Two contrasting risk exposures are presented in the above Tactical Versus Passive presentation: high yield corporate bonds and “risk-free” cash. The BofA Merrill Lynch High Yield Bond Master II® Index is an unmanaged index that tracks the performance of below investment grade U.S. denominated corporate bonds publicly issued in the U.S. domestic market. The referenced index is shown for general market comparisons and are not meant to represent the Fund. The securities that belong to this index are considered to be high-risk investments. Risks include the greater risk of loss, sensitivity to interest rate and economic changes, valuation difficulties, liquidity, credit quality, and new legislation risk. The green “Tactical” line represents alternating allocation to high yield corporate bonds and cash and their respective associated risks, while the black “Passive” line represents a permanent allocation to high yield corporate bonds and their above mentioned risks.
Mutual Funds involve risk including the possible loss of principal. The Fund is a new mutual fund as has a limited history of operations for investors to evaluate. The Fund’s investments in secured and unsecured participations in bank loans and assignments of such loans may create substantial risk. The use of leverage by the Fund or an Underlying Fund, such as borrowing money to purchase securities or the use of derivatives, will indirectly cause the Fund to incur additional expenses and magnify the Fund’s gains or losses. Derivative instruments involve risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. There is a risk that issuers and counterparties will not make payments on securities and other investments held by the Fund, resulting in losses to the Fund.
In general, the price of a fixed income security falls when interest rates rise. The Fund may invest in high yield securities, also known as “junk bonds.” High yield securities provide greater income and opportunity for gain, but entail greater risk of loss of principal. When the Fund invests in other investment companies, including ETFs, it will bear additional expenses based on it’s pro rata share of the other investment company’s or ETF’s operating expenses, including the potential duplication of management fees. The risk of owning an investment company generally reflects the risks of owning the underlying investments the investment company holds. The Fund will use model-based strategies that, while historically effective, may not be successful on an ongoing basis or could contain unknown errors. In addition, the data used in models may be inaccurate.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Counterpoint Tactical Income Fund. This and other important information about the Fund is contained in the prospectus, which can be obtained at counterpointmutualfunds.com or by calling 844-273-8637. The prospectus should be read carefully before investing. The Counterpoint Tactical Income Fund is distributed by Northern Lights Distributors, LLC member FINRA/SIPC.