Longboard

COMMENTARY: Managed Futures Strategy Fund March 2019
WAVIX

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Commentary in PDF format.


HIGHLIGHTS

    Contributors
  • Commodities: Short Corn
  • Currencies: Short Canadian Dollar / U.S. Dollar
  • Fixed Income: Long Gilt
  • Equities: Short Nikkei
    Detractors
  • Commodities: Short Lean Hogs
  • Currencies: Long Mexican Peso / U.S. Dollar
  • Fixed Income: Long U.S. 30-Year Bond
  • Equities: Long SPI 200

Past Commentaries

March 2019

February 2019

January 2019

December 2018

November 2018

October 2018

September 2018

August 2018

July 2018

June 2018

May 2018

April 2018

March 2018

February 2018

January 2018


RECAP

The fund was up 3.00% as gains from long positions in fixed income outweighed small losses in equities and commodities.

Equities were mixed across the globe as plenty of unknowns remain in the market. These include continued U.S. – China trade talks, Brexit uncertainty and signs of slowing global economic growth. This had little effect on the portfolio as the fund currently sits at all-time lows in equity exposure. One clear trend that emerged was unified central bank action to help support financial markets. The European Central Bank drastically lowered growth forecasts and pledge to keep rates low through short term rates and long-term refinancing activities. Meanwhile, the Fed signaled no rate hikes in 2019 and announced an end to quantitative tightening in September. The ECB moves helped our fixed income positions in that region, while the Fed’s action caused us to open long positions across the curve domestically.

Elsewhere, the energy complex continued to grind higher, causing some pain and led to us closing our short Brent Crude Oil position. Gold was up intra month but ended essentially flat, and grains fell dramatically at the end of the month. Meanwhile the fund remained long the USD versus most major currencies despite some volatility that occurred around the Fed announcement.

Performance (as of 3/31/2019)
*INCEPTION DATE: 6/27/12 **INCEPTION DATE: 3/22/13
The Total Annual Fund Operating Expenses for the Longboard Managed Futures Strategy Fund class A and I are 3.12% and 2.88% respectively. The maximum sales charge for Class A (Max Load) shares is 5.75%. The performance data quoted here represents past performance. Current performance may be lower or higher than the performance data quoted above. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Past performance is no guarantee of future results. For performance information current to the most recent month-end, please call toll-free 855-294-7540 or visit our website, www.longboardfunds.com. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.

OUTLOOK

Given the current historically low equity exposure in the fund, we expect our returns from other asset classes to reduce our correlation to the broader stock markets. However, if equities continue to gain and hit all-time highs the fund can adapt and re-enter long positions. The fund has less positions than average but added a significant amount into Fixed Income in March.

Moving forward these long positions in fixed income and relative U.S. dollar strength are the clearest themes in the portfolio. Given the lack of trends across the globe, the fund maintains significant flexibility to capitalize when trends emerge.


EQUITIES

There were small losses in equities but the fund is at all time low stock exposure.


FIXED INCOME

Fixed income gains were broad based with most gains coming out of the Eurozone, meanwhile we added positions in the U.S.


CURRENCIES

The long U.S. Dollar position produced small gains despite siginficant intra month volatility.


COMMODITIES

Meats were responsible for most of the losses in commodities while grains were a source of returns.


GLOSSARY
Commodity Market
A physical or virtual marketplace for buying, selling, and trading raw or primary product such as natural resources, agricultural products, and livestock.
Forward Contract
A non-standardized contract between two parties to buy or sell a specified asset of specified quantity with delivery and payment occurring on a specified date.
Futures Contract
A standardized contract between two parties to buy or sell a specified asset of standardized quantity and quality with delivery and payment occurring on a specified date.
Long
Buying an asset such as a stock, commodity or currency with the expectation that the asset will rise in value.
Risk Allocation
The estimated maximum equity a position could lose, divided by the estimated aggregate equity currently at risk of loss across all positions inthe portfolio.
Short
Selling an asset such as a stock, commodity or currency, with the expectation that the asset will decrease in value.
Long-Term
Holding periods averaging greater than one year.

PROSPECTUS OFFERING DISCLOSURE

Investors should carefully consider the investment objectives, risks, charges and expenses of the Longboard Managed Futures Strategy Fund. This and other important information about the Fund is contained in the prospectus, which can be obtained at https://www.longboardfunds.com or by calling 855-294-7540. The prospectus should be read carefully before investing. The Longboard Managed Futures Strategy Fund is distributed by Northern Lights Distributors, LLC, a FINRA/SIPC member. Longboard Asset Management, LP, is not affiliated with Northern Lights Distributors, LLC.

MUTUAL FUND RISK DISCLOSURE

Mutual funds involve risk including possible loss of principal. The fund will invest a percentage of its assets in derivatives, such as commodities, futures and options contracts. The use of such derivatives and the resulting high portfolio turnover may expose the fund to additional risks that it would not be subject to, if it invested directly in the securities and commodities underlying those derivatives. The fund may experience losses that exceed those experienced by funds that do not use futures contracts, options and commodities. Changes in interest rates and the liquidity of certain investments could affect the fund’s overall performance. The fund is non-diversified and as a result, changes in the value of a single security may have significant effect on the fund’s value. Other risks include credit risks and investments in fixed income securities, structured notes, asset-backed securities and foreign investments. Furthermore, the use of short positions and leveraging can magnify the potential for gain or loss and amplify the effects of market volatility on the fund’s share price. The fund is subject to regulatory change and tax risks. Changes to current regulation or taxation rules could increase costs associated with an investment in the Fund.

3273-NLD-4/12/2019