Advisory Research Investment Management

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Advisory Research provides access to institutional-caliber investment management with specialized expertise in targeted asset classes. We offer a wide range of strategies across the asset spectrum, paying close attention to downside protection and the pursuit of attractive risk-adjusted returns.

MLP & Energy Income Fund

Investment Overview

The Advisory Research MLP & Energy Income Fund invests in publicly traded equity and debt securities of master limited partnerships (MLPs) and in equity and debt securities of other companies focused in the energy infrastructure sector. The Fund will purchase securities across the capital structure of MLPs and their affiliates with the goal of providing greater liquidity and lower volatility with a high correlation to MLP returns. The Fund seeks to provide investors with the following benefits:

  1. High yields relative to other yield focused investments.
  2. Increased opportunity set by investing across the capital structure.
  3. Increased liquidity.
  4. High portfolio income with lower volatility.
  5. Alpha opportunity through asset allocation among MLPs, energy infrastructure equities, investment grade and high yield bonds.
as of 06/30/2014

Fund Facts

Ticker: INFRX INFFX INFIX
Share Class: A C I
CUSIP: 461418543 461418238 461418816
Inception 5/18/11 4/1/2012 12/27/2010
Minimum Investment $2,500 $2,500 $2,500 – $1,000,000*
Net Expense Ratio 1.51% 2.26% 1.26%
Gross Expense Ratio 1.45% 2.20% 1.20%
Total Net Assets (all classes) $710 million $710 million $710 million
Portfolio Managers Jim Cunnane,
Quinn Kiley
Jim Cunnane,
Quinn Kiley
Jim Cunnane,
Quinn Kiley

*Minimum depends upon location of the account.

Asset Allocation

Top Ten Holdings

The Williams Companies, Inc. 6.8%
Energy Transfer Equity, L.P. 6.3%
Enbridge Energy Management, LLC 6.3%
Plains GP Holdings, L.P. 5.2%
Targa Resources Corp. 4.9%
Kinder Morgan Management, LLC 4.5%
Kinder Morgan, Inc. 4.4%
Spectra Energy Corp. 3.5%
EQT Corp. 3.4%
ONEOK, Inc. 3.2%
Total 48.5%

Holdings are subject to change and risk.

Monthly Fund PerformanceTotal Returns As of August 31, 2014

1 Month Year to Date 1 Year 3 Year 5 Year Since Inception1

Quarterly Fund PerformanceTotal Returns As of June 30, 2014

3 Months Year to Date 1 Year 3 Year 5 Year Since Inception1

1Inception date: Class A: 05/18/2011; Class C 4/1/2012; Class I: 12/27/2010

Performance for periods over one year is annualized. The performance data quoted here represents past performance. Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. A redemption fee of 2.00% will be imposed on redemptions or exchanges of shares you have owned for 90 days or less.

Performance results with load reflect the deduction for Class A Shares of the 5.75% maximum front end sales charge. Class C Shares are subject to a contingent deferred sales charge of 1.00% when redeemed within 12 months of purchase.

The Fund’s advisor has contractually agreed to waive its fees and/or absorb expenses of the Fund to ensure that total annual fund operating expenses (excluding taxes, leverage interest, brokerage commissions, dividend expenses on short sales, acquired fund fees and expenses as determined in accordance with Form N-1A, expenses incurred in connection with any merger or reorganization, or extraordinary expenses such as litigation) do not exceed “Net Expense Ratio” listed on the Portfolio tab. This agreement is in effect until March 31, 2015, and it may be terminated before that date only by the Trust’s Board of Trustees. The Fund’s advisor is permitted to seek reimbursement from the Fund, subject to limitations, for fees it waived and Fund expenses it paid for three years from the date of any such waiver or payment. Performance would have been lower without fee waivers in effect.

The Alerian MLP Index is a composite of the 50 most prominent energy master limited partnerships that provides investors with an unbiased, comprehensive benchmark for this emerging asset class. The index, which is calculated using a float-adjusted, capitalization-weighted methodology, is disseminated real-time on a price return basis (NYSE: AMZ).

Principal Risks of Investing

The Fund’s principal risks are mentioned below. Before you decide whether to invest in the Fund, carefully consider these risk factors and special considerations associated with investing in the Fund, which may cause you to lose part or all of your investment in the Fund.

Market Risk: Market risk is the risk that the Fund’s share price may be affected by a sudden decline in the market value of an investment, or by an overall decline in the stock market.

Sector Concentration Risk: The Fund’s investments will be concentrated in the energy infrastructure sector. The focus of the Fund’s portfolio on a specific sector may present more risks than if the portfolio were broadly diversified over numerous sectors.

MLP Units Risk: An investment in MLP units involves some risks which differ from an investment in the common stock of a corporation. Holders of MLP units generally have limited control and voting rights on matters affecting the partnership. The value of the Fund’s investment in MLPs depends largely on the MLPs being treated as partnerships for U.S. federal income tax purposes. If an MLP does not meet current legal requirements to maintain partnership status, or if it is unable to do so because of tax law changes, it would be taxed as a corporation and there could be a material decrease in the value of its securities.

General MLP Risk: MLPs historically have shown sensitivity to interest rate movements. In an increasing interest rate environment, MLPs may experience upward pressure on their yields in order to stay competitive with other interest rate sensitive securities. Also, a significant portion of the market value of an MLP may be based upon its current yield. Accordingly, the prices of MLP units may be sensitive to fluctuations in interest rates and may decline when interest rates rise.

Energy and Natural Resource Risk: Under normal circumstances, the Fund concentrates its investments in the energy infrastructure sector and may invest a significant portion of its assets in the natural resources sector of the economy, which includes a number of risks, including the following: supply and demand risk, depletion and exploration risk, marine transportation companies risk, regulatory risk, commodity pricing risk, weather risk, cash flow risk, affiliated party risk, catastrophe risk, acquisition risk, and natural resources sector risk.

Small Capitalization Risk: Small capitalization companies often have limited product lines, markets, distribution channels or financial resources, and the management of such companies may be dependent upon one or a few key people. The market movements of equity securities issued by MLPs with smaller capitalizations may be more abrupt or erratic than the market movements of equity securities of larger, more established companies or the stock market in general. Historically, smaller capitalization companies have sometimes gone through extended periods when they did not perform as well as larger companies. In addition, equity securities of smaller capitalization companies generally are less liquid than those of larger companies. This means that the Fund could have greater difficulty selling such securities at the time and price than the Fund would like.

Credit Risk: This is the risk that the issuer or guarantor of a fixed income security will be unable or unwilling to make timely payments of interest or principal.

Interest Rate Risk: Generally, fixed income securities decrease in value if interest rates rise and increase in value if interest rates fall, and lower rated securities are more volatile than higher rated securities.

High Yield Securities Risk: High yield securities, also known as “junk bonds”, are below investment grade quality and may be considered speculative with respect to the issuer’s continuing ability to make principal and interest payments. Lower-rated securities may be more susceptible to real or perceived adverse economic and competitive industry conditions than higher-rated securities.

Tax Risk: The Fund has elected to be treated, and intends to qualify each year for treatment, as a “regulated investment company” under the U.S. Internal Revenue Code of 1986 (the “Code”). To maintain qualification for federal income tax purposes as a regulated investment company under the Code, the Fund must meet certain source-of-income, asset diversification and annual distribution requirements, as discussed in detail below under “Federal Income Tax Consequences.”

  • Depreciation or other cost recovery deductions passed through to the Fund from investments in MLPs in a given year will generally reduce the Fund’s taxable income, but those deductions may be recaptured in the Fund’s income in one or more subsequent years. When recognized and distributed, recapture income will generally be taxable to shareholders at the time of the distribution at ordinary income tax rates, even though those shareholders might not have held shares in the Fund at the time the deductions were taken by the Fund, and even though those shareholders will not have corresponding economic gain on their shares at the time of the recapture. In order to distribute recapture income or to fund redemption requests, the Fund may need to liquidate investments, which may lead to additional recapture income.

Non-Diversification Risk: The Fund is non-diversified, which means that the Fund may invest in the securities of relatively few issuers. Investment in securities of a limited number of issuers exposes the Fund to greater market risk and potential losses than if its assets were diversified among the securities of a greater number of issuers.

Advisor Risk: The skill of the Fund’s advisor plays a significant role in the Fund’s ability to achieve its investment objective. The Fund’s ability to achieve its investment objective depends on the advisor’s ability to select securities.

Derivatives Risk: There are various risks associated with transactions in derivative instruments. A decision as to whether, when and how to use derivatives involves the exercise of skill and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events. In addition, derivatives used by the Fund for hedging purposes may have an imperfect correlation to the assets held by the Fund and may not adequately protect against losses by, or may result in greater losses for, the Fund.

Leveraging Risk: Certain transactions, including the use of derivatives, may give rise to a form of leverage. To mitigate leveraging risk, the Fund’s custodian will segregate or identify liquid assets or otherwise cover the transactions that may give rise to such risk.

Hedging Risk: It is not possible to hedge fully or perfectly against any risk. While hedging can reduce losses, it can also reduce or eliminate gains or cause losses if the market moves in a different manner than anticipated by the Fund or if the cost of the derivative outweighs the benefit of the hedge. Hedging also involves the risk that changes in the value of the derivative will not match those of the holdings being hedged as expected by the Fund, in which case any losses on the holdings being hedged may not be reduced or may be increased. There can be no assurance that the Fund’s hedging strategies will be effective or that hedging transactions will be available to the Fund. The Fund is not required to engage in hedging transactions at any given time or from time to time, even under volatile market environment and the Fund may choose not to do so from time to time.

Fund Ticker Record Date Ex-dividend Date Payment Date Income Div Rate/share
FAMCO MLP & Energy Income Fund – Class I INFIX 08/27/14 08/28/14 08/28/14 0.1698
FAMCO MLP & Energy Income Fund – Class A INFRX 08/27/14 08/28/14 08/28/14 0.1631
FAMCO MLP & Energy Income Fund – Class C INFFX 08/27/14 08/28/14 08/28/14 0.1345
FAMCO MLP & Energy Income Fund – Class I INFIX 05/28/14 05/29/14 05/29/14 0.1685
FAMCO MLP & Energy Income Fund – Class A INFRX 05/28/14 05/29/14 05/29/14 0.1625
FAMCO MLP & Energy Income Fund – Class C INFFX 05/28/14 05/29/14 05/29/14 0.1363
FAMCO MLP & Energy Income Fund – Class I INFIX 02/26/14 02/27/14 02/27/14 0.1672
FAMCO MLP & Energy Income Fund – Class A INFRX 02/26/14 02/27/14 02/27/14 0.1617
FAMCO MLP & Energy Income Fund – Class C INFFX 02/26/14 02/27/14 02/27/14 0.1370
FAMCO MLP & Energy Income Fund – Class I INFIX 12/26/13 12/27/13 12/27/13 0.0166
FAMCO MLP & Energy Income Fund – Class A INFRX 12/26/13 12/27/13 12/27/13 0.0136
FAMCO MLP & Energy Income Fund – Class C INFFX 12/26/13 12/27/13 12/27/13 0.0045
FAMCO MLP & Energy Income Fund – Class I INFIX 11/25/13 11/26/13 11/26/13 0.166
FAMCO MLP & Energy Income Fund – Class A INFRX 11/25/13 11/26/13 11/26/13 0.1398
FAMCO MLP & Energy Income Fund – Class C INFFX 11/25/13 11/26/13 11/26/13 0.0963
FAMCO MLP & Energy Income Fund – Class I INFIX 8/28/13 8/29/13 8/29/13 0.1648
FAMCO MLP & Energy Income Fund – Class A INFRX 8/28/13 8/29/13 8/29/13 0.1472
FAMCO MLP & Energy Income Fund – Class C INFFX 8/28/13 8/29/13 8/29/13 0.1116
FAMCO MLP & Energy Income Fund – Class I INFIX 5/29/13 5/30/13 5/30/13 0.1636
FAMCO MLP & Energy Income Fund – Class A INFRX 5/29/13 5/30/13 5/30/13 0.1521
FAMCO MLP & Energy Income Fund – Class C INFFX 5/29/13 5/30/13 5/30/13 0.1265
FAMCO MLP & Energy Income Fund – Class I INFIX 2/26/13 2/27/13 2/27/13 0.1624
FAMCO MLP & Energy Income Fund – Class A INFRX 2/26/13 2/27/13 2/27/13 0.1568
FAMCO MLP & Energy Income Fund – Class C INFFX 2/26/13 2/27/13 2/27/13 0.1412
FAMCO MLP & Energy Income Fund – Class I INFIX 12/27/12 12/28/12 12/28/12 0.0128
FAMCO MLP & Energy Income Fund – Class A INFRX 12/27/12 12/28/12 12/28/12 0.0103
FAMCO MLP & Energy Income Fund – Class C INFFX 12/27/12 12/28/12 12/28/12 0.0053
FAMCO MLP & Energy Income Fund – Class I INFIX 11/28/12 11/29/12 11/29/12 0.1612
FAMCO MLP & Energy Income Fund – Class A INFRX 11/28/12 11/29/12 11/29/12 0.1544
FAMCO MLP & Energy Income Fund – Class C INFFX 11/28/12 11/29/12 11/29/12 0.1404
FAMCO MLP & Energy Income Fund – Class I INFIX 8/29/12 8/30/12 8/30/12 0.16
FAMCO MLP & Energy Income Fund – Class A INFRX 8/29/12 8/30/12 8/30/12 0.1542
FAMCO MLP & Energy Income Fund – Class C INFFX 8/29/12 8/30/12 8/30/12 0.1446
FAMCO MLP & Energy Income Fund – Class I INFIX 5/29/12 5/30/12 5/30/12 0.1588
FAMCO MLP & Energy Income Fund – Class A INFRX 5/29/12 5/30/12 5/30/12 0.1526
FAMCO MLP & Energy Income Fund – Class C INFFX 5/29/12 5/30/12 5/30/12 0.1000
FAMCO MLP & Energy Income Fund – Class I INFIX 2/27/12 2/28/12 2/28/12 0.1504
FAMCO MLP & Energy Income Fund – Class A INFRX 2/27/12 2/28/12 2/28/12 0.1500
FAMCO MLP & Energy Income Fund – Class I INFIX 11/29/11 11/30/11 11/30/11 0.15
FAMCO MLP & Energy Income Fund – Class A INFRX 11/29/11 11/30/11 11/30/11 0.15
FAMCO MLP & Energy Income Fund – Class I INFIX 8/30/11 8/31/11 8/31/11 0.15
FAMCO MLP & Energy Income Fund – Class A INFRX 8/30/11 8/31/11 8/31/11 0.15
FAMCO MLP & Energy Income Fund – Class I INFIX 5/27/11 5/31/11 5/31/11 0.15
FAMCO MLP & Energy Income Fund – Class I INFIX 2/25/11 2/28/11 2/28/11 0.1

Advisory Research Funds are distributed by IMST Distributors, LLC.


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