”) reflects view that we’ll have more opportunities and we will not be forced to take duration risk. We’re avoiding highly stressed or distressed issuers whose business model is questionable relative to other opportunities. We think there will be more of opportunities; commercial RE will raise its ugly head to create them.”
9. Q: where do you get such great ideas? A: swiped one from a student in my Global Value Investing class at NYU. (Roughly.)
 
10. Q: Has the opportunity set changed since 1/1/2023? A: "We focus on business model, the group tried to be disciplined in our credit work in all periods though everyone occasionally gets out of their lane. We’re focusing on staying at the highest level of the capital structure. Social media makes everything worse. Investors do less work, act more in reaction to events, and since it’s easier to move money, it’s also easier to over-react. Across portfolios, we have the highest level of leveraged loan ownership in years. LLs significantly higher return than the bonds, assuming no rate collapse.”
David either reads the board or has a news alert set for his name, so I’m confident that if I’ve materially misrepresented his words, he’ll help guide us back to the light.
For what that’s worth, David

SVB Bank was taken over by the Feds/FDIC. The government-run SVB Bank is now among the safest and with the best/unlimited deposit protections.
Let's watch our redundant letters here (Silicon Valley Bank and SVB Bank). :-)
Silicon Valley Bank (SVB) was taken over by the FDIC. In turn, the FDIC created Silicon Valley Bridge Bank (SVB Bank, or SVBB) to hold all the assets (including all the deposits) of SV Bank. As far as depositors are concerned, there is no longer any SV Bank.
https://www.jdsupra.com/legalnews/silicon-valley-bridge-bank-and-5653787/

Technically that is true. An FDIC-insured bank is ineligible to file for bankruptcy under the bankruptcy code. "Instead, regulators seize insolvent or unsound banks or thrifts and give the Federal Deposit Insurance Corporation (FDIC) the authority to resolve them ... almost always ... through a receivership." However, a bank's parent holding company can file for bankruptcy, as SVB Financial has done.

See 11 U.S.C. §§ 109(b), (d) (2006) (stating that banks are ineligible for bankruptcy, so that neither the bank nor the bank's creditors can place the bank in bankruptcy). [However,] bank holding companies can file for bankruptcy in the United States, and many of the largest bankruptcies on record have been bank holding companies. See ... Washington Mutual.

Why Banks Are Not Allowed in Bankruptcy (footnote 2)
11 U.S. Code § 109
SVB Financial bankruptcy filing

The fallout from the SVB (Silicon Valley Bank) collapse has finally put fear into the hearts of investors, and especially options traders, pushing up the VIX from the low 20s to a close of 26.14 on March 15, 2023. That took the VIX Index up above the prices of all of its futures contracts, which creates a unique oversold sentiment situation that is the subject of this week’s chart.

Might be worth a read:
weekly_chart/vix_index_above_all_of_its_futures

https://www.sec.gov/Archives/edgar/data/277751/000119312523073504/d406143d497.htm
Janus Investment Fund
Janus Henderson Small Cap Value Fund
Supplement dated March 17, 2023
to Currently Effective Prospectuses
and Statement of Additional Information
On March 16, 2023, the Board of Trustees of Janus Investment Fund approved reopening Janus Henderson Small Cap Value Fund (the “Fund”) to new investors, effective on or about April 17, 2023. Class L Shares of the Fund remain closed to new investors.
As a result, effective on or about April 17, 2023, all references to the Fund being closed to certain new investors are removed from the Prospectuses and Statement of Additional Information for Class A Shares, Class C Shares, Class D Shares, Class I Shares, Class N Shares, Class R Shares, Class S Shares, and Class T Shares.

Unless there are serious issues in the biggest banks ( ie top 100) I don't think this will rival 2008
In retrospect it seems that any idiot could have predicted what would happen when you sold mortgages to people with no income. Few of us, I assume, knew that was going on until the headlines. But people who should have known better still went ahead and loaded up on this junk. This was a solvency crisis as the investments were worthless.
This seems to be much more a liquidity crises, which the Fed can fix. However, it remains to be seen what that will do to inflation, given they have undone 50% of their QT so far. Does a recession become more likely?

https://www.cnbc.com/2023/03/17/big-changes-in-the-sp-500-friday-highlight-power-of-index-providers.html

Ever wonder why Walmart is classified as a consumer staples stock in the S&P 500, but similar retailers such as Target, Dollar General and Dollar Tree are classified as consumer discretionary stocks? A lot of other people have wondered as well.
Friday, that will change.

And . . .

Ever wonder why Visa, Mastercard and Paypal, which seem like they’re financials, are actually listed as Technology stocks instead?
Other people have wondered that as well.

What does it all mean?

Here’s something else it reflects: the people who decide what goes in these indexes have become very influential. They are not fund managers, they are index providers, but don’t let that fool you: in a world where people buy funds that are tied to indexes, the people who determine what go into those indexes have become very powerful indeed.

Probably not going to give The Big Short a run for its money.

Appreciate the input, all. I am indeed riding it out. Somehow, I wasn't so affected by the Crash of '08-'09. Back then, I was stashing money in my 403b, into EM bonds. They did well in the aftermath. No more EM, now. @LewisBraham: 68, retired, wife works full-time. I'm just laying back in the tall cotton. 5 cash, 58 stocks, 33 bonds. Adding every month to PRTXX: Treasuries and repurchase agreements. A MM fund with TRP. (Sweep account.) Instant access, 4.31% yield, currently. Better than always running over to the Windward side, where our Credit Unions are. I do that often enough, already.
Surely, Jamie Dimon and the others that went to the aid of First Republic will want something in return. I believe we will see consolidations. CS is still in the toilet. No confidence in that bank's survival. Unless it becomes a zombie-front for the Swiss National Bank, which promised to prop it up.
And the Fed's discount window has already dispensed a record amount in a very short time. Are banks just looking for cheap loans at 3%???
Happy St. Patrick's Day. I'll join the local alumni chapter watching a double-header: Gonzaga men and women, both on tv. GU women vs. Ole Miss. Men vs. Grand Canyon Univ. No corned beef. Tacos, instead. Futures up, slightly.

Honestly, a roller coaster ride like I can't remember, ever before.
I only began investing in 2003. So maybe a bunch of you are more well versed in it all.

I recall that the Global Financial Crisis of 2007/2008 was much worse.
It felt (to me anyway) that the entire financial system might collapse.
Many financial institutions became bankrupt (notably Lehman Brothers and Washington Mutual).
GM and Chrysler also faced bankruptcy and were bailed out after cash
was diverted from the Troubled Asset Relief Program (TARP).
The S&P 500 had a weekly decline greater than 20% in October 2008.
I hope to never experience another financial crisis of this magnitude again in my lifetime.
Once is enough!

@Crash - Thought I’d mention that what rocked markets today was the announcement that J.P. Morgan had put together a “rescue package” (loan) for First Republic funded by a number of banks. I was surprised they didn’t wait and release the information until after market. But the news broke about an hour before close and helped propel stocks higher into the end.
From CNBC: “Stocks rose Thursday as Wall Street grew increasingly optimistic after a group of banks said it would aid First Republic Bank amid the industry's crisis.” CNBC Link

@Crash I'm not sure what more you could expect from Seafarer. The fund's beaten 91% of its emerging market fund peers in the past five years and 88% in the past ten with less volatility and downside risk. That's a strong record. It sounds like you have more of a problem with emerging market funds as a fund category than you have with Seafarer specifically. You can't expect Seafarer to behave like the S&P 500 or Treasury bonds if it isn't designed to do that.

Toyota is sticking with hybrids first, the EVs second. Some say it's foolish, others say that it works for Toyota.
Europeans are making good progress in the EVs; China too and it may be ahead in batteries. In the US, Tesla dominates.

If the "Fit for 55" CO2 emission targets are formally adopted, new cars sold in the EU
will need to reduce CO2 emissions by 55% (compared to 2021 levels) by 2030.
The 2035 "Fit for 55" CO2 emission reduction target for new cars and vans is 100% (zero-emission).
European auto manufacturers have a lot at stake...
Link

Well, since we don't know Crash's age and financial situation today as compared to the 2008 crash, we don't know if he can handle it. That was--hard to believe--15 years ago. It's a mistake to assume everyone should keep a stiff upper lip, keep calm and carry on during a difficult period. Circumstances and risk tolerances differ.
This is why, I should add, financial planners exist. A good one can assess your financial situation and risk tolerance and tell you, look your goals are X and you have this much cushion for losses, so you can afford to wait out this volatile market. Or, they can say, you're way overexposed to stocks, given your age and situation. You should dial back your exposure. I presume most people here are self-directed, though.

2008 09 credit housing crash, 2012 near double dip, 2015 -16 downturn/flat returns, 2000 crashes (decade 000 returns), 2020 Covid crashes also bad....
Just hold on to the ride
Drink lots wine/ weekend relaxation
Keep buying when ItS strikingly low.
You will be very happy 10 yrs from now if no WW3 and global warming won't kill us

Grandeur Peak's negligent behavior has been discussed many times before in this forum. Just repeatedly issuing mea culpa via fund manager commentary is not good enough. There is no change in Grandeur Peak's behavior. Fool me once shame on you and all that.
I have not looked at First Republic's asset mix but Silicon Valley Bank? Silicon Valley Bank has the highest percentage of long term securities in its assets of all the banks in the country. Every individual investor (incl those in this forum) has been worried about Duration risk for the past 10 years but not Silicon Valley Bank. Hopefully, we get to see someday the Duration risk (or the lack of) in the non-equity portion of its CEO's personal portfolio. Interestingly, even Signature bank ranked 45 places higher than Silicon Valley Bank for Duration risk ( Signature Bank allegedly was playing games with the info it was providing NY regulators, leading to its demise). But back to Grandeur Peak. There is no alleged material fraud in Silicon Valley Bank for a forensic accountant to unearth - its demise is from sheer incompetence (or moral hazard at worst) in plain sight. Incompetent (negligent) fund manager picking incompetent portfolio company management, that is all we have here.
Grandeur Peak US Stalwarts fund has 4.6% in First Republic and 2.3% in Silicon Valley Bank- as of Oct 31, per their website.
I am sorry for coming out strong on this fund company - I will go to temple and seek forgiveness. Every time we make excuses for active fund managers' repeated failings we are failing innocent investors who visit this forum. I will go back to holding my silence and not posting here.

@sma3, I learned a lot about the so-called state insurance then!
First, our money was tied up for 5-6 years, not months. Rates offered were below high m-mkt rates at the time. So, only opportunity lost, not nominal money.
I called our state insurance department and said that I wanted my money back. They said, not so fast. States' insurance departments were coordinating the rescue and I will just have to be patient. BUT, if I wanted my money right away, I could take the 40% haircut offer on the table. Well, I "decided" to be patient.
By now I have personal experiences with 1 bank failure and 2 insurance failures. Only the FDIC is prompt in setting quick up to the limit. No experience with the SIPC, but from the news, I think that they also take their time while brokerage positions held may be frozen.

@LewisBraham
When I read your comment, even before your link, I immediately thought of Olstein and his funds. I stumbled across him in 2004 and thought his approach made a lot of sense. Unfortunately I sold it several years later as since then it has generally outperformed the SP500 and value indices, although with larger draw downs.
Most people don't think about this type of analysis until after they needed it. But I can see why it is a hard pitch to make as he doesn't fit into a nice little box.

“I believe social media has magnified the bank panic.”
Both social and mainstream media have had a field day. “It sells in Peoria” (increases ratings).
There are no lines in front of banks. But there’s a lot of itchy fingers on keyboards moving money around. That modern day ability changes the instantaneity & speed of old fashioned “bank runs.”
I’d been using GNMA as a cash substitute. Sold all today. The 10 year was over 4% about 1 week ago. Dropped below 3.5% (around 3.4% at one point) this morning. Hard to say what’s coming down the pipe - but a guess is they’ll find a way to patch up the shaky banking system both here and in Europe - adding liquidity in one way or another - and that inflation will be well above 2% a year from now. Bonds might do well in that environment, but I wouldn’t bank on it. There’s probably good money to be made on some of the regional banks - but not for me.
To be clear - I still own a high-yield muni and a global bond fund.