Highland Energy MLP Fund

C000104244 Fund Overview

Highland Energy MLP Fund is a US mutual fund managed by Nexpoint Funds II, categorised as Money Market. ABC INVEST provides holdings, performance, costs, cashflows, risk data, prospectus documents and SEC filings, sourced from SEC filings.

• Type: US mutual fund
• Manager: Nexpoint Funds II
• Category: Money Market
• Assets under management: $22.77M
• SEC CIK: 0000891079
• SEC series ID: S000033738
• Share class ID: C000104244

C000104244 Investment Objective and Strategy

Highland Energy MLP Fund describes its objective and strategy as follows, from its latest prospectus filed with the SEC by Nexpoint Funds II.

Investment objective

The investment objective of Highland Energy MLP Fund (“Highland Energy MLP Fund” or the “Fund”) is to provide investors with current income and capital appreciation.

Principal investment strategy

The Fund seeks to achieve its investment objective by investing primarily in master limited partnership (MLP) investments. Under normal market conditions, the Fund intends to invest at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of MLPs investments, as defined below. This investment policy may be changed by the Fund upon 60 days prior written notice to shareholders. MLPs typically are characterized as publicly traded partnerships that qualify to be treated as partnerships for U.S. federal income tax purposes and are principally engaged in one or more aspects of the exploration, production, processing, transmission, marketing, storage or delivery of energy-related commodities, such as natural gas, natural gas liquids, coal, crude oil or refined petroleum products (collectively, the energy industry).

The Funds MLP investments include investments that offer economic exposure to public MLPs in the form of common or subordinated units issued by MLPs, securities of entities holding primarily general partner or managing member interests in MLPs, debt securities of MLPs, and securities that are derivatives of interests in MLPs, including I-Shares, warrants, and derivative instruments in which the Fund may invest that have economic characteristics of MLP securities. Certain of the benefits Fund shareholders are expected to derive from the Funds MLP investments depend largely on the MLPs treatment as partnerships for U.S. federal income tax purposes. See MLP Tax Risk below for additional details. In addition, the Fund may invest up to 20% of the value of its total assets in a wide variety of securities and financial instruments, of all kinds and descriptions, that are not MLP investments, such as equity securities, equity-linked securities, fixed income securities (including junk securities), and money market securities.

The Fund may invest without limitation in exchange-traded funds (ETFs) and may invest up to 20% of the value of its total assets in ETFs that do not provide exposure to MLPs. The Fund may invest in securities of issuers of any market capitalization. The Fund may invest in securities of any credit quality. The Fund may invest in securities of non-U.S. issuers, which may include, without limitation, emerging market issuers. Such securities may be denominated in U.S. dollars, non-U.S. currencies or multinational currency units (such as the Euro). At times, the Fund intends to hedge currency exposure resulting from investments denominated in non U.S. currencies. Derivatives, which are instruments that have a value based on another instrument, exchange rate or index, may be used as substitutes for securities in which the Fund can invest.

The Fund may invest without limitation in warrants and may also use derivatives, primarily swaps (including equity, variance and volatility swaps), options and futures contracts on securities, interest rates, commodities and/or currencies, as substitutes for direct investments the Fund can make. The Fund may also use derivatives such as swaps, options (including options on futures), futures, and foreign currency transactions (e.g., foreign currency swaps, futures and forwards) to any extent deemed by the Adviser to be in the best interest of the Fund, and to the extent permitted by the 1940 Act, to hedge various investments for risk management and speculative purposes. The Fund may borrow an amount up to 33 1/3% (or such other percentage permitted by law) of its total assets (including the amount borrowed) less all liabilities other than borrowings.

The Fund may borrow for investment purposes, to meet redemption requests and for temporary, extraordinary or emergency purposes. The use of borrowing for investment purposes (i.e., leverage) increases both investment opportunity and investment risk. The Funds investment strategy utilizes the analytical models of the Adviser to evaluate potential investments. In selecting investments for the Fund, the Adviser typically focuses on MLP issuers that it believes: (i) have stable cash flows and pay regular distributions; (ii) have potential for long-term distribution growth; (iii) may be subject to a value catalyst, such as industry developments, regulatory changes, changes in management, acquisitions, sale or spin-off of a division; (iv) are well-managed;(v) will benefit from favorable demand and supply dynamics for its products and services; (vi) are best in class; and/or (vii) are underappreciated by market analysts.

The Adviser will typically focus on companies that are exhibiting one or more of these indicators. Technical analysis may also be used to help in the decision making process. The Adviser may sell short securities of a company that it believes: (i) is overvalued relative to normalized business and industry fundamentals or to the expected growth that the Adviser believes the company will achieve; (ii) has a weak competitive position relative to peers; (iii) engages in questionable accounting practices; (iv) shows declining cash flow and/or liquidity; (v) has distribution estimates that the Adviser believes are too high; (vi) has weak competitive barriers to entry; (vii) suffers from deteriorating industry and/or business fundamentals; (viii) has a weak management team; (ix) will see multiple contraction; (x) is not adapting to changes in technological, regulatory or competitive environments; or (xi) provides a hedge against the Funds long exposure, such as a broad based market ETF.

Technical analysis may be used to help in the decision making process. The Fund may engage in short sales that are not made against-the-box, which means that the Fund may sell short securities even when they are not actually owned or offset at all times during the period the short position is open. Short sales that are not made against-the-box could result in unlimited loss. The Adviser generates investment ideas from a variety of different sources. These include, but are not limited to, screening software that analyzes both fundamental and technical factors, industry contacts, consultants, company press releases, company conference calls, conversations with company management teams, buy-side contacts, sell-side contacts, brokers, third-party research, independent research of financial and corporate information, third-party research databases, and news services.

The Adviser will make investment decisions based on its analysis of the securitys value, and will also take into account its view of macroeconomic conditions and industry trends. The Adviser will make investments without regard to a companys level of capitalization. The principal investment objective of the Fund is not fundamental and may be changed without shareholder approval. The Fund is non-diversified as defined in the 1940 Act. The Fund is not intended to be a complete investment program.

C000104244 Costs and Fees

C000104244 costs about $726 per $10,000 invested per year in fund expenses.

• Net expense ratio: 7.26%
• Gross expense ratio: 8.74%
• Portfolio turnover: 15%
• Brokerage commissions: 2.56 bps of average net assets (SEC N-CEN)

C000104244 Cashflows

Over the 12 months to 2019-09, Highland Energy MLP Fund had net inflows of $2.61M, from monthly SEC N-PORT filings.

C000104244 Debt Constituents

No individual debt constituents are reported in Highland Energy MLP Fund's latest SEC N-PORT filing.

C000104244 Prospectus and SEC Filings

Official Highland Energy MLP Fund filings on SEC EDGAR — prospectus, portfolio holdings and annual reports.

• Prospectus (485BPOS) — filed 2019-01-31
• Prospectus (485BPOS) — filed 2018-02-22
• Prospectus (485BPOS) — filed 2017-02-22
• Portfolio holdings (N-PORT) — filed 2019-11-27
• Annual census (N-CEN) — filed 2019-12-16
• Annual census (N-CEN) — filed 2018-12-31

Related Funds

Other Money Market funds tracked on ABC INVEST:

• Emerald Growth Fund (HSPCX)
• Barings Active Short Duration Bond Fund (BXDIX)
• IVA Worldwide Fund (IVWAX)
• Stadion Tactical Growth Fund (ETFDX)
• BBH Partner Fund - Select Short Term Assets (BBSTX)

Data Sources

ABC INVEST compiles this page from public filings made to the U.S. Securities and Exchange Commission (SEC) through EDGAR: portfolio holdings and monthly cashflows from Form N-PORT, expenses and returns from fund prospectuses (Form 485BPOS) and the SEC DERA Risk/Return Summary data sets, annual data from Form N-CEN, and shareholder reports from Form N-CSR.