INVESTORS SHOULD CAREFULLY CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES OF BOTH THE CATALYST FUNDS AND THE RATIONAL FUNDS. THIS AND OTHER IMPORTANT INFORMATION ABOUT EACH FUND IS CONTAINED IN THE APPLICABLE PROSPECTUS, WHICH CAN BE OBTAINED BY CALLNG 866-447-4228 OR AT EITHER WWW.CATALYSTMF.COM OR WWW.RATIONALMF.COM. THE APPLICABLE PROSPECTUS SHOULD BE READ CAREFULLY BEFORE INVESTING. THE CATALYST FUNDS AND THE RATIONAL FUNDS ARE DISTRIBUTED BY NORTHERN LIGHTS DISTRIBUTORS, LLC, MEMBER FINRA/SIPC. NEITHER CATALYST CAPITAL ADVISORS LLC NOR RATIONAL ADVISORS, INC. ARE AFFILIATED WITH NORTHERN LIGHTS DISTRIBUTORS, LLC.
Risk Considerations:
Investing in the Funds carries certain risks. The value of the Funds may decrease in response to the activities and financial prospects of an individual security or group of securities in the Funds’ portfolios. Investments in foreign securities could subject the Funds to greater risks, including, currency fluctuation, economic conditions, and different governmental and accounting standards. The Funds’ portfolios may be focused on a limited number of industries, asset classes, countries, or issuers. The Funds may invest in high yield or junk bonds which present a greater risk than bonds of higher quality. Other risks include credit risks and interest rate risk for floating rate loan funds. Changes in short-term market interest rates will directly affect the yield on the shares of a Fund whose investments are normally invested in floating rate debt. Floating rate loan funds tend to be illiquid, the Funds might be unable to sell the loan in a timely manner as the secondary market is private, unregulated winter-dealer or inter-bank re-sale market. Fixed income investments are affected by a number of risks, including fluctuation in interest rates, credit risk, and prepayment risk. In general, as prevailing interest rates rise, fixed income prices will fall. MBS and ABS may be more sensitive to changes in interest rates and may results in prepayments which can include the possibility that securities with stated interest rates may have the principal prepaid earlier than expected, which may occur when interest rates may have the principal prepaid earlier than expected, which may occur when interest rates decline. Rates of prepayment faster or slower than expected could reduce the Fund’s yield, increase the volatility of the Fund ad/or cause a decline in NAV. These factors may affect the value of your investment.
Prior to August 1, 2018, CFRIX was managed by a different sub-advisor with different investment strategies and policies. CFRIX’s past performance may have been different if it were managed by the current Sub-Advisor and consequently the performance record may be less pertinent for investors considering whether to purchase shares of CFRIX. CFRIX’s investment strategies changed on November 1, 2020 to permit CFRIX to use derivative instruments for hedging purposes.
RFXIX commenced operations by acquiring all of the assets and liabilities of ESM Fund I, L.P. (the “Predecessor Fund”) in a tax-free reorganization, which was consummated after the close of business on July 17, 2019 (the “Reorganization”). In connection with the Reorganization, investors in the Predecessor Fund received Institutional shares of RFXIX. RFXIX’s investment objectives, policies, guidelines and restrictions are, in all material respects, equivalent to those of the Predecessor Fund. However, the Predecessor Fund was not registered under the 1940 Act and, therefore, was not subject to certain investment restrictions, limitations and diversification requirements that are imposed by the 1940 Act or Subchapter M of the Internal Revenue Code of 1986, as amended, which, if they had been applicable, might have adversely affected the Predecessor Fund’s performance. RFXIX’s Sub-Advisor was the investment adviser to the Predecessor Fund. The performance shown prior to July 17, 2019, is that of the Predecessor Fund, which reflects all of the Predecessor Fund’s actual fees and expenses (i.e., the Predecessor Fund’s annual management fees and operating expenses before any fee waivers and/or expense subsidies), as adjusted to include any applicable sales loads and distribution (12b-1) fees of each class of shares of RFXIX. The performance of the Predecessor Fund has not been restated to include the other fees, estimated expenses and fee waivers and/or expense subsidies applicable to each class of shares of RFXIX. RFXIX’s fees and expenses are expected to be higher than those of the Predecessor Fund, so if RFXIX’s expenses were applied to the Predecessor Fund’s performance, the performance would have been lower.
Glossary:
Bloomberg US Aggregate TR Index: A market capitalization weighted index that is designed to measure the performance of the U.S. investment grade bond market with maturities of more than one year. Bloomberg US Treasury TR index: Measures U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. Treasury. Yield-to-Maturity (YTM): The internal rate of return that equates all future cash flows of a bond to its current price. Standard Deviation: A statistical measurement that looks at how far discrete points in a dataset are dispersed from the mean of that set. Asymmetric Upside: Describes a situation where the potential for profit is significantly greater than the potential for loss or risk taken. Floating Rate Securities: Bonds or loans that have an interest rate that periodically adjusts based on a predetermined benchmark.
