Axonic Strategic Income Fund Update:  Positioned for Stability, Prepared for Opportunity

An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. To obtain a prospectus containing this and other information, please call (212) 259-0430 or download the file from www.AxonicFunds.com. Please read the prospectus carefully before you invest.

ALPS Distributors, Inc. is the distributor of the Axonic Alternative Income Fund (ALPS Distributors, Inc. 1290 Broadway, Suite 1000, Denver, CO 80203). Axonic Capital LLC (the Fund’s adviser), ALPS Distributors, Inc., and BNY Mellon are not affiliated.

The Fund is an unlisted 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 (The board has approved a 10% repurchase for the next quarterly repurchase date). 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. Accordingly, the Fund should be considered a speculative investment that entails substantial risks, and prospective investors should invest in the Fund only if they can sustain a complete loss of their investment.

It is important to note that differences exist between the Fund’s daily internal accounting records, the Fund’s financial statements prepared in accordance with U.S. GAAP, and recordkeeping practices under income tax regulations. It is possible that the Fund may not issue a Section 19 Notice in situations where the Fund’s financial statements prepared later and in accordance with U.S. GAAP or the final tax character of those distributions might later report that the sources of those distributions included capital gains and/or a return of capital.

The Fund’s distribution rate may be affected by numerous factors, including changes in realized and projected market returns, Fund performance, and other factors. There is no assurance that monthly distributions paid by the Fund will be maintained at a certain level or that dividends will be paid at all.

A “non-diversified” fund has the ability to take larger positions in a smaller number of issues than a “diversified” fund. Non-diversified funds will generally experience greater price volatility.

Investments made by the Fund and the results achieved by the Fund are not expected to be the same as those made by any other Axonic-advised account, including those with a similar name, investment objective or policies.

This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy, or investment product.

No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.

Unlike most closed-end funds, Shareholders should not expect to be able to sell their shares at the quarterly redemption regardless of how the Fund performs.

The principal risks of investing in the Fund are summarized below. There may be circumstances that could prevent the Fund from achieving its investment objective and you may lose money by investing in the Fund. You should carefully consider the Fund’s investment risks before deciding whether to invest in the Fund. An investment in the Fund is not a deposit at a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Definitions

• Asset Backed Securities (ABS) are a financial security collateralized by a pool of assets such as loans, leases, credit card debt, royalties or receivables.
• Bloomberg US Aggregate Bond Index/Bloomberg–Index LBUSTRUU is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market.
• Cash-Flow Generating Assets typically return either a principal and/or interest component on a regular, consistent basis.
• Commercial Real Estate (CRE) is non-residential property that serves to generate income.
• Commercial Mortgage-Backed Securities (CMBS) are secured by mortgages on commercial properties rather than on residential real estate.
• Current Distribution Rate are distributions from the Fund’s net investment income are accrued daily and typically paid monthly. However, there can be no assurances that the Fund will achieve any level of distribution to its Shareholders. The Fund intends to make sufficient distributions of its ordinary taxable income and capital gain net income prior to the end of each calendar year to avoid liability for the excise tax. The character of income and gains to be distributed is determined in accordance with income tax regulations, which may differ from Generally Accepted Accounting Principles. The distribution yield is calculated by annualizing actual dividends distributed for the monthly period ended on the date shown and dividing by the net asset value on the last business day for the same period.
• Duration measures price sensitivity of fixed income securities to interest rate changes.
• Non-Agency Residential Mortgage-Backed Securities (Non-Agency RMBS) are a form of debt-based securities which are backed by the principal and interest payments on loans for residences.
• Real Estate Investment Trusts (REIT) are companies that own, operate, or finance income-generating real estate.
• Residential Mortgage-Backed Securities (RMBS) are a form of debt-based securities which are backed by the principal and interest payments on loans for residences.  There are two types of residential mortgage-backed securities: agency or non-agency (see above for non-agency definition).  Agency RMBS are created by one of three agencies. These are Government National Mortgage Association (GNMA or Ginnie Mae), Federal National Mortgage (FNMA or Fannie Mae), and Federal Home Loan Mortgage Corp. (Freddie Mac).
• Structured Credit applies broadly to the asset class associated with pooling debt obligations into channels which can then be distributed to different risk appetites.
• Weighted Average Price calculation excludes any assets without a stated coupon or allocated principal
• Yield is the income returned on an investment. The measure may take into account Axonic Capital’s assumptions for prepayment speeds, default probability and loss given default.

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