Energy MLP Fund

JAMES DONDERO, CFA
Co-Founder, President

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JON POGLITSCH, CFA
Head of Credit Research

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MATTHEW GRAY, CFA
Managing Director

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Fund Overview

Investment Objective

Highland Energy MLP Fund aims to provide investors with current income and capital appreciation by investing primarily in large and mid-cap Master Limited Partnerships (MLPs) of domestic midstream energy companies.

Combining the Tax Benefits of MLPs with a Mutual Fund Strategy

Diversification 

  • Provides access to a portfolio of MLPs and a wide variety of energy industry subsectors and regional areas

Potential Tax and Estate Planning Benefits

  • Typically all quarterly distributions are considered return of capital
  • Investors receive a 1099 form rather than individual K-1 forms for each underlying investment
  • Potential for greater suitability for IRAs/401k’s due to lack of UBTI (unrelated business taxable income), unlike the circumstance when the underlying securities are directly owned

Experienced Management

  • Supported by a team of energy specialists
  • Highland has extensive expertise in energy-related investing

Growth, Quality, and Daily Liquidity

  • Focused on midstream MLPs that are historically not as susceptible to distribution fluctuations as those from variable-pay MLPs
  • Exposure to North American energy infrastructure expansion

Limited Fund Expenses

  • Fee cap is set at 1.1%
Fund NAV (As of Nov 11, 2019)
SYMBOLNAV
HEFAX (Class A)$2.37
HEFCX (Class C)$2.36
HEFYX (Class Y)$2.35
Fund AUM (As of Nov 11, 2019)
AUM
Total Net Assets$18.22 M
VIEW FULL PERFORMANCE
Class AClass CClass Y
SymbolHEFAXHEFCXHEFYX
Inception12/01/1112/01/1112/01/11
Gross Expense Ratio8.99%9.74%8.74%
Net Expense Ratio17.51%8.26%7.26%

Historical Returns & NAV

As of 11/11/2019Class AClass CClass Y
Net Asset Value (NAV)$2.37$2.36$2.35
Daily NAV Change ($)$-0.05$-0.05$-0.05
Daily NAV Change (%)-2.07%-2.08%-2.08%
As of 10/31/2019 MonthlyQuarterlyClass AClass A (w/sales charge)Class CClass C (w/sales charge)Class Y
One Year-11.48%-16.64%-11.96%-12.76%-10.99%
Three Year-8.45%-10.27%-9.10%-9.10%-8.15%
Five Year-18.95%-19.90%-19.52%-19.52%-18.81%
Since Inception-8.29%-8.97%-8.92%-8.92%-8.07%




View all Literature & Forms

The performance data quoted here represents past performance and is no guarantee of future results. Investment returns 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 performance data quoted.

Please consider the investment objectives, risks, charges and expenses of Highland Funds carefully before investing. A prospectus with this and other information about Highland's mutual funds can be found on the Literature tab above. You may also obtain a prospectus for our mutual funds by calling 877-665-1287. Please read the prospectus carefully before investing.

  1. The Fund accrues deferred income tax liability for its future tax liability associated with the capital appreciation of its investments, the distributions received by the Fund on equity securities of master limited partnerships ("MLPs") considered to be return of capital and for any net operating gains. The Fund’s accrued deferred tax liability, if any, is reflected each day in the Fund’s net asset value per share. The Fund’s deferred tax liability, if any, depends upon the Fund’s net investment gains and losses and realized and unrealized gains and losses on investments and may vary greatly from year to year depending on the nature of the Fund’s investments, the performance of those investments and general market conditions. Therefore, any estimate of deferred tax liability cannot be reliably predicted from year to year. See "Net Asset Value" in the Fund’s prospectus. Performance results reflect the contractual waivers and/or reimbursements of fund expenses by the Advisor. Absent this limitation, performance results would have been lower. The Advisor has contractually agreed to limit the total annual operating expenses through at least January 31, 2019. Total annual Fund operating expenses excluding deferred taxes (after expense reimbursement) were 2.18%, 2.93% and 1.93% for Class A, Class C and Class Y shares, respectively.

*The maximum sales charge for Class A shares is 5.75%.

Industry Concentration Risk. Because the Fund normally invests at least 80% of the value of its assets in energy and materials companies, the Fund’s performance largely depends on the overall condition of these industries and the Fund is susceptible to economic, political and regulatory risks or other occurrences associated with these industries.

Equity Securities Risk. Equity securities, such as common stocks, are subject to market, economic and business risks that may cause their prices to fluctuate.

Short Sales Risk.Short sales that are not made “against-the-box” (as defined under “Description of Principal Investments”) theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase.

Derivatives Risk.Derivatives are subject to the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index. Derivatives also expose the Fund to the credit risk of the derivative counterparty.

Leverage Risk. Leverage may increase the risk of loss, cause fluctuations in the market value of the Fund’s portfolio to have disproportionately large effects or cause the NAV of the Fund generally to decline faster than it would otherwise.

Debt Securities Risk.The Fund’s ability to invest in high-yield debt securities generally subjects the Fund to greater risk than securities with higher ratings. Such securities are regarded by the rating organizations as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation.

Senior Loans Risks.  Investments in senior loans involves risks similar to the risks of high yield debt securities, although senior loans are typically senior and secured in contrast to below investment grade securities

ETF Risk.The price movement of an ETF may not track the underlying index and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Non-U.S. Securities Risk. Investments in securities of non-U.S. issuers involve certain risks not involved in domestic investments (for example, expropriation or political or economic instability).

Hedging Risk. Although intended to limit or reduce investment risk, hedging strategies may also limit or reduce the potential for profit. There is no assurance that hedging strategies will be successful.

Market Risk.The Fund’s share price will fluctuate with changes in the market value of its portfolio securities.  Many factors can affect this value and you may lose money by investing in the Fund.

Portfolio Turnover Risk.High portfolio turnover will increase the Fund’s transaction costs and may result in increased realization of net short-term capital gains.

Securities Lending Risk. The Fund may lend its portfolio securities to brokers, dealers and financial institutions.  The risk in lending portfolio securities, as with other extensions of credit, consists of possible loss of rights in the collateral should the borrower fail financially.

Illiquid and Restricted Securities Risk. The Adviser may not be able to sell illiquid or restricted securities at the price it would like or may have to sell them at a loss.

Non-Diversification Risk.As a non-diversified fund, the Fund may invest a larger portion of its assets in the securities of one or a few issuers than a diversified fund. A non-diversified fund’s investment in fewer issuers may result in the fund’s shares being more sensitive to the economic results of those issuers. An investment in the Fund could fluctuate in value more than an investment in a diversified fund.

Management Risk.The Fund relies on Highland’s ability to achieve its investment objective. Highland may be incorrect in its assessment of the intrinsic value of companies whose securities the Fund holds, which may result in a decline in the value of Fund shares.

Risks Related to Current Market Conditions. Recently, domestic and international markets have experienced a period of acute stress starting in the real estate and financial sectors and then moving to other sectors of the world economy. This stress has resulted in unusual and extreme volatility in the equity markets and in the prices of individual stocks.  These market conditions could add to the risk of short-term volatility of the Fund.

Glossary: Click for important terms and definitions

Source: State Street Bank and Trust Company

Highland Funds’ mutual funds are distributed by Highland Capital Funds Distributor