Senior portfolio manager Peter Higgins, of the Shelton Tactical Credit Fund, sits down with Investment News anchor Gregg Greenberg to highlight active fixed income opportunities.
Overview
Shelton Tactical Credit Fund is an actively managed bond fund focused on generating both income and capital appreciation through a flexible total return approach.
The strategy looks across U.S. high yield and investment grade municipal and corporate bonds and combines top-down macro views with bottom-up fundamental credit research to evaluate opportunities across issuer types, credit quality, and maturity profiles. It can be relevant for advisors evaluating how a more flexible, credit-focused bond fund could complement traditional core fixed income exposures.
Fund Objective
The Fund seeks capital appreciation and income.
Where DEBIX can fit
DEBIX may be relevant for investors and advisors looking to broaden fixed income exposure beyond more static core bond allocations.
The Fund is designed to fit as a complementary fixed income holding for portfolios seeking:
- A tactical credit approach within a mutual fund structure.
- A broader fixed income opportunity set across high-yield and investment grade, corporate and municipal issuers.
- An actively managed credit strategy with the flexibility to adjust exposures across sectors, credit quality, and market environments.
- A bond allocation that is not tightly tethered to a traditional benchmark.
- A differentiated source of return potential alongside core fixed income holdings.
How the fund works
DEBIX is managed as a total return strategy that dynamically allocates across credit sectors. The portfolio management team evaluates opportunities across credit markets using both macro views and bottom-up issuer research, with flexibility to invest across issuer types, credit quality, and maturity profiles without the constraints of traditional benchmarks.
The Fund may invest in U.S. high yield and investment grade municipal and corporate bonds. The strategy may also employ derivatives for hedging and portfolio management purposes, including futures, options, credit-default swaps, and total return swaps.
How Shelton Approaches Tactical Credit
Macro plus bottom-up research
The strategy uses a top-down macroeconomic thesis to shape the team’s views on credit market trends, rate conditions, and portfolio positioning. This is then paired with bottom-up fundamental research at the issuer level to evaluate credit quality, valuations, and relative attractiveness against the Fund’s investment universe.
Broad credit toolkit
The Fund can invest across a wide range of credit-related instruments rather than staying confined to a narrow segment of the bond market. That flexibility is meant to give the portfolio managers flexibility to pursue opportunities across credit markets as conditions change.
Flexible positioning
The portfolio is not tied to a single segment of the bond market and can be repositioned as valuations and macro conditions shift, supporting a more responsive approach to managing credit and interest rate risk.
Why investors consider a tactical credit mutual fund
- Total return approach focused on both capital appreciation and income.
- Flexible credit strategy across corporate and municipal bonds.
- Actively managed credit strategy with available hedging tools.
- Broader opportunity set than many traditional core bond approaches.
- Mutual fund structure suited to advisor-managed portfolios, retirement accounts, and model portfolios.
- May complement core fixed income holdings with a differentiated return profile and active management approach.
Management Team
Peter Higgins
Jeffrey Rosenkranz
Chris Walsh
Common Questions
A traditional core bond fund typically holds a long-only portfolio of investment grade bonds meant to track against a benchmark index. These funds are typically limited in their ability to deviate too far from that benchmark or to utilize short positions and derivatives as active portfolio management tools. The Shelton Tactical Credit Fund does not operate under such constraints. It can invest across high-yield and investment grade corporate and municipal bonds, take long or short credit positions, and utilize derivatives as ways to manage risk.
The fund is designed to serve as a complementary fixed income holding alongside more traditional core bond or aggregate bond allocations. By leveraging active credit positioning, the fund may offer a non-correlated source of total return potential through active credit positioning. It may also be relevant for advisors seeking tactical credit exposure, more opportunities across corporate and municipal bonds, or a more dynamic approach to managing credit and rate risk within portfolios.
The fund manages risk through diversification across credit sectors, ongoing monitoring of market conditions, and disciplined security selection. By combining macroeconomic analysis with fundamental credit research, the portfolio team seeks to identify relative value opportunities while maintaining a balanced risk/return approach.
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Important Information
It is possible to lose money by investing in the Fund. Past performance does not guarantee future results.
The Fund invests without restriction as to issuer capitalization, country, credit quality and without restriction as to the maturity of fixed income securities. The Fund generally will take long positions in securities believed to be undervalued and short positions in securities believed to be overvalued. The Fund typically employs derivatives for hedging purposes, such as futures contracts, options, credit-default swaps, and total return swaps.
The risk for loss on short selling is greater than the original value of the securities sold short, and theoretically is unlimited, because the price of the borrowed security may rise, thereby increasing the price at which the security must be purchased. Although the Fund intends to use derivatives to reduce risk, they may have the opposite effect and increase the volatility or magnitude of loss by the Fund. Derivatives may be illiquid and subject to the risk of default by a counter-party. The value of the Fund’s investments in fixed income securities will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed income securities. The Fund may invest in non-investment grade fixed income securities, sometimes known as “high-yield bonds” or “junk bonds,” which may subject the Fund to greater credit risk, price volatility and risk of loss than investment grade securities. Some of the “junk bonds” may include securities issued by distressed companies experiencing acquisition, merger, spinoff, restructuring, bankruptcy, downgrade, delinquency, default, or relatively poor financial performance. Distressed securities are speculative and involve substantial risks in addition to the risks of investing in junk bonds, including potential loss of the Fund’s entire investment.
Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other information about the Fund. To obtain a prospectus, visit www.sheltoncap.com or call (800) 955-9988. A prospectus should be read carefully before investing.
Shelton Tactical Credit Fund is distributed by RFS Partners, a member of FINRA and affiliate of Shelton Capital Management.
Shelton Tactical Credit Fund (DEBIX, DEBTX) has been selected by Investor’s Business Daily as one of the Best U.S. Taxable Bond Funds for 2024. The ninth annual Investor’s Business Daily Best Mutual Funds Awards can help you figure out which funds to buy or sell. IBD looked at all the mutual funds with at least a 10-year track record. Each award-winning fund had to outperform its benchmark for the past one, three, five and 10 years, showing its ability to outperform in both the short term and long haul.
INVESTMENTS ARE NOT FDIC INSURED OR BANK GUARANTEED AND MAY LOSE VALUE.
