- Our purpose is to utilize blockchain to enable an inclusive resilient, and frictionless global economy.
Stablecoin challenges
- No yield
- Taxes
- Lack transparency
- USA regulatory compliance
- Depegging, USDC reliance
Segment | Problem |
---|---|
B2B Payments |
Difficult to track High fees Slow Lack transparency |
Stablecoins |
No yield distribution Lack transparency Taxes U.S. regulatory compliance Depegging, USDC reliance |
Money Market Funds |
Collateral immobility Redemption pressure during market stress Costly, problematic settlement |
Cash Management |
Idle cash losing value due to inflation High subscription and redemption fees |
XFT’s Compliant Solution
- Permissionless stablecoin
- SEC regulated
- Daily yield
- Tax exempt
Trillion dollar problem
- $127T B2B payment volume
- $8.5T stablecoin market
- $2.7T cash management costs
- 80% SMB share of B2B spend
- $950B revenue opportunity
Scalable fee structure
- 20% yield share
- Gas fee pass-through
- No mgmt, performance, txn fees
- Margins grow with AUM
Why USDX?
- Low minimums
- Zero counterparty risk
- Programmatically banked
- No capital gains or income taxes
- No management, performance, transaction fees
Type | Example | Use Case |
---|---|---|
Neobanks | Brex | Cross-border payments |
Corporate Treasuries | Apple | Yield-bearing collateral |
Insurance | Prudential | Managing float and reserves with low-risk, yield-bearing collateral |
Fintech | Robinhood | Yield on idle cash balances |
MMF Managers | FOBXX | Inflows, counterparty diversification, liquidity risk reduction |
Customer | Value Proposition |
---|---|
MMFs |
Boosts AUM + fee income Reduces cash flow volatility Increases daily/weekly liquid assets Allows for greater counterparty diversification |
Investors |
Daily yield on idle cash Low minimums Instant settlement + 24/7 minting and redemption Yielding-bearing collateral |
Payment Providers |
Reduce prefunding from eight days to four Reduce FX fees by 20 to 30 bps Focus on corporate strategy vs. operations Improved access, reduced cost, faster speed, certainty |
Bringing the rest of capital markets onchain
- SEC registration
- Pilot with funds and neobanks
- Plug and Play ecosystem for B2B acquisition
- Target fintech infra (Visa, Plaid) + advisors for distribution
- XFT Coin Systems
- Geoledgers -> regulatory capture
- USDC: yield, taxes, dealer
- USDM: taxes, dealer
- OUSG: taxes, dealer
- ArCoin: taxes
- d.USDR: underlying, taxes
- Bridge: stablecoin
- VMSXX: collateral mobility
- DTCC: tech stack
HEADLINES
- US HEALTHCARE PAYMENTS NETWORK RESTORED 9 MONTHS AFTER RANSOMWARE ATTACK
- CYBERATTACK CRIPPLES US MILITARY PHARMACIES WORLDWIDE
- CYBERATTACK PARALYZES NEW YORK PRESCRIPTION SYSTEM
- PHARMACIES ACROSS US STRUGGLE TO PROCESS PRESCRIPTIONS AFTER CYBERATTACK
- PATIENTS STRUGGLE TO GET LIFESAVING MEDICATION AFTER HEALTHCARE CYBERATTACK
- UNITEDHEALTH CYBERATTACK STILL IMPACTING PRESCRIPTION ACCESS: "THREATS TO LIFE"
- UNITEDHEALTH HACK EXPOSES 100M RECORDS IN LARGEST-EVER US HEALTHCARE BREACH
- TREASURY AND IRS FINALIZE DIGITAL ASSET TAX REPORTING RULES
- SEC EXPANDS "DEALER" DEFINITION TO INCLUDE KEY MARKET PARTICIPANTS
- THE PATENT THAT HELPED VANGUARD POCKET BIG GAINS EXPIRES
- STRIPE ACQUIRES STABLECOIN PLATFORM BRIDGE FOR $1.1 BILLION
- STABLECOINS FIND PRODUCT-MARKET FIT
- FIDELITY SUFFERS $3.8BN MUTUAL FUND OUTFLOWS IN 2024
- Alexander Reed
- Michael McCullom
- Internet mobility
- Low minimums
- No slippage
- No chargeback risks
- Zero counterparty risk
- Programmatically banked
- Prefunded transactions
- No capital gains or income taxes
- No management, performance, transaction fees
- Instant 24/7/365 bilateral settlement
- Quantum resistant cryptography
- Daily yield distributions
- SEC regulated
- Global fiat onramps
- Real-time NAV for underlying assets
- Tax-exempt in-kind redemption
- Yield-bearing collateral
- Smart contract collateral
- Redemption collateral
- Secure payment systems
- Tax management
- Self-custodied bank account
- No management, performance, transaction fees
- Outflow reduction
- Cash drag reduction
- Fractional shares
- Cross-border payments
- Intra-company payments
- Inter-company payments
- Event driven payments
- Tracking error reduction
- Return from low-risk US government securities
Municipal Bonds
- High dividends
- Tax free
- Safe
- Rising NAVs
Closed-end funds
- Managed distributions
- Fixed supply
- Compliance
- Not required to redeem if outflows
- "The one advantage that a closed-end fund or ETF has over an open-end fund is that it cannot be forced to sell stocks because of redemptions. If shareholders in an open-end fund want to redeem more shares than the dividends the fund receives, the fund must sell stock and realize capital gains. In an ETF, shares are redeemed in-kind by institutions, so there is no tax consequence. In a closed-end fund, shareholders cannot have net redemptions; if they want to sell, they must find a buyer on the market."
- Total Return (Yield Driven)
- Diversification
- Professional Management
- Leverage Used by Fund
- Free Leverage of The Discount
- Control: Limit & Stop Orders
- Fixed Capitalization: No Redemption Pressures
- Capitalize on Market Inefficiencies
- Low Active Institutional Ownership / Mostly Retail
- Investor gets NAV value vs discount
- Tax efficient in-kind transaction
- Exits at NAV
- Second layer of liquidity for fixed share investment products
USE CASES
- Arbitrage
- Activist prevention
FAQs
- Interval and tender offer funds typically engage in a continuous offering of shares registered under the Securities Act of 1933 (the "1933 Act") and may open and close to admit new investors as needed.
- Enables an interval or tender offer fund to replenish cash that can be used to satisfy periodic repurchase offers.
- Can alleviate the need to sell existing portfolio holdings to generate cash for new investments.
- Allows the fund to take in cash to pursue new investment opportunities.
- [BLANK]
Prospectus
- XFT Municipal Income Fund (the “Fund”) is a continuously offered, diversified, closed-end management investment company that intends to operate as an interval fund. As an interval fund, the Fund will offer to make repurchases of between 5% and 25% of its outstanding shares at net asset value (“NAV”), on a quarterly basis, unless such offer is suspended or postponed in accordance with regulatory requirements.
- XFT Municipal Money Market Fund’s investment objective is to seek to provide current income that is exempt from federal personal income taxes while maintaining liquidity and a stable share price of $1. As such it is considered one of the most conservative investment options offered by XFT. Although the fund invests in short-term, high-quality securities, the amount of income that a shareholder may receive will be largely dependent on the current interest rate environment and the availability of eligible municipal securities. Investors in a higher tax bracket who have a short-term savings goal and seek a competitive tax-free yield may wish to consider this option.
- The Fund seeks to provide current income that is exempt from federal personal income taxes while maintaining liquidity and a stable share price of $1.
Investment Goal
- Maintain $1.00 share price
- Tax exemption
- Yield
- Maintain stable $1.00 share price
- Tax exemption
- Yield
- Under normal market conditions, the Fund will invest at least 80% of its Managed Assets in municipal securities that at the time of investment are investment grade quality. “Managed Assets” means the total assets of the Fund (including any assets attributable to money borrowed for investment purposes) minus the sum of the Fund’s accrued liabilities (other than money borrowed for investment purposes). Investment grade quality securities are those that are rated within the four highest grades (Baa or BBB or better by Moody’s Investor’s Service, Inc. (“Moody’s”), Standard & Poor’s Corporation Ratings Group, a division of The McGraw-Hill Companies, Inc. (“S&P”), or Fitch Ratings, Inc. (“Fitch”)) or those that are unrated but judged to be of comparable quality by the Advisor or BlackRock Investment Management, LLC (the “Sub-Advisor”), the Fund’s investment sub-adviser. Municipal securities rated Baa by Moody’s are investment grade, but Moody’s considers municipal securities rated Baa to have speculative characteristics. Changes in economic conditions or other circumstances are more likely to lead to a weakened capacity for issuers of municipal securities that are rated BBB or Baa (or that have equivalent ratings) to make principal and interest payments than is the case for issuers of higher grade municipal securities.
- The Fund may invest up to 20% of its Managed Assets in municipal securities that at the time of investment are rated below investment grade quality (rated Ba/BB or below by Moody’s, S&P or Fitch) or securities that are unrated but judged to be of comparable quality by the Advisor or the Sub-Advisor. Securities of below investment grade quality are regarded as having predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal, and are commonly referred to as “junk bonds.”
- The Fund may invest 25% or more of its Managed Assets in municipal securities of issuers in the same state (or U.S. Territory) or in the same economic sector.
- After the initial investment period, the Fund intends to actively manage the maturity of its securities, which are expected to have a dollar weighted average effective maturity approximately equal to the Fund’s maturity date. As a result, over time the maturity of the Fund’s portfolio is expected to shorten in relation to the remaining term of the Fund.
- There can be no assurance that the Fund’s investment objectives, including to return $25.00 per common share to holders of common shares on or about December 31, 2030, will be achieved or that the Fund’s investment program will be successful. See “The Fund’s Investments.”
- The following tables describe the fees and expenses you may pay if you buy, hold, and sell Dollar Shares or DeFi Shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.
Annual Fund Operating Expenses
(Expenses that you pay each year as a percentage of the value of your investment)
(Expenses that you pay each year as a percentage of the value of your investment)
|
|
Management Fees
|
0.00
%
|
12b-1 Distribution Fee
|
None
|
Other Expenses
|
0.01
%
|
Total Annual Fund Operating Expenses
|
0.01
%
|
Examples
The following examples are intended to help you compare the cost of investing in
the Fund’s Dollar Shares or DeFi Shares with the cost of investing in other
mutual funds. They illustrate the hypothetical expenses that you would incur over
various periods if you were to invest $10,000 in the Fund’s shares. These
examples assume that the shares provide a return of 5% each year and that total
annual fund operating expenses remain as stated in the preceding table. You
would incur these hypothetical expenses whether or not you were to redeem
your investment at the end of the given period. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
|
1 Year
|
3 Years
|
5 Years
|
10 Years
|
Dollar Shares
|
$17
|
$55
|
$96
|
$217
|
DeFi Shares
|
$9
|
$29
|
$51
|
$115
|
- The following examples are intended to help you compare the cost of investing in the Fund's Dollar Shares or DeFi Shares with the cost of investing in other mutual funds. They illustrate the hypothetical expenses that you would incur over various periods if you were to invest $10,000 in the Fund's shares. These examples assume that the shares provide a return of 5% each year and that total annual fund operating expenses remain as stated in the preceding table. You would incur these hypothetical expenses whether or not you were to redeem your investment at the end of the given period. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
- The Fund’s distributions may be taxable as ordinary income or capital gain. A majority of the income dividends that you receive from the Fund are expected to be exempt from federal income taxes. However, a portion of the Fund’s distributions may be subject to federal, state, or local income taxes or the federal alternative minimum tax.
- RIC status; avoids US income tax if income and gains are distributed.
- Tax exemption via municipal bonds
- Frequent flyer miles and reward points
- Distribute daily variable dollar amounts to maintain $1 NAV per managed distribution policy.
Methods
- Increase distribution if NAV > $1
- Distribute income to avoid NAV growth
- Return capital to offset premium
- Reduce distribution if NAV < $1
- The Fund invests in a variety of high-quality, short-term municipal securities. To be considered high quality, a security must be determined by XFT to present minimal credit risk based in part on a consideration of maturity, portfolio diversification, portfolio liquidity, and credit quality. The Fund invests in securities with effective maturities of 397 days or less, maintains a dollar-weighted average maturity of 60 days or less, and maintains a dollar-weighted average life of 120 days or less.
Principal Risks
The Fund is designed for investors with a low tolerance for risk, but you could still
lose money by investing in it.
The Fund is subject to the following risks, which
could affect the Fund’s performance, and the level of risk may vary based on
market conditions:
•
Income risk
, which is the chance that the Fund’s income will decline because
of falling interest rates. Income risk is generally high for short-term bond funds,
so investors should expect the Fund’s monthly income to fluctuate accordingly.
•
Interest rate risk
, which is the chance that bond prices overall will decline
because of rising interest rates. Interest rate risk should be low for the Fund
because it invests primarily in short-term bonds, whose prices are less sensitive
to interest rate changes than are the prices of longer-term bonds.
•
Call risk
, which is the chance that during periods of falling interest rates,
issuers of callable bonds may call (redeem) securities with higher coupon rates
or interest rates before their maturity dates. The Fund would then lose any price
appreciation above the bond’s call price and would be forced to reinvest the
unanticipated proceeds at lower interest rates, resulting in a decline in the Fund’s
income. Such redemptions and subsequent reinvestments would also increase
the Fund’s portfolio turnover rate. Call risk is generally low for short-term
bond funds.
•
Extension risk
, which is the chance that during periods of rising interest rates,
certain debt securities will be paid off substantially more slowly than originally
anticipated, and the value of those securities may fall. Extension risk is generally
low for short-term bond funds.
•
Credit risk
, which is the chance that a bond issuer will fail to pay interest or
principal in a timely manner or that negative perceptions of the issuer’s ability to
make such payments will cause the price of that bond to decline. In general,
credit risk should be relatively low for the Fund because it invests primarily in
bonds that are considered to be of high quality.
•
Liquidity risk
, which is the chance that the Fund may not be able to sell a
security, including restricted securities, in a timely manner at a desired price.
•
Manager risk
, which is the chance that poor security selection will cause the
Fund to underperform relevant benchmarks or other funds with a similar
investment objective.
•
Tax risk
, which is the chance that all or a portion of the tax-exempt income
from municipal bonds held by the Fund will be declared taxable, possibly with
retroactive effect, because of unfavorable changes in tax laws, adverse
interpretations by the Internal Revenue Service or state or local tax authorities, or
noncompliant conduct of a bond issuer.
- You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon sale of your shares. An investment in the Fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor is not required to reimburse the Fund for losses, and you should not expect that the sponsor will provide financial support to the Fund at any time, including during periods of market stress.
- You may purchase or redeem shares online through our website (xft.finance). The minimum investment amount required to open and maintain a Fund account for Investor Shares or DeFi Shares is $3,000 or $50,000, respectively. The minimum investment amount required to add to an existing Fund account is generally $1. Financial intermediaries, institutional clients, and XFT-advised clients should contact XFT for information on special eligibility rules that may apply to them regarding DeFi Shares. If you are investing through an intermediary, please contact that firm directly for more information regarding your eligibility.
- The Fund’s distributions may be taxable as ordinary income or capital gain. A majority of the income dividends that you receive from the Fund are expected to be exempt from federal income taxes. However, a portion of the Fund’s distributions may be subject to federal, state, or local income taxes or the federal alternative minimum tax.
- The Fund and its investment advisor do not pay financial intermediaries for sales of Fund shares.
CIK | ||
Series | ||
Class/Contract | Name | Symbol |
0000225997 | XFT MUNICIPAL BOND FUNDS | |
S000002892 | XFT High-Yield Tax-Exempt Fund | |
0x81536233C3FfaEa0198D7B5Ce8dEceDf3C520A66 | Dollar Tokens | USDX |
C000007950 | DeFi Shares | USDXW |
- Structure
- Non-diversified, closed-end management company registered under the 1940 Act
- Distribution Policy
- Distributes daily variable dollar amounts per managed distribution policy, benchmarked to CEFA's Municipal Bond Select portfolio.
- Tax Treatment
- The Company intends to elect to be treated as a regulated investment company (RIC); if qualified, the Company will not be subject to US income tax to the extent income and gains are distributed
- Delaware Series Trust
- The Fund is a statutory trust established under the laws of the State of Delaware upon the filing of a Certificate of Trust with the Secretary of State of Delaware on [insert date]. The Fund’s Declaration of Trust (the “Declaration of Trust”) provides that the Trustees of the Fund may authorize separate series and classes of shares of beneficial interest. The Fund does not intend to hold annual meetings of its shareholders.
- CEFA Municipal Bond Select
CEFA's National Municipal Bond Index
- The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” the portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year, the Fund's portfolio turnover rate was [*] of the average value of its portfolio.
- Pending investment in municipal securities that meet the Fund’s investment objectives and policies, the net proceeds of this offering will be invested in high quality, short-term tax-exempt money market securities or in high quality municipal securities with relatively low volatility (such as pre-refunded and intermediate-term securities), to the extent such securities are available. If necessary to invest fully the net proceeds of this offering immediately, the Fund may also purchase, as temporary investments, short-term taxable investments of the type described under “Investment Policies and Techniques—Short-Term Taxable Fixed Income Securities,” the income on which is subject to regular federal income tax, and securities of other open- or closed-end investment companies that invest primarily in municipal securities of the type in which the Fund may invest directly. We currently anticipate that the Fund will be able to invest primarily in tax-exempt municipal securities that meet the Fund’s investment objectives and policies within approximately three months after the completion of this offering.
- The Fund’s common shares have no history of public trading. Shares of closed-end investment companies frequently trade at a discount from their net asset value. This risk may be greater for investors expecting to sell their shares in a relatively short period after completion of the public offering.
- Each Common Shareholder will have all dividends, including any capital gain dividends, reinvested automatically in additional Common Shares, unless the shareholder elects to receive cash. An election to receive cash may be revoked or reinstated at the option of the shareholder. In the case of record shareholders such as banks, brokers or other nominees that hold common shares for others who are the beneficial owners, Common Shares will be administered on the basis of the number of Common Shares certified from time to time by the record shareholder as representing the total amount registered in such shareholder's name and held for the account of beneficial owners. Shareholders whose shares are held in the name of a bank, broker or nominee should contact the bank, broker or nominee for details. Such shareholders may not be able to transfer their shares to another bank or broker.
- Common Shares will be issued to you at their NAV on the ex‑dividend date; there is no sales or other charge for reinvestment. You may request to have your dividends paid to you by check, sent via electronic funds transfer through Automated Clearing House network. For further information, contact your financial advisor or call XFT Investor Services at (833) 000-0000. If you request that your distributions be paid by check but those distributions cannot be delivered because of an incorrect mailing address, or if a distribution check remains uncashed for six months, the undelivered or uncashed distributions and all future distributions will be reinvested in Fund shares at the current net asset value.
- Automatically reinvested dividends and distributions are taxed in the same manner as cash dividends and distributions. See "Tax Matters."
SEC REQUIRED
- The Distributor serves as the Fund’s principal underwriter, within the meaning of the 1940 Act, and acts as the distributor of the Fund’s shares on a reasonable efforts basis, subject to the terms and conditions set forth in the Distribution Agreement. The Fund’s shares are offered for sale through the Distributor at NAV plus applicable sales load (if any). The Distributor also may enter into selected dealer agreements with other broker-dealers for the sale and distribution of the Fund’s shares.
- The Fund’s continuous offering is expected to continue in reliance on Rule 415 under the Securities Act until the date the Fund has sold 100,000,000 shares, or such shorter date as the Board may determine. No arrangement has been made to place funds received in an escrow, trust, or similar account. The Distributor is not required to sell any specific number or dollar amount of the Fund’s shares, but will use its reasonable efforts to sell the shares. Shares of the Fund are not listed on any national securities exchange, and the Distributor does not act as a market maker in Fund shares.
- The shares are issued as digital securities, which can be transferred in peer-to-peer transactions on the Ethereum blockchain. The shares represent an ownership interest in the Fund’s underlying assets.
- PROSPECTUS SUMMARY
- THE FUND
- ABOUT THE DIGITAL SECURITIES
- INVESTMENT OBJECTIVE AND STRATEGIES
- FEES AND FUND EXPENSES
- EXAMPLE
- FINANCIAL HIGHLIGHTS
- USE OF PROCEEDS
- RISK FACTORS
- MANAGEMENT OF THE FUND
- DETERMINATION OF NET ASSET VALUE
- CONFLICTS OF INTEREST
- PEER-TO-PEER TRANSACTIONS
- MONTHLY REPURCHASE OF SHARES
- DISTRIBUTION POLICY
- DISTRIBUTION REINVESTMENT PLAN
- U.S. FEDERAL INCOME TAX MATTERS
- DESCRIPTION OF CAPITAL STRUCTURE AND SHARES
- ANTI-TAKEOVER PROVISIONS
- PLAN OF DISTRIBUTION
- POTENTIAL FUTURE FUND ATTRIBUTES
- LEGAL MATTERS
- ANTI-MONEY LAUNDERING/KYC
- ADDITIONAL INFORMATION
- GLOSSARY
- PRIVACY NOTICE
- THE FUND
- INVESTMENT OBJECTIVE & STRATEGIES
- INVESTMENT OBJECTIVE
- PRINCIPAL INVESTMENT STRATEGIES
- THE OFFERING
- FEES AND EXPENSES
- EXAMPLE
- PORTFOLIO TURNOVER
- PURCHASE AND SALE OF FUND SHARES
- Common shares of closed-end investment companies frequently trade at prices lower than their NAV. The Fund cannot assure you that its common shares will trade at a price higher than or equal to NAV. See “Use of Proceeds.” The Fund’s common shares trade in the open market at market prices that are a function of several factors, including dividend levels (which are in turn affected by expenses), NAV, call protection for portfolio securities, portfolio credit quality, liquidity, dividend stability, relative demand for and supply of the common shares in the market, general market and economic conditions and other factors. See “Leverage,” “Risks,” “Description of Capital Stock” and “Repurchase of Common Shares.” The common shares are designed primarily for long-term investors and you should not purchase common shares of the Fund if you intend to sell them shortly after purchase.
Delaware Statutory Trust (DST)
- Series = hubs, underlying investment portfolio strategy
- Classes = spokes
- SERIES
- XFT High-Yield Tax-Exempt Fund
- XFT Intermediate-Term Tax-Exempt Fund
- XFT Limited Term Tax-Exempt Fund
- XFT Long-Term Tax-Exempt Fund
- XFT Ultra-Short-Term Tax-Exempt Fund
- XFT Tax-Exempt Bond Index Fund
- XFT Municipal Money Market Fund
- XFT Intermediate-Term Tax-Exempt Bond ETF
- XFT Core Tax-Exempt Bond ETF
- XFT Short Duration Tax-Exempt Bond ETF
- CLASSES
- Mutual Fund Shares
- A, B, C (Retail)
- I (Institutional)
- R (Retirement)
- ETF Shares
- Token Shares
- [BLANK]
- [BLANK]