Apex Real Estate Income Trust (REIT) Fund¶

Fund Ticker: AREIX | CUSIP: 00412Q-50-2 | ISIN: US00412Q5028
Inception Date: August 22, 2011 | Fiscal Year End: December 31
Benchmark: FTSE Nareit All Equity REITs Index
Fund Manager: Daniel Rivera, CFA, CCIM | Co-Manager: Karen Yoshida, CFA
Total Net Assets: $1.73 billion (as of September 30, 2025)

Investment Objective¶

The Apex Real Estate Income Trust (REIT) Fund seeks to provide shareholders with above-average current income and long-term capital appreciation through a diversified portfolio of publicly traded real estate investment trusts and real estate operating companies. The Fund aims to deliver a dividend yield premium of 200-400 basis points above the S&P 500, with total returns competitive with broad equity indices over full market cycles.

The Fund targets a 12-month distribution yield of 3.5-5.5% and total annualized returns exceeding the FTSE Nareit All Equity REITs Index by 75-150 basis points net of fees over rolling 5-year periods.

Investment Strategy¶

The Fund invests at least 80% of net assets in equity securities of U.S. and international REITs and real estate operating companies (REOCs). The investment process combines top-down property sector allocation with bottom-up REIT selection based on asset quality, management capabilities, balance sheet strength, and dividend sustainability.

Property Sector Allocation: The Fund diversifies across property types to manage sector-specific cyclical risks. Target allocations: Industrial/Logistics 18-24%, Residential (Multifamily/Single-Family Rental) 15-22%, Data Centers/Digital Infrastructure 12-18%, Healthcare 8-14%, Retail (Net Lease/Shopping Centers) 8-14%, Office 5-10%, Specialty (Self-Storage, Cell Towers, Timber) 10-16%, and International REITs 5-12%.

REIT Selection Criteria: The team evaluates REITs based on (i) funds from operations (FFO) and adjusted FFO (AFFO) growth, (ii) net asset value (NAV) premium/discount, (iii) debt-to-EBITDA below 7.0x, (iv) fixed charge coverage ratio above 3.0x, (v) dividend payout ratio below 85% of AFFO, and (vi) same-property net operating income (NOI) growth above inflation. REITs trading at >15% premium to estimated NAV are generally avoided unless superior growth justifies the premium.

Portfolio Construction: The Fund holds 35-50 positions with sector-neutral to modestly overweight positioning versus the FTSE Nareit benchmark. Individual REIT positions are capped at 8% at market value. The top 10 positions represent approximately 42-52% of net assets.

The Fund may invest up to 15% of net assets in international REITs, primarily in developed markets (Australia, UK, continental Europe, Japan, Singapore). Currency exposure from international holdings is generally unhedged. The Fund may also hold up to 10% in REIT preferred securities and mortgage REITs for yield enhancement.

Risk Factors¶

Real Estate Market Risk. The Fund is concentrated in real estate securities and is therefore more susceptible to real estate market conditions than a diversified equity fund. Property values can decline due to oversupply, rising vacancy rates, decreased rental income, neighborhood deterioration, changes in zoning laws, environmental liabilities, and natural disasters.

Interest Rate Risk. REITs are highly sensitive to interest rate movements. Rising interest rates increase borrowing costs for leveraged REITs, reduce the present value of future rental income streams, and make REIT dividend yields less attractive relative to fixed income alternatives. During the 2022 rate-hiking cycle, the FTSE Nareit All Equity REITs Index declined 24.4% while the S&P 500 fell 18.1%.

Leverage Risk. REITs typically employ significant financial leverage, with average debt-to-total-assets ratios of 35-55%. Leverage amplifies both gains and losses, and highly leveraged REITs face refinancing risk when debt matures during periods of tight credit conditions or elevated rates.

Sector Concentration Risk. Certain property types face structural headwinds. Office REITs confront secular declines in space utilization due to remote/hybrid work trends. Retail REITs face competitive pressure from e-commerce penetration. Healthcare REITs are subject to government reimbursement policy changes. These sector-specific risks can impair the Fund's returns.

Liquidity Risk. While publicly traded REITs are generally liquid, the Fund's smaller-cap REIT positions and preferred REIT securities may trade with lower volume and wider spreads during periods of market stress.

Tenant Concentration and Credit Risk. Individual REITs may derive significant revenue from a limited number of tenants. Tenant bankruptcy, lease non-renewal, or rent concessions can materially impact a REIT's cash flows and dividend-paying capacity.

Regulatory and Tax Risk. REITs must distribute at least 90% of taxable income to maintain their tax-advantaged status. Changes to REIT qualification rules or tax treatment of REIT distributions could materially affect the Fund's income and returns.

Environmental and Climate Risk. Real estate assets are exposed to physical climate risks (flooding, wildfires, hurricanes) and transition risks (building energy efficiency regulations, carbon pricing). Climate-related events can impair property values and increase insurance costs.

Fee Schedule¶

Expense Example: An investor purchasing $10,000 in Class A shares would pay approximately $500 in front-end load plus $102 in annual expenses in the first year, totaling $602. Over 5 years, assuming 5% annual return, cumulative costs would approximate $1,359. Institutional class investors pay approximately $77 annually per $10,000 invested.

Historical Performance¶

Performance data as of September 30, 2025. Returns for periods greater than one year are annualized.

Top 10 Holdings¶

As of September 30, 2025. Holdings are subject to change.

Sector Allocation¶

Tax Implications¶

REIT dividends receive distinct tax treatment compared to other equity dividends. Shareholders should be aware of the following:

Capital Gains Distributions: The Fund distributed $0.84 per share in long-term capital gains and $0.22 per share in short-term capital gains for the fiscal year ended December 31, 2024. Portfolio turnover was 41%, reflecting moderate rebalancing activity.

Tax Efficiency Rating: Morningstar Tax Cost Ratio of 1.68% (3-year), placing the Fund in the 54th percentile among real estate peers. REIT funds are inherently less tax-efficient than broad equity funds due to the nature of REIT distributions.

Qualified REIT Dividends: Under Section 199A of the Internal Revenue Code (Tax Cuts and Jobs Act of 2017), shareholders may be eligible for a 20% deduction on qualified REIT dividends, effectively reducing the maximum tax rate on these distributions from 37% to 29.6% for the highest tax bracket. Approximately 78% of the Fund's ordinary income distributions qualified for the Section 199A deduction in the most recent fiscal year.

Qualified Dividend Income: Only approximately 12% of the Fund's ordinary income distributions qualified for the reduced QDI tax rate, as most REIT dividends are classified as ordinary income rather than qualified dividends. The limited QDI qualification reflects the pass-through nature of REIT income.

Return of Capital: Approximately 18% of the Fund's distributions in the most recent fiscal year were classified as return of capital, which is not immediately taxable but reduces the shareholder's cost basis and may result in higher capital gains upon eventual sale of shares.

Minimum Investment¶

Redemption Terms¶

Shares are redeemable on any NYSE business day at the NAV next determined after receipt of the redemption request in good order (typically 4:00 PM ET).

Settlement: Standard settlement is T+2 business days for electronic disbursements. Wire transfers are processed same-day for requests received before 2:00 PM ET with appropriate wire instructions on file.

Early Redemption Fee: A 2.00% fee applies to shares held fewer than 90 days. The fee is retained by the Fund to compensate long-term shareholders for the costs associated with short-term trading activity.

Systematic Withdrawal Plans: Available for accounts with a minimum balance of $50,000. Shareholders may elect monthly, quarterly, or annual distributions, subject to a minimum withdrawal of $500 per transaction.

Important Disclosures¶

Past performance does not guarantee future results. The value of investments may fluctuate, and investors may receive back less than they invested. Current performance may differ from quoted results. Visit www.apexfinancialpartners.com/performance for the most recent data or call 1-800-APEX-FND.

Investors should carefully read the prospectus before investing. The prospectus, dated January 28, 2025, contains complete information about the Fund's objectives, risks, charges, and expenses. Copies are available at www.apexfinancialpartners.com/prospectus.

The Fund is concentrated in real estate securities and is therefore subject to greater risk and volatility than a broadly diversified equity fund. Real estate investments are affected by a variety of factors beyond the Fund's control, including local, regional, and national economic conditions.

The Fund is registered under the Investment Company Act of 1940. Apex Financial Partners serves as the investment adviser, registered with the SEC under the Investment Advisers Act of 1940. Shares are distributed by Apex Fund Distributors, LLC, member FINRA/SIPC.

FTSE Nareit All Equity REITs Index is a free-float adjusted, market capitalization-weighted index of U.S. equity REITs. The index is unmanaged and does not reflect fees, expenses, or sales charges. It is not possible to invest directly in an index.