Preferred - Plus

Data updated: 2022-02-25

C000206475 — Preferred - Plus. Developed ex-US Real Estate · $14.31M AUM · 1.87% expense ratio. Holdings, fees, performance and SEC filings.

C000206475 Fund Overview

Preferred - Plus is a US mutual fund managed by Collaborative Investment Series Trust, categorised as Developed ex-US Real Estate. ABC INVEST provides holdings, performance, costs, cashflows, risk data, prospectus documents and SEC filings, sourced from SEC filings.

Type: US mutual fund
Manager: Collaborative Investment Series Trust
Category: Developed ex-US Real Estate
Assets under management: $14.31M
1-year return: 10.8%
SEC CIK: 0001719812
SEC series ID: S000063690
Share class ID: C000206475

C000206475 Investment Objective and Strategy

Preferred - Plus describes its objective and strategy as follows, from its latest prospectus filed with the SEC by Collaborative Investment Series Trust.

Investment objective

The Preferred-Plus (the Fund) investment objective is to seek to provide income. The Fund may change its investment objectives without shareholder approval, although it has no current intention to do so. Shareholders will be provided with at least 60 days prior written notice of any change to the Funds investment objectives.

Principal investment strategy

The Funds investment strategy is two-fold: (1) preferred securities, and (2) credit spread options on an S&P 500 ETF or Index; both of which are described in detail below. Preferred Investment Strategy The Fund pursues its objective primarily by investing in issues of preferred securities and debt securities that the Funds Adviser, Innovative Portfolios, LLC, (the Adviser) believes to be undervalued. In making this determination, the Funds Adviser evaluates the fundamental characteristics of an issuer, including an issuers creditworthiness, and also takes into account prevailing market factors. In analyzing credit quality, the Adviser considers not only fundamental analysis, but also an issuers corporate and capital structure and the placement of the preferred or debt securities within that structure.

In evaluating relative value, the Adviser also takes into account call, conversion and other structural security features, in addition to such factors as the likely directions of credit ratings and relative value versus other fixed-income security classes. The Fund invests at least 80% of its net assets in a portfolio of preferred securities issued by U.S. and non-U.S. companies, including traditional preferred securities; hybrid preferred securities that have investment and economic characteristics of both preferred stock and debt securities; floating rate preferred securities; convertible preferred securities; and shares of other open-end, closed-end or exchange-traded funds (ETFs) that invest primarily in preferred securities as described herein. The Fund may invest in preferred securities of all issuer capitalizations.

The Fund intends to concentrate its investments in securities issued by financial services companies such banks, diversified financials, real estate (including real estate investment trusts (REITs)) and insurance companies, meaning that the Fund will invest at least 25% of its net assets in securities issued by such companies. In addition, the Fund also may focus its investments in other sectors such as (but not limited to) energy, industrials, utilities, pipelines, health care and telecommunications. The Adviser retains broad discretion to allocate the Funds investments across various sectors and industries. The Fund may invest in preferred equity or debt securities of any maturity or credit rating, including investment grade securities, below investment grade securities (commonly known as junk bonds) and unrated securities.

The Fund generally seeks to maintain a minimum weighted average senior debt rating of the issuing companies in which it invests of BBB-, which the Fund considers to be investment grade. Although a companys senior debt rating may be BBB-, an underlying security issued by such company in which the Fund invests may have a lower rating than BBB-. A security must be rated no lower than B- or B3 in order to be purchased by the Fund (or if unrated, of similar quality in the opinion of the Adviser). S&P 500 Options Investment Strategy The Fund may expose up to 10% of its assets to a credit spread options strategy however market conditions may dictate additional exposure. The Fund seeks to achieve a credit spread on an S&P 500 ETF or Index by selling/writing an out-of-the-money (an out-of-the-money put option is one whose strike price is lower than the market price of the underlying reference asset of the option) short put option each month while simultaneously purchasing an out-of-the-money long put option below the short option position.

A credit spread is an options strategy that involves the purchase of one option and a sale of another option in the same class and expiration but different strike prices. Such a strategy results in a net credit for entering the option position, and wants the spreads to narrow or expire for profit. Buying the protective long put option is hedging any significant downside risk posed by the short put option by employing a defensive position. The short option premium is derived from implied volatility the expected level of volatility priced into an option and is higher, on average, than the volatility actually experienced on the security underlying the option. For example, an option buyer typically pays a premium to an option seller, such as the Fund, that is priced based on the expected amount by which the value of the instrument underlying the option will move up or down.

On average, this expected amount of value movement (or implied volatility) is generally greater than the amount by which the value of the underlying instrument actually moves (realized volatility). By entering into derivatives contracts, the Fund is, in essence, accepting a risk that its counterparty seeks to transfer in exchange for the premium received by the Fund under the derivatives contract. By providing this risk transfer service, the Fund seeks to benefit over the long-term from the difference between the level of volatility priced into the options it sells and the level of volatility realized on the securities underlying those options. There can be no assurance that the variance risk premium will be positive for the Funds investments at any time or on average and over time. The premium paid for a long put option is typically priced based on the expected amount by which the value of the instrument underlying the option will move up or down.

On average, this expected amount of value movement (or implied volatility) is generally greater than the amount by which the value of the underlying instrument actually moves (realized volatility). By entering into this derivative contract, the Fund is, in essence, transferring a risk that its counterparty seeks to accept in exchange for the premium received by the counterparty under the derivatives contract. By transferring this risk to a counterparty, the Fund seeks to benefit over the long-term from the difference in premium collected on the short put option premium above and the long option premium paid herein. There can be no assurance that the variance risk premium will be positive for the Funds investments at any time or on average and over time. A put option typically gives the option buyer the right to sell, and obligates the option seller to purchase, a security at an agreed-upon price.

Generally, the Fund intends to sell put options that are out-of-the-money. Options that are more substantially out-of-the-money generally would pay lower premiums than options that are at or slightly out-of-the-money. By selling put options, the Fund will sell protection against depreciation below the option exercise price to the option purchaser in exchange for an option premium. If an option is exercised, the Fund will either purchase or sell the security at the strike price or pay to the option holder the difference between the strike price and the current price level of the underlying equity security, ETF or index, depending on the terms of the option. When the Fund enters into derivatives transactions, it is typically required to post collateral, or initial margin, to secure its payment or delivery obligations.

The Fund invests as indicated above in preferred securities. These securities will be used to meet asset coverage or margin requirements on the Funds option writing strategy. The Fund may write put options in respect of an underlying security in which the Fund does not have a short position. The Fund may hold positions in equities and ETFs to the extent necessary to meet asset coverage or margin requirements. Generally, the investment goal is to write options with a target of 10% spread notional exposure however market conditions may dictate more notional exposure. The Fund may be considered to have created investment leverage; leverage increases the volatility of the Fund and may result in losses greater than if the Fund had not been leveraged.

C000206475 Performance

Total returns for C000206475 (as of 2026-10-01), from SEC filings.

Period	Total return
1 year	10.8%

C000206475 Risk Information

Risk metrics for C000206475, derived from monthly returns in SEC filings.

1-year volatility (annualised): 99.1%

C000206475 Costs and Fees

C000206475 costs about $187 per $10,000 invested per year in fund expenses.

Net expense ratio: 1.87%
Gross expense ratio: 22.46%
Portfolio turnover: 27%
Brokerage commissions: 2.84 bps of average net assets (SEC N-CEN)

C000206475 Cashflows

Over the 12 months to 2021-12, Preferred - Plus had net inflows of $2.58M, from monthly SEC N-PORT filings.

Month	Net flow
2021-12	$244.24K
2021-11	$21.88K
2021-10	$45.12K
2021-09	$149.30K
2021-08	$396.91K
2021-07	−$29.43K

C000206475 Debt Constituents

No individual debt constituents are reported in Preferred - Plus's latest SEC N-PORT filing.

C000206475 Prospectus and SEC Filings

Official Preferred - Plus filings on SEC EDGAR — prospectus, portfolio holdings and annual reports.

Related Funds

Other Developed ex-US Real Estate funds tracked on ABC INVEST:

Data Sources

ABC INVEST compiles this page from public filings made to the U.S. Securities and Exchange Commission (SEC) through EDGAR: portfolio holdings and monthly cashflows from Form N-PORT, expenses and returns from fund prospectuses (Form 485BPOS) and the SEC DERA Risk/Return Summary data sets, annual data from Form N-CEN, and shareholder reports from Form N-CSR.