August 2022

There is a natural tendency in life when difficulties arise to just “do something,” even when you’re uncertain as to what to do. For myself, this habit manifests especially when driving — I generally take routes on the road where traffic is at least moving as opposed to sitting on the freeway in stop-and-go fashion, alternating my foot maddeningly between the brake and acceleration, even if that stop-and-go path saves minutes. The seeming futility of being in a 70 MPH zone and moving at an average of 10 MPH is just too much for me to bear. It may not make much sense in the long haul, but at least I know I’m moving — I’m “doing something.”

For many people, this same tendency is revealed while investing during times of market turmoil and volatility. Financial conversations for the few years leading up to 2022 seemed to be dominated by upmanship and bragging rights over who owned the superior assets. “I’m in XYZ! How much do you have?” where XYZ was a meme stock, crypto, or FAANG. It wasn’t only a sign of being on the inside, but an opportunity to stick it to the man (even as many of the protagonists were themselves “the man”).

But nowadays, conversations start with questions far more timid and reserved. “What are you investing in?” or “Do you think it’s time to get back in?” or “Are you buying the dips?” are far more common, sincere efforts to understand what actions to take in a very uncertain world. While there is a general urge to be people of action instead of stagnant stop-and-go drivers, sometimes being cautious is more than appropriate, particularly when the path forward is so unclear. What was once just basic risk has now morphed into frightening uncertainty with a seemingly infinite number of possible outcomes for the market.

As noted in our Q1 review, we launched SOLRX in this world not just because of higher risk, but higher and rising uncertainty. We are talking about an environment with inflation the Federal Reserve just acknowledged was not transitory, where they are about to embark on raising interest rates in an historically aggressive fashion, and where supply chain woes have dominated headlines and consumers’ purchasing power, not to mention Russia’s “special military action” and other ongoing international issues. A seemingly more uncertain world.

With this environment as a backdrop, we proceeded cautiously, investing in short-term, high-quality assets. We founded Finite to be investors, custodians of your dollars — not traders — and this philosophy paid off well in Q1 when both the fixed income and equity markets traded off dramatically. When we embarked on Q2, we remained just as skeptical about the market’s ability to weather higher inflation, higher interest rates, and higher uncertainty over corporate earnings, meaning we stayed cautious. As the quarter progressed and yields rose, we began to judiciously put some money to work, staying focused on maintaining a shorter duration and overall high-quality portfolio. And as in Q1, this prudence paid off in Q2:

SOLRX Bloomberg Bond Index [i] Bloomberg High Yield Index [ii] S&P 500 [iii]
Q1 2022 -0.40% -5.95% -4.84% -4.60%
Q2 2022  -1.91% -4.69% -9.83% -16.21%
YTD 2022 -2.30% -10.35% -14.19% -19.97%

Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 844-4-FINITE or

Our capital deployment continues to be conservative as the U.S. economy, if not already in a technical recession (defined as two consecutive quarters of negative GDP growth), may be in a traditional recession before year-end. The perceived strength in the labor market based on a low unemployment rate has buoyed hope that the U.S. may be able to skirt a serious slowdown. This faith, however, is being challenged by a continued falling labor force participation rate as working age persons leave the labor force and therefore no longer count as unemployed. Indeed, there were 711,000 fewer people employed in June 2022 than in February 2020 despite headlines of recent job gains. More recently, the layoff announcements that have increasingly been scrolling across the business pages have added to the market’s anxiety and the expectation of a higher unemployment rate. Questions still remain as to the Fed’s willingness to battle inflation in the face of a slowing economy particularly as we head into elections this fall, but they seem steadfast (for the moment at least) to continue raising short-term rates.

As Finite embarks on Q3, we remain overweight on treasuries and short-term cash equivalents and underweight on private assets. Private asset pricing tends to lag the public markets, meaning we are just now seeing opportunities in which rates and spreads are beginning to generate return expectations commensurate with the associated risk, so expect to begin deploying capital soon. Expected returns on commercial deals are moving from the mid- to high-single digit range to the high-single/low-double digit area while risks remain the same. Residential solar expected returns are moving more up a bit more slowly but should reach our hurdle rate in the next few months as well. As such, the gross portfolio yield is now approaching 3% and we expect to reach our goal of 6% to 8% net yield by the end of Q3 as we deploy these opportunities.

Very truly yours,

David Kretschmer & Kevin Conroy

Portfolio Managers

Required Disclosures:

Investors should carefully consider the investment objective, risks, charges and expenses of the Fund before investing. This and other important information about the Fund is in the prospectus which can be obtained by contacting your financial advisor or by calling 844‐4‐FINITE. The prospectus should be read carefully before investing.

Current and future holdings are subject to change and should not be considered a recommendation to buy or sell a security.

The Finite Solar Finance Fund is distributed by Foreside Fund Services, LLC. SOLRX is a closed end interval fund

An investment in the Fund is not suitable for investors who need certainty about their ability to access all of the money they invest in the short term. You may not have access to the money you invest for an extended period of time.

The Fund has implemented a Share repurchase program, however, the Fund is not required to repurchase more than 5% of its outstanding Shares each quarter. Shares will not be redeemable at a Shareholder’s option nor will they be exchangeable for Shares of any other fund. Investors should therefore consider Shares of the Fund to be an illiquid investment. You should not expect to be able to sell your Shares (other than through the repurchase process), regardless of how the Fund performs.

Because you will be unable to sell your Shares at the time of your choosing or have them repurchased immediately, you will find it difficult to reduce your exposure on a timely basis during market volatility.

Although the Fund is not permitted to invest in loans that are of subprime quality at the time of investment, an investment in the Fund’s Shares should be considered speculative and involving a substantial degree of risk, including the risk of loss of investment. There can be no assurance that payments due on loans or other alternative lending‐related securities in which the Fund will invest will be made.

At any given time, the Fund’s portfolio may be substantially illiquid and subject to increased credit and default risk. The Shares therefore should be purchased only by investors who could afford the loss of the entire amount of their investment.

The Fund intends to accrue and declare dividends daily and distribute them on a quarterly basis; however, the amount of distributions that the Fund may pay, if any, is uncertain. 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 from offering proceeds, and borrowings. A portion or all of any distribution of the Fund may consist of a return of capital and may result in potentially adverse tax consequences to the Fund or its shareholders.

The Fund’s distribution policy could result in a return of capital, resulting in less of a shareholder’s assets being invested in the Fund and, over time, potentially causing the Fund’s expense ratio to increase.

The distribution policy also may cause the Fund to sell a security at a time it would not otherwise do so.

If the borrower of the loan or other alternative lending‐related security in which the Fund invests is unable to make its payments on a loan, the Fund may be greatly limited in its ability to recover any outstanding principal and interest due under such loan, as (among other reasons) the Fund may not have direct recourse against the borrower or may otherwise be limited in its ability to directly enforce its rights under the loan, whether through the borrower or the platform through which such loan was originated, the loan may be unsecured or undercollateralized, and/or it may be impracticable to commence a legal proceeding against the defaulting borrower.

Substantially all of the Solar Assets in which the Fund invests will not be guaranteed or insured by a third party or will not be backed by any governmental authority.

Prospective borrowers supply a variety of information regarding income, occupation and employment status (as applicable) to the alternative lending platforms that may originate or source loans. As a general matter, platforms do not verify the majority of this information, which may be incomplete, inaccurate, false or misleading. Prospective borrowers may misrepresent any of the information they provide to the platforms.

Under the 1940 Act, the Fund may utilize leverage through the issuance of preferred stock in an amount up to 50% of its total assets and/or through borrowings and/or the issuance of notes or debt securities in an aggregate amount of up to 33 1/3% of its total assets which could magnify losses as well as gains.. There can be no assurance that any leveraging strategy the Fund employs will be successful during any period in which it is employed.

The estimated gross expense ratio is 2.51%. Expense ratios are annualized and calculated as a percentage of estimated average total assets.

[1] The Bloomberg US Aggregate Bond Index is a broad-based benchmark that measures the investment grade, US dollar-denominated, fixed rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed rate pass-throughs), ABS and CMBS.

[2] The Bloomberg US Corporate High Yield Bond Index measures the USD-denominated, high yield, fixed-rate corporate bond market. Securities are classified as high yield if the middle rating of Moody’s, Fitch and S&P is Ba1/BB+/BB+ or below.

[3] The S&P 500 Index, or Standard & Poor’s 500 Index, is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S.