Bond Index at 9/30/17. GROWTH OF $10 (SINCE FOCIX INCEPTION). Best. +79.94% ... Top 10 Issuers as of 6/30/17(4) (% of Ne
20
14
FOCIX
THE FAIRHOLME FOCUSED INCOME FUND Managed by Bruce Berkowitz, Chief Investment Officer of Fairholme Capital Management (the “Manager”)
at 9/30/17
Seeks current income.
Growth of $10 (Since Inception)(1) Net Asset Value
$11.98
60-Month Rolling Returns Best
Distributions
$5.20
Average
Reinvestment Value(2)
$2.23
Worst
Total Value
$19.41
FOCIX
Bloomberg Barclays Bond Index
+79.94%
+25.01%
(12/2011-11/2016)
(2/2010-1/2015)
+49.61%
+16.74%
Percentage of Positive Periods(3)
+17.51%
+10.52%
(3/2011-2/2016)
(8/2012-7/2017)
100%
100%
20
$
$19.41
18
$
GROWTH OF $10 (SINCE FOCIX INCEPTION) 16
$
FOCIX TOTAL RETURN (with dividends) BLOOMBERG BARCLAYS BOND INDEX (with dividends)
14
$
$13.23
12
$
10
$
8 1-Dec-09 31-Mar-10 30-Jun-10 30-Sep-10 31-Dec-10 31-Mar-11 30-Jun-11 30-Sep-11 31-Dec-11 31-Mar-12 30-Jun-12 30-Sep-12 31-Dec-12 31-Mar-13 30-Jun-13 30-Sep-13 31-Dec-13 31-Mar-14 30-Jun-14 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15 30-Sep-15 31-Dec-15 31-Mar-16 30-Jun-16 30-Sep-16 30-Nov-2016 31-Dec-16 31-Mar-17 30-Jun-17 30-Sep8
$
2010
2011
2012
2013
2014
2015
2016
2017
The chart above covers the period from inception (December 31, 2009) of The Fairholme Focused Income Fund (the “Fund” or “FOCIX”) to September 30, 2017. Performance information quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted herein. Performance figures assume reinvestment of dividends and capital gains. Performance prior to March 29, 2012, reflects fee waivers by the Manager. Most recent month-end performance and answers to any questions you may have can be obtained by calling Shareholder Services at (866) 202-2263. The Bloomberg Barclays U.S. Aggregate Bond Index (the “Bloomberg Barclays Bond Index”) is a broad-based flagship benchmark that measures the investment grade, U.S. dollar‐denominated, fixed‐rate taxable bond market, and includes Treasuries, government‐related and corporate securities, mortgage-backed securities (agency fixed‐rate and hybrid adjustable‐rate mortgage pass‐throughs), asset‐backed securities and commercial mortgage‐backed securities (agency and non‐agency). The Bloomberg Barclays Bond Index is used for comparative purposes only, and is not meant to be indicative of the Fund’s performance, asset composition, or volatility. Results may differ markedly from the performance of the Bloomberg Barclays Bond Index in either up or down market trends. Because indices cannot be invested in directly, these index returns do not reflect a deduction for fees, expenses, or taxes. The Fund’s expense ratio is 1.01%. The expense ratio includes acquired fund fees and expenses which are incurred indirectly by the Fund as a result of investing in securities issued by one or more investment companies, including money market funds.
Bloomberg Barclays Bond Index
FOCIX
1-Year
+17.48%
+0.07%
1-Year
+17.48%
+0.07%
5-Year
+59.55%
+10.76%
5-Year
+9.79%
+2.06%
Since Inception
+94.05%
+32.34%
Since Inception
+8.93%
+3.68%
The Fund’s 30-Day SEC Yield at September 30, 2017, was 5.04%.
Annualized Return
Bloomberg Barclays Bond Index
Cumulative Return
FOCIX
FOCIX
THE FAIRHOLME FOCUSED INCOME FUND Top 10 Issuers as of 6/30/17(4) (% of Net Assets) Cash and Cash Equivalents
(5)
33.5%
Sears Holdings Corp.
10.3%
Imperial Metals Corp.
10.1%
Seritage Growth Properties
9.6%
Federal National Mortgage Association
6.6%
Federal Home Loan Mortgage Corp.
6.0%
International Wire Group, Inc.
4.6%
GMAC Capital Trust I, Inc.
4.5%
Monitronics International, Inc.
4.2%
HC2 Holdings, Inc.
3.9%
Investment Minimums Initial, Regular Account Initial, IRA
Portfolio Composition by Security Type as of 6/30/17 Domestic Corporate Bonds
6.0%
Commercial Paper Domestic Preferred Equities Domestic Common Equities Foreign Corporate Bonds
10.1%
Money Market Funds $5,500
(6)
Subsequent, Regular Account and IRA Subsequent, Automatic Investment Plan
25.8%
11.5%
$10,000
(6)
2.1% 2.0%
25.5%
19.6% Miscellaneous Investments
$1,000 $250/month
U.S. Treasury Bills
Investment Objective The Fund seeks current income. The Manager attempts, under normal circumstances, to achieve this objective by investing in a focused portfolio of cash distributing securities. To maintain maximum flexibility, the securities in which the Fund may invest include corporate bonds and other corporate debt securities of issuers in the U.S. and foreign countries, bank debt (including bank loans and participations), government and agency debt securities of U.S. and foreign countries (including U.S. Treasury bills), convertible bonds and other convertible securities, and equity securities, including preferred and common stock, and interests in real estate investment trusts. There is no guarantee that the Fund will meet its objective. (1) This chart assumes that distributions have been reinvested and does not include the effect of taxes. (2) This figure represents the appreciation of the reinvested distributions since inception. (3) This figure represents the percentage of 60-month rolling periods with returns greater than 0% since the inception of the Fund. (4) Percentages were calculated aggregating all securities held of a particular issuer. (5) Includes cash, U.S. Treasury Bills, money market funds, and various commercial paper issuers. (6) The minimum initial investment for regular accounts and IRAs may be waived by the Manager in its discretion. The Fund is a non-diversified mutual fund, which means that the Fund invests in a smaller number of securities when compared to more diversified funds. This strategy exposes the Fund and its shareholders to greater risk of loss from adverse developments affecting portfolio companies. The Fund’s investments are also subject to interest rate risk, which is the risk that the value of a security will decline because of a change in general interest rates. Investments subject to interest rate risk will usually decrease in value when interest rates rise and rise in value when interest rates decline. Also, securities with long maturities typically experience a more pronounced change in value when interest rates change. Debt securities are subject to credit risk (potential default by the issuer). The Fund may invest without limit in lower-rated securities. Compared to higher-rated fixed-income securities, lower-rated debt may entail greater risk of default and market volatility. Shares of the Fund are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risk, including possible loss of the principal amount invested. Automatic Investment Plans do not assure a profit and do not protect against a loss in declining markets. The composition of the Fund’s portfolio holdings and sector weightings is subject to change and should not be considered a recommendation to buy or sell any securities. Current and future portfolio holdings are subject to risk.
Contacts SHAREHOLDER SERVICES
MANAGER
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Fairholme Funds, Inc. c/o BNY Mellon Investment Servicing (US) Inc. 4400 Computer Drive Westborough, MA 01581-1722
Fairholme Capital Management, LLC 4400 Biscayne Boulevard Miami, FL 33137
Deloitte & Touche LLP 1700 Market Street Philadelphia, PA 19103
CUSTODIAN
DISTRIBUTOR
LEGAL
The Bank of New York Mellon 225 Liberty Street New York, NY 10286
Fairholme Distributors, LLC 899 Cassatt Road Berwyn, PA 19312
Seward & Kissel, LLP 901 K Street NW Washington, DC 20001
The Fund’s investment objective, risks, charges, and expenses should be considered carefully before investing. The prospectus and summary prospectus contain this and other important information about the Fund, and may be obtained by calling Shareholder Services at (866) 202-2263 or visiting our website www.fairholmefunds.com. Read them carefully before investing. Fairholme Distributors, LLC (10/17)
