A new player just launched its first mutual fund, with help from a Beantown subadvisor. Today Philadelphia-based Innovator Management and Boston-based Trust & Fiduciary Management Services unveiled the Innovator Matrix Income Fund (IMIFX), which went live on February 1 and focused on pass-through securities, i.e. investments in entities who pass through most of their profits to their unit holders without paying corporate taxes. Watch for Innovator to team up with more niche asset managers.

A New Old Player Returns

David Jacovini, president of Innovator, is not new to the mutual fund business. A former Prudential Securities advisor and foreign exchange derivatives trader, Jacovini launched his own Academy Asset Management at the end of 2007, managing individual client accounts and building a mutual fund structure.

"It was a tough time to start," Jacovini told MFWire.com. "In the past year, a lot of stuff came together."

Innovator is Born Out of a Partnership

Jacovini teamed up with CliftonLarsonAllen Wealth Advisors, a $3-billion-AUM RIA subsidiary of the Minneapolis-based accounting firm, and started to hunt for innovative, income-focused asset managers. Academy and CLA teamed up to start Innovator, with Academy as the controlling partner and CLA as the minority one.

"They knew what they wanted and they didn't see a mutual fund that did that," Jacovini said of CLA. "They're focused more on the client perspective and trying to find value-added solutions."

Innovator Finds Its First SubAdvisor

TFMS, a subsidiary of Copell Financial, subadvises Innovator's new fund, and TFMS chief investment officer Steve Carhart serves as PM. The fund invests in vehicles like business development companies (BDCs), closed-end funds (CEFs), master limited partnerships (MLPs), real estate investment trusts (REITs) and royalty trust.

"They came up with this strategy ten years ago," Jacovini said of TFMS. "It really fits a lot of portfolios right now. Some people view it as a fixed-income surrogate."

Jacovini Targets Supermarkets and B-Ds

The fund offers A shares (IMIFX) charge a 575-basis-point load and 135 bps in annual expenses.

"We have the ability to waive load. It's already on the Schwab platform in load-waived form," Jacovini said, noting that he's pursuing more supermarket distribution, too. "We also wanted the A shares to make it available through B-D channels."

Watch for Innovator to Partner and Launch More Funds

Going forward, Jacovini said he wants to find more "niche strategeis that ... are really additive to portfolios" and put them, too, into mutual funds.

"We definitely have a plan to do so," Jacovini said, clarifying that he's not interested in traditional asset classes and strategies. "We're never going to be a neat-style-box-fund creator."

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Company Press Release

Innovator Management LLC Picks Boston-Based Trust & Fiduciary Management Services to Manage New Mutual Fund

New Fund to be based on TFMS’s Focused “Pass-Through Securities” Strategy seeking Monthly, High-Income Returns

BOSTON--Innovator Management LLC today announced it has launched a new mutual fund focused on pass-through securities to be managed by Trust & Fiduciary Management Services (TFMS). The new fund, named Innovator Matrix Income Fund (IMIFX), began trading February 1 and will provide mutual fund investors TFMS’s Matrix Income strategy previously available only through separately managed accounts with significant minimum balances.

“We chose the TFMS team as our sub-advisor from a lengthy due diligence process because of their well-reasoned philosophy, their sound long-term strategy, and their decade long track-record of steady-handed execution,” said David Jacovini, President of Innovator Management LLC. “Steve Carhart and his team have done an impressive job through a variety of different market conditions. We are thrilled to be able to work with them and offer this strategy—with the efficiencies of a mutual fund format—to a wide range of investors.”

Pass-through securities are assets managed by entities that “pass-through” a majority of their operating profits directly to their unit holders while not paying taxes at the corporate level. These include Master Limited Partnerships (MLP’s), Royalty Trusts, Real Estate Investment Trusts (REIT’s), Business Development Companies (BDC’s), and Closed-end Funds (CEF’s).

“Given today’s market volatility and record-low bond yields, it is our opinion that many investors believe they have no place to invest their hard-earned savings,” said Steve Carhart, Chief Investment Officer at Trust & Fiduciary Management Services. “By working with Innovator to manage an open-end mutual fund with monthly distributions, we’ll be able to bring our distinctive approach to all investors here in the U. S.”

Though other pass-through mutual funds exist, many tend to target a specific sector only. The Matrix Income style adapts to different phases of the economic cycle using the full spectrum of pass-throughs depending upon the outlook for growth, interest rates, and inflation. All the pass-through securities included in the Fund are listed on U. S. exchanges and are traded daily.

“Given the historically low interest rates in the current market environment, we believe our clients are having some difficulty finding adequate income in traditional investments,” said Tony Hallada, CEO of CliftonLarsonAllen Wealth Advisors, a significant investor in Innovator. “They need alternative income solutions, which is why we’ve chosen to bring the Matrix Income approach to all investors.” CLA Wealth Advisors is a subsidiary of CliftonLarsonAllen LLP, one of the ten largest accounting firms in the U. S.

For more information on the new Innovator Matrix Income Fund, please review the fund prospectus at www.innovatorfunds.com or contact Innovator Management at management@innovatorfunds.com.

About TFMS

Trust & Fiduciary Management Services, Inc. was organized in 2000 to provide comprehensive portfolio management services to bank and trust departments as well as individuals and institutions. TFMS serves clients across the nation with a number of investment products both directly and through partnerships with like-minded firms. Its senior managers contribute over 60 years of combined experience at many of the most prestigious investment firms, uniting personal investment services with exceptional research depth. TFMS is a wholly owned subsidiary of Copell Financial, LLC.

About Innovator

Innovator Management LLC serves as the advisor to the Innovator Funds. Innovator’s goal is to bring talented portfolio managers with distinctive and seasoned investment strategies to the mutual fund marketplace.

About CliftonLarsonAllen Wealth Advisors

CLA Wealth Advisors is a registered investment advisor and a subsidiary of CliftonLarsonAllen LLP, one of the ten largest accounting firms in the U.S.

Mutual fund investing involves risk; principal loss is possible. Along with general market risks, investors should also note that the Innovator Matrix Income® Fund is classified as non-diversified and may be more volatile than diversified funds that hold a greater number of securities. Additionally, it may invest in securities that have additional risks. Foreign companies can be more volatile, less liquid, and subject to the risk of currency fluctuations. Small and mid-cap companies can have limited liquidity and greater volatility than large-cap companies. Debt securities will typically decrease in value when interest rates rise. This risk is usually greater for longer term debt securities. Lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities. Closed-end funds are subject to additional risks that do not apply to conventional mutual funds, including the risks that the market price of a closed-end fund’s shares may trade at a discount to its net asset value, an active secondary trading market may not develop or be maintained, or trading may be halted by the exchange in which they trade, which may impact the Fund’s ability to sell its shares. Closed-end funds and exchange-traded funds may experience many of the same risks associated with individual securities. Holders of the units of master limited partnerships have more limited control and limited rights to vote on matters affecting the partnership. There are also certain tax risks associated with an investment in units of master limited partnerships. The Fund may have concentrations in REITs and real estate securities with additional risks such as declines in the value of real estate and increased susceptibility to adverse economic or regulatory developments. Royalty trusts are subject to additional risks such as: cash-flow fluctuations and revenue decreases due to a sustained decline in demand for crude oil, natural gas and refined petroleum products, risks related to economic conditions, higher taxes or other regulatory actions that increase costs for royalty trusts.

The investment objectives, risk, charges, expenses, early redemption fees, and other information about a fund are contained in the prospectus, which is available online at www.innovatorfunds.com or by calling 1-877-FUND-890. Read and consider it carefully before investing.

Distributed by Quasar Distributors, LLC

 

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