decidedly different Catalyst Mutual s Investor Overview
Our Mission We strive to provide innovative strategies to support financial advisors and their clients in meeting the investment challenges of an ever changing global market environment. Catalyst Mutual s Overview From our founding in 2006, Catalyst Mutual s set out to be decidedly different. We understood that the market did not need another traditional family of mutual funds. At Catalyst we endeavor to offer unique investment products to meet the needs of discerning financial advisors and their clients. We offer a broad range of distinctive funds that offer specialized strategies seeking to produce income- and equityoriented returns while limiting risk and volatility. We offer these exclusive strategies through a team of in-house portfolio managers and boutique institutional investment management partners. - 1 -
What Sets Catalyst Apart? Catalyst s investment solutions are designed around characteristics we believe investors need to be pursuing in their portfolios: alpha focused income- and equity-oriented returns with lower correlation to the common indexes. Specialized Expertise Catalyst has brought together a team of experienced investment professionals that focus on specialized strategies including alternative, income and total return, focused equity, options overlay, global exposure, and tactical allocation. Multi-Disciplined Through our Investment Manager Partners, we provide a broad and diversified array of unique investment strategies to meet the challenging needs of investors through various market cycles. These include numerous investment styles and approaches across equity, fixed income and alternative asset classes. Modern Thinking Catalyst s seasoned investment professionals look beyond conventional wisdom to bring fresh ideas and innovative strategies to our clients. We strive to be ahead of the curve in exploiting emerging areas of opportunity to assist our clients in achieving their long-term investment goals. Proactive Management We strive to proactively manage our investments using sophisticated strategies in an attempt to generate alpha and control risk and volatility in diverse and evolving market conditions. - 2 -
Why Catalyst Mutual s are Different We are active managers, not closet indexers. The goal of our s is to generate alpha while attempting to control risk and volatility. All of our investment strategies share some common characteristics and use a number of techniques seeking to meet those goals: Seeking Catalysts We look for investments that have a catalyst that could unlock intrinsic value. Catalysts include heavy corporate insider trading, corporate actions such as acquisitions and divestitures, company management changes, shareholder activism or changes to the competitive or regulatory landscape. Focused Portfolios Our portfolios are generally concentrated with the manager s best ideas. We have conviction in our strategies. We don t use filler investments. After all, how good is your 250 th best idea? Value Oriented We seek value, focusing on the risk/return tradeoff of every investment. This includes traditional equity valuation metrics such as price/cash flow or return on equity. We also look for balance sheet strength and tangible value relative to our position in the capital structure. Risk Management We use several techniques to potentially control risk in our portfolios. These include hedging strategies such as using options and short selling, covered call writing and dynamic tactical and cash allocations. We also look at margin of safety based on underlying asset values and past trading history. Unconstrained Many of our s are unconstrained by market cap, geography, sector, asset class or credit rating. We can go anywhere to discover value and generate alpha. Active Share and Low Correlation Our portfolios maintain a high active share meaning they generally don t own the same securities in the same proportions as the benchmark. This can lead to performance that has lower correlation to industry benchmarks thus enhancing the diversification benefits of our s in client portfolios. - 3 -
Catalyst Mutual Lineup Hedged Strategies Catalyst Event Arbitrage (CEAAX, CEACX & CEAIX) Seeks low correlation and low volatility through a hedged portfolio focused on merger and event arbitrage transactions. Catalyst Hedged Futures Strategy (HFXAX, HFXCX & HFXIX) Seeks to provide positive returns in all market conditions with low volatility and low correlation to the equity markets by investing in options and option spreads on equity index futures contracts. Catalyst Insider Long/Short (CIAAX & CIACX) Long/Short equity with long positions in companies with significant corporate insider buying activity and short positions in companies with significant corporate insider selling. Catalyst Strategic Insider (STVAX & STVCX) Seeks lower volatility through a hedged equity portfolio driven by corporate insider knowledge and complemented by premium income from writing covered call options on equity indexes. Catalyst/Lyons Hedged Premium Return (CLPAX & CLPCX) Seeks exposure to equities with low volatility and low correlation to the equity market by overlaying an option strategy with the objective of generating premium income and hedging a portion of the downside risk. Focused Equity Catalyst Insider Buying (INSAX & INSCX) Large cap equity using corporate insider buying research. Catalyst Small-Cap Insider Buying (CTVAX, CTVCX & CTVIX) Small/Micro-cap equity using corporate insider buying research. Catalyst/EquityCompass Buyback Strategy (BUYAX, BUYCX & BUYIX) All-cap equity that seeks to exploit the potential excess returns from share buyback announcements. Catalyst/Groesbeck Growth of Income (CGGAX, CGGCX & CGGIX) Equity income fund investing in high quality large cap stocks with a history of dividend increases. Catalyst/CP Core Equity (CPEAX & CPECX) All-cap equity portfolio using a focused quantitative methodology to select alpha generating stocks from outperforming industries. Dynamic Equity Catalyst/Lyons Tactical Allocation (CLTAX & CLTCX) Seeks capital appreciation with downside protection through a portfolio of dividend paying stocks with a tactical risk-management overlay. Strategic Income Catalyst/SMH Total Return Income (TRIFX, TRICX & TRIIX) Diverse mix of income producing securities including high yield bonds, convertible bonds, REITs, high dividend paying stocks, Business Development Companies, MLPs and covered call writing. Catalyst/SMH High Income (HIIFX, HIICX & HIIIX) Focused high yield bond fund using a deep value, balance sheet oriented, intensive research strategy. Catalyst/Princeton Floating Rate Income (CFRAX, CFRCX & CFRIX) Seeks current income with low duration and interest rate volatility through a portfolio of senior floating rate loans. Global Opportunities Catalyst/MAP Global Total Return Income (TRXAX & TRXCX) Focused go anywhere total return strategy using corporate bonds and global equities selected using thematic filters with opportunistic covered call writing. Catalyst/MAP Global Capital Appreciation (CAXAX & CAXCX) Focused portfolio of value oriented global equities selected using thematic filters with opportunistic covered call writing. There is no assurance that a will achieve its investment objective. - 4 -
Catalyst Investment Manager Partners We have brought together an exceptional team of portfolio managers from hedge funds, investment banks and institutional investment managers to deliver their investment strategies under our shared mutual fund platform. Our investment managers typically have long-term investment track records serving institutional, family office and private clients. By taking advantage of our shared mutual fund distribution and administration platform, our investment managers can focus their time and attention on delivering superior investment results for clients. Catalyst s Investment Manager Partners model allows us to offer a broad array of institutional quality investment strategies, unconstrained by the expertise of just a single investment firm. Investment Manager Catalyst Capital Advisors LLC Huntington, NY. Founded 2006 Cookson, Peirce & Company, Inc. Pittsburgh, PA. Founded 1984 EquityCompass Strategies Baltimore, MD. Founded 2007 Groesbeck Investment Management, Inc. Paramus, NJ. Founded 1993 Lyons Wealth Management, LLC Winter Park, FL. Founded 2009 Managed Asset Portfolios, LLC Rochester, MI. Founded 2000 Princeton Advisory Group, Inc. Kingston, NJ. Founded 2002 SMH Capital Advisors, Inc. Fort Worth, TX. Founded 1996 Catalyst s Managed Catalyst Event Arbitrage Catalyst Hedged Futures Strategy Catalyst Insider Buying Catalyst Insider Long/Short Catalyst Small-Cap Insider Buying Catalyst Strategic Insider Catalyst/CP Core Equity Catalyst/EquityCompass Buyback Strategy Catalyst/Groesbeck Growth of Income Catalyst/Lyons Tactical Allocation Catalyst/Lyons Hedged Premium Return Catalyst/MAP Global Capital Appreciation Catalyst/MAP Global Total Return Income Catalyst/Princeton Floating Rate Income Catalyst/SMH High Income Catalyst/SMH Total Return Income - 5 -
Glossary Alpha: A measure of a fund's excess returns relative to the returns of its benchmark, given its level of risk as measured by beta. Beta: A measure of a fund's sensitivity to market movements relative to its benchmark. R-squared / Correlation: A measure of the relationship between a portfolio and its benchmark. Standard Deviation: A statistical measurement that shows historical volatility. Sell Short: Any sale that is completed by the delivery of a security borrowed by the seller. Short sellers attempt to buy back the security at a lower price than at which they sold it short. Covered Call: An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that asset in an attempt to generate increased income and reduced volatility. Arbitrage: A strategy that seeks to profit by capturing the difference between a securities current price and the final closing price of a corporate transaction. Important Disclosures: There is no assurance that a will achieve its investment objective. Investors should carefully consider the investment objectives, risks, charges and expenses of the Catalyst s. This and other important information about the Catalyst s is contained in the prospectus. The prospectus should be read carefully before investing and can be obtained by calling 866-447-4228 or at www.catalystmf.com. Investments in foreign securities could be subject to greater risks including currency fluctuation, economic conditions, and different governmental and accounting standards. Investments in high yield or junk bonds present a greater risk than bonds of higher quality. Floating Rate Loans are subject to credit, interest rate and liquidity risks. If a security sold short increases in price, the investment may have to cover its short position at a higher price than the short sale price, resulting in a loss. There are risks associated with the sale and purchase of call and put options. These factors may affect the value of your investment. The Catalyst s are distributed by Northern Lights Distributors, LLC, member FINRA. Neither Catalyst Capital Advisors LLC nor any of its Investment Management Partners are affiliated with Northern Lights Distributors, LLC. 0185-NLD-1/18/2013-6 -
every portfolio needs a catalyst decidedly different non-correlated modern hedged Catalyst Capital Advisors LLC 22 High Street Huntington, NY 11743 www.catalystmf.com Shareholder Services: (866) 447-4228 Advisor Services: (631) 629-4908