Investors should carefully consider the investment objectives, risks, charges and expenses of the PCS Commodity Strategy Fund. This and other important information about the Fund is contained in the Prospectus, which can be obtained by calling 888-430-0043. The Prospectus should be read carefully before investing. The PCS Commodity Strategy Fund is distributed by Northern Lights Distributors, LLC, member FINRA/SIPC. Price Asset Management, LLC and Northern Lights Distributors are not affiliated.
Mutual Funds involve risks including the possible loss of principal.
The Fund uses derivatives (including commodity futures and options on futures) to enhance returns and hedge against market declines, which may subject the Fund to greater volatility than investments in traditional securities. The Fund’s use of derivative instruments involves risks including leverage risk, counterparty default risk and tracking risk. The value of a commodity-linked investments typically are based upon the price movements of a physical commodities (such as heating oil, livestock, or agricultural products), a commodity futures contract or commodity index, or some other readily measurable economic variable dependent upon changes in the value of commodities or the commodities markets. Trading in the futures and forward markets typically results in volatile performance and sudden or major reversals in these markets could result in losses for traders.
Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the U.S. or abroad, resulting in losses. Foreign markets may be less liquid, more volatile and subject to less government supervision than domestic markets. There may be difficulties enforcing contractual obligations, and it may take more time for trades to clear and settle.
Most United States futures exchanges limit fluctuations in some futures contract prices during a single day by regulations referred to as “daily limits.” Futures prices have occasionally moved to the daily limit for several consecutive days with little or no trading, which could prevent the Fund from executing trades and subject the Fund to substantial losses. Also, the Commodity Futures Trading Commission (“CFTC”) or exchanges (both U.S. exchanges and non-U.S. exchanges) may suspend or limit trading, and exchanges may be subject to periods of illiquidity.
Using derivatives to increase the Fund’s combined long and short exposure creates leverage which can magnify the Fund’s gain or loss and amplify the effects of volatility on the Fund’s share price. A futures commission merchant (“FCM”) is required to segregate assets pursuant to CFTC regulations. However, in the event of the insolvency of an FCM, the Fund may be subject to a risk of loss of its funds and would be able to recover only a pro rata share of assets specifically traceable to the account of the Fund and its investors.
The regulation of the U.S. commodities and the economic features of the markets traded by the Fund have undergone substantial change in recent years, a process which is expected to continue, particularly as rules are enacted by the CFTC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Reform Act”). Certain Fund investment strategies may be subject to special tax rules, the effect of which may have adverse tax consequences for the Fund. By investing in commodities indirectly through the Subsidiary, the Fund will obtain exposure to the commodities and any income received from its investments will be passed through to the Fund as ordinary income, which may be taxed at less favorable rates than capital gains.
The Subsidiary will not be registered under the 1940 Act and, unless otherwise noted in this Prospectus, will not be subject to all of the investor protections of the 1940 Act. Changes in the laws or regulations of the United States and/or the Cayman Islands could result in the inability of the Fund and/or the Subsidiary to operate as described in this Prospectus and could negatively affect the Fund and its shareholders. Your cost of investing in the Fund will be higher because you indirectly bear the expenses of the Subsidiary. There is a risk that issuers and counterparties will not make payments on investments held by the Fund, resulting in losses. The Fund could experience delays in the delivery of loans or other income securities. The credit quality of securities held by the Fund may be lowered if an issuer’s financial condition changes. Fixed income securities could lose value because of interest rate changes and are subject to prepayment and credit risks.
The Fund has a limited history of operation and the Adviser has limited experience managing a mutual fund. Overall securities and derivatives market risks may affect the value of individual instruments in which the Fund invests. When the value of the Fund’s investments goes down, your investment in the Fund decreases in value and you could lose money. Strategies employed by the Adviser in selecting investments and asset allocations for the Fund may not result in an increase in the value of your investment. The Fund is classified as non-diversified under the 1940 Act which means the performance of one or a small number of portfolio holdings can affect overall performance.
“Jim Rogers”, “James Beeland Rogers, Jr.”, and “Rogers” are trademarks and service marks of, and “Rogers International Commodity Index” and “RICI” are registered service marks of, Beeland Interests, Inc., which is owned and controlled by James Beeland Rogers, Jr., and are used subject to license. The personal names and likeness of Jim Rogers/James Beeland Rogers, Jr. are owned and licensed by James Beeland Rogers, Jr. The PCS Commodity Strategy Fund Shares are not sponsored, endorsed, sold or promoted by Beeland Interests, Inc. (“Beeland Interests”), James B. Rogers, Jr. or their affiliates. Neither Beeland Interests, James B. Rogers, Jr. nor their affiliates makes any representation or warranty, express or implied, nor accepts any responsibility, regarding the accuracy or completeness of this website, or the advisability of investing in securities or commodities generally, or in PCS Commodity Strategy Fund Shares or in futures particularly.
*The RICI® uses the Bloomberg Commodity Index Total Return® and the S&P GSCI™ Total Return as its primary benchmarks. It is not possible to invest directly in an index and unmanaged index returns do not reflect any fees, expenses or sales charges.
The Bloomberg Commodity Index Total Return® is an unmanaged index composed of futures contracts on physical commodities and reflects the returns on a fully collateralized investment in the Bloomberg Commodity Index (BCOM). This combines the returns of the BCOM with the returns on cash collateral invested in U.S. Treasury Bills. The BCOM is made up of 22 exchange-traded futures on physical commodities, with position sizing based on production and liquidity, subject to weighting restrictions, and is rebalanced annually. The index is designed to be a highly liquid and diversified benchmark for commodities as an asset class.
The S&P GSCI™ Total Return index is an unmanaged index composed of futures contracts on physical commodities and measures a fully collateralized commodity futures investment in the S&P GSCI™. This combines the returns for the S&P GSCI with the returns invested in U.S. Treasury Bills. The S&P GSCI is made up of 24 exchange-traded futures on physical commodities, with position sizing based primarily on production and liquidity, and is rebalanced annually. It is broad-based, production-weighted and meant to be representative of the global commodity market beta.
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