Long/Short Equity Fund


Bio »


James Dondero is Co-founder and President of Highland Capital Management, LP (an alternative asset manager specializing in high-yield fixed income investments). Jim has over 30 years of experience in the credit markets. Prior to founding Highland in 1993, Jim served as Chief Investment Officer of Protective Life’s GIC subsidiary and helped grow the business from concept to over $2 billion between 1989 and 1993. His portfolio management experience includes mortgage-backed securities, investment grade corporates, leveraged bank loans, high-yield bonds, emerging market debt, derivatives, preferred stocks and common stocks. From 1985 to 1989, he managed approximately $1 billion in fixed income funds for American Express. Prior to American Express, he completed the financial training program at JP Morgan. Jim received a BS in Commerce (Accounting and Finance) from the University of Virginia. Jim is a Certified Public Accountant, a Certified Managerial Accountant, and a Chartered Financial Analyst. He currently serves as Chairman for CCS Medical and NexBank and serves on the Board of Directors of Cornerstone Healthcare Group and Metro-Goldwyn-Mayer.

Managing Director

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Managing Director

Mr. Heiss is a Managing Director at Highland Capital Management Fund Advisors and a Co-Portfolio Manager for the Highland Long/Short Equity and Highland Merger Arbitrage Funds. Prior to joining Highland in July 2013, Mr. Heiss spent three years as a Senior Analyst and Partner at Varna Capital where he was a Generalist covering multiple sectors for the long/short equity hedge fund. Prior to Varna, Mr. Heiss spent three years as an Analyst at Maverick Capital where he covered the U.S. Financial Services sector for the $10 billion long/short equity hedge fund. Mr. Heiss began his career at Goldman Sachs in New York, first as a Senior Analyst in the Finance Division and later as an Investment Banking Analyst in the Financial Institutions Group. Mr. Heiss holds a BBA in Finance from the University of Miami and is a holder of the right to use the Chartered Financial Analyst designation.

Managing Director

Bio »

Managing Director

Mr. McLochlin is a Managing Director at Highland Capital Management Fund Advisors and is a Co-Portfolio Manager for the Highland Long/Short Equity and Highland Merger Arbitrage Funds. He has 18 years of investment management experience, and has spent the past 12 years focused on long/short equity strategies. Prior to joining Highland in July 2009, Mr. McLochlin spent five years as the Sector Manager responsible for Technology and Telecom at Ranger Investments, an asset management firm with approximately $2 billion in assets under management. Prior to Ranger, Mr. McLochlin spent three years as a Senior Analyst for private equity firms Dubilier & Company and Saunders, Karp & Megrue, where he focused on analyzing, structuring and executing leveraged buyouts of middle market companies. Mr. McLochlin began his career as an investment banking analyst with Morgan Stanley. Mr. McLochlin received an MBA from the University of Texas at Austin and a BA from Princeton University.

Fund Overview

Investment Objective

The Long/Short Equity Fund seeks to maximize returns with low correlation to equity markets and other asset classes. Performance of the Fund is expected to be driven by preservation of capital in weak markets and driven by solid returns in rising markets.

Low Beta Equity Alternative

Focus on providing strong risk adjusted returns that can provide meaningful diversification impact as a core part of client portfolios.

  • Maximize returns by investing both long and short across the investment spectrum
  • Seeks lower volatility and correlation to equities
  • Focus on downside protection and capital preservation
  • Unconstrained, fundamentally driven style
  • Access to one of the longest tenured and most experienced liquid alternative asset managers
Fund NAV (As of Aug 16, 2019)
HEOAX (Class A)$10.81
HEOCX (Class C)$9.81
HEOZX (Class Z)$11.36
Fund AUM (As of Aug 16, 2019)
Total Net Assets$119.48 M
Class AClass CClass Z
Gross Expense Ratio4.13%4.78%3.78%
Net Expense Ratio12.88%3.53%2.53%

Historical Returns & NAV

As of 08/16/2019Class AClass CClass Z
Net Asset Value (NAV)$10.81$9.81$11.36
Daily NAV Change ($)$0.10$0.09$0.10
Daily NAV Change (%)0.93%0.93%0.89%
As of 07/31/2019 MonthlyQuarterlyClass AClass A (w/sales charge)Class CClass C (w/sales charge)Class Z
One Year-1.15%-6.62%-1.73%-2.61%-1.03%
Three Year3.91%1.97%3.26%3.26%4.18%
Five Year2.45%1.30%1.79%1.79%2.76%
Ten Year4.50%3.91%3.86%3.86%4.81%
Since Inception3.93%3.46%3.30%3.30%4.25%

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. 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 waive 1.25% of the Fund’s management fee. This fee waiver will continue through at least October 31, 2018. Total net operating expenses including the expense cap and excluding dividends on short sales are Class A 2.10%, Class C 2.74%, and Class Z 1.74%.

*The maximum sales charge for Class A shares is 5.50%.

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.

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.

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 net asset value (“NAV”) of the Fund generally to decline faster than it would otherwise.

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

Micro, Small and Mid-Cap Securities Risk. Investments in securities of companies with micro, small or medium capitalizations involve certain risks that may differ from, or be greater than, those for larger companies, such as higher volatility, lower trading volume, fewer business lines and lack of public information.

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.

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