FS Credit Income Fund takes an active approach to investing beyond core fixed income
See how the fund has performed against its goals
Diversification does not protect an investor from market risk and does not ensure a profit. Investing in non-core asset classes may carry increased risks as compared to core fixed income assets, including credit risk and liquidity risk.
Investors have traditionally relied on a mix of Treasuries, municipal bonds and corporate bonds to generate income. Less-liquid, harder-to-access areas of the credit market may provide an income premium over traditional fixed income investments.3
Past performance is not a guarantee of future results. The benchmarks are shown for illustrative purposes only. An investment cannot be made directly in an index.
FS Credit Income Fund’s actual investments and performance may differ substantially from those of the indexes presented. Differentiated sources of income refers to income generated by non-core fixed income investments (including, but not limited to, emerging market government debt, high yield bonds, emerging market corporate debt and structured products). The yields of these investments may be higher than those of core fixed income investments (including, but not limited to, U.S. Treasuries, investment grade corporate bonds and U.S. municipal bonds). Investing in non-core assets may carry a variety of risks, including credit risk and liquidity risk.
U.S. Treasuries are represented by the ICE BofAML U.S. Treasury Index. Municipal bonds are represented by the ICE BofAML U.S. Municipal Securities Index. Municipal bonds may be subject to interest rate risk. Emerging market government debt is represented by the J.P. Morgan EMBI Global Index. Emerging market government debt may be subject to a higher degree of currency, default and political risk. U.S. corporate bonds are represented by the ICE BofAML U.S. Corporate Index. U.S. corporate bonds may be subject to default and interest rate risk. U.S. loans are represented by the S&P/LSTA Leveraged Loan Index. U.S. loans may be subject to default risk. Emerging market corporate debt is represented by the J.P. Morgan CEMBI Broad Index. Emerging market corporate debt may be subject to higher degree of currency, default and political risk. U.S. high yield bonds are represented by the ICE BofAML U.S. High Yield Index. U.S. high yield bonds may be subject to higher degree of default risk compared to investment grade bonds. Mortgage-backed securities are represented by the ICE BofAML U.S. ABS and CMBS Index. Mortgage-backed securities may be subject to default risk. Structured products are represented by the J.P. Morgan CLOIE Index and Clarity Solutions Group, LLC. Structured products may be subject to higher degree of default and liquidity risk.
FS Credit Income Fund broadly invests across global credit markets and seeks to generate attractive total returns, including current income and capital appreciation.
FS Credit Income Fund is a multi-sector alternative income fund within a closed-end interval fund structure. Its flexible strategy is designed to provide diversification and differentiated sources of income by investing in harder-to-access credit market assets.3,4
FCRIX (CLASS I) DISTRIBUTION RATE HISTORY
As of June 30, 2020. The annualized distribution rate shown is expressed as a percentage equal to the projected annualized distribution amount per share (which is calculated by annualizing the most recent quarterly cash distribution per share declared as of the quarter indicated without compounding), divided by the fund’s NAV per share as of the end of the quarter indicated, in each case on a per class basis. The fund intends to pay ordinary cash distributions quarterly. The payment of future distributions on the fund’s common shares is subject to the discretion of the fund’s board of trustees and applicable legal restrictions and, therefore, there can be no assurance as to the amount or timing of any such future distributions. The fund may pay distributions in significant part from sources that may not be available in the future and that are unrelated to the fund’s performance, such as return of capital, borrowings or expense reimbursements and waivers. For the 12 months ended June 30, 2020, 100% of distributions were funded through ordinary income.
Together, FS Investments and GoldenTree Asset Management bring over 30 years of experience designing and managing institutional-quality credit funds for institutions and the broader investing public.
GoldenTree Asset Management is an employee-owned asset management firm that specializes in opportunities across the credit universe.
Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market.
ICE BofAML European High Yield Index tracks the performance of Euro-denominated below investment grade corporate debt publicly issued in the eurodomestic or eurobond markets.
ICE BofAML U.S. Corporate Master Index tracks the performance of U.S. dollar-denominated investment grade corporate debt publicly issued in the U.S. domestic market.
ICE BofAML U.S. Fixed Rate CMBS Index tracks the performance of investment grade fixed-rate commercial mortgage-backed pass-through securities.
ICE BofAML U.S. High Yield Distressed Index is a subset of the ICE BofAML U.S. High Yield Master II Index that includes all high yield bonds that trade with a spread over U.S. Treasuries greater than or equal to 10%.
ICE BofAML U.S. High Yield Index is designed to track the performance of U.S. dollar-denominated below investment grade corporate debt publicly issued in the U.S. domestic market.
ICE BofAML U.S. Municipal Securities Index tracks the performance of U.S. dollar-denominated investment grade tax-exempt debt publicly issued by U.S. states and territories, and their political subdivisions, in the U.S. domestic market.
ICE BofAML U.S. Treasury Index is designed to track the performance of U.S. dollar-denominated sovereign debt publicly issued by the U.S. government in its domestic market.
J.P. Morgan ABS Index is designed to track the U.S. dollar-denominated, tradable asset-backed securities market.
J.P. Morgan CEMBI Broad Index is designed to track U.S. dollar-denominated debt issued by emerging-market corporations.
J.P. Morgan Collateralized Loan Obligation Index (CLOIE) tracks the U.S. dollar-denominated floating-rate collateralized loan obligation market.
J.P. Morgan Emerging Markets Bond Index Global (EMBI Global) tracks total returns for traded external debt instruments in emerging markets.
J.P. Morgan Government Bond Index-Emerging Markets (GBI-EM) Indexes are comprehensive emerging-market debt benchmarks that track local currency bonds issued by emerging-market governments.
S&P/LSTA Leveraged Loan Index is a market value-weighted index designed to measure the performance of the U.S. leveraged loan market.
The indexes referenced herein are the exclusive property of each respective index provider and have been licensed for use by FS Investments. The index providers do not guarantee the accuracy and/or completeness of the indexes and accept no liability in connection with the use, accuracy or completeness of the data included therein. Inclusion of the indexes in these materials does not imply that the index providers endorse or express any opinion in respect of FS Investments. Visit www.fsinvestments.com/support/articles/index-disclaimers for more information.
The Fund is “non-diversified” under the Investment Company Act of 1940 since changes in the financial condition or market value of a single issuer may cause a greater fluctuation in the Fund’s net asset value than in a “diversified” fund.
Investing in the fund involves risk, including the risk that a shareholder may receive little or no return on their investment or that a shareholder may lose part or all of their investment. The fund expects most of its investments to be in securities that are rated below investment grade or would be rated below investment grade if they were rated. Below investment grade instruments may be particularly susceptible to economic downturns. The fund is subject to interest rate risk and will decline in value as interest rates rise. The fund may engage in leveraging and other speculative investment practices that may increase the risk of loss of investment and accelerate the velocity of potential losses. In addition to the normal risks associated with investing, investing in international and emerging markets may involve risk of capital loss from unfavorable fluctuations in currency values, differences in generally accepted accounting principles or from social, economic or political instability in other nations. The fund may invest in derivatives, which are often more volatile than other investments and may magnify the fund’s gains or losses. An investment in shares should be considered only by investors who can assess and bear the illiquidity and other risks associated with such an investment.