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Thrivent Church Loan and Income Fund

XCLIX | Class S | Inception Date: September 28, 2018

Net Annual Fund Operating Expenses: 1.50%2 | Daily NAV

Zion Lutheran Church

Invest for impact with a unique offering from Thrivent Interval Funds, sponsored by Thrivent Financial, a not-for-profit membership organization of Christians.

 

Thrivent Church Loan and Income Fund Sales Profile

 

WHO SHOULD CONSIDER INVESTING?

The Fund may be suitable for investors who:

  • Want to positively impact Christian communities. 
  • Seek income and are able to tolerate limited liquidity. 
  • Have a long-term time horizon and a moderately conservative risk tolerance.

The Fund is only available through Financial Professionals.

 

 

Learn more about the fund’s potential impact.

Hear about the impact made within the Christian community by Thrivent and its Church Financing Group: https://www.thriventchurchloans.com/people-helped

 

Did you know? Thrivent made its first church loan in 1905 to Zion Lutheran Church in Rhinelander, Wisconsin, to help them rebuild after a fire.

 

The information about the Thrivent Church Financing Group is provided for informational purposes only and may not be illustrative of church loans included in the Fund's portfolio.
 

 

 

FUND OVERVIEW

 

Description

Thrivent Church Loan and Income Fund (XCLIX) has an inception date of September 28, 2018 and seeks to produce income. As an interval fund, the Fund offers daily subscriptions and quarterly redemptions.  

This fund seeks to produce income by investing in church loans and other debt securities. Church loans are privately issued mortgages to churches and other non-profit organizations with a Christian mission and can also include bonds issued by these organizations. The fund will invest in mortgage-backed securities and is not restricted in investing in other types of securities, including derivatives. As an interval fund, the Fund is not subject to regulatory limitations on illiquid securities, such as church loans.

Investment Strategy 

The Fund has a long-term target allocation of 70% church loans and 30% mortgage-backed securities and cash. The church loan segment of the Fund aims to provide impact and income, while the mortgage-backed segment seeks to provide income and liquidity for the quarterly redemption process. The portfolio management team works with Thrivent’s Church Finance group to source and structure the church loans. They use various research techniques, both quantitative and qualitative, to assess a borrower’s ability to repay the loan. The portfolio is constructed through a bottom-up process and is not managed with a target duration or yield. However, fund management will pay attention to these and other factors in building and managing the portfolio.

Church loans include mortgage loans and mortgage bonds issued by non-profit organizations with a Christian mission, such as churches, denominations and associations, and educational institutions. Church loans are not actively traded and are typically held to maturity. As a result, church loans have limited liquidity and may be difficult to value. The management team aims to invest in higher quality church loans that are secured by the borrower’s real assets.

The Fund has received an exemptive order from the SEC that permits it to co-invest in church loans with other Thrivent affiliated funds and is expected to provide the Fund investment opportunities that otherwise would be difficult to access.

Risks

The Fund invests primarily in church loans and should not be considered a liquid investment. The Fund also invests in mortgage-backed securities. The value of the Fund is influenced by factors impacting the overall market, debt securities in particular, and specific issues. The Fund may incur losses due to investments that do not perform as anticipated by the investment adviser. The Fund is a newly-organized and non-diversified closed end interval fund.

Church loans are mortgages taken out by non-profit organizations with a Christian mission, or bonds issued by these organizations. They are typically not listed on any national securities exchange and no active trading market exists for them. Church loans are primarily backed by real estate and are vulnerable to factors that affect the real estate market. Default risk is the risk that a borrower will not be able to make principal and interest payments in which case the value of the Fund may be negatively affected. There are many factors specific to churches that may impact a borrower’s finances and its ability to make payments.

The Fund has an interval fund structure, which means that, unlike with an open-ended mutual fund, investors cannot sell their shares daily. The Fund conducts quarterly repurchase offers. It is possible that a repurchase offer may be oversubscribed, and shareholders may only be able to have a portion of their shares repurchased. 

Bond prices may decline during periods of rising interest rates. Credit risk is the risk that an issuer of a debt security may not pay its debt. The value of mortgage-backed securities will be influenced by the factors affecting the housing market. In periods when dealer inventories of bonds are low in relation to market size, there is the potential for decreased liquidity and increased price volatility in the fixed income markets. The Fund has received an exemptive order allowing co-investment with other Thrivent accounts, which may give rise to actual or perceived conflicts of interest and subject the Fund to the risk of regulatory changes and regulatory actions. The Fund may require a period of time before it is fully invested in securities that achieve a desired portfolio composition for the Fund’s investment strategy. 

These and other risks are described in the Fund’s prospectus.

 

 


 

 

PORTFOLIO MANAGEMENT TEAM

 

Church Loans

 

Securitized Assets

 

 


 

 

FUND DOCUMENTS

 

Fund Prospectus & Fund Documents Statement of Additional Information Annual Report Semi-Annual Report
Thrivent Church Loan and Income Fund View View View View collapse rowexpand row
Thrivent Church Loan and Income Fund Prospectus & Fund Documents
Thrivent Church Loan and Income Fund Statement of Additional Information
Thrivent Church Loan and Income Fund Annual Report
Thrivent Church Loan and Income Fund Semi-Annual Report

 

 

BUYING AND SELLING SHARES

 

The Fund is a closed-end interval fund that allows investors to purchase shares daily and sell them quarterly on a predetermined date.

Subscriptions: Daily

Redemption/Repurchase Frequency: Quarterly

Redemption/Repurchase Fee: None1

Redemption/Repurchases Offered: March, June, September, December

Minimum Investment:

Initial (non-retirement): $2,000

Initial (IRA, tax-deferred): $1,000

Subsequent: $50

Net Expense Ratio: 1.50%2

 

 


The Fund is a closed-end “interval fund.”  Limited liquidity is provided to shareholders only through the fund’s quarterly offers to repurchase between 5% to 25% of its outstanding shares at net asset value (subject to applicable laws and approval of the Board of Trustees). The Fund currently expects to offer to repurchase 25% of outstanding shares per quarter. It is possible that a repurchase offer may be oversubscribed, with the result that shareholders may only be able to have a portion of their shares repurchased. There is no assurance that you will be able to redeem your shares when or in the amount that you desire. There is no secondary market for the fund’s shares and none is expected to develop.  Investors should consider shares of the fund to be an illiquid investment.

1The Fund does not currently charge a repurchase fee. However, the Fund may introduce a repurchase fee in the future of up to 2% on shares accepted for repurchase, subject to approval of the Fund Board.

2Thrivent Church Loan and Income Fund's gross expense ratio is 5.28%. The adviser has contractually agreed through at least July 31, 2020 to waive certain fees and/or reimburse certain expenses associated with the Fund. Refer to the expense table in the Fund's Prospectus.