At yesterday’s close, all share classes of the Hanlon Tactical Dividend and Momentum Dividend Fund (the Fund) received a $1.69 long-term capital gain distribution. The net effect is no investment gain or loss associated with the capital gain because like all mutual funds the capital gain payment comes out of the net asset value of the Fund and therefore the share price drops by the amount of the capital gain distribution. Yesterday the share price declined 11.75% from $13.45 to $11.87, a drop of $1.58, not $1.69, because the Fund actually was up $0.11 (+0.85%) yesterday.
As mentioned, the distribution is a long-term capital gain, so for taxable accounts it is taxed at the current low capital gain rates before any potential tax rate increases next year. For 2021 YTD the Fund is up 15.83% and is ranked in the top quartile of its Morningstar Peer group, and for the trailing 18 months (6/22/2021-12/22/2021) is up 35.37%.
The capital gain cash will be credited to accounts (it might take a day or so to appear) and we will be using the cash to mostly reinvest into the Fund, but also to perform some year-end rebalancing on the models we manage that contain the Fund.
Happy Holidays and here’s to a Happy, Healthy, Prosperous New Year!
