Quarterly Repurchase Offer Period Open for Q4 2020
The Fund’s quarterly repurchase offer begins on November 20, 2020 and ends on December 15, 2020. If shareholders do not wish to tender any shares to the Fund, they do not need to take any action. The fund is offering 20% of its outstanding shares.
Repurchase requests must be submitted by December 15, 2020 at 4:00 p.m. Eastern time. Shareholders can withdraw or modify their submitted request any time before the deadline. As a reminder, the fund does not provide daily liquidity and the next opportunity for shareholders to redeem shares will be in February 2021.
This Fund seeks to produce income by investing in church loans and other debt securities. These church loans are privately issued mortgages to churches and other U.S. non-profit organizations with a stated Christian mission. The Fund will also invest in mortgage-backed securities and may also invest in other types of securities, including derivatives. Churches borrow to fund growth in their congregations and their ministries. Church loans in the Fund are directly originated and underwritten by Thrivent, which has been an active church lender for over 100 years. As an interval fund, to the extent consistent with the applicable liquidity requirements for interval funds, The Fund may invest without limit in illiquid securities, such as church loans.
The Fund will invest a majority of its assets in church loans and the remainder in other debt securities, such as 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.
The Fund invests primarily in church loans and mortgage-backed securities. The value of the Fund is influenced by factors impacting the overall market, debt securities and specific issuers . The Adviser's assessment of investments may prove incorrect, resulting in losses or poor performance. The Fund is a non-diversified closed-end interval fund with a quarterly repurchase option. An investment in the Fund’s shares should be considered a long-term investment with risks, including concentration risk, limited liquidity and the risk of a loss of some or all of the amount invested.
The church loans invested in by the Fund are mortgages taken out by U.S. non-profit organizations with a stated Christian mission. They are typically not listed on any national securities exchange and no active trading market exists for them. These church loans are primarily backed by real estate and are vulnerable to factors that affect the real estate market. Certain factors specific to churches may impact a borrower’s finances and its ability to make payments. Churches rely on voluntary contributions from their congregations for their primary source of income, which may be used to repay church loans. The membership of a church, the attendance of its members, or the per capita contributions of its members may not remain constant or may decrease, which could have a negative impact on the ability of a church to repay a loan. Loans are subject to a number of risks including credit risk, default risk, refinance risk and modification risk. Credit risk is the risk that an issuer of a debt security may not pay its debt. 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. The value of mortgage-backed securities will be influenced by the factors affecting the housing market. A global pandemic such as COVID-19 may result in substantial market volatility and business disruption and may negatively impact church borrowers and the Fund’s ability to process shareholder repurchases. Bond prices may decline during periods of rising interest rates. 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 actions. These and other risks are described in the Fund’s prospectus.
The Fund is a closed-end interval fund that allows investors to purchase shares daily and sell them quarterly on a predetermined date.
Net Expense Ratio: 1.00%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). 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.
Thrivent Church Loan and Income Fund is expected to pay a capital gain distribution in December 2020. Please contact your tax advisor to review the impact of the capital gains on your situation and discuss possible strategies. Thrivent Financial and its representatives and employees cannot provide tax or accounting advice.
Capital Gain Distribution estimates as of October 31, 2020
Thrivent Church Loan and Income Fund
For state income tax purposes, several states allow “pass-through” treatment of interval fund dividends derived from interest on U.S. government obligations. To calculate the number of dividends qualifying for pass-through treatment, multiply the amount in Box 1a of your Form 1099-DIV by the percentages that apply to your state.
The types of government securities that qualify for such treatment vary by state. Please consult with a tax advisor to determine which, if any, of the obligations listed in the following table may be exempt from your state income tax.
At Thrivent, we recommend you consult your tax advisor to make sure you’re getting the most out of your investments. Thrivent and their representatives cannot provide legal or tax advice.
Type of Government Obligation
U.S. Treasury Bonds: 0.30%
U.S. Government Agencies Total: 5.76%
Learn more about the Fund's potential impact.
Hear about the impact made within the Christian community by Thrivent and its Church Financing Group.4
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.
1 Thrivent Church Loan and Income Fund portfolio management team works with Thrivent Church Finance group to source and structure the loans in the portfolio.
2 Thrivent Church Loan and Income Fund's gross expense ratio is 5.40%. The adviser has contractually agreed through at least July 31, 2021 to waive certain fees and/or reimburse certain expenses associated with the Fund. Refer to the expense table in the Fund's Prospectus.
3 The 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.
4 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.
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Investing involves risks, including the possible loss of principal. The prospectus contains more complete information on the investment objectives, risks, charges and expenses of the fund, and other information, which investors should read and consider carefully before investing. Prospectuses are available at thriventintervalfunds.com or by calling 800-847-4836.
No communication or content on this website, including investment analysis tools and information about Thrivent Church Loan and Income Fund, is intended to provide investment advice or recommendations of any kind and may not be relied upon as such. The information provided is also not intended as a source for tax, legal or accounting advice. Please consult with a legal and/or tax professional for specific information regarding your individual situation. The communication and content found on this website, including investment analysis tools and information about the Thrivent Church Loan and Income Fund, are not intended as a solicitation to buy or an offer to sell any security. Thrivent Distributors, LLC has undertaken no review of the individual circumstances of any investor and makes no representations with respect to the suitability of any investment for a particular investor.
The distributor for Thrivent Church Loan and Income Fund is Thrivent Distributors, LLC, a registered broker-dealer and member of FINRA and SIPC. Any purchase, sale or redemption of the Thrivent Church Loan and Income Fund will be executed through the transfer agent, Thrivent Financial Investor Services, Inc., Asset management services provided by Thrivent Asset Management, LLC., an SEC-registered investment adviser. Thrivent Distributors, LLC, Thrivent Financial Investor Services Inc, and Thrivent Asset Management, LLC are subsidiaries of Thrivent, the marketing name for Thrivent Financial for Lutherans.