LQTIX — Theta Income Fund

Data updated: 2021-03-12

LQTIX — Theta Income Fund. Europe Value Equity · $45.86M AUM · 1.25% expense ratio · 2.0% 1-yr return. Holdings, fees, performance and SEC filings.

LQTIX Fund Overview

LQTIX — Theta Income Fund is a US mutual fund managed by Investment Managers Series Trust, categorised as Europe Value Equity. ABC INVEST provides holdings, performance, costs, cashflows, risk data, prospectus documents and SEC filings, sourced from SEC filings.

Type: US mutual fund
Manager: Investment Managers Series Trust
Category: Europe Value Equity
Assets under management: $45.86M
1-year return: 2.0%
Ticker: LQTIX
SEC CIK: 0001318342
SEC series ID: S000044743
Share class ID: C000139041

LQTIX Investment Objective and Strategy

Theta Income Fund describes its objective and strategy as follows, from its latest prospectus filed with the SEC by Investment Managers Series Trust.

Investment objective

The investment objective of the Theta Income Fund (the Fund) is to seek to generate current income with a low correlation to the risks and returns of major market indices.

Principal investment strategy

Under normal market conditions, the Fund seeks to achieve its investment objective by selling listed short-term put options to generate income to the Fund while also purchasing intermediate-term put options for hedging purposes. The put options sold and purchased by the Fund will primarily be on the S&P 500 Index. If the purchaser of a put option exercises the option, the seller of the put option is obligated to buy the underlying instrument at a specified exercise price. Put options are among the types of instruments commonly referred to as derivatives. The sale of put options generates income for the Fund through the receipt of cash (i.e., premiums), but exposes it to the risk of declines in the value of the underlying assets below the option strike price that are in excess of the income collected.

In an effort to protect against significant declines in the value of the underlying assets below the strike price of an option, the Fund will purchase long put options. A long put option gives the purchaser of the option, upon payment of a premium, the right to sell a specified quantity of an underlying asset at a fixed exercise price over a defined period of time. The Funds sale and purchase of put options is designed to generate a positive return in rising and flat equity markets, and may generate a positive return in equity markets that are modestly declining, assuming the net premiums collected from the options written and purchased exceeds the net cost to close the position. In an effort to limit losses in declining equity markets, the Fund may reduce its sale of put options and/or purchase put options with strike prices closer to the strike prices of the put options sold.

The Fund focuses primarily on equity index options which offer both European settlement (i.e., options can only be exercised at their expiration date) and cash settlement (i.e., options carry an obligation by their seller to pay the difference between their strike price and their settlement value instead of allowing the seller to take delivery of securities). However, the Fund reserves the right to use options which offer American settlement (i.e., options can be exercised any time prior to their expiration date) which may allow delivery of underlying stock. While the Funds adviser expects that the Fund will primarily write short-term put options (i.e., options that expire in less than 3 weeks) and purchase intermediate-term put options (i.e., options that expire in 3-6 weeks), the Fund reserves the right to utilize options of various expirations.

The Fund writes put options with shorter expirations than the put options purchased in an effort to collect more premiums over time from the short-term puts sold than premiums paid on the longer-term puts purchased. The potential returns of the Fund are generally limited to the amount of cash (premiums) the Fund receives when selling put options, net of any cash (premiums) paid by the Fund to purchase long put options, plus the returns of the fixed income securities in which the Fund invests. The Funds sale and purchase of put options may result in the generation of positive returns for the Fund; however, the loss potential if the strategy is not effective may be greater than the profit potential. The Fund may lose significantly more than the premiums it receives in highly volatile market conditions.

The Fund may also invest in fixed income securities to cover the put options it sells and/or to seek its investment objective. The fixed income securities in which the Fund invests may include government and agency debt obligations and investment grade corporate debt obligations (with an average weighted maturity of less than 5 years). The Fund may invest in fixed income securities issued by companies of any market capitalization. The Funds adviser evaluates investments in fixed income securities based on credit quality, coupon, allocation needs and diversification requirements. The Fund will segregate cash and/or other liquid assets in an amount equal to the Funds obligations under each put option sold by the Fund so that each option sold will be secured, or covered. The Funds adviser intends to limit the use of leverage by ensuring that the Funds potential obligations from the put options sold will not exceed the Funds total net assets.

The Funds adviser employs a disciplined portfolio construction process that relies on guidelines to govern capital allocations based on a quantitative methodology designed by the Funds adviser to measure the perceived risk of the broad U.S. equity market. In making this determination, the Funds adviser considers various factors including but not limited to the overall volatility (rate of change) in the markets. The Funds adviser bases allocation decisions on a combination of quantitative risk measures and a qualitative assessment of potential risk/reward scenarios, with the ultimate goals of dampening volatility in the Funds portfolio and maintaining adequate portfolio diversification while achieving the Funds targeted return potential. The Funds adviser evaluates the metrics associated with the valuation of options, including volatility, time to expiration and the relationship of the exercise price to the prevailing market price of the underlying instrument.

There can be no guarantee that the strategy of the Funds adviser will be successful in this regard. During market conditions in which market volatility rises, the price of options could rise, which, in turn, could have a detrimental effect on the Funds performance and achieving its targeted return potential.

LQTIX Performance

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

Period	Total return
1 year	2.0%

LQTIX Risk Information

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

1-year volatility (annualised): 3.3%

LQTIX Costs and Fees

LQTIX costs about $125 per $10,000 invested per year in fund expenses.

Net expense ratio: 1.25%
Gross expense ratio: 1.25%
Portfolio turnover: 13%
Brokerage commissions: 0.33 bps of average net assets (SEC N-CEN)

LQTIX Cashflows

Over the 12 months to 2020-12, Theta Income Fund had net inflows of $283.21M, from monthly SEC N-PORT filings.

Month	Net flow
2020-12	$2.38M
2020-11	$466.58K
2020-10	$1.03M
2020-09	$4.40M
2020-08	$6.92M
2020-07	$68.15M

LQTIX Debt Constituents

No individual debt constituents are reported in Theta Income Fund's latest SEC N-PORT filing.

LQTIX Prospectus and SEC Filings

Official Theta Income Fund filings on SEC EDGAR — prospectus, portfolio holdings and annual reports.

Related Funds

Other Europe Value Equity 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.