MLP & Equity Fund
The Advisory Research MLP & Equity Fund seeks to provide total return by investing in master limited partnership (MLP) and energy infrastructure equities. Under normal market conditions, the Fund will invest at least 80% of its total assets in publicly traded equity of MLPs and other companies focused in the energy infrastructure sector. Fund attributes include:
- MLP and energy infrastructure equity portfolio.
- Opportunistic midstream focus.
- RIC structure: provides a 1099 – no K-1s; no state tax filings.
- No Unrelated Business Taxable Income (“UBTI”)
- No fund-level taxation.
- Seeks to provide total return.
Click here to read about the advantages of the Advisory Research MLP & Equity Fund RIC structure.
Fund Factsas of 6/30/2017
|Net Expense Ratio||1.35%||2.10%||1.10%|
|Gross Expense Ratio||3.39%||4.14%||3.14%|
|Total Net Assets (all classes)||$14.0 million||$14.0 million||$14.0 million|
|Portfolio Managers||Jim Cunnane,
*Minimum depends upon location of the account.
Top Ten Holdings
|EnLink Midstream, LLC||8.4%|
|The Williams Companies, Inc.||7.1%|
|Targa Resources Corp.||6.5%|
|Antero Midstream GP LP||5.6%|
|NextEra Energy Partners, LP||5.0%|
|Pattern Energy Group, Inc.||4.9%|
|NRG Yield, Inc.||4.7%|
Holdings are subject to change and risk. The Fund may have considerable cash balances for temporary periods and the potential benefit to the Fund of any market upswing during this time may be reduced adversely affecting the Fund’s performance.
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.
Risks Specific to Master Limited Partnerships (MLPs): Investing in MLPs using mutual funds allows the investor to delay paying taxes on any distributed income until the investment is sold, potentially enabling any gains to qualify as long term (which are taxed at a lower rate than short-term capital gains).
Investments in securities of MLPs involve risks that differ from investments in common stock, including risks related to limited control and limited rights to vote on matters affecting the MLP, risks related to potential conflicts of interest between the MLP and the MLP’s general partner, cash flow risks, dilution risks, and risks related to the general partner’s limited call right. Additionally, investing in MLPs involves material income tax risks and certain other risks. Actual results, performance, or events may be affected by, without limitation: (1) general economic conditions; (2) performance of financial markets; (3) interest rate levels; (4) changes in laws and regulations; and (5) changes in the policies of governments and/or regulatory authorities. MLPs may have additional expenses, as some MLPs pay incentive distribution fees to their general partners. The value of MLPs depends largely on the MLPs being treated as partnerships for U.S. federal income tax purposes. If MLPs were subject to U.S. federal income taxation, distributions generally would be taxed as dividend income. As a result, after-tax returns could be reduced, which could cause a decline in the value of MLPs. If MLPs are unable to maintain partnership status because of tax law changes, the MLPs would be taxed as corporations and there could be a decrease in the value of the MLP securities.
Risks Specific to the Fund: The Fund is non-diversified, which means that it may invest in the securities of relatively few issuers. Investments in the securities of a limited number of issuers or primarily of the energy infrastructure sector expose the Fund to greater market risk and potential losses than if its assets were diversified among the securities of a greater number of issuers.
The Fund is newly organized and has no operating history. There can be no assurances that its objective will be met. The Fund’s overall result will depend on the Advisor’s judgement about the quality, relative yield, value or market trends affecting a particular security, industry, sector or region. MLPs and other higher yield securities historically have shown sensitivity to interest rate movements and involve a significant degree of 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, such as 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.
The Fund may invest in securities of small and mid-capitalization companies that may be more volatile and less liquid than larger, more established companies.
Investing in foreign securities, including American depositary receipts (ADRs), may be more volatile because of economic and social conditions abroad, political developments, and changes in the regulatory environments of foreign countries. In addition, changes in exchange rates and interest rates may adversely affect the values of the Fund’s foreign investments. Foreign companies are generally subject to different legal and accounting standards.
The Fund may invest in initial public offerings (IPOs). The market value of IPO shares will fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading, the small number of shares available for trading, and limited information about the issuer. The purchase of IPO shares may involve high transaction costs. IPO shares are subject to market risk and liquidity risk.
The Fund may invest in shares of other investment companies, including open-end funds, closed-end funds, unit investment trusts (UITs) and exchange-traded funds (ETFs), to the extent permitted by applicable law and subject to certain restrictions set forth in the Statement of Additional Information.
The Fund intends to elect to be treated and to qualify each year 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. If for any taxable year the Fund fails to qualify for the special federal income tax treatment afforded to regulated investment companies, all taxable income will be subject to federal income tax and possibly state and local income tax at regular corporate rates (without any deduction for distributions to shareholders), and any income available for distribution will be reduced.
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.
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.
Prospectus and SAI
The MLP & Equity Fund intends to make distributions semi-annually and net capital gains, if any, at least annually.
|Fund Ticker||Record Date||Ex-dividend Date||Payment Date||Distribution Rate/share|
|Adv. Research MLP & Equity Fund – Cl. I||INFEX||5/26/17||5/30/17||5/30/17||0.00000|
|Adv. Research MLP & Equity Fund – Cl. A||INFJX||5/26/17||5/30/17||5/30/17||0.00000|
|Adv. Research MLP & Equity Fund – Cl. C||INFKX||5/26/17||5/30/17||5/30/17||0.00000|
|Adv. Research MLP & Equity Fund – Cl. I||INFEX||12/28/16||12/29/16||12/29/16||0.01459|
|Adv. Research MLP & Equity Fund – Cl. A||INFJX||12/28/16||12/29/16||12/29/16||0.01265|
|Adv. Research MLP & Equity Fund – Cl. C||INFKX||12/28/16||12/29/16||12/29/16||0.00661|
|Adv. Research MLP & Equity Fund – Cl. I||INFEX||11/28/16||11/29/16||11/29/16||0.0104|
|Adv. Research MLP & Equity Fund – Cl. A||INFJX||11/28/16||11/29/16||11/29/16||0.0000|
|Adv. Research MLP & Equity Fund – Cl. C||INFKX||11/28/16||11/29/16||11/29/16||0.0000|
|Adv. Research MLP & Equity Fund – Cl. I||INFEX||5/26/16||5/27/16||5/27/16||0.0383|
|Adv. Research MLP & Equity Fund – Cl. A||INFJX||5/26/16||5/27/16||5/27/16||0.0313|
|Adv. Research MLP & Equity Fund – Cl. C||INFKX||5/26/16||5/27/16||5/27/16||0.0000|
|Adv. Research MLP & Equity Fund – Cl. I||INFEX||12/29/15||12/30/15||12/30/15||0.012|
|Adv. Research MLP & Equity Fund – Cl. A||INFJX||12/29/15||12/30/15||12/30/15||0.011|
|Adv. Research MLP & Equity Fund – Cl. C||INFKX||12/29/15||12/30/15||12/30/15||0.0082|
|Adv. Research MLP & Equity Fund – Cl. I||INFEX||11/23/15||11/24/15||11/24/15||0.000|
|Adv. Research MLP & Equity Fund – Cl. A||INFJX||11/23/15||11/24/15||11/24/15||0.000|
|Adv. Research MLP & Equity Fund – Cl. C||INFKX||11/23/15||11/24/15||11/24/15||0.000|
MLP & EQUITY FUND TEAM
JAMES CUNNANE JR., CFA
MANAGING DIRECTOR, CHIEF INVESTMENT OFFICER
Jim Cunnane, with 23 years of investment experience, is Managing Director and Chief Investment Officer of the Advisory Research MLP & Energy Infrastructure team. He oversees the firm’s MLP and energy infrastructure product lines and chairs the Risk Management Committee. He joined the MLP team in 1996 and currently serves as a portfolio manager for three closed end mutual funds: the Fiduciary/Claymore MLP Opportunity Fund, the Nuveen Energy MLP Total Return Fund and the Nuveen All Cap Energy MLP Opportunities Fund. He also serves as a portfolio manager for three open‐end mutual funds: the Advisory Research MLP & Energy Income Fund, the Advisory Research MLP & Energy Infrastructure Fund and the Advisory Research MLP & Equity Fund. Mr. Cunnane holds a B.S. in finance from Indiana University and is a Chartered Financial Analyst (CFA) charterholder. He serves on the finance council and investment committee of the Archdiocese of St. Louis, the investment committee of Mercy Health, and on the Board of Directors of St. Patrick’s Center.
MANAGING DIRECTOR, SENIOR PORTFOLIO MANAGER
Quinn Kiley, with 15 years of investment experience, is Managing Director and Senior Portfolio Manager of the Advisory Research MLP & Energy Infrastructure team and his responsibilities include portfolio management of various energy infrastructure assets and oversight of the energy infrastructure research process. He joined the MLP team in 2005. Mr. Kiley serves as a portfolio manager for three closed-end mutual funds: the Fiduciary/Claymore MLP Opportunity Fund, the Nuveen Energy MLP Total Return Fund and the Nuveen All Cap Energy MLP Opportunities Fund. He also serves as a portfolio manager for three open-end mutual funds: the Advisory Research MLP & Energy Income Fund, the Advisory Research MLP & Energy Infrastructure Fund and the Advisory Research MLP & Equity Fund. Prior to joining the MLP team, Mr. Kiley served as Vice President of Corporate & Investment Banking at Banc of America Securities in New York. He was responsible for executing strategic advisory and financing transactions for clients in the Energy & Power sectors. Mr. Kiley holds a B.S. with honors in geology from Washington & Lee University, a M.S. in geology from the University of Montana, a Juris Doctorate from Indiana University School of Law, and a M.B.A. from the Kelley School of Business at Indiana University. Mr. Kiley has been admitted to the New York State Bar. He serves on the finance committees of Rossman School and the Magic House.
Advisory Research Funds are distributed by IMST Distributors, LLC.