FS Credit Income Fund

FS Credit Income Fund takes an active approach to investing beyond core fixed income

See how the fund has performed against its goals

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The opportunity in credit markets

Though the first quarter of 2020 delivered significant volatility to the markets, there may be an opportunity to participate in a significant bounce back. Credit markets have historically proven resilient following downturns, with negative years being followed by strong returns.

HIGH YIELD BOND RETURNS (%)

Source: ICE BofAML U.S. High Yield Index. Past performance is not indicative of future results. Short-term performance is not representative of long-term results.

Accessing a $6.4 trillion opportunity1

There is a $6.4T investment opportunity beyond core fixed income, including bondsBonds are issued by companies that typically carry a credit rating below investment grade., loansLoans are issued by companies to finance their operations, support growth or refinance existing debt., structured productsStructured products are investment vehicles that invest in a wide range of income-producing assets that raise money by issuing debt and equity securities backed by a pool of assets. and emerging market debtEmerging market debt includes investing in the debt of developing countries and the corporations within them.. Adding these to your fixed income portfolio may help provide differentiated sources of income and diversification as well as help manage the impact of changing interest rates.2

  • $1,153BEmerging market government debt
  • $1,079BEmerging market corporate debt
  • $1,242BU.S. high yield bonds
  • $1,154BU.S. loans
  • $306BEuropean high yield bonds
  • $343BEuropean loans
  • $60BU.S. distressed high yield bonds
  • $1,050BAsset-backed securities

Diversification does not protect an investor from market risk and does not ensure a profit. Investing in non-core asset classes may carry increased risks as compared to core fixed income assets, including credit risk and liquidity risk.

Going beyond the core

Investors have traditionally relied on a mix of Treasuries, municipal bonds and corporate bonds to generate income. Less-liquid, harder-to-access areas of the credit market may provide an income premium over traditional fixed income investments.3

See the comparison

CURRENT YIELD AS OF MARCH 31, 2020

  • Traditional core3
  • Differentiated sources of income2
Bar chart comparing yield percentage between Government, Corporate and Asset-backed securities. GOVERNMENT CORPORATE ASSET-BACKED SECURITIES U.S. Treasuries Municipal bonds Emerging market government debt U.S. corporate bonds U.S. loans Emerging market corporate debt U.S. high yield bonds Mortgage- backed securities Structured products 0.6% 3.0% 3.7% 1.3% 7.0% 10.1% 6.0% 9.2% 4.6%

Past performance is not a guarantee of future results. The benchmarks are shown for illustrative purposes only. An investment cannot be made directly in an index.

FS Credit Income Fund’s actual investments and performance may differ substantially from those of the indexes presented. Differentiated sources of income refers to income generated by non-core fixed income investments (including, but not limited to, emerging market government debt, high yield bonds, emerging market corporate debt and structured products). The yields of these investments may be higher than those of core fixed income investments (including, but not limited to, U.S. Treasuries, investment grade corporate bonds and U.S. municipal bonds). Investing in non-core assets may carry a variety of risks, including credit risk and liquidity risk.

U.S. Treasuries are represented by the ICE BofAML U.S. Treasury Index. Municipal bonds are represented by the ICE BofAML U.S. Municipal Securities Index. Municipal bonds may be subject to interest rate risk. Emerging market government debt is represented by the J.P. Morgan EMBI Global Index. Emerging market government debt may be subject to a higher degree of currency, default and political risk. U.S. corporate bonds are represented by the ICE BofAML U.S. Corporate Index. U.S. corporate bonds may be subject to default and interest rate risk. U.S. loans are represented by the S&P/LSTA Leveraged Loan Index. U.S. loans may be subject to default risk. Emerging market corporate debt is represented by the J.P. Morgan CEMBI Broad Index. Emerging market corporate debt may be subject to higher degree of currency, default and political risk. U.S. high yield bonds are represented by the ICE BofAML U.S. High Yield Index. U.S. high yield bonds may be subject to higher degree of default risk compared to investment grade bonds. Mortgage-backed securities are represented by the ICE BofAML U.S. ABS and CMBS Index. Mortgage-backed securities may be subject to default risk. Structured products are represented by the J.P. Morgan CLOIE Index and Clarity Solutions Group, LLC. Structured products may be subject to higher degree of default and liquidity risk.

FS Credit Income Fund broadly invests across global credit markets and seeks to generate attractive total returns, including current income and capital appreciation.

Focusing on select assets

FS Credit Income Fund is a multi-sector alternative income fund within a closed-end interval fund structure. Its flexible strategy is designed to provide diversification and differentiated sources of income by investing in harder-to-access credit market assets.3,4

62%

Bonds are issued by companies that typically carry a credit rating below investment grade.

11%

Loans are issued by companies to finance their operations, support growth or refinance existing debt.

25%

Structured credit is an investment vehicle that invests in a wide range of income-producing assets that raise money by issuing debt and equity securities backed by a pool of assets.

1%

Emerging market debt includes investing in the debt of developing countries and the corporations within them.

As of 3/31/2020

Percentages are rounded to the nearest full point; therefore, they may not add to 100%. Holdings and allocations are subject to change.

Attractive level of income since inception

FS Credit Income Fund has generated an above-average level of income since inception making it an attractive allocation in a low yield environment.

FCRIX (CLASS I) DISTRIBUTION RATE HISTORY

As of March 31, 2020. The annualized distribution rate shown is expressed as a percentage equal to the projected annualized distribution amount per share (which is calculated by annualizing the most recent quarterly cash distribution per share declared as of the quarter indicated without compounding), divided by the fund’s NAV per share as of the end of the quarter indicated, in each case on a per class basis. The fund intends to pay ordinary cash distributions quarterly. The payment of future distributions on the fund’s common shares is subject to the discretion of the fund’s board of trustees and applicable legal restrictions and, therefore, there can be no assurance as to the amount or timing of any such future distributions. The fund may pay distributions in significant part from sources that may not be available in the future and that are unrelated to the fund’s performance, such as return of capital, borrowings or expense reimbursements and waivers. For the 12 months ended March 31, 2020, 100% of distributions were funded through ordinary income.

Managers with extensive credit experience

Together, FS Investments and GoldenTree Asset Management bring over 30 years of experience designing and managing institutional-quality credit funds for institutions and the broader investing public.

Read more about our partnership with GoldenTree

GoldenTree Asset Management is an employee-owned asset management firm that specializes in opportunities across the credit universe.

Managing risk sensibly

With all investments comes risk. FS Credit Income Fund is designed to navigate three key risks of fixed income investing – interest rate risk, credit risk and liquidity risk.