Two Shops Have 335MM Reasons to Celebrate Their Fund's First Birthday
Reported by Casey Quinlan
The Eagle MLP Strategy Fund, now a year old, and co-advised by Eagle Global Advisors and Princeton Fund Advisors, has surpassed $335 million in assets. This fund's anniversary passed on September 14. The fund, which is distributed by Northern Lights Distributors, was launched with the aim to access a high current yield and potential attractive total return in the midstream energy infrastructure space, though diversified and actively managed MLP portfolios and MLP-related securities. Its year-to-date return is 21.14 percent as of August 31. The fund was up 1.26 percent today at noon.
The fund was structured to avoid the "tax drag" of other MLP mutual funds and ETFs, which are required to pay taxes as corporations at the fund level and focuses on energy infrastructure in the mistreat transportation and storage segment.
"We believe long-term fundamentals for energy infrastructure remain strong--and that valuations are structurally inexpensive relative to many other yield-oriented investments," stated David Chiaro, co-head of MLP Investment Strategies at Eagle Global Advisors and co-PM of the Eagle MLP Strategy Fund.
For more information, read the press release below.
HOUSTON, Sep 20, 2013 -- Eagle Global Advisors, LLC and Co-Advisor Princeton Fund Advisors, LLC announced the one year anniversary on September 14th, 2013 of the Eagle MLP Strategy Fund, a '40 Act Mutual Fund that intends to avoid the "tax drag" of other MLP-focused funds. The Fund attempts to provide access to a high current yield and the potential attractive total return opportunity associated with the midstream energy infrastructure space, through a diversified and actively managed portfolio of Master Limited Partnerships ("MLPs") and MLP-related securities.
"The Eagle MLP Strategy Fund not only provides 1099 tax reporting, daily liquidity at NAV and transparency, it is also structured to avoid the "tax drag" of other MLP mutual funds and ETFs that have to pay taxes as corporations at the fund level. These other funds incur a corporate-level tax that may cause approximately 35% of their income and gains to be lost to taxes at the fund level," said Greg Anderson, Chief Investment Officer at Princeton Fund Advisors. "The Eagle MLP Strategy Fund intends to qualify as a Regulated Investment Company (RIC) and avoid the double taxation these funds are incurring."
The Fund's MLP strategy is a distinctive investment approach that seeks a total rate of return from tax-advantaged income, qualified dividends, ordinary income and capital appreciation through investments in MLPs and MLP-related securities. The Fund does not carry the burden of K-1s, state tax filing requirements and UBTI to shareholders and may be appropriate for tax-exempt investors and qualified accounts.
The Eagle MLP Strategy Fund focuses primarily on energy infrastructure in the "midstream" transportation and storage segment of the energy supply chain. These are long-lived, high-value physical assets that are paid a fee for the transportation and storage of natural resources and have minimal direct exposure to commodity prices. Energy infrastructure continues to experience significant growth, as the United States attempts to become energy independent.
"We believe long-term fundamentals for energy infrastructure remain strong--and that valuations are structurally inexpensive relative to many other yield-oriented investments," said David Chiaro, Co-Head of MLP Investment Strategies at Eagle Global Advisors and Co-Portfolio Manager of the Eagle MLP Strategy Fund. Eagle's investment methodology favors companies with limited or no commodity price exposure, strong balance sheets, and proven management who they believe are attractively valued based on current and prospective distributions. "The dependability of the cash distribution is extremely important in analyzing and valuing MLP investments," continued Mr. Chiaro. "Tax benefits of MLPs are preserved through low turnover and long term gains."
About Eagle Global Advisors
Eagle Global Advisors, LLC was founded in 1996 and is located in Houston, Texas, the knowledge center for both Energy and MLPs. Eagle is an SEC registered investment advisor and manages approximately $3.6 billion in assets of which over $2.1 billion is in MLPs and MLP-related securities. The company is 100% employee owned and managed by six partners and a team of 25 professionals. As an early entrant in the actively managed MLP space, Eagle has been managing MLP strategies for over eleven years. Its experienced investment team has over 50 years of direct MLP investment experience. Eagle Global Advisors serves as Co-Advisor to the Eagle MLP Strategy Fund.
About Princeton Fund Advisors
Princeton Fund Advisors, LLC, together with its affiliates, manages approximately $1.6 billion of assets for institutional and private clients worldwide. Princeton Fund Advisors (PFA) is a Registered Investment Advisor with the SEC. PFA was established to develop a series of 1940 Act mutual funds in alternative asset classes. The firm's Investment Committee Members contribute more than 60 years of alternative asset management experience to the portfolio construction and management process. The Company has offices in Colorado and Minnesota. Princeton Fund Advisors serves as Co-Advisor to the Eagle MLP Strategy Fund.
Eagle MLP Strategy Fund was launched September 2012. Investors should carefully consider the investment objectives, risks, charges and expenses of the Eagle MLP Strategy Fund. This and other important information about the Fund is contained in the Prospectus, which can be obtained by contacting your financial advisor, or by calling 1.888.868.9501 or at www.eaglemlpfund.com. The Prospectus should be read carefully before investing. The Eagle MLP Strategy Fund is an actively managed dynamic portfolio. There is no guarantee that this investment will achieve its objectives, goals, generate positive returns, or avoid losses. The information provided should not be considered tax advice. Please consult your tax advisor for further information. Past performance is not indicative of future results.
The Eagle MLP Strategy Fund is distributed by Northern Lights Distributors, LLC member FINRA Eagle Global Advisors, Eagle MLP Strategy Fund Advisors and Northern Lights Distributors, LLC are not affiliated.
Credit Risk: There is a risk that note issuers will not make payments on securities held by the Fund, resulting in losses to the Fund. In addition, the credit quality of securities held by the Fund may be lowered if an issuer's financial condition changes.
Distribution Policy Risk: The Fund's distribution policy is not designed to guarantee distributions that equal a fixed percentage of the Fund's current net asset value per share. Shareholders receiving periodic payments from the Fund may be under the impression that they are receiving net profits. However, all or a portion of a distribution may consist of a return of capital (i.e. from your original investment). Shareholders should not assume that the source of a distribution from the Fund is net profit. Shareholders should note that return of capital will reduce the tax basis of their shares and potentially increase the taxable gain, if any, upon disposition of their shares.
ETN Risk: ETNs are subject to administrative and other expenses, which will be indirectly paid by the Fund. Each ETN is subject to specific risks, depending on the nature of the ETN. ETNs are subject to default risks. Foreign Investment Risk: Investing in notes of foreign issuers involves risks not typically associated with U.S. investments, including 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.
Interest Rate Risk: Typically, a rise in interest rates can cause a decline in the value of notes and MLPs owned by the Fund.
Liquidity Risk: Liquidity risk exists when particular investments of the Fund would be difficult to purchase or sell, possibly preventing the Fund from selling such illiquid securities at an advantageous time or price, or possibly requiring the Fund to dispose of other investments at unfavorable times or prices in order to satisfy its obligations.
Management Risk: Eagle's judgments about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results. Additionally, Princeton's judgments about the potential performance of the Fund's investment portfolio, within the Fund's investment policies and risk parameters, may prove incorrect and may not produce the desired results.
Market Risk: Overall securities market risks may affect the value of individual instruments in which the Fund invests. Factors such as domestic and foreign economic growth and market conditions, interest rate levels, and political events affect the securities markets.
MLP Risk: Investments in MLPs involve risks different from those of investing in common stock including risks related to limited control and limited rights to vote on matters affecting the MLP, risks related to potential conflicts of interest between the MLP and the MLP's general partner, cash flow risks, dilution risks and risks related to the general partner's limited call right. MLPs are generally considered interest-rate sensitive investments. During periods of interest rate volatility, these investments may not provide attractive returns. Depending on the state of interest rates in general, the use of MLPs could enhance or harm the overall performance of the Fund.
MLP Tax Risk: MLPs, typically, do not pay U.S. federal income tax at the partnership level. Instead, each partner is allocated a share of the partnership's income, gains, losses, deductions and expenses. A change in current tax law or in the underlying business mix of a given MLP could result in an MLP being treated as a corporation for U.S. federal income tax purposes, which would result in such MLP being required to pay U.S. federal income tax on its taxable income. The classification of an MLP as a corporation for U.S. federal income tax purposes would have the effect of reducing the amount of cash available for distribution by the MLP. Thus, if any of the MLPs owned by the Fund were treated as corporations for U.S. federal income tax purposes, it could result in a reduction of the value of your investment in the Fund and lower income, as compared to an MLP that is not taxed as a corporation.
Energy Related Risk: The Fund focuses its investments in the energy infrastructure sector, through MLP securities. Because of its focus in this sector, the performance of the Fund is tied closely to and affected by developments in the energy sector, such as the possibility that government regulation will negatively impact companies in this sector. Energy infrastructure entities are subject to the risks specific to the industry they serve including, but not limited to, the following: Fluctuations in commodity prices; Reduced volumes of natural gas or other energy commodities available for transporting, processing, storing or distributing; New construction risk and acquisition risk which can limit potential growth; A sustained reduced demand for crude oil, natural gas and refined petroleum products resulting from a recession or an increase in market price or higher taxes; Depletion of the natural gas reserves or other commodities if not replaced; Changes in the regulatory environment; Extreme weather; Rising interest rates which could result in a higher cost of capital and drive investors into other investment opportunities; and Threats of attack by terrorists.
Non-Diversification Risk: As a non-diversified fund, the Fund may invest more than 5% of its total assets in the securities of one or more issuers. Small and Medium Capitalization Company Risk: The value of a small or medium capitalization company's securities may be subject to more abrupt or erratic market movements than those of larger, more established companies or the market averages in general. Structured Note Risk: MLP-related structured notes involve tracking risk, issuer default risk and may involve leverage risk. Mutual Funds involve risk including possible loss of principal.
SOURCE: Eagle Global Advisors, LLC and Princeton Fund Advisors, LLC