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Arrow Alternative Solutions Fund
 Presentation (with Audio)
 Fact Sheet
 Fund Holdings
 Summary Prospectus

 

 

Ticker Symbols:

Class A

ASFFX

Class C

ASFTX

Class I

ASFNX

CUSIP Numbers:

Class A

042765107

Class C

042765206

Class I

042765305

Minimum Investment:

· $5,000 non-qualified accounts

· $2,000 retirement accounts

· $250 subsequent investments

· Class I minimum initial investment $1 million

Operating Expenses*:

Class A

1.75%

Class C

2.52%

Class I

1.52%

*Plus acquired fund fees and short interest of 0.12% (when combined, the total fund expenses are 1.87%, 2.64% and 1.64%, respectively).

Fund Type:
Long/Short Allocation

Definitions:
Standard deviation is a statistical measurement of volatility based on historical returns.
Correlation measures how closely two securities' movements are associated, ranging from 1.0 (highly correlated) to -1.0 (inversely correlated).
Sharpe Ratio is a measure of risk adjusted returns and is the return less the risk-free rate divided by the standard deviation.
Absolute Returns are generally positive returns in any market environment.

Before investing, please read the fund's prospectus and shareholder reports to learn about its investment strategy and potential risks. Mutual fund investing involves risk including loss of principal. An investor should consider the fund's investment objective, charges, expenses and risks carefully before investing. This and other information about the fund is contained in the fund's prospectus, which can be obtained by calling 1-877-277-6933. Please read the prospectus carefully before investing. Distributed by Northern Lights Distributors, LLC, (member FINRA).

The Arrow Alternative Solutions Fund may not be suitable for all investors. The fund's use of derivatives such as futures, options and swap agreements may expose the fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. Investing in leveraged instruments will magnify any gains or losses on those instruments. Investing in commodity and currency related securities may be subject to greater volatility than investments in traditional securities. The fund's use of short selling involves increased risks and additional costs. Investing in small-cap securities, may have special risks associated including wider variations in earnings and business prospects than larger, more established companies. The fund may invest in fixed income securities, which are subject to risks including interest rate, credit and inflation.

 

 
 

 

Objective

The fund seeks capital appreciation with an emphasis on absolute returns, low volatility, and low correlation to the equity markets.

 

Investment Strategy

Diversified long/short exposure by combining strategies that provide long/short exposure to equities, fixed income, and futures. The fund is managed to maintain a consistent level of risk in the overall portfolio. This is managed by the allocation across the sub-strategies and the individual investment components.
Portfolio Manager

Fund Highlights

  • Exposure to three alternative strategies
  • Seeks absolute returns with a targeted risk objective
  • Low correlation to traditional investments
  • Quantitative buy & sell discipline
  • Designed to help reduce portfolio volatility
  • Core holding for alternative investment allocations

Diversification Across Alternative Strategies

Arrow Alternative Solutions Fund is a mutual fund that delivers unique risk and return characteristics. The
advisor uses a systematic quantitative methodology for allocation among three alternative strategies:
hedged equities, fixed income arbitrage and managed futures. Alternative strategies have
historically exhibited relatively low correlation to traditional investments (e.g., equities & bonds).

Exposure to Long/Short Absolute Return FactorsTM

The advisor utilizes quantitative methodologies to create traditional return factors (e.g., value, size, etc.)
as a foundation for creating Absolute Return Factors. Absolute Return Factors are based on an
underlying investment rationale supported by industry practice, academic research, or both.
These factors are typically incorporated in investment strategies widely employed by hedge funds, and
are also the basis of hedge fund replication. Portfolio creation with Absolute Return Factors attempts to
protect the portfolio in environments where it traditionally decreases in value; or, put another way, to
lower the volatility that arises from market risks.

The fund's three long/short investment strategies may include, but are not limited to, the Absolute Return
Factors shown in the table below:

 

Non-Correlated Returns with Targeted Risk

Within the framework of modern portfolio theory the advisor will optimize the exposure to the
underlying long/short strategies to diversify the portfolio. In portfolio optimization, the advisor seeks
to build a portfolio that provides the optimal balance between risk and expected return. Below is a
description of each long/short strategy including minimum and maximum portfolio exposure.

Risk Management Targets: Over a rolling 3-5 year time horizon, the fund targets a 7% risk level (as measured
by standard deviation), a beta and correlation to the S&P 500 of less than 0.5 with a Sharpe Ratio greater than
0.25. The advisor does not represent or guarantee that the fund will meet these goals.

 

Capital Preservation Tool

Like a hedge fund, the fund seeks to
deliver absolute returns--that is,
generally positive returns in any market
environment. As a result, the fund offers
the potential for increased diversification,
enhanced risk-adjusted returns and
protection against volatility. We believe
the lower volatility allows portfolio assets
to grow steadily, possibly compounding
positive returns year after year.

The portfolio exposure graph illustrates
how long and short exposure is created
relative to the fund's assets and to the
reduction of the fund's overall net
exposure. Based on its investment
methodology, the fund's net market
exposure can be expected to range from
30% to 80%. Adjustment in net market
exposure is intended help the fund produce
absolute returns in all market conditions.

 

Mutual Fund Structure with Hedge Fund Features

Hedge funds have long been highly regarded for their use of alternative strategies and investment
techniques. However, their structure often raises concerns for investors. The Arrow Alternative
Solutions Fund seeks to combine the features of both hedge funds and open-ended mutual funds. The
table below highlights the fund's characteristics alongside those of mutual funds and hedge funds.
 
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Before investing, please read the Fund's prospectus and shareholder reports to learn about its investment strategy and potential risks. Mutual Fund investing involves risk including loss of principal.  An investor should also consider the Fund's investment objective, charges, expenses, and risk carefully before investing. This and other information about the fund is contained in the fund's prospectus, which can be obtained by calling 1-877-277-6933. Please read the prospectus carefully before investing. Distributed by Northern Lights Distributors, LLC, member FINRA.

Arrow Funds may not be suitable for all investors. The funds' use of short selling involves increased risks and additional costs. The funds may invest in commodity- and currency-related securities, which may be subject to greater volatility than investments in traditional securities. The funds may invest in fixed income securities, which are subject to risks including interest rate, credit, inflation and counterparty risks. The use of derivatives such as futures, options and swap agreements may expose the funds to additional risks that it would not be subject to if it invested directly in the underlying securities. The funds may invest in international and emerging market securities which may be subject to special risks including currency fluctuation, government regulation, differences in accounting standards and liquidity. Investing in leveraged instruments will magnify any gains or losses on those instruments. The funds' potential use of short selling involves increased risks and additional costs. The funds may not replicate the exact performance of their benchmarks because of fees, expenses, transaction costs and portfolio tracking error of the underlying investments. The maximum sales charge for Arrow's A-Shares is 5.75%. A-Share investors may be eligible for a reduction in sales charges. The funds charges a fee of 1.00% on redemptions of shares held less than 30 days.  1149-NLD-11/6/2008