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Fund Profile

PORTFOLIO OF MLPs AND MLP-RELATED SECURITIES

Our goal is to provide investors access to the MLP asset class through what we believe to be a diversified portfolio of primarily midstream companies.  Our focus is on businesses that we believe can generate consistent distribution growth through stable, fee-based business models with reduced commodity price exposure. We further attempt to preserve the tax benefits of MLPs through low portfolio turnover and long term gains.

 

Fund's Potential Advantage

Our approach to managing MLP mutual funds attempts to avoid the shortcomings of most currently available open- and closed-end mutual funds that are subject to corporate taxation. We believe professional management may add significant value to the Fund and the management team at Eagle Global Advisors has a long history of MLP investing and alpha(1) generation.

 

Experienced Active Management

We believe MLPs are attractive for active management because the limited institutional interest and dominance by retail investors lead to inefficiencies in MLP assets. Professional management using internally generated independent research can have significant value in this investment area. Eagle Global Advisors is based in Houston, Texas which we believe is the knowledge center for both Energy and MLPs.


Investment Research Process

Eagle Global Advisor’s conducts in depth, fundamental analysis of individual partnerships. This includes:

 

    Comparing the mixture of expected growth and income of different partnerships to determine relative value.

     

    Determining opportunistic value using statistical analysis and other methods.

     

    Considering the tax effect of all transactions in determining the attractiveness of any change to the portfolio.

     

    Investing in a portfolio of MLP units and MLP-related securities to attempt to reduce specific company risks.

 

ALPHA is a measure of risk-adjusted performance, the difference between the investment return and the benchmark return.


 

Past performance is not a guarantee of future results. Investors should carefully consider the investment objectives, risks, charges and expenses of the Eagle MLP Strategy Fund. This and other important information about the Fund is contained in the Prospectus, which can be obtained by contacting your financial advisor, or by calling 1.888.868.9501. The Prospectus should be read carefully before investing.

 

The Eagle MLP Strategy Fund is distributed by Northern Lights Distributors, LLC member FINRA/SIPC, Eagle Global Advisors, Princeton Fund Advisors and Northern Lights Distributors, LLC are not affiliated.

 

DISCLOSURES

CREDIT RISK
There is a risk that note issuers will not make payments on securities held by the Fund, resulting in losses to the Fund. In addition, the credit quality of securities held by the Fund may be lowered if an issuer's financial condition changes.


DISTRIBUTION POLICY RISK

The Fund's distribution policy is not designed to guarantee distributions that equal a fixed percentage of the Fund's current net asset value per share. Shareholders receiving periodic payments from the Fund may be under the impression that they are receiving net profits. However, all or a portion of a distribution may consist of a return of capital (i.e. from your original investment). Shareholders should not assume that the source of a distribution from the Fund is net profit. Shareholders should note that return of capital will reduce the tax basis of their shares and potentially increase the taxable gain, if any, upon disposition of their shares.


ETN RISK
ETNs are subject to administrative and other expenses, which will be indirectly paid by the Fund. Each ETN is subject to specific risks, depending on the nature of the ETN. ETNs are subject to default risks. Foreign Investment Risk: Investing in notes of foreign issuers involves risks not typically associated with U.S. investments, including adverse political, social and economic developments, less liquidity, greater volatility, less developed or less efficient trading markets, political instability and differing auditing and legal standards.


INTEREST RATE RISK
Typically, a rise in interest rates can cause a decline in the value of notes and MLPs owned by the Fund.


LIQUIDITY RISK

Liquidity risk exists when particular investments of the Fund would be difficult to purchase or sell, possibly preventing the Fund from selling such illiquid securities at an advantageous time or price, or possibly requiring the Fund to dispose of other investments at unfavorable times or prices in order to satisfy its obligations.


MANAGEMENT RISK
Eagle's judgments about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results. Additionally, Princeton's judgments about the potential performance of the Fund's investment portfolio, within the Fund's investment policies and risk parameters, may prove incorrect and may not produce the desired results.


MARKET RISK
Overall securities market risks may affect the value of individual instruments in which the Fund invests. Factors such as domestic and foreign economic growth and market conditions, interest rate levels, and political events affect the securities markets.


MLP RISK
Investments in MLPs involve risks different from those of investing in common stock including risks related to limited control and limited rights to vote on matters affecting the MLP, risks related to potential conflicts of interest between the MLP and the MLP's general partner, cash flow risks, dilution risks and risks related to the general partner's limited call right. MLPs are generally considered interest-rate sensitive investments. During periods of interest rate volatility, these investments may not provide attractive returns. Depending on the state of interest rates in general, the use of MLPs could enhance or harm the overall performance of the Fund.


MLP TAX RISK
MLPs, typically, do not pay U.S. federal income tax at the partnership level. Instead, each partner is allocated a share of the partnership's income, gains, losses, deductions and expenses. A change in current tax law or in the underlying business mix of a given MLP could result in an MLP being treated as a corporation for U.S. federal income tax purposes, which would result in such MLP being required to pay U.S. federal income tax on its taxable income. The classification of an MLP as a corporation for U.S. federal income tax purposes would have the effect of reducing the amount of cash available for distribution by the MLP. Thus, if any of the MLPs owned by the Fund were treated as corporations for U.S. federal income tax purposes, it could result in a reduction of the value of your investment in the Fund and lower income, as compared to an MLP that is not taxed as a corporation.


ENERGY RELATED RISK
The Fund focuses its investments in the energy infrastructure sector, through MLP securities. Because of its focus in this sector, the performance of the Fund is tied closely to and affected by developments in the energy sector, such as the possibility that government regulation will negatively impact companies in this sector. Energy infrastructure entities are subject to the risks specific to the industry they serve including, but not limited to, the following: Fluctuations in commodity prices; Reduced volumes of natural gas or other energy commodities available for transporting, processing, storing or distributing; New construction risk and acquisition risk which can limit potential growth; A sustained reduced demand for crude oil, natural gas and refined petroleum products resulting from a recession or an increase in market price or higher taxes; Depletion of the natural gas reserves or other commodities if not replaced; Changes in the regulatory environment; Extreme weather; Rising interest rates which could result in a higher cost of capital and drive investors into other investment opportunities; and Threats of attack by terrorists.


NON-DIVERSIFICATION RISK
As a non-diversified fund, the Fund may invest more than 5% of its total assets in the securities of one or more issuers.


SMALL AND MEDIUM CAPITALIZATION COMPANY RISK

The value of a small or medium capitalization company securities may be subject to more abrupt or erratic market movements than those of larger, more established companies or the market averages in general.


STRUCTURED NOTE RISK

MLP-related structured notes involve tracking risk, issuer default risk and may involve leverage risk.

 

6650-NLD-5/3/2017     FR2012-0924-0070/E