https://www.sec.gov/Archives/edgar/data/1494928/000139834417004560/fp0025080_497.htm497 1 fp0025080_497.htm
RiverPark Funds Trust
RiverPark Short Term High Yield Fund
Institutional Class (RPHIX)
Retail Class (RPHYX)
Supplement dated April 5, 2017 to the Summary Prospectus, Prospectus and Statement of Additional Information (the “Disclosure Documents”) dated January 27, 2017.
This supplement provides new and additional information beyond that contained in the Disclosure Documents and should be read in conjunction with the Disclosure Documents.
IMPORTANT NOTICE ON PURCHASE OF FUND SHARES
Effective as of the close of business on April 5, 2017 (the “Re-Opening Date”), the RiverPark Short Term High Yield Fund (the “Fund”) will be publicly available for sale on a limited basis as set forth below.
The following groups will be permitted to purchase Fund shares after the Re-Opening Date:
1. Shareholders of record of the Fund as of the Re-Opening Date (although if a shareholder closes all accounts in the Fund, additional investment in the Fund from that shareholder may not be accepted) may continue to purchase additional shares in their existing Fund accounts either directly from the Fund or through a financial intermediary and may continue to reinvest dividends or capital gains distributions from shares owned in the Fund,
2. New shareholders may open Fund accounts and purchase directly from the Fund (i.e. not through a financial intermediary), and
3.Members of the Fund’s Board of Trustees, persons affiliated with RiverPark Advisors, LLC or Cohanzick Management, LLC and their immediate families will be able to purchase shares of the Fund and establish new accounts.
The Fund may from time to time, in its sole discretion, limit the types of investors permitted to open new accounts, limit new purchases or otherwise modify the above policy at any time on a case-by-case basis.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
Comments
Kind of a limited re-opening. Very limited.
Its a smart move by RiverPark.
Often funds do the reverse - go from being completely open to limiting new accounts to direct investments. American Century Midcap Value ACMVX, Wellington VWELX (since then completely closed), etc.
They've now been able to move $150 million or so out of RPHYX and into what Mr. Schaja refers to as "private label funds" at Cohanzick; those fiunds will pursue a somewhat different investment strategy than Short-Term High Yield, which creates additional space for investors interested in the fund. As with other managers (Seafarer, for instance), RiverPark pursued the "direct purchase" as a tool for managing inflows (and, implicitly, to keep people from gaming the system).
Mr. Schaja guesses that the fund might remain open for a couple months, but that's going to be determined by flows.
David
Derf
P.S. Thanks for report D_S
No, the "beating" came at Mr. Sherman's other fund, RiverPark Strategic Income. Things went poorly with two positions at once, which causes a sustained dip in performance. RPHYX's maximum drawdown by 0.5% in August 2015. RSIVX's maximum drawdown occurred in February 2016, with a peak to trough drop of 7.6%. It's up 13.4% since then.
David
Regards,
Ted
YTD= 97 Percentile
1-Yr.=99 " "
3-Yr.=83 " "
5-Yr.-97 " "
http://performance.morningstar.com/fund/performance-return.action?t=RPHYX®ion=usa&culture=en-US
Not quite. My response is that it has few if any peers, so it is not a mischaracterization by Morningstar (an extrinsic error). Rather because of its unusual nature (and perhaps unique investment strategey) intrinsically any characterization winds up being inadequate.
(Sometimes M* could do a better job in selecting a bucket for a given fund; this is not one of them. As Junkster wrote, it's not as though this fund doesn't share attributes with other HY funds.)
In such situations one is better served by looking at category-independent metrics. That's what David did in pointing out RPHYX's superb Sharpe ratio.
FWIW, the duration of the fund, at 1.28 years, is below all but a few other HY funds that you could count on one hand. The category average is 3.6 years (from M*).
Of that handful of short duration HY funds, perhaps the one that has been most talked about here is ZEOIX. A more conventional fund, with admittedly better performance. (It lands in the 96th percentile over five years, so it beats RPHYX's 97th percentile.) But to achieve that "outperformance", it endures a standard deviation nearly double that of RPHYX. If I'm looking for an enhanced cash fund, I'm quite willing to give up a bit of performance for a more stable fund.
It's not appropriate to benchmark to the HY group. The argument appears in both of our profiles (2011, 2012) of the fund. The five-year correlation between RPHYX and three possible HY benchmark funds (FAGIX, HYG, VWEHX) is 0.6. It has a higher correlation to, oh, the Vanguard Emerging Markets Equity Index Fund than to high-yield funds.
In 2015, the fund returned 1.22%. If you want to compare it to the HY group, that's a top 3% performance. PIMCO's attempt at a cash-management fund (Short Asset Investment PAIAX, which follows as a fund that strategy PIMCO uses for managing "cash" in their mutual funds) made 0.32% that same year. Its best absolute-return year and worst relative-return year were both 2012; high yield bonds were up 15% and RPHYX made 4.4% (because it's weakly correlated to the HY market) and trailed 99% of them (because it's not appropriate to benchmark to the HY group).
The reasons we offered for folks to consider it were: 300-400 bps more than a money market, minimal volatility, protection against rising interest rates and shareholder-friendly management.
David
The reasons we offered for folks to consider it were: 300-400 bps more than a money market, minimal volatility, protection against rising interest rates and shareholder-friendly management.
I admit to sometimes being purposely a bit provocative. But this time not. Just my OCD about detail.
This fund is not going to give you 3.5%-4.5% a year. I mean 2.20% over the past 3 years and 2.76 over the past 5 years. This year it is on track for around 2.80. Some of the Fidelity money market funds are now yielding over 1% (of course you will need a million dollars) And lesser money market funds yields are rising and will continue to rise with the increase in the fed funds rate. So no way 300-400bps over money market. Otherwise a fine fund with negligible volatility and way above money market returns (for now) This we can agree on.
By the way I telephoned the fund at the 888 number to see if both classes of shares were now open. The feller at the other end seemed unaware that this fund had re-opened. He asked some others in the office and confirmed that both classes were open but that the Institutional share minimum was $100,000 whereas the Investor share minimum was $1000. The person I spoke to at the 212 number was aware and very well-informed but he said the Investor share minimum was $2500. Practically speaking the discrepancy is not important since if I decide to put some $ in this fund it would be more than $2500. But $100,000? 'fraid I don't have that kind of cash just lying around.
Any and all thoughts welcome. Thanks!
-Ben
I agree with you that the cost is ridiculously high (for my tastes, a smidgeon high even for an equity fund), but I give the management credit for being able to execute a unique strategy that is not cheap to do and IMHO doesn't scale well. Hence the closure and the fairly small AUM, which adds to cost as a percentage of AUM.
Funds typically pay 0.40% to brokerages like Schwab and Fidelity to list NTF. That's where the 0.25% 12b-1 of the retail shares is going. Some people invest directly and so the fund doesn't have to pay an extra 0.40% on their money. With "luck", their 12b-1 fees added to those of investors who go through brokerages might be enough to cover the 0.40%. If not, the management company pays the difference out of pocket, so it keeps its cut high enought to cover that plus a decent profit.
So when one complains that fund X isn't available NTF, remember that this fact is saving you money in the long term.
The fund is required to charge all investors the same fee for the same share class regardless of channel (direct or brokerage). This is part of the appeal of "clean" shares. The fund charges a bare bones fee (just management and a little overhead), and it's up to the distributor or broker to add its costs in. You'll get to pay for the services you get, through the channel you use, regardless of how other people buy their shares.
http://www.morningstar.com/funds/XNAS/RPHYX/quote.html
True. Just the very little bit better that's needed to give the institutional class an extra star. (An artifact of star ratings being discrete; 1.99 stars are not given out, only 1 or 2.)
I also checked performance at M*, with their closest return indicator at 5 years and the total return numbers since inception are very close.
I fired up my handy-dandy HP-12C and did rough numbers.
RPHYX data is for a time period of 6 years; and has a total return of 17.75% in this time frame. The rough math indicates an annualized return of 2.89 (M* reads 2.76% at the 5 year return), before any taxes, if held in such an account.
Stockcharts by default, uses adjusted calculations for returns. The adjustments are for common items as; dividends, cap. gains, splits and assumes everything reinvested; whatever affects total return. I prefer this method versus the commonly used price/NAV only shown at many charts. I want the whole picture for the investment return. If one wants price only appreciation, an _ is placed in front of the ticker symbol.
The below linked chart is "active", meaning that you may add up to 9 more tickers separated by a comma; if you want to compare something else. Save the page for future use, if you have not. Lastly, Stockcharts will not chart a ticker that has not yet attained an age of 2 years.
One may move the slider bar under the graphic to change the begin and end period if you want to view a particular period.
Pillow time here,being a bit to the tired side ......hoping for no errors in the above; .
http://stockcharts.com/freecharts/perf.php?RPHYX&n=1519&O=111000
Okay, but what are you saying? That this is better than cash, or that it's worse than more volatile funds?
If someone was in the top marginal tax bracket (that's how M* computes tax-adjusted returns), then they probably owned RPHIX that gave an extra 1/6% or so in return (after taxes). You can also add another 0.1%/year to the after tax return to account for the capital loss writeoff when cashing out. (Shares were around $10/share until about 3 years ago; they're now around $9.75.)
So over five years, the after tax return looks closer to 1.65%. Not bad compared to a five year CD (offered five years ago). Even before taking out the 30+% (top rate) taxes on that CD.
http://www.bankrate.com/banking/cds/historical-cd-interest-rates-1984-2016/
The after-tax return also looks good compared to short-intermediate muni funds like BTMIX, VMLUX, or FSTFX. (I'm inclined to look in this duration range for muni funds; anything shorter doesn't seem to pay enough to beat cash, and anything longer seems to have too much interest rate risk.)
http://quotes.morningstar.com/chart/fund/chart?t=RPHYX®ion=usa&culture=en-US
The Stockchart link you gave appears to go back only to March 24, 2011 (just over 6.0 years). The fund started Sept. 30, 2010 (just over 6.5 years). Not sure where 6 3/8 years came from.
The M* chart can be adjusted for any dates. If I adjust it to begin on March 24, 2011, I get a total return of 19.17%. I don't yet have an explanation for the discrepancy.
Well, poo; yes. I don't know why Stockchart didn't chart back to inception date.
Thank you for the notation regarding inception date, as I didn't check while at M*.
Now I do need to hit the hay.