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Arrow Managed Futures Strategy Fund
 Fact Sheet
 Fund Holdings
 
Summary Prospectus
 Class A & C
 Class I

 

 

Ticker Symbols:

Class A

MFTFX

Class C

MFTTX

Class I

MFTNX

CUSIP Numbers:

Class A

042765875

Class C

042765867

Class I

042765859

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

1.50%

Class C

2.25%

Class I

1.25%

*Plus acquired fund fees and short interest of 0.04%. When combined, the total fund expenses are 1.54%, 2.29% and 1.29%, respectively.

Fund Type:
Managed Futures Beta

Benchmarks (50/50 blend):

Trader Vic Index (TVI)™
A rules-based index for measuring trends in the financial and commodity futures markets.

A.I. Managed Futures Volatility Index (AIMFV)
A systematic, quantitative index of multiple components that serve as a proxy for exposures to economic sectors related to financial, commodity and volatility futures.


Trader Vic Index and "TVI" are trademarks of Enhanced Alpha Management, LP ("EAM"). EAM is not affiliated with Arrow Investment Advisors, LLC or Northern Lights Distributors, LLC, and does not sponsor or endorse the fund.


Definitions:
Volatility is a measure of fluctuations based on annualized standard deviation of monthly returns. Correlation is similarity in performance movement between two investments. Beta is the statistical measurement of an investment's return attributed to that of a financial market as a whole.

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 Managed Futures Strategy Fund may not be suitable for all investors. The fund may not replicate the exact performance of the benchmark because of fees, expenses, transaction costs and portfolio tracking error of the underlying investments. The fund's use of short selling involves increased risks and additional costs. The fund may invest in commodity- and currency-related securities, which may be subject to greater volatility than investments in traditional securities. The fund 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 fund to additional risks that it would not be subject to if it invested directly in the underlying securities. The fund 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 maximum sales charge for Arrow's Class A is 5.75%. Class A investors may be eligible for a reduction in sales charges. The fund charges a fee of 1.00% on redemptions of shares held less than 30 days.

0460-NLD-2/14/2013

 

 


 

Investment Strategy

The fund seeks to provide investment results that match the performance of a blended managed futures index benchmark.


Portfolio Manager


 Arrow Funds


Fund Highlights

  • An alternative to "long-only" commodity funds
  • Exposure to a blend of indexed managed futures strategies
  • Historically low correlation to traditional assets (i.e., stocks and bonds)
  • An alternative to illiquid managed futures or CTA funds


Fund Overview

Arrow Managed Futures Strategy Fund is a mutual fund that seeks to provide exposure to the global futures market by providing exposure to a blend of two managed futures indexes: Trader Vic Index (TVI) and A.I. Managed Futures Volatility Index (AIMFV). With the ability to go long or short, the fund is designed to capture the economic benefit derived from both rising and declining trends from a diverse cross section of futures markets. As an asset class, managed futures are a compelling choice for investors seeking portfolio diversification, exposure to non-traditional assets (such as commodities and currencies), and seeking access to directional trading strategies. One of the key features of managed futures is their historically low correlation to traditional assets, which make them an attractive and efficient portfolio diversification tool. Additionally, managed futures have the potential to exhibit strong performance during periods of stress in the markets.


Benchmark Analysis

Index Exposure: The fund's benchmark consists of an equal blend of two index strategies: Trader Vic Index (TVI) and A.I. Managed Futures Volatility Index (AIMFV).

The Trader Vic Index (TVI) is comprised of 14 sectors across a 50/50 combination of financials and commodities. These sectors are made up of 24 diverse components, which were chosen based on fundamental characteristics of liquidity, economic importance and credit stability. Each month, the TVI's sector exposures are rebalanced and the components are positioned either long or short based on moving average indicators customized for each sector. The only exception is the energy sector, which is either long or neutral (zero allocation) due to the potential for geopolitical risks uniquely associated with assets such as oil and gas. Should the energy sector take a neutral position, its weightings are allocated proportionately to the other sectors.

The A.I. Managed Futures Volatility Index (AIMFV) is a long/short/flat diversified managed futures index. The AIMFV is a systematic and quantitative-based index of numerous components that serve as a proxy for exposures to economic sectors related to financial instruments, commodity markets and volatility futures. This exposure is complimented with innovative overlays that account for seasonality and efficiency at the individual component level. All of the AIMFV components (inlcuding energies) may be positioned as long, short or flat (neutral/cash). If a flat position is determined, the index allocates to cash at the component weighting percentage.  

Blending indexes:

  • Diversification of systematic strategies - different price trends, risk controls, and roll schedules
  • Mitigates single strategy drawdowns
  • Multi-strategy alpha approach, similar CTAs
  • Improved portfolio efficiencies and cost structure
  • Increased exposure to a more diverse array of components


With a blended index approach, the Arrow Managed Futures Strategy Fund provides exposure to the following:

    

*Indexes are unmanaged, do not include fees and are generally not available for direct investment.

 

 


 

 
 
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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 Class A is 5.75% and 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