What Are MLPs?

An MLP is a Limited Partnership that is publicly traded and listed on major stock exchanges such as the NYSE. These Publicly Traded Partnerships (“PTPs”) are more commonly known as Master Limited Partnerships (“MLPs”) and are highly liquid and trade on a daily basis. Similar to publicly traded equities, MLPs/PTPs are required to make public filings (10‐K, 10‐Q, 8‐K, etc.) with the SEC and thereby provide the same amount of disclosure as publicly traded equities.

Potential benefits of the partnership structure are the avoidance of corporate income tax and the flow through to the investor of non-cash charges against income. MLPs typically distribute 100% of their cash flow, which may be much greater than their reported taxable income, and taxes are deferred on excess distributions until the time of sale.


MLPs own, maintain and operate energy infrastructure in North America such as oil & natural gas pipelines and storage facilities. Energy infrastructure is an emerging asset class experiencing rapid growth. MLPs may have the ability to generate free cash flow, income and growth potential and can possibly add valuable diversification to portfolios. MLPs distribution growth may provide a natural hedge against inflation. There are also a number of C-Corporations that hold MLP interests and energy infrastructure assets.


The Energy Supply Chain

MLPs are broadly categorized in three segments: Upstream, Midstream and Downstream. The Fund focuses primarily on Midstream MLPs.



TOLL ROAD BUSINESS MODEL Midstream MLPs typically do not own the energy commodity they transport and store, but collect revenue to act as a “toll road” or storage facility
FREE CASH FLOW History of stable and predictable cash flows paid to investors
GROWTH OPPORTUNITY Potential to grow cash flow through the build out of U.S. energy infrastructure development of unconventional/shale gas and oil & Canadian oil sands




Credit Risk

There is a risk that note issuers will not make payments on securities held by the Fund, resulting in losses to the Fund. In addition, the credit quality of securities held by the Fund may be lowered if an issuer's financial condition changes.


Distribution Policy Risk

The Fund's distribution policy is not designed to guarantee distributions that equal a fixed percentage of the Fund's current net asset value per share. Shareholders receiving periodic payments from the Fund may be under the impression that they are receiving net profits. However, all or a portion of a distribution may consist of a return of capital (i.e. from your original investment). Shareholders should not assume that the source of a distribution from the Fund is net profit. Shareholders should note that return of capital will reduce the tax basis of their shares and potentially increase the taxable gain, if any, upon disposition of their shares.


ETN Risk

ETNs are subject to administrative and other expenses, which will be indirectly paid by the Fund. Each ETN is subject to specific risks, depending on the nature of the ETN. ETNs are subject to default risks. Foreign Investment Risk: Investing in notes of foreign issuers involves risks not typically associated with U.S. investments, including adverse political, social and economic developments, less liquidity, greater volatility, less developed or less efficient trading markets, political instability and differing auditing and legal standards.


Interest Rate Risk

Typically, a rise in interest rates can cause a decline in the value of notes and MLPs owned by the Fund.


Liquidity Risk

Liquidity risk exists when particular investments of the Fund would be difficult to purchase or sell, possibly preventing the Fund from selling such illiquid securities at an advantageous time or price, or possibly requiring the Fund to dispose of other investments at unfavorable times or prices in order to satisfy its obligations.


Management Risk

Eagle's judgments about the attractiveness, value and potential appreciation of particular asset classes and securities in which the Fund invests may prove to be incorrect and may not produce the desired results. Additionally, Princeton's judgments about the potential performance of the Fund's investment portfolio, within the Fund's investment policies and risk parameters, may prove incorrect and may not produce the desired results.


Market Risk

Overall securities market risks may affect the value of inpidual instruments in which the Fund invests. Factors such as domestic and foreign economic growth and market conditions, interest rate levels, and political events affect the securities markets.


MLP Risk

Investments in MLPs involve risks different from those of investing 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. MLPs are generally considered interest-rate sensitive investments. During periods of interest rate volatility, these investments may not provide attractive returns. Depending on the state of interest rates in general, the use of MLPs could enhance or harm the overall performance of the Fund.


MLP Tax Risk

MLPs, typically, do not pay U.S. federal income tax at the partnership level. Instead, each partner is allocated a share of the partnership's income, gains, losses, deductions and expenses. A change in current tax law or in the underlying business mix of a given MLP could result in an MLP being treated as a corporation for U.S. federal income tax purposes, which would result in such MLP being required to pay U.S. federal income tax on its taxable income. The classification of an MLP as a corporation for U.S. federal income tax purposes would have the effect of reducing the amount of cash available for distribution by the MLP. Thus, if any of the MLPs owned by the Fund were treated as corporations for U.S. federal income tax purposes, it could result in a reduction of the value of your investment in the Fund and lower income, as compared to an MLP that is not taxed as a corporation.


Energy Related Risk

The Fund focuses its investments in the energy infrastructure sector, through MLP securities. Because of its focus in this sector, the performance of the Fund is tied closely to and affected by developments in the energy sector, such as the possibility that government regulation will negatively impact companies in this sector. Energy infrastructure entities are subject to the risks specific to the industry they serve including, but not limited to, the following: Fluctuations in commodity prices; Reduced volumes of natural gas or other energy commodities available for transporting, processing, storing or distributing; New construction risk and acquisition risk which can limit potential growth; A sustained reduced demand for crude oil, natural gas and refined petroleum products resulting from a recession or an increase in market price or higher taxes; Depletion of the natural gas reserves or other commodities if not replaced; Changes in the regulatory environment; Extreme weather; Rising interest rates which could result in a higher cost of capital and drive investors into other investment opportunities; and Threats of attack by terrorists.


Non-Diversification Risk

As a non-diversified fund, the Fund may invest more than 5% of its total assets in the securities of one or more issuers.


Small and Medium Capitalization Company Risk

The value of a small or medium capitalization company securities may be subject to more abrupt or erratic market movements than those of larger, more established companies or the market averages in general.


Structured Note Risk

MLP-related structured notes involve tracking risk, issuer default risk and may involve leverage risk.