Longboard

COMMENTARY: Managed Futures Strategy Fund April 2019
WAVIX

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Commentary in PDF format.


HIGHLIGHTS

    Contributors
  • Commodities: Long Carbon Emissions
  • Currencies: Short Swiss Franc / U.S. Dollar
  • Fixed Income: Long Australian 3-Year Bond
  • Equities: Long Toronto S&P 60 Index
    Detractors
  • Commodities: Short WTI Crude
  • Currencies: Short Australian Dollar / Japanese Yen
  • Fixed Income: Long UK Gilt
  • Equities: Short MSCI Singapore Index

Past Commentaries

April 2019

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 Longboard Managed Futures Strategy Fund was up +2.26% on the month as gains in currencies, commodities and equities offset losses in fixed income.

In April, the global equity rebound carried on despite the International Monetary Fund (IMF) continuing to lower growth expectations. Both developed and emerging markets were up on the month, although they still trail the U.S. In central bank news we saw dovish talk as the Fed, ECB and Bank of Japan all signaled no tightening in 2019. A calmer political backdrop also served as a growth catalyst for the month.

Despite the Fed’s dovish tone, the U.S. dollar remained the relative strength leader in the world economy as it finished higher against the British pound and the euro. We also saw an increase in U.S. interest rates, which hurt the fund as we were long the domestic curve. However, the strength of the dollar helped to offset that loss as we remain long the U.S. dollar versus most international counterparts.

In commodities, WTI crude has rallied nearly $20 a barrel on the year as supply concerns from OPEC production cuts, and a ban on Iranian oil sales drove prices higher. Gold was slightly down as expected due to the stronger U.S. dollar. Meanwhile, short positions in soybeans, wheat, coffee and orange juice were beneficial to the portfolio as prices continued to fall.

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

The fund has rebuilt some of its equity exposure, bringing it close to its historical average. It now has some long exposure both domestically and internationally and will add to this position to take advantage of the bull market if the rally continues. Meanwhile, the fund offers robust diversification specifically in commodities, as that remains our largest exposure. Energy positions have been significantly cut and we currently hold no positions in crude oil. However, we continue to profit from substantial short exposure in grains and softs.

Even with considerable restructuring of the portfolio in recent months, the U.S. dollar strength trade remains our strongest/clearest position. We remain long versus most major currencies and our short positions in commodities stand to profit from the stronger dollar. The other major theme is long bonds across the globe allowing us to benefit from lower rates and further central bank easing. The fund also is currently at the low end of its historical number of positions, allowing us to benefit from new trends as they arise.


EQUITIES

Equities contributed to gains for the first time in 2019 as new long positions were proftable amid the global rally.


FIXED INCOME

Fixed income was a detractor after being a strong source of returns in March, we remain long global bonds.


CURRENCIES

Long U.S. Dollar positions continued to profit, and we benefited from a stronger Japanese Yen.


COMMODITIES

Commodities gained as short positions in grains and softs offset small losses in energy and meats.


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.

3359-NLD-5/8/2019