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CMG Tactical Bond Fund

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Fund Objective:

The Fund seeks to generate total returns over a complete market cycle through capital appreciation and income.

Strategy Description:

The CMG Tactical Bond Fund (the “Fund”) invests in high yield bond markets using a proprietary quantitative investment model that looks at price, volume, yield spreads and default rates to identify trends in U.S. high yield bonds. The investment model seeks to identify opportunities where the short-term and intermediate-term direction of the U.S. high yield bond market can be predicted with high probability. The Fund’s investment advisor (the “Advisor”) adjusts the Fund’s portfolio to obtain maximum total return (income and price appreciation) in up trending high yield bond markets and focuses on capital preservation in down trending price environments, in seeking to achieve the Fund’s objective of generating total returns over a complete market cycle (full periods of rising and falling interest rates from a bull market to bear market and back again). The Advisor utilizes its proprietary risk management “Asset Allocation Program” in managing the Fund. In down trending price environments, the Fund can also invest in put and call options as a means to protect (hedge) the portfolio’s high yield bond exposure and/or move its high yield bond exposure temporarily to cash or short-term cash equivalents in an attempt to mitigate market declines as well as lower portfolio volatility.

The Fund invests in fixed income securities that are sometimes referred to as “high yield” or “junk” bonds. The Fund defines high yield bonds as those rated lower than Baa3 by Moody’s or lower than BBB- by S&P, or determined to be of similar quality by the Fund’s Advisor. Such securities are considered speculative investments that carry a greater risk of default. Because high yield bonds have a historically high correlation to equity markets, in particular to small cap stocks, the Fund may be indirectly exposed to the same risks as the stock market in general.

There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.

 

Ticker Information:

Fund Name:
CMG Tactical Bond FundTM Class A Shares
Inception Date:
May 29, 2015
Ticker Symbol:
CHYAX
CUSIP:
66538B107
Sales Load:
5.75%1
Minimum Investment:
$2,500 – $5,000 (depending on custodial platform)
Minimum Subsequent:
$1,000
Objective:
Income & Capital Appreciation
Fund Classification:
Nontraditional Bond
Investment Advisor:
CMG Capital Management Group, Inc.
Fund Name:
CMG Tactical Bond FundTM Class I Shares
Inception Date:
October 6, 2014
Ticker Symbol:
CHYOX
CUSIP:
66538B206
Sales Load:
None
Minimum Investment:
$15,0002
Minimum Subsequent:
$1,000
Objective:
Income & Capital Appreciation
Fund Classification:
Nontraditional Bond
Investment Advisor:
CMG Capital Management Group, Inc.

¹ Load waivable. Please review prospectus for qualification. Other fees and expenses do apply to investments in the Fund.

² The adviser may waive the Class I shares minimum account requirements if the adviser believes that the aggregated accounts of a financial intermediary will meet the minimum initial investment requirement. Lower minimum initial and additional investments may also be applicable in certain other circumstances, including purchases by certain tax deferred retirement programs.

Definition of terms:

Call Option:  An agreement that gives an investor the right, but not the obligation, to buy a stock, bond, commodity, or other instruments at a specified price within a specific time period.

Downside Risk: An estimation of a security’s potential to suffer a decline in price if the market conditions turn negative.

Hedge: an investment to reduce the risk of adverse price movements in an asset.  Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract.

Long: Buying a security such as a stock, commodity or currency, with the expectation that the asset will rise in value.

Put Option:  An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time.  This is the opposite of a call option, which gives the holder the right to buy shares.

Spread Duration:  Represents the sensitivity of a portfolio to spread changes in the corporate bond market.

Volatility:  A statistical measure of the dispersion of returns for a given security or market index.  Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index.  Commonly, the higher the volatility, the riskier the security.

Mutual Funds involve risk including possible loss of principal. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. An investor should consider each individual Fund's investment objective, risks, charges, and expenses carefully before investing.

The Fund may invest more than 5% of its assets in the securities of one or more issuers and the resulting performance may be more sensitive to any single economic, business, political or regulatory occurrence than that of a diversified investment company. Equity prices can fall rapidly. Additionally, smaller companies may trade less frequently and in smaller volumes, experience higher failure rates and disproportionate price fluctuations.

The Fund's use of derivatives and futures contracts involves hedging, leverage risk and tracking risk. Leverage through futures can magnify the Fund's gains or losses. The Fund may invest in short futures positions which could prevent the Fund from participating in market gains. Derivative instruments may be used to hedge against losses, however these positions can potentially offset gains. The Fund may be required to segregates assets or enter into offsetting positions in connections with investments in derivatives but these may not limit exposure to loss.

The Fund's investment in foreign securities may be affected by changes in exchange control regulations, application of foreign tax laws, changes in governmental administration, economic, or monetary policy, currency fluctuations relative to the U.S. dollar and changed circumstances between nations. In addition to these risks, countries with emerging markets may have relatively unstable governments, social and legal systems that do not protect shareholders, economies based on only a few industries, and securities markets that trade a small number of issues

Changes in foreign currency exchange rates will affect the value of what the Fund owns and the price of the Fund's shares. Generally, when the U.S. dollar rises in value against a foreign currency, an investment in that country loses value because that currency is worth fewer U.S. dollars. Derivative instruments involve risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments.

Foreign investing involves risks not typically associated with U.S. investments, including adverse fluctuations in foreign currency values, 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. Investments in gold-related securities, such as ETFs and forward and futures contracts, may subject the Fund to greater volatility than investments in traditional securities.

When the Fund invests in fixed income, the value of your investment will fluctuate with changes in interest rates. Lower-quality bonds, known as "high yield" or "junk" bonds, present a greater risk than bonds of higher quality, including an increase of default, maturity length, prepayment, and credit risk. The use of leverage, such as borrowing money to purchase securities, will magnify the Fund's gains or losses. Non-diversification risk, as the Funds are more vulnerable to events affecting a single issuer. Increased portfolio turnover may result in higher brokerage commissions, dealer mark-ups and other transaction costs and may result in taxable capital gains. The Fund's investments in a sector bear the risk that securities within the same group of industries will decline in price due to sector-specific market or economic developments. The Fund (and the Underlying Funds) may engage in short selling activities, which are more risky than "long" positions (purchases) because the cost of the replacement security or instrument is unknown. Debit issuers may not make interest and principal payments on securities held by the Fund, resulting in losses. Mutual funds, closed-end funds and ETFs are subject to investment advisory and other expenses, which will be indirectly paid by the Fund. As a result, the cost of investing in the Fund will be higher than the cost of investing directly in other investment companies and may be higher than other mutual funds that invest directly in stocks and bonds. For a Fund using a sub-advisor, the sub-advisor’s methodology may produce incorrect judgements about the attractiveness, relative value and potential appreciation of an investment.

This and other information about the CMG Family of Funds is contained in each fund's prospectus, which can be obtained by calling 1-866-CMG-9456 (1-866-264-9456). Please read the prospectus carefully before investing. The CMG Mauldin Core Fund™, the CMG Tactical All Asset Strategy Fund™, and the CMG Tactical Bond Fund™ are distributed by Northern Lights Distributors, LLC, Member FINRA/SIPC. CMG Capital Management Group, Inc. is not affiliated with Northern Lights Distributors, Inc.

3647-NLD-7/10/2018