Eventide Multi-Asset Income Fund

Transcription

1 Eventide Multi-Asset Income Fund Presentation September 30, /17/16 Eventide Asset Management, LLC. 1

2 Eventide Funds: At A Glance Founded in 2008 Headquartered in Boston, MA Vision: to offer high performance values-based asset management to individuals, financial advisors, and institutions. Three mutual funds: Eventide Gilead Fund, Eventide Healthcare & Life Sciences Fund, Eventide Multi-Asset Income Fund $1.79B in net assets under management There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Past performance is not assurance of future results. 11/17/16 Eventide Asset Management, LLC. 2

3 Our Investment Philosophies Four beliefs that guide our investment strategy: We believe that truly wise investing means partnering with companies that excel at creating value for others. We believe in the value of expertise over general knowledge. We believe that truly active management is the best strategy. We believe that risk management should rely on a wide range of rigorous data. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Past performance is not assurance of future results. 11/17/16 Eventide Asset Management, LLC. 3

4 Eventide Multi-Asset Income Fund A: ETAMX C: ETCMX I: ETIMX N: ETNMX FUND OBJECTIVE Seeks to provide current income while maintaining the potential for capital appreciation ABOUT THE FUND A diversified, best ideas income mutual fund that seeks to provide attractive levels of current income, income growth, and long-term capital appreciation by balancing exposure between fixed-income, equity-income, and non-traditional income categories. BENCHMARK MSCI AC World Index MORNINGSTAR CATEGORY World Allocation SECONDARY BENCHMARK 60% MSCI AC World Index / 40% BarCap Aggregate Bond Index LIPPER CATEGORY Flexible Portfolio TOTAL ASSETS $57.8MM (Inception date: July 15, 2015) The MSCI All-Country World Index is a free float adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets and consists of 46 country indexes comprising 23 developed and 23 emerging market country indexes. Blended benchmark returns represents 60% MSCI ACWI Index, 40% BarCap Aggregate Bond Index, rebalanced monthly. The volatility of the indices may be materially different than that of the Fund, and investors should not expect the Fund to achieve the same results as the indices listed. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Past performance is not assurance of future results. 11/17/16 Eventide Asset Management, LLC. 4

5 Investment Team ROLE Mr. Wildy serves as Portfolio Manager of the Eventide Multi-Asset Income Fund. Martin Wildy, CFA Portfolio Manager BACKGROUND Senior Portfolio Manager at Aris Wealth Services, co-managing Aris Income Builder and values-based allocation portfolios Equity analyst at 1620 Investment Advisors, Inc. CFA Charterholder since 2003 Active consultant for CFA Institute B.S. in Finance from Penn State University Eventide Multi-Asset Income Fund Lead Portfolio Manager There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Past performance is not assurance of future results. 11/17/16 Eventide Asset Management, LLC. 5

6 Wider Investment Team Finny Kuruvilla, MD PhD Eventide Funds CIO Dr. Finny Kuruvilla, Eventide s Chief Investment Officer, serves in an oversight capacity for all of the firm s investment strategies. David Barksdale Eventide Funds Portfolio Manager David Barksdale provides quantitative analysis and tools which will assist in the management of the Fund. David Dirk, CFA Boyd Watterson Portfolio Manager David Dirk, CFA serves as the Fixed Income Sub-Adviser and is responsible for the strategy and day to day investment decision making responsibilities within assigned allocation. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Past performance is not assurance of future results. 11/17/16 Eventide Asset Management, LLC. 6

7 Eventide Multi-Asset Income Fund Distinctives A MEANINGFULLY MULTI- ASSET APPROACH TO INCOME Wide opportunity set and up to 40% of net assets allocated to non-traditional income sources. TACTICALLY ALLOCATING TO ASSET CLASSES FAVORED IN THE FORWARD ENVIRONMENT Significant flexibility to allocate tactically across asset classes based on the portfolio manager s views of yield opportunities and risks in today s markets. VALUES- FOCUSED, VALUE ADDING Incorporates Eventide s Business 360 framework to find companies that are both attractive for current income generation and truly admirable. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Past performance is not assurance of future results. 11/17/16 Eventide Asset Management, LLC. 7

8 A Meaningfully Multi-Asset Approach to Income Eventide believes that in a yield-constrained world investors need to take advantage of a broader income opportunity set. TRADITIONAL EQUITY INCOME 20-60% TYPICAL RANGE TRADITIONAL FIXED INCOME 20-50% TYPICAL RANGE NON- TRADITIONAL INCOME 10-40% TYPICAL RANGE U.S. Equities (all cap) Foreign Equities (incl. EM) 10-40% 10-30% Cash & Equivalents 0-30% Agency / Mortgage-Backed Securities Taxable Municipal Bonds Green Bonds Corporate Bonds Convertible Bonds High Yield Corp Bonds 0-20% 0-20% 0-40% 0-30% 0-10% 0-15% Preferred Stock REITs MLPs / YieldCos Covered Call Options Cash-Secured Put Options Private Investments Catastrophe Bonds / Reinsurance BDCs Bank Loans 0-15% 0-20% 0-20% 0-10% 0-10% 0-15% 0-5% 0-5% 0-5% Each of these asset classes has its own set of investment characteristics and risks and investors should consider these risks carefully prior to making any investments. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. 11/17/16 Eventide Asset Management, LLC. 8

9 Example of Non-Traditional Income: Option Premium Strategies Options strategies provide a differentiated source of income. Covered call writing Write call options on positions held in the portfolio Give up additional upside in exchange for option premium If stock appreciates, sell stock, keep premium If stock depreciates, keep stock, keep premium Cash-secured put writing Write put options on purchase candidates at below current market prices Receive premium in exchange for pre-commit to purchasing securities If stock appreciates, keep cash, keep premium If stock depreciates, purchase stock, keep premium The use of derivative instruments, such as options, involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Past performance is not assurance of future results. 11/17/16 Eventide Asset Management, LLC. 9

10 Example of Non-Traditional Income: Catastrophe Bonds / Reinsurance Catastrophe bonds and reinsurance provide differentiated sources of income. Catastrophe Bonds: Bond issued, often by state or municipality, that matures in one year Bond pays an attractive spread above T-bills If at any point during the year the triggering event occurs (e.g., wind speeds in Broward County exceeds 140mph), the bond defaults and holder gets nothing Diversify by natural catastrophe type and geography Reinsurance: Slice of the catastrophe related book of a global reinsurer (SwissRe, MunichRe, etc.) Insurers may get too much concentration in catastrophe risk Solution is to bring in outside capital as partners to avoid turning away business Returns are uncorrelated with financial markets There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Past performance is not assurance of future results. 11/17/16 Eventide Asset Management, LLC. 10

11 Tactically Allocating to Asset Classes Favored in the Forward Environment The Multi-Asset Income Fund maintains significant flexibility to allocate tactically across asset classes based on the portfolio manager s views of yield opportunities and risks in today s markets. Portfolio Positioning Is Flexible and Reflects PM Macro Views Asset Class Investment Grade Bonds High Yield Bonds Cat Bonds / Reinsurance Preferred Stocks U.S. Equities Foreign Equities REITs MLPs / YieldCos Option Income Private Placements Typical Range 15 40% 0 15% 0 5% 0 15% 10 40% 10 30% 0 20% 0 20% 0 20% 0 15% Current Views Cautious low yields, rate risk Cautious energy spillover / ETF concerns Favorable but limited buying windows Neutral selective opportunities Neutral relatively full valuations Favorable higher yields, lower valuations Cautious cap rates relatively low Favorable focus on non-commodity exposure Favorable relatively full equity valuations Favorable as Fund scales All investments involve risks, including possible loss of principal. Each of these asset classes has its own set of investment characteristics and risks and investors should consider these risks carefully prior to making any investments. 11/17/16 Eventide Asset Management, LLC. 11

12 Values-Focused, Value Adding The Eventide Multi-Asset Income Fund incorporates Eventide s Business 360 framework to analyze companies across six key stakeholders often ignored by traditional finance. VALUES- FOCUSED The goal of the Business 360 analysis is to identify companies that excel at creating compelling value for others VALUE ADDING and thereby capable of sustained profitability and growth over time. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Past performance is not assurance of future results. 11/17/16 Eventide Asset Management, LLC. 12

13 Example of Portfolio Theme: Renewable Energy We take a long-term perspective when evaluating industry trends The energy and utility sectors are going through tremendous change as the world transitions to renewable resources 11.40% of net assets invested in renewables as of September 30, 2016 Exposure includes investments in alternative energy financiers, equity in asset owners, and convertible bonds This example is for informational purposes only and is not meant to represent investment advice. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. 11/17/16 Eventide Asset Management, LLC. 13

14 Where does electricity come from? Source: EIA and Penn State University The chart above is for informational purposes only and is not meant to represent buy or sell advice. 11/17/16 Eventide Asset Management, LLC. 14

15 Renewable Power is Surpassing Conventional Additions Renewable Power Generation and Capacity % as a Share of Global Power, Renewable capacity change as % of Global capacity change (net) Global power generation Global power capacity Source: BNEF The data lines above are for informational purposes only and not meant to represent buy or sell advice. 11/17/16 Eventide Asset Management, LLC. 15

16 Renewable Cost Curves Have Declined Dramatically Onshore Wind Levelised Cost* ($/MWh) Onshore Wind Levelised Cost** ($/MWh) 1, Wind costs have fallen 50% since 2009 H Module costs have fallen 99% since 1976 and 80% since Current 2015 price ,000 10, ,000 1m ,000 10, ,000 1m Thailand Germany U.S. Brazil Learning Rate 19% Learning Rate 19% * Pricing data has been inflation corrected to We assume the debt ratio of 70%, cost of debt (bps to LIBOR) of 175, cost of equity of 8% ** Prices are in real (2015) USD. Current price is $0.61/W Source: Bloomberg New Energy Finance, Maycock The data lines above are for informational purposes only and not meant to represent buy or sell advice. 11/17/16 Eventide Asset Management, LLC. 16

17 Tax Credit Extensions Expected to Have Positive Impact * Production Tax Credit extension case assumes 5-year phase-out onwards is forecast. Source: Bloomberg New Energy Finance The data above is for informational purposes only and not meant to represent buy or sell advice. 11/17/16 Eventide Asset Management, LLC. 17

18 Renewables Expected to Continue to Gain Share Global Capacity Forecasts: IEA vs. BNEF (GW installed) Wind Solar 4,000 4,000 3,500 3,500 3,000 3,000 2,500 2,000 Revised Up 5-fold since ,500 2,000 Revised Up 14-fold since ,500 1,500 1,000 1, Actual International Energy Agency s World Energy Outlook Bloomberg New Energy Finance forecast Source: IEA, Bloomberg New Energy Finance The data lines above are for informational purposes only and not meant to represent buy or sell advice. 11/17/16 Eventide Asset Management, LLC. 18

19 Example of Non-Traditional Income: Yieldcos Renewable Power Infrastructure Assets (e.g., own electrical power plants) Typically hydro, solar, wind, or newer natural gas powered facilities Sell power via long-term power purchase agreements, generate stable cash flows Dividend yields frequently in the 4-7%+ range Can be internally managed or work with a sponsor (development company) Relatively new, smaller asset class with less coverage and more inefficiencies: REIT Market Cap: ~$1.1 Trillion MLP Market Cap: ~$188 Billion Yieldco Market Cap: < $50 Billion 11.40% percent of the Multi-Asset Income Fund invested in yieldcos as of September 30, 2016 The above data is for informational purposes only and not meant to represent buy or sell advice. YieldCos have its own set of investment characteristics and risks and investors should consider these risks carefully prior to making any investments. The dividend yield data is historical in nature, and not a guarantee of future results. 11/17/16 Eventide Asset Management, LLC. 19

20 Composition Industry Allocation is subject to change at any time. Past performance does not assure future results. Sector and Asset Allocation as of 09/30/ /17/16 Eventide Asset Management, LLC. 20

21 Return Performance is historic and does not guarantee future results. Investment return and principal value will fluctuate with changing market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the data quoted. Investors cannot directly invest in an index and unmanaged index returns do not reflect any fees, expenses or sales charges. To obtain the most recent month-end performance information and a current Eventide Multi-Asset Income Fund prospectus please call the fund, toll free at EVEN (3836). Multi-Asset Income Fund Multi-Asset Income Blend MSCI AC World Index (Net) 1 Year 15.29% 9.43% 11.96% Inception (annualized) 7.14% 2.34% 0.02% These charts compare the Eventide Multi-Asset Income Fund to index fund performance over the previous periods shown, and since inception. Because of ongoing market volatility, Fund performance may be subject to substantial short-term changes. Since Inception returns pertain to Class N and assume the inception date of 15 July Performance will differ for other fund classes, based upon fees and commissions. The MSCI World All-Country World Index (Net) captures large and mid cap representation across 23 developed markets and 23 emerging markets. The volatility of the index may be materially different than that of the Fund, and investors should not expect the Fund to achieve the same results as the index. Returns pertain to Class N. ** The Multi-Asset Income Blend is a proprietary Eventide benchmark based on 60% MSCI All Country World Index (Net), 40% BarCap Aggregate Bond Index at inception, rebalanced monthly. The volatility of the index may be materially different than that of the Fund, and investors should not expect the Fund to achieve the same results as the index. 11/17/16 Eventide Asset Management, LLC. 21

22 Distributions These charts compare the Eventide Multi-Asset Income Fund to index fund performance over the previous periods shown, and since inception. Because of ongoing market volatility, Fund performance may be subject to substantial short-term changes. Since Inception returns pertain to Class N and assume the inception date of 15 July Performance will differ for other fund classes, based upon fees and commissions. The MSCI World All-Country World Index (Net) captures large and mid cap representation across 23 developed markets and 23 emerging markets. The volatility of the index may be materially different than that of the Fund, and investors should not expect the Fund to achieve the same results as the index. Returns pertain to Class N. Dividends and Capital Gains are subject to change and are not assured 11/17/16 Eventide Asset Management, LLC. 22

23 Market Risk ** Source: Zephyr StyleADVISOR, with Fund returns supplied to Zephyr by Morningstar, Inc. Standard deviation of return measures the average deviations of a return series from its mean. StyleADVISOR calculates standard deviation as the square root of the squared differences of each monthly return from the mean monthly return over the specified period. Beta is a measure of systematic risk, or the sensitivity of ETNMX to movements in the S&P 500 Index (Index). StyleADVISOR defines Beta as the covariance of ETNMX and Index divided by the variance of the Index. Alpha is the mean of the excess return of ETNMX over beta times the Index. The R-Squared (R2) of ETNMX versus the Index is a measure of how closely related the variance of ETNMX returns and the variance of the Index returns are. StyleADVISOR calculates R2 by squaring the correlation of monthly returns between ETNMX and the Index over the specified period Since inception market risk details assume inception date of 1 August 2015 and not Class N's actual inception date of 15 July 2015, as only full month data is included in the market risk calculations. 11/17/16 Eventide Asset Management, LLC. 23

24 Awards and Recognition Morningstar Sustainability Rating Top 2% World Allocation for September 30, 2016 Sustainability Rating as of 09/30/2016. Sustainalytics provides company-level analysis used in the calculation of Morningstar s Sustainability Score. The Morningstar Sustainability Rating is derived from the Morningstar Portfolio Sustainability Score TM, which is calculated based on company-level ESG scores and company involvement in ESG-related controversies, using Sustainalytics ESG data. 11/17/16 Eventide Asset Management, LLC. 24

25 Contact For Fund platform availability inquiries or to initiate a sales agreement, please contact Robin John at rjohn@eventidefunds.com or , x55 To speak with a sales agent of the Fund, please contact Jason Myhre at jmyhre@eventidefunds.com or , x56 For Fund literature or prospectuses, please contact info@eventidefunds.com 11/17/16 Eventide Asset Management, LLC. 25

26 Disclosures Mutual Funds involve risk including the possible loss of principal. The Funds ethical values screening criteria could cause it to under-perform similar funds that do not have such screening criteria. The Funds can have risk related to option investing. There are special risks associated with investments in foreign companies including exposure to currency fluctuations, less efficient trading markets, political instability and differing auditing and legal standards. Because of ongoing market volatility, the Funds performance may be subject to substantial short-term changes. The Eventide Gilead Fund & Eventide Healthcare & Life Sciences Fund can invest in smaller-sized companies which may experience higher failure rates than larger companies and they normally have a lower trading volume than larger companies. The Funds can also have risk associated with the biotechnology and pharmaceutical industry in which these companies may be heavily dependent on clinical trials with uncertain outcomes and decisions made by the U.S. Food and Drug Administration. The Funds can invest in private companies. Private investments include various risks including but not limited to lack of liquidity, capital commitment risk, and valuation risk. Private companies may not be financially profitable and have uncertain futures, thus subject to additional risks. Investors in the Gilead Fund should be aware that companies in the technology industries have different risks including but not limited to products becoming obsolete, and entrance of competing products. 11/17/16 Eventide Asset Management, LLC. 26

27 Disclosures Investors in the Eventide Multi-Asset Income Fund should be aware that interest rates are at historic lows and may change at any time based on government policy. In general, the price of a fixed income security falls when interest rates rise. A rise in interest rates may result in volatility and increased redemptions, which in turn could result in the fund being forced to liquidate portfolio securities at disadvantageous prices. Longer-term securities may be more sensitive to changes in interest rates. The intermediate-term bond portion of the Fund s portfolio may represent 0% to 100% of the Fund s portfolio with an average duration of between two and eight years. The Eventide Multi-Asset Income Fund may invest in other funds. If other funds are utilized, such underlying funds are subject to investment advisory and other expenses, which will be indirectly paid by the Fund. As a result, your cost of investing in the Fund will be higher than the cost of investing directly in underlying funds and may be higher than other mutual funds that do not invest in underlying funds. The Fund may invest, directly or indirectly, in junk bonds. Such securities are speculative investments that carry greater risks than higher quality debt securities. There are unique risks associated with REITs, MLPs, preferred stocks, convertible bonds, BDCs, and yieldcos that are covered in the Fund's prospectus and SAI. The Fund is a new mutual fund and has a limited history of operations for investors to evaluate. An investor should consider a fund's investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the prospectus, which can be obtained at or by calling EVEN (3836). Please read the prospectus carefully before investing. Eventide Mutual Funds are distributed by Northern Lights Distributors, LLC, Member FINRA/SIPC, which is not affiliated with Eventide Asset Management, LLC. 11/17/16 Eventide Asset Management, LLC. 27

28 Eventide Asset Management, LLC One International Place, Ste Boston, MA EVEN (3836) E V E N T I D E F U N D S. COM 11/17/16 Eventide Asset Management, LLC NLD-11/16/