REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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Pre-Effective Amendment No.
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Post-Effective Amendment No.
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434
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
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Amendment No.
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435
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Brian R. Wiedmeyer, President and Principal Executive Officer
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Managed Portfolio Series
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615 East Michigan Street
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Milwaukee, WI 53202
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Michael P. O’Hare, Esq.
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Stradley Ronon Stevens & Young, LLP.
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2005 Market Street, Suite 2600
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Philadelphia, PA 19103
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immediately upon filing pursuant to paragraph (b)
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On September 13, 2019 pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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on (date) pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on (date) pursuant to paragraph (a)(2) of Rule 485.
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This post-effective amendment designates a new effective date for a previously filed post- effective amendment.
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Prospectus |
September 13, 2019
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Funds’ annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Funds’ website (www.tortoiseadvisors.com), and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from a Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling 1-855-TCA-FUND (855-822-3863) or by sending an e-mail request to info@tortoiseadvisors.com.
Beginning on January 1, 2019, you may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. If you invest directly with a Fund, you can call 1-855-822-3863 or send an email request to info@tortoiseadvisors.com to let the Fund know you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held in your account if you invest through your financial intermediary or all Funds held with the fund complex if you invest directly with a Fund.
The U.S. Securities and Exchange Commission (“SEC”) has not approved or disapproved of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Tortoise Funds
Series of Managed Portfolio Series (the “Trust”)
The Tortoise MLP & Energy Income Fund and the Tortoise MLP & Energy Infrastructure Fund are collectively referred to herein as the “Tortoise Funds.”
Tortoise MLP & Energy Income Fund
Investment Objectives
The investment objectives of Tortoise MLP & Energy Income Fund (the “Fund”) are primarily to seek current income and secondarily to seek long-term capital appreciation.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the Tortoise Funds. Sales loads and waivers may vary by financial intermediary. For more information on specific financial intermediary sales loads and waivers, see Appendix A to the statutory Prospectus. More information about these and other discounts is available from your financial professional and in the “Shareholder Information - Class Descriptions” section of the Fund’s Statutory Prospectus on page 40.
Shareholder Fees
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A Class |
Institutional Class |
C Class |
Maximum Front-End Sales Charge (Load) Imposed on Purchases (as a percentage of the offering price) |
5.50% | None | None |
Maximum Deferred Sales Charge (Load) (as a percentage of initial investment or the value of the investment at redemption, whichever is lower) |
1.00%(1) | None | 1.00%(2) |
Redemption Fee (as a percentage of amount redeemed within 90 days of purchase) | None | None | None |
Annual Fund Operating Expenses
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A Class |
Institutional Class |
C Class |
Management Fees | 1.00% | 1.00% | 1.00% |
Distribution and Service (Rule 12b-1) Fees | 0.25% | 0.00% | 1.00% |
Other Expenses(3) | 0.09% | 0.09% | 0.09% |
Total Annual Fund Operating Expenses | 1.34% | 1.09% | 2.09% |
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(1) | No sales charge is payable at the time of purchase on investments of $1 million or more, although the Fund may impose a Contingent Deferred Sales Charge (“CDSC”) of 1.00% on certain redemptions. If imposed, the CDSC applies to redemptions made within 18 months of purchase and will be assessed on an amount equal to the lesser of the initial value of the shares redeemed and the value of shares redeemed at the time of redemption. |
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(2) | The CDSC applies to redemptions made within 12 months of purchase and will be assessed on an amount equal to the lesser of the initial investment of the shares redeemed and the value of the shares redeemed at the time of redemption. |
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(3) | Other expenses for the Fund are based on estimates for the current fiscal year and reflect the current fees for the Fund rather than those of the Fund’s predecessor, the Advisory Research MLP & Energy Income Fund, a series of the Investment Managers Series Trust (the “MLP & Energy Income Predecessor Fund” or “Predecessor Fund”). |
Example
This Example is intended to help you compare the costs of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
One Year | Three Years | Five Years | Ten Years | |
A Class | $679 | $951 | $1,244 | $2,074 |
Institutional Class | $111 | $347 | $601 | $1,329 |
C Class | $312 | $655 | $1,124 | $2,421 |
You would pay the following expenses if you did not redeem your shares:
One Year | Three Years | Five Years | Ten Years | |
C Class | $212 | $655 | $1,124 | $2,421 |
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the annual fund operating expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year ended November 30, 2018, the MLP & Energy Income Predecessor Fund’s portfolio turnover rate was 55% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, the Fund will invest at least 80% of its total assets in equity and debt securities of master limited partnerships (“MLPs”) focused in the energy infrastructure sector and in equity and debt securities of other companies focused in the energy infrastructure sector. Companies focused in the energy infrastructure sector include MLP parent companies and other MLP affiliates (together with MLPs, “MLP Entities”), which may invest their assets in varying degrees in MLPs. Some of these parent companies and other affiliates primarily own equity interests in MLPs, while others may jointly own assets with MLPs, and still others may only invest small portions of their assets in equity interests of MLPs. The Fund’s investment adviser, Tortoise Capital Advisors, L.L.C. (the “Adviser”), considers the energy infrastructure sector to be comprised of companies that engage in one or more aspects of exploration, production, gathering, processing, refining, transmission, marketing, storage and delivery of energy products such as natural gas, natural gas liquids (including propane), crude oil, refined petroleum products or coal; oilfield services, including drilling, cementing and stimulations; the generation, transmission and distribution of electricity; water and wastewater treatment, distribution and disposal; or the generation, transportation and sale of alternative, non-fossil fuel based energy sources including, but not limited to, biodiesel, ethanol, biomass, geothermal, hydroelectric, nuclear, solar or wind energy. The Adviser considers a company to be focused in the energy infrastructure sector if at least 50% of the company’s assets are utilized in one or more of these activities. The Fund will also invest in MLP Entities and other companies operating in the natural resources sector, which includes companies principally engaged in owning or developing non-energy natural resources (including timber and minerals) and industrial materials, or supplying goods or services to such companies.
In addition to making direct investments in MLP equity units, the Adviser intends to invest the Fund’s remaining assets in such a way as to provide, in total, a high level of correlation with MLP equities. These other investments may include equity and debt securities of entities that own interests in MLPs or assets owned in common with MLPs. The Fund will also invest in securities of entities that operate in industries similar to MLPs, such as energy infrastructure, even though such entities have no direct affiliation with an MLP.
The Fund will purchase securities across the capital structure of MLP Entities, including equity and debt securities of MLPs and their affiliates. The Fund may invest in equity securities of MLP Entities and other issuers without regard for their market capitalizations.
The Adviser intends to allocate the Fund’s assets towards the mix of equity and debt securities it deems appropriate based upon its view of economic, market, and political conditions. As a result of this asset allocation the Fund’s portfolio may, at times, be significantly invested in either equity or debt securities, or both. The Fund’s investment in equity securities may include both common and preferred stock. The Fund’s investment in debt securities may include both investment grade debt securities and high yield debt securities (often called “junk bonds”), which are securities rated below investment grade (that is, rated Ba or lower by Moody’s Investors Service, Inc. (“Moody’s”) or BB or lower by Standard & Poor’s Ratings Group (“S&P”), comparably rated by another statistical rating organization, or, if unrated, determined by the Adviser to be of comparable credit quality). The Fund will only purchase debt securities which, at the time of acquisition, are rated at least B3 by Moody’s or B- by Standard & Poor’s or are comparably rated by another statistical rating organization, or, if unrated, are determined by the Adviser to be of comparable credit quality. The Fund may invest in debt securities of any maturity.
The Fund may invest in foreign securities and U.S. dollar denominated foreign issuers. Such investments in securities of foreign issuers may include sponsored or unsponsored American Depository Receipts (“ADRs”) and Yankee bonds. ADRs are receipts that represent interests in foreign securities held on deposit by U.S. banks. Yankee bonds are bonds denominated in U.S. dollars that are publicly issued in the United States by foreign banks and corporations.
In certain market environments, the Fund may, but is not required to, use various hedging techniques, such as the buying and selling of options, to seek to mitigate one or more risks associated with investments in MLPs and energy infrastructure assets including market risk and interest rate risk, which, among other factors, could adversely affect market valuations of specific securities or certain sectors of the energy MLP and energy infrastructure market place, or the Fund’s overall portfolio.
The Fund may invest up to 15% of its net assets in securities that are not registered under the Securities Act of 1933 or that otherwise may not be sold in public offerings, which are commonly known as “restricted” securities. The Fund will typically acquire restricted securities in directly negotiated transactions.
The Fund may invest in initial public offerings (“IPOs”), other investment companies including exchange-traded funds (“ETFs”), and exchange-traded notes (“ETNs”). ETFs are investment companies that generally seek to track the performance of specific indices, shares of which are traded on exchanges. The Fund will include ETFs that primarily invest in MLPs and/or other companies focused in the energy infrastructure sector for purposes of satisfying the Fund’s investment strategy of investing at least 80% of its total assets in equity and debt securities of MLPs focused in the energy infrastructure sector, and in equity and debt securities of other companies focused in the energy infrastructure sector. ETNs are unsecured debt securities issued by a bank that are linked to the total return of a market index.
The Fund is “non-diversified” under the 1940 Act, which means that it may invest more of its assets in fewer issuers than “diversified” mutual funds.
Principal Investment Risks
As with any mutual fund, there are risks to investing. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) or any other governmental agency. Remember, in addition to possibly not achieving your investment goals, you could lose all or a portion of your investment in the Fund over short or even long periods of time. The principal risks of investing in the Fund are:
Energy and Natural Resource Company Risk. Under normal circumstances, the Fund concentrates its investments in the energy infrastructure sector and may invest a significant portion of its assets in the natural resources sector of the economy, which includes a number of risks, including the following: supply and demand risk, depletion and exploration risk, marine transportation companies risk, regulatory risk, commodity pricing risk, weather risk, cash flow risk, affiliated party risk, catastrophe risk, acquisition risk, and natural resources sector risk. For example, decreases in oil prices may have a substantial impact on the prices of publicly-traded equity securities of energy infrastructure companies. The Fund considers the following industries as making up the energy infrastructure sector: energy, materials, transportation and utilities.
Fixed Income Securities Risk. The prices of fixed income securities respond to economic developments, particularly interest rate changes, as well as to changes in an issuer’s credit rating or market perceptions about the creditworthiness of an issuer. Generally fixed income securities decrease in value if interest rates rise and increase in value if interest rates fall, and longer-term and lower rated securities are more volatile than shorter-term and higher rated securities.
General MLP Risk. MLPs historically have shown sensitivity to interest rate movements. In an increasing interest rate environment, MLPs may experience upward pressure on their yields in order to stay competitive with other interest rate sensitive securities. Also, a significant portion of the market value of an MLP may be based upon its current yield. Accordingly, the prices of MLP units may be sensitive to fluctuations in interest rates and may decline when interest rates rise.
High Yield (“Junk”) Bond Risk. High yield bonds are debt securities rated below investment grade (often called “junk bonds”). Junk bonds are speculative, involve greater risks of default, downgrade, or price declines and are more volatile and tend to be less liquid than investment-grade securities. Companies issuing high yield bonds are less financially strong, are more likely to encounter financial difficulties, and are more vulnerable to adverse market events and negative sentiments than companies with higher credit ratings.
MLP Units Risk. An investment in MLP units involves some risks which differ from an investment in the common stock of a corporation. Holders of MLP units generally have limited control and voting rights on matters affecting the partnership. The value of the Fund’s investment in MLPs depends largely on the MLPs being treated as partnerships for U.S. federal income tax purposes. If an MLP does not meet current legal requirements to maintain partnership status, or if it is unable to do so because of tax law changes, it would be taxed as a corporation and there could be a material decrease in the value of its securities.
Capital Markets Risk. MLPs normally pay out the majority of their operating cash flows to partners. Therefore, MLPs and other issuers in which the Fund invests may rely significantly on capital markets for access to equity and debt financing in order to fund organic growth projects and acquisitions. Should market conditions limit issuers’ access to capital markets, their distribution growth prospects could be at risk.
Counterparty Risk. Counterparty risk is the risk that the other party or parties to an agreement or a participant to a transaction, such as a broker, might default on a contract or fail to perform by failing to pay amounts due or failing to fulfill the obligations of the contract or transaction.
Credit Risk. If an issuer or guarantor of a debt security held by the Fund or a counterparty to a financial contract with the Fund defaults or is downgraded or is perceived to be less creditworthy, or if the value of the assets underlying a security declines, the value of the Fund’s portfolio will typically decline.
Cybersecurity Risk. Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets, customer data (including private shareholder information), or proprietary information, or cause the Fund, the Adviser, and/or other service providers (including custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data breaches, data corruption or loss of operational functionality. In an extreme case, a shareholder’s ability to exchange or redeem Fund shares may be affected.
Derivatives Risk. Derivatives include instruments and contracts that are based on and valued in relation to one or more underlying securities, financial benchmarks, indices, or other reference obligations or measures of value. The use of derivatives could increase or decrease the Fund’s exposure to the risks of the underlying instrument. Using derivatives can have a leveraging effect and increase fund volatility. A small investment in derivatives could have a potentially large impact on the Fund’s performance. Derivatives transactions can be highly illiquid and difficult to unwind or value, and changes in the value of a derivative held by the Fund may not correlate with the value of the underlying instrument or the Fund’s other investments. Many of the risks applicable to trading the instruments underlying derivatives are also applicable to derivatives trading. However, additional risks are associated with derivatives trading that are possibly greater than the risks associated with investing directly in the underlying instruments. These additional risks include, but are not limited to, illiquidity risk and counterparty credit risk. For derivatives that are required to be cleared by a regulated clearinghouse, other risks may arise from the Fund’s relationship with a brokerage firm through which it submits derivatives trades for clearing, including in some cases from other clearing customers of the brokerage firm. The Fund would also be exposed to counterparty risk with respect to the clearinghouse. Financial reform laws have changed many aspects of financial regulation applicable to derivatives. Once implemented, new regulations, including margin, clearing, and trade execution requirements, may make derivatives more costly, may limit their availability, may present different risks or may otherwise adversely affect the value or performance of these instruments. The extent and impact of these regulations are not yet fully known and may not be known for some time.
Equity Risk. The value of the equity securities held by the Fund may fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities held by the Fund participate, or factors relating to specific companies in which the Fund invests.
ETF Risk. Investing in an ETF will provide the Fund with exposure to the securities comprising the index on which the ETF is based and will expose the Fund to risks similar to those of investing directly in those securities. Shares of ETFs typically trade on securities exchanges and may at times trade at a premium or discount to their net asset values. In addition, an ETF may not replicate exactly the performance of the benchmark index it seeks to track for a number of reasons, including transaction costs incurred by the ETF, the temporary unavailability of certain index securities in the secondary market or discrepancies between the ETF and the index with respect to the weighting of securities or the number of securities held. Investing in ETFs, which are investment companies, involves duplication of advisory fees and certain other expenses. The Fund will pay brokerage commissions in connection with the purchase and sale of shares of ETFs.
ETN Risk. ETNs are debt securities that combine certain aspects of ETFs and bonds. ETNs are not investment companies and thus are not regulated under the 1940 Act. ETNs, like ETFs, are traded on stock exchanges and generally track specified market indices, and their value depends on the performance of the underlying index and the credit rating of the issuer. ETNs may be held to maturity, but unlike bonds there are no periodic interest payments and principal is not protected.
Foreign Investment Risk. The prices of foreign securities may be more volatile than the prices of securities of U.S. issuers because of economic and social conditions abroad, political developments, and changes in the regulatory environments of foreign countries. In addition, changes in exchange rates and interest rates may adversely affect the values of the Fund’s foreign investments. Foreign companies are generally subject to different legal and accounting standards than U.S. companies, and foreign financial intermediaries may be subject to less supervision and regulation than U.S. financial firms. Foreign securities include ADRs. Unsponsored ADRs are organized independently and without the cooperation of the foreign issuer of the underlying securities, and involve additional risks because U.S. reporting requirements do not apply. In addition, the issuing bank may deduct shareholder distribution, custody, foreign currency exchange, and other fees from the payment of dividends.
Hedging Risk. It is not possible to hedge fully or perfectly against any risk. While hedging can reduce losses, it can also reduce or eliminate gains or cause losses if the market moves in a different manner than anticipated by the Fund or if the cost of the derivative outweighs the benefit of the hedge. Hedging also involves the risk that changes in the value of the derivative will not match those of the holdings being hedged as expected by the Fund, in which case any losses on the holdings being hedged may not be reduced or may be increased. There can be no assurance that the Fund’s hedging strategies will be effective or that hedging transactions will be available to the Fund. The Fund is not required to engage in hedging transactions at any given time or from time to time, even under volatile market environment and the Fund may choose not to do so from time to time.
Interest Rate Risk. MLPs and other higher yield securities historically have shown sensitivity to interest rate movements. In an increasing interest rate environment, these types of securities may experience upward pressure on their yields in order to stay competitive with other interest rate sensitive securities. Also, significant portions of the market value of MLPs and other higher yield securities may be based upon their current yields. Accordingly, the prices of these securities may be sensitive to fluctuations in interest rates and may decline when interest rates rise.
IPO Risk. The market value of IPO shares will fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading, the small number of shares available for trading and limited information about the issuer. The purchase of IPO shares may involve high transaction costs. IPO shares are subject to market risk and liquidity risk.
Leveraging Risk. Certain transactions, including the use of derivatives, may give rise to a form of leverage. To mitigate leveraging risk, the Fund’s custodian will segregate or identify liquid assets or otherwise cover the transactions that may give rise to such risk. Leveraging may cause the Fund to liquidate portfolio positions to satisfy its obligations or to meet segregation requirements when it may not be advantageous to do so. Leveraging may cause the Fund to be more volatile than if the Fund had not been leveraged.
Liquidity Risk. The Fund may not be able to sell some or all of the investments that it holds due to a lack of demand in the marketplace or other factors such as market turmoil, or if the Fund is forced to sell an illiquid asset to meet redemption requests or other cash needs it may only be able to sell those investments at a loss. In addition, the reduction in dealer market-making capacity in the fixed income markets that has occurred in recent years has the potential to decrease the liquidity of the Fund’s investments. Illiquid assets may also be difficult to value.
Management and Strategy Risk. The value of your investment depends on the judgment of the Fund’s investment adviser about the quality, relative yield, value or market trends affecting a particular security, industry, sector or region, which may prove to be incorrect. Investment strategies employed by the Fund’s investment adviser in selecting investments for the Fund may not result in an increase in the value of your investment or in overall performance equal to other investments.
Market Risk. The market price of a security or instrument may decline, sometimes rapidly or unpredictably, due to general market conditions that are not specifically related to a particular company, such as real or perceived adverse economic or political conditions throughout the world, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. The market value of a security or instrument also may decline because of factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.
Non-Diversification Risk. The Fund is classified as “non-diversified,” which means the Fund may invest a larger percentage of its assets in the securities of a smaller number of issuers than a diversified fund. Investment in securities of a limited number of issuers exposes the Fund to greater market risk and potential losses than if its assets were diversified among the securities of a greater number of issuers.
Options Risk. Purchasing and writing put and call options are highly specialized activities and entail greater than ordinary investment risks. The Fund may not fully benefit from or may lose money on an option if changes in its value do not correspond as anticipated to changes in the value of the underlying securities. If the Fund is not able to sell an option held in its portfolio, it would have to exercise the option to realize any profit and would incur transaction costs upon the purchase or sale of the underlying securities. Ownership of options involves the payment of premiums, which may adversely affect the Fund’s performance. To the extent that the Fund invests in over-the-counter options, the Fund may be exposed to counterparty risk.
Preferred Stock Risk. Preferred stock represents an equity interest in a company that generally entitles the holder to receive, in preference to the holders of other stocks such as common stock, dividends and a fixed share of the proceeds resulting from a liquidation of the company. The market value of preferred stock is subject to company-specific and market risks applicable generally to equity securities and is also sensitive to changes in the company’s creditworthiness, the ability of the company to make payments on the preferred stock, and changes in interest rates, typically declining in value if interest rates rise.
Small-Cap and Mid-Cap Company Risk. The securities of small-capitalization and mid-capitalization companies may be subject to more abrupt or erratic market movements and may have lower trading volumes or more erratic trading than securities of larger, more established companies or market averages in general. In addition, such companies typically are more likely to be adversely affected than large capitalization companies by changes in earning results, business prospects, investor expectations or poor economic or market conditions.
Tax Risk. The Fund has elected to be, and intends to qualify each year for treatment as, a “regulated investment company” under the U.S. Internal Revenue Code of 1986, as amended (the “Code”). To maintain qualification for federal income tax purposes as a regulated investment company under the Code, the Fund must meet certain source-of-income, asset diversification and annual distribution requirements, as discussed in detail below under “Federal Income Tax Consequences.”
Depreciation or other cost recovery deductions passed through to the Fund from investments in MLPs in a given year will generally reduce the Fund’s taxable income, but those deductions may be recaptured in the Fund’s income in one or more subsequent years. When recognized and distributed, recapture income will generally be taxable to shareholders at the time of the distribution at ordinary income tax rates, even though those shareholders might not have held shares in the Fund at the time the deductions were taken by the Fund, and even though those shareholders will not have corresponding economic gain on their shares at the time of the recapture. In order to distribute recapture income or to fund redemption requests, the Fund may need to liquidate investments, which may lead to additional recapture income.
Who Should Invest
Before investing in the Fund, investors should consider their investment goals, time horizons and risk tolerance. The Fund may be an appropriate investment for investors who are seeking:
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· | An investment vehicle for accessing a portfolio of MLP and energy infrastructure companies; |
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· | A traditional flow-through mutual fund structure with daily liquidity at NAV; |
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· | Simplified tax reporting through a Form 1099; |
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· | A fund offering the potential for current income and secondarily long-term capital appreciation; |
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· | A fund that may be suitable for retirement and other tax exempt accounts; |
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· | Potential diversification of their overall investment portfolio; and |
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· | Professional securities selection and active management by an experienced adviser. |
The Fund is designed for long-term investors and is not designed for investors who are seeking short-term gains. The Fund will take reasonable steps to identify and reject orders from market timers. See “Shareholder Information – Buying Shares” and “– Redeeming Shares” of the Fund’s Statutory Prospectus.
Performance
The returns presented reflect the performance of the MLP & Energy Income Predecessor Fund. The Fund has adopted the performance of the MLP & Energy Income Predecessor Fund as a result of a reorganization in which the Fund will acquire all the assets and liabilities of the MLP & Energy Income Predecessor Fund (the “Reorganization”). The Reorganization is expected to occur on or about November 15, 2019. Prior to the Reorganization, the Fund was a “shell” Fund with no assets and had not commenced operations. The Fund’s portfolio management team served as the portfolio management team of the MLP & Energy Income Predecessor Fund and have been the Fund’s portfolio management team since inception.
The bar chart and the performance table below provide some indication of the risks of investing in the Fund by showing changes in the performance of Institutional Class shares of the MLP & Energy Income Predecessor Fund from year to year and by showing how the average annual returns of A Class shares and C Class shares of the Fund over time compare to the performance of a broad-based market index. Fund returns shown in the performance table reflect the maximum sales charge of 5.50% for the Fund’s A Class shares and the contingent deferred sales charge of 1.00% during the one year period for the Class C shares. The Predecessor Fund’s past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available on the Fund’s website at www.tortoiseadvisors.com or by calling 855-TCA-FUND (855-822-3863).
Calendar Year Total Returns as of December 31
Best Quarter | Worst Quarter |
Q2 2016 19.84% | Q3 2015 -23.53% |
The year-to-date return of the Fund as of June 30, 2019 was 15.94%
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(1) | The Fund offers multiple classes of shares. A Class shares of the MLP & Energy Income Predecessor Fund commenced operations on May 18, 2011. C Class shares of the MLP & Energy Income Predecessor Fund commenced operations on April 2, 2012. Institutional Class shares of the MLP & Energy Income Predecessor Fund commenced operations on December 27, 2010. The performance figures for A Class and C Class include the performance for the Institutional Class for the periods prior to the start date of each such Class. A Class and C Class impose higher expenses than that of the Institutional Class. For the index shown, the measurement period used in computing the returns for the “Since Inception” period begins on December 27, 2010. |
After tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. The “Return After Taxes on Distributions and Sale of Fund Shares” may be higher than other return figures because when a capital loss occurs upon redemption of portfolio shares. Actual after-tax returns depend on your situation and may differ from those shown. The after-tax returns are shown only for the Institutional Class and the after-tax returns for the other classes will vary to the extent they have different expenses. Furthermore, the after-tax returns shown are not relevant to those investors who hold their shares through tax-advantaged arrangements such as 401(k) plans or individual retirement accounts (“IRAs”).
Investment Adviser and Portfolio Managers
Purchase and Sale of Fund Shares
You may purchase, exchange, or redeem Fund shares on any day that the New York Stock Exchange (“NYSE”) is open for business by written request via mail (Tortoise MLP & Energy Income Fund, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701), by contacting the Fund by telephone at 855-TCA-FUND (855-822-3863) or through a financial intermediary. You may also purchase or redeem Fund shares by wire transfer. The minimum initial and subsequent investment amounts are shown below. The Fund may reduce or waive the minimums in its sole discretion.
Tax Information
The Fund’s distributions are generally taxable, and will be taxed as ordinary income or capital gains, unless you are a tax-exempt organization or are investing through a tax-advantaged arrangement such as a 401(k) plan or an IRA. For more information, please see “Tax Consequences” of the Fund’s Statutory Prospectus. Distributions on investments made through tax-advantaged arrangements may be taxed as ordinary income when withdrawn from those accounts.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a bank or financial adviser, and including affiliates of the Adviser), the Fund and/or its Adviser may pay the intermediary for the sale of Fund shares and related services. These payments may create conflicts of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.
Investment Objectives
The investment objectives of Tortoise MLP & Energy Infrastructure Fund (the “Fund”) are primarily to seek current income and secondarily to seek long-term capital appreciation.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.
Shareholder Fees
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Institutional Class |
Maximum Front-End Sales Charge (Load) Imposed on Purchases (as a percentage of the offering price) |
None |
Maximum Deferred Sales Charge (Load) (as a percentage of the initial investment or the value of the investment at redemption, whichever is lower) |
None |
Redemption Fee (as a percentage of amount redeemed within 90 days of purchase) | None |
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) |
Institutional Class |
Management Fees | 0.75% |
Distribution and Service (Rule 12b-1) Fees | None |
Other Expenses(1) | 0.16% |
Total Annual Fund Operating Expenses
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0.91% |
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(1) | Other expenses for the Fund are based on estimates for the current fiscal year and reflect the current fees of the Fund rather than those of the Fund’s predecessor, the Advisory Research MLP & Energy Infrastructure Fund, a series of the Investment Managers Series Trust (the “MLP & Energy Infrastructure Predecessor Fund” or “Predecessor Fund”). |
Example
This Example is intended to help you compare the costs of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
One Year | Three Years | Five Years | Ten Years | |
Institutional Class | $93 | $290 | $504 | $1,120 |
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the annual fund operating expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year ended November 30, 2018, the MLP & Energy Infrastructure Predecessor Fund’s portfolio turnover rate was 73% of its average portfolio value.
Principal Investment Strategies
Under normal market conditions, the Fund will invest at least 80% of its total assets in equity and debt securities of master limited partnerships (“MLPs”) focused in the energy infrastructure sector and in equity and debt securities of other companies focused in the energy infrastructure sector. Companies focused in the energy infrastructure sector include MLP parent companies and other MLP affiliates (together with MLPs, “MLP Entities”), which may invest their assets in varying degrees in MLPs. Some of these parent companies and other affiliates primarily own equity interests in MLPs, while others may jointly own assets with MLPs, and still others may only invest small portions of their assets in equity interests of MLPs. The Fund’s investment adviser, Tortoise Capital Advisors, L.L.C. (the “Adviser”), considers the energy infrastructure sector to be comprised of companies that engage in one or more aspects of exploration, production, gathering, processing, refining, transmission, marketing, storage and delivery of energy products such as natural gas, natural gas liquids (including propane), crude oil, refined petroleum products or coal; oilfield services, including drilling, cementing and stimulations; the generation, transmission and distribution of electricity; water and wastewater treatment, distribution and disposal; or the generation, transportation and sale of alternative, non-fossil fuel based energy sources including, but not limited to, biodiesel, ethanol, biomass, geothermal, hydroelectric, nuclear, solar or wind energy. The Adviser considers a company to be focused in the energy infrastructure sector if at least 50% of the company’s assets are utilized in one or more of these activities. The Fund will also invest in MLP Entities and other companies operating in the natural resources sector, which includes companies principally engaged in owning or developing non-energy natural resources (including timber and minerals) and industrial materials, or supplying goods or services to such companies.
In addition to making direct investments in MLP equity units, the Adviser intends to invest the Fund’s remaining assets in such a way as to provide, in total, a high level of correlation with MLP equities. These other investments may include equity and debt securities of entities that own interests in MLPs or assets owned in common with MLPs. The Fund will also invest in securities of entities that operate in industries similar to MLPs, such as energy infrastructure, even though such entities have no direct affiliation with an MLP.
The Fund will purchase securities across the capital structure of MLP Entities, including equity and debt securities of MLPs and their affiliates. The Fund may invest in equity securities of MLP Entities and other issuers without regard for their market capitalizations.
The Adviser intends to allocate the Fund’s assets towards the mix of equity and debt securities it deems appropriate based upon its view of economic, market, and political conditions. As a result of this asset allocation, the Fund’s portfolio may, at times, be significantly invested in either equity or debt securities, or both. The Fund’s investment in equity securities may include both common and preferred stock. The Fund’s investment in debt securities may include both investment grade debt securities and high yield debt securities (often called “junk bonds”), which are securities rated below investment grade (that is, rated Ba or lower by Moody’s Investors Service, Inc. (“Moody’s”) or BB or lower by Standard & Poor’s Ratings Group (“S&P”), comparably rated by another statistical rating organization, or, if unrated, determined by the Adviser to be of comparable credit quality). The Fund will only purchase debt securities which, at the time of acquisition, are rated at least B3 by Moody’s or B- by Standard & Poor’s or are comparably rated by another statistical rating organization, or, if unrated, are determined by the Adviser to be of comparable credit quality. The Fund may invest in debt securities of any maturity.
The Fund may invest in foreign securities and U.S. dollar denominated foreign issuers which may include sponsored or unsponsored American Depository Receipts (“ADRs”) and Yankee bonds. ADRs are receipts that represent interests in foreign securities held on deposit by U.S. banks. Yankee bonds are bonds denominated in U.S. dollars that are publicly issued in the United States by foreign banks and corporations.
In certain market environments, the Fund may, but is not required to, use various hedging techniques, such as the buying and selling of options, to seek to mitigate one or more risks associated with investments in MLPs and energy infrastructure assets including market risk and interest rate risk, which, among other factors, could adversely affect market valuations of specific securities or certain sectors of the energy MLP and energy infrastructure market place, or the Fund’s overall portfolio.
The Fund may invest up to 15% of its net assets in securities that are not registered under the Securities Act of 1933 or that otherwise may not be sold in public offerings, which are commonly known as “restricted” securities. The Fund will typically acquire restricted securities in directly negotiated transactions.
The Fund may invest in initial public offerings (“IPOs”), other investment companies including exchange-traded funds (“ETFs”), and exchange-traded notes (“ETNs”). ETFs are investment companies that generally seek to track the performance of specific indices, shares of which are traded on exchanges. The Fund will include ETFs that primarily invest in MLPs and/or other companies focused in the energy infrastructure sector for purposes of satisfying the Fund’s investment strategy of investing at least 80% of its total assets in equity and debt securities of MLPs focused in the energy infrastructure sector, and in equity and debt securities of other companies focused in the energy infrastructure sector. ETNs are unsecured debt securities issued by a bank that are linked to the total return of a market index.
The Fund is “non-diversified” under the 1940 Act, which means that it may invest more of its assets in fewer issuers than “diversified” mutual funds
Principal Investment Risks
As with any mutual fund, there are risks to investing. An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) or any other governmental agency. Remember, in addition to possibly not achieving your investment goals, you could lose all or a portion of your investment in the Fund over short or even long periods of time. The principal risks of investing in the Fund are:
Energy and Natural Resource Company Risk. Under normal circumstances, the Fund concentrates its investments in the energy infrastructure sector and may invest a significant portion of its assets in the natural resources sector of the economy, which includes a number of risks, including the following: supply and demand risk, depletion and exploration risk, marine transportation companies risk, regulatory risk, commodity pricing risk, weather risk, cash flow risk, affiliated party risk, catastrophe risk, acquisition risk, and natural resources sector risk. For example, decreases in oil prices may have a substantial impact on the prices of publicly-traded equity securities of energy infrastructure companies. The Fund considers the following industries as making up the energy infrastructure sector: energy, materials, transportation and utilities.
Fixed Income Securities Risk. The prices of fixed income securities respond to economic developments, particularly interest rate changes, as well as to changes in an issuer’s credit rating or market perceptions about the creditworthiness of an issuer. Generally fixed income securities decrease in value if interest rates rise and increase in value if interest rates fall, and longer-term and lower rated securities are more volatile than shorter-term and higher rated securities.
General MLP Risk. MLPs historically have shown sensitivity to interest rate movements. In an increasing interest rate environment, MLPs may experience upward pressure on their yields in order to stay competitive with other interest rate sensitive securities. Also, a significant portion of the market value of an MLP may be based upon its current yield. Accordingly, the prices of MLP units may be sensitive to fluctuations in interest rates and may decline when interest rates rise.
High Yield (“Junk”) Bond Risk. High yield bonds are debt securities rated below investment grade (often called “junk bonds”). Junk bonds are speculative, involve greater risks of default, downgrade, or price declines and are more volatile and tend to be less liquid than investment-grade securities. Companies issuing high yield bonds are less financially strong, are more likely to encounter financial difficulties, and are more vulnerable to adverse market events and negative sentiments than companies with higher credit ratings.
MLP Units Risk. An investment in MLP units involves some risks which differ from an investment in the common stock of a corporation. Holders of MLP units generally have limited control and voting rights on matters affecting the partnership. The value of the Fund’s investment in MLPs depends largely on the MLPs being treated as partnerships for U.S. federal income tax purposes. If an MLP does not meet current legal requirements to maintain partnership status, or if it is unable to do so because of tax law changes, it would be taxed as a corporation and there could be a material decrease in the value of its securities.
Capital Markets Risk. MLPs normally pay out the majority of their operating cash flows to partners. Therefore, MLPs and other issuers in which the Fund invests may rely significantly on capital markets for access to equity and debt financing in order to fund organic growth projects and acquisitions. Should market conditions limit issuers’ access to capital markets, their distribution growth prospects could be at risk.
Counterparty Risk. Counterparty risk is the risk that the other party or parties to an agreement or a participant to a transaction, such as a broker, might default on a contract or fail to perform by failing to pay amounts due or failing to fulfill the obligations of the contract or transaction.
Credit Risk. If an issuer or guarantor of a debt security held by the Fund or a counterparty to a financial contract with the Fund defaults or is downgraded or is perceived to be less creditworthy, or if the value of the assets underlying a security declines, the value of the Fund’s portfolio will typically decline.
Cybersecurity Risk. Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets, customer data (including private shareholder information), or proprietary information, or cause the Fund, the Adviser, and/or other service providers (including custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data breaches, data corruption or loss of operational functionality. In an extreme case, a shareholder’s ability to exchange or redeem Fund shares may be affected.
Derivatives Risk. Derivatives include instruments and contracts that are based on and valued in relation to one or more underlying securities, financial benchmarks, indices, or other reference obligations or measures of value. The use of derivatives could increase or decrease the Fund’s exposure to the risks of the underlying instrument. Using derivatives can have a leveraging effect and increase fund volatility. A small investment in derivatives could have a potentially large impact on the Fund’s performance. Derivatives transactions can be highly illiquid and difficult to unwind or value, and changes in the value of a derivative held by the Fund may not correlate with the value of the underlying instrument or the Fund’s other investments. Many of the risks applicable to trading the instruments underlying derivatives are also applicable to derivatives trading. However, additional risks are associated with derivatives trading that are possibly greater than the risks associated with investing directly in the underlying instruments. These additional risks include, but are not limited to, illiquidity risk and counterparty credit risk. For derivatives that are required to be cleared by a regulated clearinghouse, other risks may arise from the Fund’s relationship with a brokerage firm through which it submits derivatives trades for clearing, including in some cases from other clearing customers of the brokerage firm. The Fund would also be exposed to counterparty risk with respect to the clearinghouse. Financial reform laws have changed many aspects of financial regulation applicable to derivatives. Once implemented, new regulations, including margin, clearing, and trade execution requirements, may make derivatives more costly, may limit their availability, may present different risks or may otherwise adversely affect the value or performance of these instruments. The extent and impact of these regulations are not yet fully known and may not be known for some time.
Equity Risk. The value of the equity securities held by the Fund may fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities held by the Fund participate, or factors relating to specific companies in which the Fund invests.
ETF Risk. Investing in an ETF will provide the Fund with exposure to the securities comprising the index on which the ETF is based and will expose the Fund to risks similar to those of investing directly in those securities. Shares of ETFs typically trade on securities exchanges and may at times trade at a premium or discount to their net asset values. In addition, an ETF may not replicate exactly the performance of the benchmark index it seeks to track for a number of reasons, including transaction costs incurred by the ETF, the temporary unavailability of certain index securities in the secondary market or discrepancies between the ETF and the index with respect to the weighting of securities or the number of securities held. Investing in ETFs, which are investment companies, involves duplication of advisory fees and certain other expenses. The Fund will pay brokerage commissions in connection with the purchase and sale of shares of ETFs.
ETN Risk. ETNs are debt securities that combine certain aspects of ETFs and bonds. ETNs are not investment companies and thus are not regulated under the 1940 Act. ETNs, like ETFs, are traded on stock exchanges and generally track specified market indices, and their value depends on the performance of the underlying index and the credit rating of the issuer. ETNs may be held to maturity, but unlike bonds there are no periodic interest payments and principal is not protected.
Foreign Investment Risk. The prices of foreign securities may be more volatile than the prices of securities of U.S. issuers because of economic and social conditions abroad, political developments, and changes in the regulatory environments of foreign countries. In addition, changes in exchange rates and interest rates may adversely affect the values of the Fund’s foreign investments. Foreign companies are generally subject to different legal and accounting standards than U.S. companies, and foreign financial intermediaries may be subject to less supervision and regulation than U.S. financial firms. Foreign securities include ADRs. Unsponsored ADRs are organized independently and without the cooperation of the foreign issuer of the underlying securities, and involve additional risks because U.S. reporting requirements do not apply. In addition, the issuing bank may deduct shareholder distribution, custody, foreign currency exchange, and other fees from the payment of dividends.
Hedging Risk. It is not possible to hedge fully or perfectly against any risk. While hedging can reduce losses, it can also reduce or eliminate gains or cause losses if the market moves in a different manner than anticipated by the Fund or if the cost of the derivative outweighs the benefit of the hedge. Hedging also involves the risk that changes in the value of the derivative will not match those of the holdings being hedged as expected by the Fund, in which case any losses on the holdings being hedged may not be reduced or may be increased. There can be no assurance that the Fund’s hedging strategies will be effective or that hedging transactions will be available to the Fund. The Fund is not required to engage in hedging transactions at any given time or from time to time, even under volatile market environment and the Fund may choose not to do so from time to time.
Interest Rate Risk. MLPs and other higher yield securities historically have shown sensitivity to interest rate movements. In an increasing interest rate environment, these types of securities may experience upward pressure on their yields in order to stay competitive with other interest rate sensitive securities. Also, significant portions of the market value of MLPs and other higher yield securities may be based upon their current yields. Accordingly, the prices of these securities may be sensitive to fluctuations in interest rates and may decline when interest rates rise.
IPO Risk. The market value of IPO shares will fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading, the small number of shares available for trading and limited information about the issuer. The purchase of IPO shares may involve high transaction costs. IPO shares are subject to market risk and liquidity risk.
Leveraging Risk. Certain transactions, including the use of derivatives, may give rise to a form of leverage. To mitigate leveraging risk, the Fund’s custodian will segregate or identify liquid assets or otherwise cover the transactions that may give rise to such risk. Leveraging may cause the Fund to liquidate portfolio positions to satisfy its obligations or to meet segregation requirements when it may not be advantageous to do so. Leveraging may cause the Fund to be more volatile than if the Fund had not been leveraged.
Liquidity Risk. The Fund may not be able to sell some or all of the investments that it holds due to a lack of demand in the marketplace or other factors such as market turmoil, or if the Fund is forced to sell an illiquid asset to meet redemption requests or other cash needs it may only be able to sell those investments at a loss. In addition, the reduction in dealer market-making capacity in the fixed income markets that has occurred in recent years has the potential to decrease the liquidity of the Fund’s investments. Illiquid assets may also be difficult to value.
Management and Strategy Risk. The value of your investment depends on the judgment of the Fund’s investment adviser about the quality, relative yield, value or market trends affecting a particular security, industry, sector or region, which may prove to be incorrect. Investment strategies employed by the Fund’s investment adviser in selecting investments for the Fund may not result in an increase in the value of your investment or in overall performance equal to other investments.
Market Risk. The market price of a security or instrument may decline, sometimes rapidly or unpredictably, due to general market conditions that are not specifically related to a particular company, such as real or perceived adverse economic or political conditions throughout the world, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. The market value of a security or instrument also may decline because of factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.
Non-Diversification Risk. The Fund is classified as “non-diversified,” which means the Fund may invest a larger percentage of its assets in the securities of a smaller number of issuers than a diversified fund. Investment in securities of a limited number of issuers exposes the Fund to greater market risk and potential losses than if its assets were diversified among the securities of a greater number of issuers.
Options Risk. Purchasing and writing put and call options are highly specialized activities and entail greater than ordinary investment risks. The Fund may not fully benefit from or may lose money on an option if changes in its value do not correspond as anticipated to changes in the value of the underlying securities. If the Fund is not able to sell an option held in its portfolio, it would have to exercise the option to realize any profit and would incur transaction costs upon the purchase or sale of the underlying securities. Ownership of options involves the payment of premiums, which may adversely affect the Fund’s performance. To the extent that the Fund invests in over-the-counter options, the Fund may be exposed to counterparty risk.
Preferred Stock Risk. Preferred stock represents an equity interest in a company that generally entitles the holder to receive, in preference to the holders of other stocks such as common stock, dividends and a fixed share of the proceeds resulting from a liquidation of the company. The market value of preferred stock is subject to company-specific and market risks applicable generally to equity securities and is also sensitive to changes in the company’s creditworthiness, the ability of the company to make payments on the preferred stock, and changes in interest rates, typically declining in value if interest rates rise.
Small-Cap and Mid-Cap Company Risk. The securities of small-capitalization and mid-capitalization companies may be subject to more abrupt or erratic market movements and may have lower trading volumes or more erratic trading than securities of larger, more established companies or market averages in general. In addition, such companies typically are more likely to be adversely affected than large capitalization companies by changes in earning results, business prospects, investor expectations or poor economic or market conditions.
Tax Risk. The Fund has elected to be, and intends to qualify each year for treatment as, a “regulated investment company” under the U.S. Internal Revenue Code of 1986, as amended (the “Code”). To maintain qualification for federal income tax purposes as a regulated investment company under the Code, the Fund must meet certain source-of-income, asset diversification and annual distribution requirements, as discussed in detail below under “Federal Income Tax Consequences.”
Depreciation or other cost recovery deductions passed through to the Fund from investments in MLPs in a given year will generally reduce the Fund’s taxable income, but those deductions may be recaptured in the Fund’s income in one or more subsequent years. When recognized and distributed, recapture income will generally be taxable to shareholders at the time of the distribution at ordinary income tax rates, even though those shareholders might not have held shares in the Fund at the time the deductions were taken by the Fund, and even though those shareholders will not have corresponding economic gain on their shares at the time of the recapture. In order to distribute recapture income or to fund redemption requests, the Fund may need to liquidate investments, which may lead to additional recapture income.
Who Should Invest
Before investing in the Fund, investors should consider their investment goals, time horizons and risk tolerance. The Fund may be an appropriate investment for investors who are seeking:
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· | An investment vehicle for accessing a portfolio of MLP and energy infrastructure companies; |
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· | A traditional flow-through mutual fund structure with daily liquidity at NAV; |
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· | Simplified tax reporting through a Form 1099; |
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· | A fund offering the potential for current income and secondarily long-term capital appreciation; |
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· | A fund that may be suitable for retirement and other tax exempt accounts; |
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· | Potential diversification of their overall investment portfolio; and |
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· | Professional securities selection and active management by an experienced adviser. |
The Fund is designed for long-term investors and is not designed for investors who are seeking short-term gains. The Fund will take reasonable steps to identify and reject orders from market timers. See “Shareholder Information – Buying Shares” and “– Redeeming Shares” of the Fund’s Statutory Prospectus.
Performance
The returns presented reflect the performance of the MLP & Energy Infrastructure Predecessor Fund. The Fund has adopted the performance of the MLP & Energy Infrastructure Predecessor Fund as the result of a reorganization in which the Fund will acquire all the assets and liabilities of the MLP & Energy Infrastructure Predecessor Fund (the “Reorganization”). The Reorganization is expected to occur on or about November 15, 2019. Prior to the Reorganization, the Fund was a “shell” fund with no assets and had not commenced operations. The Fund’s portfolio management team served as the portfolio management team of the MLP & Energy Infrastructure Predecessor Fund and have been the Fund’s portfolio management team since inception.
The bar chart and the performance table below provide some indication of the risks of investing in the Fund by showing changes in the performance of Institutional Class shares of the MLP & Energy Infrastructure Predecessor Fund from year to year and by showing how the average annual returns of the Fund over time compare to the performance of a broad-based market index. The Predecessor Fund’s past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available on the Fund’s website at www.tortoiseadvisors.com or by calling 855-TCA-FUND (855-822-3863).
Calendar Year Total Returns as of December 31
Best Quarter | Worst Quarter |
Q2 2016 21.00% | Q3 2015 -23.92% |
The year-to-date return as of June 30, 2019 was 14.88%
Average Annual Total Returns for the periods ended December 31, 2018(1) | |||
One Year | Five Years |
Since Inception (September 9, 2010) |
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Institutional Class | |||
Return Before Taxes | -14.11% | -5.18% | 2.60% |
Return After Taxes on Distributions | -16.06% | -6.32% | 1.19% |
Return After Taxes on Distributions and Sale of Fund Shares | -8.04% | -4.01% | 2.00% |
Alerian MLP Index (reflects no deduction for fees, expenses or taxes) | -12.42% | -7.31% | 1.92% |
After tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. The “Return After Taxes on Distributions and Sale of Fund Shares” may be higher than other return figures because when a capital loss occurs upon redemption of portfolio shares. Actual after-tax returns depend on your situation and may differ from those shown. Furthermore, the after-tax returns shown are not relevant to those who hold their shares through tax-advantaged arrangements such as 401(k) plans or individual retirement accounts (“IRAs”).
Investment Adviser and Portfolio Managers
Tortoise Capital Advisors, L.L.C. (the “Adviser”) is the Fund’s investment adviser. Primary responsibility for the day-to-day management of the Fund’s portfolio is the joint responsibility of a team of portfolio managers consisting of James J. Cunnane Jr., CFA, Managing Director and Senior Portfolio Manager, and Quinn T. Kiley, Managing Director and Senior Portfolio Manager. They have been jointly and primarily responsible for the day-to-day management of the Fund’s portfolio since the MLP & Energy Income Predecessor Fund’s inception on September 9, 2010.
Purchase and Sale of Fund Shares
You may purchase, exchange, or redeem Fund shares on any day that the New York Stock Exchange (“NYSE”) is open for business by written request via mail (Tortoise MLP & Energy Infrastructure Fund, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701), by contacting the Fund by telephone at 855-TCA-FUND (855-822-3863) or through a financial intermediary. You many also purchase or redeem Fund shares via wire transfer. The minimum initial and subsequent investment amounts are shown below. The Fund may reduce or waive the minimums in its sole discretion.
Tax Information
The Fund’s distributions are generally taxable, and will be taxed as ordinary income or capital gains, unless you are a tax-exempt organization or are investing through a tax-advantaged arrangement such as a 401(k) plan or an IRA. For more information, please see “Tax Consequences” of the Fund’s Statutory Prospectus. Distributions on investments made through tax-advantaged arrangements may be taxed as ordinary income when withdrawn from those accounts.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a bank or financial adviser, and including affiliates of the Adviser), the Fund and/or its Adviser may pay the intermediary for the sale of Fund shares and related services. These payments may create conflicts of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.
The investment objective of each of the Tortoise MLP & Energy Income Fund and Tortoise MLP & Energy Infrastructure Fund (each a “Fund” and collectively, the “Funds”) is to seek current income and secondarily to seek long-term capital appreciation. Each Fund’s investment objective is not fundamental and may be changed by the Board of Trustees without the approval of the Fund’s shareholders upon 60 days’ prior written notice to shareholders.
Principal Investment Strategies
Under normal market conditions, each Fund will invest at least 80% of its total assets in equity and debt securities of MLPs focused in the energy infrastructure sector and in equity and debt securities of other companies focused in the energy infrastructure sector. Companies focused in the energy infrastructure sector include MLP parent companies and other MLP affiliates (together with MLPs, “MLP Entities”), which may invest their assets in varying degrees in MLPs. Some of these parent companies and other affiliates primarily own equity interests in MLPs, while others may jointly own assets with MLPs, and still others may only invest small portions of their assets in equity interests of MLPs. The Adviser considers the energy infrastructure sector to be comprised of companies that engage in one or more aspects of exploration, production, gathering, processing, refining, transmission, marketing, storage and delivery of energy products such as natural gas, natural gas liquids (including propane), crude oil, refined petroleum products or coal; oilfield services, including drilling, cementing and stimulations; the generation, transmission and distribution of electricity; water and wastewater treatment, distribution and disposal; or the generation, transportation and sale of alternative, non-fossil fuel based energy sources including, but not limited to, biodiesel, ethanol, biomass, geothermal, hydroelectric, nuclear, solar or wind energy. The Adviser considers a company to be focused in the energy infrastructure sector if at least 50% of the company’s assets are utilized in one or more of these activities. Each Fund will also invest in MLP Entities and other companies operating in the natural resources sector, which includes companies principally engaged in owning or developing non-energy natural resources (including timber and minerals) and industrial materials, or supplying goods or services to such companies.
The Adviser believes each Fund’s performance will be highly, but not exactly, correlated to the same fundamentals that drive MLP equity returns. By allocating each Fund’s investments among equity and debt securities, the Adviser expects that, over time, the Fund will tend to benefit from a high level of current income with greater liquidity and less volatility than a similarly sized portfolio comprised solely of MLP equities. The Adviser further believes that in strong positive MLP equity markets the Funds may not achieve as favorable returns as a portfolio comprised solely of MLP equities; conversely in weak MLP equity markets the Funds may have more favorable returns than such a portfolio.
In addition to making direct investments in MLP equity units, the Adviser intends to invest each Fund’s remaining assets in such a way as to provide, in total, a high level of correlation with MLP equities. These other investments may include equity and debt securities of entities that own interests in MLPs or assets owned in common with MLPs. Each Fund will also invest in securities of entities that operate in industries similar to MLPs, such as energy infrastructure, even though such entities have no direct affiliation with an MLP.
Each Fund will purchase securities across the capital structure of MLP Entities, including equity and debt securities of MLPs and their affiliates. Each Fund may invest in equity securities of MLP Entities and other issuers without regard for their market capitalizations.
The Adviser intends to allocate each Fund’s assets towards the mix of equity and debt securities it deems appropriate based upon its view of economic, market, and political conditions. As a result of this asset allocation each Fund’s portfolio may, at times, be significantly invested in either equity or debt securities, or both.
The Adviser’s MLP-dedicated investment committee conducts fundamental and quantitative research on specific MLPs and on the energy infrastructure sector for the purpose of identifying potential investment ideas for each Fund. The Adviser will typically sell a position held by each Fund due to changes in the Adviser’s strategic outlook or fundamental changes at a specific MLP. The Adviser also may sell a position because of each Fund’s risk controls concerning position concentrations or the performance of an MLP relative to its particular sub-sector or to the MLP group as a whole. In addition, the Adviser may sell a position when a Fund requires cash to meet redemption requests.
Master Limited Partnerships. An MLP is an entity receiving partnership taxation treatment under the Code, the partnership interests or “units” of which are traded on securities exchanges like shares of corporate stock. To qualify for treatment as a partnership for U.S. federal income tax purposes, a “publicly traded partnership,” such as an MLP, must receive at least 90% of its income from qualifying sources such as interest, dividends, income and gain from mineral or natural resources activities, income and gain from the transportation or storage of certain fuels, and, in certain circumstances, income and gain from commodities or futures, forwards and options with respect to commodities. For this purpose, mineral or natural resources activities include exploration, development, production, mining, refining, marketing and transportation (including pipelines) of oil and gas, minerals, geothermal energy, fertilizer, timber or industrial source carbon dioxide.
A typical MLP consists of a general partner and limited partners; however, some entities receiving partnership taxation treatment under the Code are established as limited liability companies (“LLCs”). The general partner manages the partnership, and has an ownership stake in the partnership and in some cases the general partners are eligible to receive incentive distributions. The limited partners provide capital to the partnership, receive common units of the partnership, have a limited role in the operation and management of the partnership and are entitled to receive cash distributions with respect to their units. Currently, most MLPs operate in the energy, natural resources and real estate sectors. Because they are treated as partnerships for U.S. federal income tax purposes, MLPs generally do not pay income taxes. Thus, unlike investors in corporate securities, direct MLP investors are generally not subject to double taxation (i.e., corporate level tax and tax on corporate dividends).
The Adviser believes that MLPs are attractive investments for several reasons, including: higher yields relative to most common equity and investment grade debt, generally low correlation to other asset classes, cash flows that remain relatively stable regardless of broader market conditions, and the potential for deferred taxation for taxable investors. Many of these characteristics of MLPs stem from the underlying assets in the energy infrastructure sector. In the Adviser’s opinion, those assets are generally in demand and are critical components in a fully-functioning economy. These characteristics tend to reduce the extent to which MLP fundamentals correlate to broader market conditions over the long term. In addition, assets held by MLPs depreciate in value, which provides the potential for taxable investors to benefit from tax-deferred growth of their investments.
Common and Preferred Stock of Energy Infrastructure Companies. Each Fund may increase its equity exposure to companies in the energy infrastructure sector by purchasing the common and preferred stock of entities that, in the Adviser’s opinion, are likely to perform similarly to MLPs because they generally own and operate energy infrastructure. These companies are generally treated as corporations for tax purposes, but in some cases they have low effective tax rates.
Fixed Income Securities. Each Fund may invest in the debt securities of MLP Entities and other issuers. These include both investment grade debt securities and high yield debt securities (often called “junk bonds”), which are securities rated below investment grade (that is, rated Ba or lower by Moody’s, or BB or lower by S&P, comparably rated by another statistical rating organization, or, if unrated, determined by the Adviser to be of comparable credit quality). Each Fund will only purchase debt securities which, at the time of acquisition, are rated at least B3 by Moody’s, B- by S&P, comparably rated by another statistical rating organization, or, if unrated, are determined by the Adviser to be of comparable credit quality. Each Fund may invest in debt securities of any maturity.
Foreign Securities. Each Fund may invest in foreign securities and U.S. dollar-denominated securities of foreign issuers. Such investments in securities of foreign issuers may include investments in sponsored and unsponsored ADRs and Yankee bonds. ADRs are receipts that represent interests in foreign securities held on deposit by U.S. banks. Yankee bonds are bonds denominated in U.S. dollars that are publicly issued in the United States by foreign banks and corporations.
Hedging Techniques. In certain market environments, each Fund may, but is not required to, use various hedging techniques, such as the buying and selling of options, to seek to mitigate one or more risks associated with investments in MLPs and energy infrastructure assets including market risk and interest rate risk, which, among other factors, could adversely affect market valuations of specific securities or certain sectors of the energy MLP and energy infrastructure market place, or the Fund’s overall portfolio.
It is not possible to hedge fully or perfectly against any risk. While hedging can reduce losses, it can also reduce or eliminate gains or cause losses if the market moves in a different manner than anticipated by each Fund or if the cost of the derivative outweighs the benefit of the hedge. Hedging also involves the risk that changes in the value of the derivative will not match those of the holdings being hedged as expected by each Fund, in which case any losses on the holdings being hedged may not be reduced or may be increased. There can be no assurance that each Fund’s hedging strategies will be effective or that hedging transactions will be available to the Fund. Each Fund is not required to engage in hedging transactions at any given time or from time to time, even under volatile market environment and the Fund may choose not to do so from time to time.
Restricted Securities. Each Fund may invest up to 15% of its net assets in illiquid securities, including securities that are not registered under the Securities Act of 1933 or that otherwise may not be sold in public offerings, which are commonly known as “restricted” securities. Each Fund will typically acquire restricted securities in directly negotiated transactions.
Other Securities. Each Fund may invest in IPOs, other investment companies including ETFs, and ETNs. ETFs are investment companies that generally seek to track the performance of specific indices, shares of which are traded on exchanges. Each Fund will include ETFs that primarily invest in MLPs and/or other companies focused in the energy infrastructure sector for purposes of satisfying the Fund’s investment strategy of investing at least 80% of its total assets in equity and debt securities of MLPs focused in the energy infrastructure sector, and in equity and debt securities of other companies focused in the energy infrastructure sector. ETNs are unsecured debt securities issued by a bank that are linked to the total return of a market index.
Temporary Strategies; Cash or Similar Investments
At the Adviser’s discretion, the Funds may invest in high-quality, short-term debt securities and money market instruments for (i) temporary defensive purposes in amounts up to 100% of a Fund’s assets in response to adverse market, economic, or political conditions and (ii) retaining flexibility in meeting redemptions, paying expenses, and identifying and assessing investment opportunities. These short-term debt securities and money market instruments include cash, shares of other mutual funds, commercial paper, certificates of deposit, bankers’ acceptances, U.S. government securities, discount notes and repurchase agreements. To the extent that a Fund invests in money market mutual funds for its cash position, there will be some duplication of expenses because the Fund will bear its pro rata portion of such money market funds’ management fees and operational expenses. When investing for temporary defensive purposes, the Adviser may invest up to 100% of a Fund’s total assets in such instruments. Taking a temporary defensive position may result in the Fund not achieving its investment objective.
Non-Diversification
Each Fund is classified as “non-diversified” under the Investment Company Act of 1940, as amended, which means that it may focus its investments in the securities of relatively few issuers. Each Fund intends, however, to diversify its assets to the extent necessary to qualify for tax treatment as a regulated investment company under the Code. This requires, among other things, that at the end of each quarter of a Fund’s taxable year no more than 25% of the Fund’s assets be invested in the securities of any one issuer (other than U.S. Government securities or securities of other regulated investment companies) or in the securities of all MLPs combined, and at least 50% of a Fund’s assets be represented by (i) cash, (ii) securities of other regulated investment companies, (iii) U.S. Government securities, and (iv) other securities limited, with respect to any single issuer, to an amount not greater than 5% of the Fund’s assets and not greater than 10% of the outstanding voting securities of such issuer.
The Funds are “non-diversified” under the 1940 Act, which means that it may invest more of its assets in fewer issuers than “diversified” mutual funds.
The Funds’ Investment Process
The Adviser’s investment process for determining the securities to be purchased or sold, with respect to each Fund, utilizes fundamental analysis and a comparison of quantitative, qualitative, and relative value factors. Investment decisions are driven by proprietary financial, risk, and valuation models, developed and maintained by the Adviser, which assist in the evaluation of investment decisions and risk. Financial models, based on business drivers with historical and multi-year operational and financial projections, quantify growth, facilitate sensitivity and credit analysis, and aid in peer comparisons. Risk models assess a company’s asset quality, management, nature of cash flows and operational positioning. Valuation models and traditional valuation metrics such as cash flow multiples and net asset value (“NAV”) are also used in the Adviser’s investment process.
To determine whether a company meets a Fund’s criteria, the Adviser generally look for the targeted investment characteristics described herein. Although the Adviser uses research provided by broker-dealers and investment firms, primary emphasis is placed on proprietary analysis conducted by and valuation models maintained by the Adviser’s in-house investment analysts. The due diligence process followed by the Adviser is comprehensive and may include:
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· | Review of historical and prospective financial information; |
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· | Quarterly updates, conference calls and/or management meetings; |
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· | Analysis of financial models and projections; |
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· | On-site visits; and |
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· | Screening of key documents. |
Principal Risks of Investing in the Funds
Before investing in the Funds, you should carefully consider your own investment goals, the amount of time you are willing to leave your money invested, and the amount of risk you are willing to take. An investment in the Funds is not a deposit of a bank and is not insured or guaranteed by the FDIC or any other governmental agency. There can be no assurance that a Fund will achieve its investment objective. Remember, in addition to possibly not achieving your investment goals, you could lose all or a portion of your investment in the Fund over short or even long periods of time. The principal risks of investing in the Funds are:
General Risks:
Capital Markets Risk. MLPs normally pay out the majority of their operating cash flows to partners. Therefore, MLPs and other issuers in which the Fund invests may rely significantly on capital markets for access to equity and debt financing in order to fund organic growth projects and acquisitions. Should market conditions limit issuers’ access to capital markets, their distribution growth prospects could be at risk. Increased costs of capital also may reduce an issuer’s ability to execute acquisitions or expansion projects in a cost-effective manner.
Credit Risk. The issuer or guarantor of a fixed income security may be unable or unwilling to make timely payments of interest or principal. This risk is magnified for lower-rated debt securities, such as high yield securities. High yield securities are considered predominantly speculative with respect to the ability of the issuer to make timely payments of interest or principal. In addition, if a Fund invests in fixed income securities issued in connection with corporate restructurings by highly leveraged issuers or in fixed income securities that are in default, it may be subject to greater credit risk because of such investments.
Cybersecurity Risk. Cybersecurity incidents may allow an unauthorized party to gain access to Fund assets, customer data (including private shareholder information), or proprietary information, or cause a Fund, the Adviser, and/or other service providers (including custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data breaches, data corruption or loss of operational functionality. In an extreme case, a shareholder’s ability to exchange or redeem Fund shares may be affected.
Derivatives Risk. Derivatives include instruments and contracts that are based on and valued in relation to one or more underlying securities, financial benchmarks, indices, or other reference obligations or measures of value. The use of derivatives could increase or decrease the Fund’s exposure to the risks of the underlying instrument. Using derivatives can have a leveraging effect and increase fund volatility. A small investment in derivatives could have a potentially large impact on a Fund’s performance. Derivatives transactions can be highly illiquid and difficult to unwind or value, and changes in the value of a derivative held by a Fund may not correlate with the value of the underlying instrument or the Fund’s other investments. Many of the risks applicable to trading the instruments underlying derivatives are also applicable to derivatives trading. However, additional risks are associated with derivatives trading that are possibly greater than the risks associated with investing directly in the underlying instruments. These additional risks include, but are not limited to, illiquidity risk, operational leverage risk and counterparty credit risk. For derivatives that are required to be cleared by a regulated clearinghouse, other risks may arise from a Fund’s relationship with a brokerage firm through which it submits derivatives trades for clearing, including in some cases from other clearing customers of the brokerage firm. The Funds would also be exposed to counterparty risk with respect to the clearinghouse. Financial reform laws have changed many aspects of financial regulation applicable to derivatives. Once implemented, new regulations, including margin, clearing, and trade execution requirements, may make derivatives more costly, may limit their availability, may present different risks or may otherwise adversely affect the value or performance of these instruments. The extent and impact of these regulations are not yet fully known and may not be known for some time. Certain risks relating to various types of derivatives in which each Fund may invest are described below.
Call Options. The seller (writer) of a call option which is covered (e.g., for which the writer holds the underlying security) assumes the risk of a decline in the market price of the underlying security below the purchase price of the underlying security less the premium received, and gives up the opportunity for gain on the underlying security above the exercise price of the option. The seller of an uncovered call option assumes the risk of a theoretically unlimited increase in the market price of the underlying security above the exercise price of the option. The buyer of a call option assumes the risk of losing its entire investment in the call option. However, if the buyer of the call sells short the underlying security, the loss on the call will be offset in whole or in part by gain on the short sale of the underlying security.
Counterparty Credit Risk. Many purchases, sales, financing arrangements, and derivative transactions in which the Funds may engage involve instruments that are not traded on an exchange. Rather, these instruments are traded between counterparties based on contractual relationships. As a result, a Fund is subject to the risk that a counterparty will not perform its obligations under the related contract. Although the Funds expect to enter into transactions only with counterparties believed by the Adviser to be creditworthy, there can be no assurance that a counterparty will not default and that the Funds will not sustain a loss on a transaction as a result.
In situations where a Fund is required to post margin or other collateral with a counterparty, the counterparty may fail to segregate the collateral or may commingle the collateral with the counterparty's own assets. As a result, in the event of the counterparty's bankruptcy or insolvency, a Fund's collateral may be subject to the conflicting claims of the counterparty's creditors and the Fund may be exposed to the risk of being treated as a general unsecured creditor of the counterparty, rather than as the owner of the collateral.
Each Fund is subject to the risk that issuers of the instruments in which it invests and trades may default on their obligations, and that certain events may occur that have an immediate and significant adverse effect on the value of those instruments. There can be no assurance that an issuer will not default, or that an event that has an immediate and significant adverse effect on the value of an instrument will not occur, and that the Fund will not sustain a loss on a transaction as a result.
Illiquidity. Derivatives, especially when traded in large amounts, may not always be liquid. In such cases, in volatile markets a Fund may not be able to close out a position without incurring a loss. Daily limits on price fluctuations and speculative position limits on exchanges on which a Fund may conduct its transactions in derivatives may prevent profitable liquidation of positions, subjecting the Fund to potentially greater losses.
Over-the-Counter, Non-Cleared Derivatives Transactions. The Funds may enter into derivatives that are not traded on an exchange or other organized facility or contract market. Many of these instruments are also not required to be cleared or are not cleared on a voluntary basis. The risk of nonperformance by the obligor on such an instrument may be greater than the risk associated with an instrument traded on an exchange or other organized trading facility and centrally cleared. In addition, a Fund may not be able to dispose of, or enter into a closing transaction with respect to, such an instrument as easily as in the case of an instrument traded on an exchange or other organized trading facility. Significant disparities may exist between “bid” and “asked” prices for derivative instruments that are not traded on an exchange or other organized facility. Derivatives not traded on exchanges or other organized facilities may be subject to less regulation than exchange-traded and on-facility instruments, and many of the protections afforded to participants on an exchange or other organized facility may not be available with respect to these instruments. In situations where a Fund is required to post margin or other collateral with a counterparty, the counterparty may fail to segregate the collateral or may commingle the collateral with the counterparty's own assets. As a result, in the event of the counterparty's bankruptcy or insolvency, a Fund's collateral may be subject to the conflicting claims of the counterparty's creditors and the Fund may be exposed to the risk of being treated as a general unsecured creditor of the counterparty, rather than as the owner of the collateral.
Bilateral derivatives trading has become subject to increased regulation under recent financial reform laws, and further proposed measures – such as margin requirements for non-cleared transactions – may offer market participants additional protections once implemented. Nonetheless, the Funds will not be fully protected from risks that are present in an over-the-counter, non-cleared trading environment.
Put Options. The seller (writer) of a put option which is covered (e.g., the writer holds or has a short position in the underlying security) assumes the risk of an increase in the market price of the underlying security above the exercise price of the option plus the premium received, and gives up the opportunity for gain on the underlying security above the exercise price of the option. The seller of an uncovered put option assumes the risk of an increase in the market price of the underlying security above the exercise price of the option plus the premium received. The buyer of a put option assumes the risk of losing its entire investment in the put option.
Energy and Natural Resources Company Risk. Under normal circumstances, each Fund concentrates its investments in the energy infrastructure sector and may invest a significant portion of its assets in the natural resources sector of the economy, each of which includes a number of risks, including the following:
Acquisition Risk. The abilities of MLP Entities to grow and to increase distributions can be highly dependent on their ability to make acquisitions that result in an increase in cash available for distributions. Recently, the acquisition market has become more competitive as a result of the increased amount of MLP Entities, as well as significant private equity interest in midstream energy assets. Almost all MLP Entities have been active in the third-party acquisition market. As a result, the competitive nature of the market has resulted in higher multiples, which may reduce the attractiveness of returns on acquisitions. Accordingly, MLP Entities may be unable to make accretive acquisitions because they are unable to identify attractive acquisition candidates, negotiate acceptable purchase contracts, raise financing for such acquisitions on economically acceptable terms or because they are outbid by competitors. Such circumstances may limit their future growth and their ability to raise distributions could be reduced. Furthermore, even if MLP Entities do consummate acquisitions that they believe will be accretive, the acquisitions may instead result in a decrease in operating income. Any acquisition involves risks, including, among other risks, mistaken assumptions about revenues and costs, the assumption of unknown liabilities, limitations on rights to indemnity from the seller, the diversion of management’s attention from other business concerns, unforeseen difficulties operating in new product or geographic areas and customer or key employee losses at the acquired businesses.
Affiliated Party Risk. Certain energy companies are dependent on their parents or sponsors for a majority of their revenues. Any failure by such a company’s parents or sponsors to satisfy their payments or obligations would impact the company’s revenues and cash flows and ability to make distributions.
Cash Flow Risk. The amount and tax characterization of cash available for distribution by an MLP Entity depends upon the amount of cash generated by its operations. Cash available for distribution by MLP Entities will vary widely from quarter to quarter and is affected by various factors affecting the MLP Entities’ operations. In addition to the risks described herein, operating costs, capital expenditures, acquisition costs, construction costs, exploration costs and borrowing costs may reduce the amount of cash that an MLP Entity has available for distribution in a given period.
Catastrophe Risk. The operations of energy companies are subject to many hazards inherent in the exploring, transporting, processing, storing and distributing of energy commodities. These hazards may include damage to pipelines, storage tanks or related equipment and surrounding properties caused by hurricanes, tornadoes, floods, fires and other natural disasters or by acts of terrorism; inadvertent damage from construction equipment; leaks; and fires and explosions. These risks could result in substantial losses due to personal injury or loss of life, severe damage to and destruction of property and equipment and pollution or other environmental damage and may result in the curtailment or suspension of their related operations. Not all energy companies are fully insured against all risks inherent to their businesses. If a significant accident or event occurs that is not fully insured, it could adversely affect the energy company’s operations and financial condition.
Commodity Pricing Risk. The return on investments in energy companies is partly dependent on the prices received by those companies for the exploration, development, production, gathering, transportation, processing, storing, refining, distribution, mining or marketing of energy commodities such as natural gas, natural gas liquids, crude oil, refined petroleum products or coal. These prices may fluctuate widely in response to a variety of factors, including global and domestic economic conditions, weather conditions, the supply and price of imported energy commodities, the production and storage levels of energy commodities in certain regions or in the world, political stability, transportation facilities, energy conservation, domestic and foreign governmental regulation and taxation and the availability of local, intrastate and interstate transportation systems. Volatility of commodity prices also may make it more difficult for energy companies to raise capital to the extent the market perceives that their performance may be directly or indirectly tied to commodity prices.
Counterparty Risk. Counterparty risk is the risk that the other party or parties to an agreement or a participant to a transaction, such as a broker, might default on a contract or fail to perform by failing to pay amounts due or failing to fulfill the obligations of the contract or transaction.
Depletion and Exploration Risk. Energy reserves naturally deplete as they are consumed over time. Energy companies that are either engaged in the production of energy commodities or in their transporting, storing, distributing or processing rely on the expansion of reserves through exploration of new sources of supply or the development of existing sources in order to grow or maintain their revenues. The financial performance of energy companies may be adversely affected if they, or the companies to whom they provide services, are unable to cost-effectively acquire additional energy deposits sufficient to replace the natural decline of existing reserves. If an energy company is not able to raise capital on favorable terms, it may not be able to add to or maintain its reserves.
Marine Transportation Companies Risk. Marine transportation (or “tanker” companies) are exposed to the highly cyclical nature of the tanker industry and may be subject to volatile changes in charter rates and vessel values, which may adversely affect the earnings of tanker companies. Fluctuations in charter rates and vessel values result from changes in the supply and demand for tanker capacity and changes in the supply and demand for oil and oil products. Changes in demand for transportation of oil over longer distances and the supply of tankers to carry that oil may materially affect the revenues, profitability and cash flows of tanker companies. Tanker company vessels are at risk of damage or loss because of events such as mechanical failure, collision, human error, war, terrorism, piracy, cargo loss and bad weather. These sorts of events could interfere with shipping lanes and result in market disruptions and a significant loss of tanker company earnings.
Natural Resources Sector Risk. The natural resources sector includes companies principally engaged in owning or developing non-energy natural resources (including timber and minerals) and industrial materials, or supplying goods or services to such companies. A Fund’s investments in MLP Entities and other companies operating in the natural resources sector will be subject to the risk that prices of these securities may fluctuate widely in response to the level and volatility of commodity prices; exchange rates; import controls; domestic and global competition; environmental regulation and liability for environmental damage; mandated expenditures for safety or pollution control; the success of exploration projects; depletion of resources; tax policies; and other governmental regulation. Investments in the natural resources sector can be significantly affected by changes in the supply of or demand for various natural resources. The value of investments in the natural resources sector may be adversely affected by a change in inflation.
Regulatory Risk. Energy companies are subject to significant federal, state and local government regulation in virtually every aspect of their operations, including how facilities are constructed, maintained and operated, environmental and safety controls and the prices they may charge for the products and services they provide. Various governmental authorities have the power to enforce compliance with these regulations and the permits issued under them. Companies that violate such regulations are subject to administrative, civil and criminal penalties, including civil fines, injunctions or both. Stricter laws, regulations or enforcement policies could be enacted in the future, which would likely increase compliance costs and may adversely affect the financial performance of energy companies. In addition, changes to existing regulations or new interpretations of existing guidelines by a regulatory agency may affect an energy company’s use of its existing resources or adversely affect its existing revenues. Regulatory agencies may set tariff rates for interstate transportation of certain energy commodities, through pipelines or otherwise. If a regulator elected to lower pipeline tariffs or create regulations that adversely affect a pipeline owned by an MLP Entity, for example, that MLP Entity’s long-term cash flows could be jeopardized.
Supply and Demand Risk. A decrease in the production of natural gas, natural gas liquids, crude oil, coal or other energy commodities, a decrease in the volume of such commodities available for transportation, mining, processing, storage or distribution, or a sustained decline in demand for such commodities, may adversely impact the financial performance of companies operating in the energy sector. These companies are subject to supply and demand fluctuations in the markets they serve, which will be impacted by a wide range of factors, including fluctuating commodity prices, weather, increased conservation or use of alternative fuel sources, increased governmental or environmental regulation, depletion, rising interest rates, declines in domestic or foreign production, accidents or catastrophic events and economic conditions, among others. The United States relies on foreign imports of energy such as crude oil and refined products. If a supply source decides to restrict supply to the United States or is unable to meet demand, some MLP Entities’ cash flows may be adversely impacted.
Weather Risk. Weather plays a role in the seasonality of some MLP Entities’ cash flows. MLP Entities in the propane industry, for example, rely on the winter season to generate almost all of their earnings. In an unusually warm winter season, propane MLP Entities experience decreased demand for their product. Although most MLP Entities can reasonably predict seasonal weather demand based on normal weather patterns, extreme weather conditions, such as the hurricanes that severely damaged cities along the Gulf Coast in recent years, demonstrate that no amount of preparation can protect an MLP Entity from the unpredictability of the weather. The damage done by extreme weather also may serve to increase many MLP Entities’ insurance premiums.
Equity Risk. The value of equity securities held by a Fund may fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities held by the Fund participate, or factors relating to specific companies in which the Fund invests. The price of common stock of an issuer in a Fund’s portfolio may decline if the issuer fails to make anticipated dividend payments because, among other reasons, the financial condition of the issuer declines. Common stock is subordinated to preferred stocks, bonds and other debt instruments in a company’s capital structure in terms of priority with respect to corporate income, and therefore will be subject to greater dividend risk than preferred stocks or debt instruments of such issuers. In addition, while broad market measures of common stocks have historically generated higher average returns than fixed income securities, common stocks have also experienced significantly more volatility in those returns.
ETF Risk. Investing in an ETF will provide a Fund with exposure to the securities comprising the index on which the ETF is based and will expose a Fund to risks similar to those of investing directly in those securities. Shares of ETFs typically trade on securities exchanges and may at times trade at a premium or discount to their net asset values. In addition, an ETF may not replicate exactly the performance of the benchmark index it seeks to track for a number of reasons, including transaction costs incurred by the ETF, the temporary unavailability of certain index securities in the secondary market or discrepancies between the ETF and the index with respect to the weighting of securities or the number of securities held. Investing in ETFs, which are investment companies, involves duplication of advisory fees and certain other expenses. The Funds will pay brokerage commissions in connection with the purchase and sale of shares of ETFs.
ETN Risk. ETNs are debt securities that combine certain aspects of ETFs and bonds. ETNs are not investment companies and thus are not regulated under the 1940 Act. ETNs, like ETFs, are traded on stock exchanges and generally track specified market indices, and their value depends on the performance of the underlying index and the credit rating of the issuer. ETNs may be held to maturity, but unlike bonds there are no periodic interest payments and principal is not protected.
Fixed Income Securities Risk. The prices of fixed income securities respond to economic developments, particularly interest rate changes, as well as to changes in an issuer’s credit rating or market perceptions about the creditworthiness of an issuer. Prices of fixed income securities tend to move inversely with changes in interest rates. Generally fixed income securities decrease in value if interest rates rise and increase in value if interest rates fall, with lower rated securities more volatile than higher rated securities. The longer the effective maturity and duration of a Fund’s portfolio, the more the Fund’s share price is likely to react to changes in interest rates. (Duration is a weighted measure of the length of time required to receive the present value of future payments, both interest and principal, from a fixed income security.) Some fixed income securities give the issuer the option to call, or redeem, the securities before their maturity dates. If an issuer calls its security during a time of declining interest rates, the Fund might have to reinvest the proceeds in an investment offering a lower yield, and therefore might not benefit from any increase in value of the security as a result of declining interest rates. During periods of market illiquidity or rising interest rates, prices of callable issues are subject to increased price fluctuation. In addition, the Fund may be subject to extension risk, which occurs during a rising interest rate environment because certain obligations may be paid off by an issuer more slowly than anticipated, causing the value of those securities held by the Fund to fall.
Foreign Investment Risk. Investments in foreign securities are affected by risk factors generally not thought to be present in the United States. The prices of foreign securities may be more volatile than the prices of securities of U.S. issuers because of economic and social conditions abroad, political developments, and changes in the regulatory environments of foreign countries. Special risks associated with investments in foreign markets include less liquidity, less developed or less efficient trading markets, lack of comprehensive company information, less government supervision of exchanges, brokers and issuers, greater risks associated with counterparties and settlement, and difficulty in enforcing contractual obligations. In addition, changes in exchange rates and interest rates, and imposition of foreign taxes, may adversely affect the value of a Fund’s foreign investments. Foreign companies are generally subject to different legal and accounting standards than U.S. companies, and foreign financial intermediaries may be subject to less supervision and regulation than U.S. financial firms. The Funds’ investments in depository receipts (including ADRs) are subject to these risks, even if denominated in U.S. dollars, because changes in currency and exchange rates affect the values of the issuers of depository receipts. In addition, the underlying issuers of certain depository receipts, particularly unsponsored or unregistered depository receipts, are under no obligation to distribute shareholder communications to the holders of such receipts, or to pass through to them any voting rights with respect to the deposited securities.
General MLP Risk. MLPs historically have shown sensitivity to interest rate movements. In an increasing interest rate environment, MLPs may experience upward pressure on their yields in order to stay competitive with other interest rate sensitive securities. Also, a significant portion of the market value of an MLP may be based upon its current yield. Accordingly, the prices of MLP units may be sensitive to fluctuations in interest rates and may decline when interest rates rise. In addition, rising interest rates could adversely impact the financial performance of MLPs by increasing their costs of capital. Also, because MLPs normally pay out the majority of their operating cash flows to partners, they may rely significantly on capital markets for access to equity and debt financing in order to fund organic growth projects and acquisitions. Should market conditions limit MLPs’ access to capital markets, their distribution growth prospects could be at risk. Increased costs of capital also may reduce an MLP’s ability to execute acquisitions or expansion projects in a cost-effective manner.
Hedging Risk. It is not possible to hedge fully or perfectly against any risk. While hedging can reduce losses, it can also reduce or eliminate gains or cause losses if the market moves in a different manner than anticipated by a Fund or if the cost of the derivative outweighs the benefit of the hedge. Hedging also involves the risk that changes in the value of the derivative will not match those of the holdings being hedged as expected by a Fund, in which case any losses on the holdings being hedged may not be reduced or may be increased. There can be no assurance that a Fund’s hedging strategies will be effective or that hedging transactions will be available to the Fund. The Funds are not required to engage in hedging transactions at any given time or from time to time, even under volatile market environment and each Fund may choose not to do so from time to time.
High Yield (“Junk”) Bond Risk. High yield bonds (often called “junk bonds”) are speculative, involve greater risks of default or downgrade and are more volatile and tend to be less liquid than investment-grade securities. High yield bonds involve a greater risk of price declines than investment-grade securities due to actual or perceived changes in an issuer’s creditworthiness. Companies issuing high yield fixed-income securities are less financially strong, are more likely to encounter financial difficulties, and are more vulnerable to adverse market events and negative sentiments than companies with higher credit ratings. These factors could affect such companies’ abilities to make interest and principal payments and ultimately could cause such companies to stop making interest and/or principal payments. In such cases, payments on the securities may never resume, which would result in the securities owned by a Fund becoming worthless. The market prices of junk bonds are generally less sensitive to interest rate changes than higher rated investments, but more sensitive to adverse economic or political changes or individual developments specific to the issuer.
Interest Rate Risk. Prices of fixed income securities tend to move inversely with changes in interest rates. Generally fixed income securities decrease in value if interest rates rise and increase in value if interest rates fall, with longer-term securities being more sensitive than shorter-term securities. For example, the approximate percentage change in the price of a security with a three-year duration would be expected to drop by approximately 3% in response to a 1% increase in interest rates. Duration is a weighted measure of the length of time required to receive the present value of future payments, both interest and principal, from a fixed income security. Generally, the longer the maturity and duration of a bond or fixed rate loan, the more sensitive it is to this risk. Falling interest rates also create the potential for a decline in a Fund's income. Changes in governmental policy, rising inflation rates, and general economic developments, among other factors, could cause interest rates to increase and could have a substantial and immediate effect on the values of the Fund’s investments. These risks are greater during periods of rising inflation. In addition, a potential rise in interest rates may result in periods of volatility and increased redemptions that might require the Fund to liquidate portfolio securities at disadvantageous prices and times.
MLPs and other higher yield securities historically have shown sensitivity to interest rate movements. In an increasing interest rate environment, these types of securities may experience upward pressure on their yields in order to stay competitive with other interest rate sensitive securities. Also, significant portions of the market values of MLPs and other higher yield securities may be based upon their current yields. Accordingly, the prices of these securities may be sensitive to fluctuations in interest rates and may decline when interest rates rise. In addition, rising interest rates could adversely impact the financial performance of MLPs by increasing their costs of capital.
IPO Risk. The market value of IPO shares will fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading, the small number of shares available for trading and limited information about the issuer. The purchase of IPO shares may involve high transaction costs. IPO shares are subject to market risk and liquidity risk
Leveraging Risk. Certain transactions, including the use of derivatives, may give rise to a form of leverage. To mitigate leveraging risk, the Funds’ custodian will segregate or identify liquid assets or otherwise cover the transactions that may give rise to such risk. Leveraging may cause a Fund to liquidate portfolio positions to satisfy its obligations or to meet segregation requirements when it may not be advantageous to do so. Leveraging may cause a Fund to be more volatile than if the Fund had not been leveraged. This is because leveraging tends to exaggerate the effect of any increase or decrease in the value of a Fund’s securities.
Liquidity Risk. Due to a lack of demand in the marketplace or other factors, such as market turmoil, a Fund may not be able to sell some or all of the investments that it holds, or if a Fund is forced to sell an illiquid asset to meet redemption requests or other cash needs, it may only be able to sell those investments at a loss. Liquidity risk arises, for example, from small average trading volumes, trading restrictions, or temporary suspensions of trading. In addition, when the market for certain investments is illiquid, a Fund may be unable to achieve its desired level of exposure to a certain sector. Moreover, the reduction in dealer market-making capacity in the fixed income markets that has occurred in recent years has the potential to decrease the liquidity of the MLP & Energy Income Fund’s and the MLP & Energy Infrastructure Fund’s investments.
Management and Strategy Risk. The value of your investment depends on the judgment of the Adviser about the quality, relative yield, value or market trends affecting a particular security, industry, sector or region, which may prove to be incorrect. Investment strategies employed by the Adviser in selecting investments for a Fund may not result in an increase in the value of your investment or in overall performance equal to other investments.
Market Risk. The market price of a security or instrument may decline, sometimes rapidly or unpredictably, due to general market conditions that are not specifically related to a particular company, such as real or perceived adverse economic or political conditions throughout the world, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. The market value of a security or instrument also may decline because of factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. For example, the financial crisis that began in 2008 caused a significant decline in the value and liquidity of many securities; in particular, the values of some sovereign debt and of securities of issuers that invest in sovereign debt and related investments fell, credit became more scarce worldwide and there was significant uncertainty in the markets. Such environments could make identifying investment risks and opportunities especially difficult for the Adviser. In response to the crisis, the United States and other governments have taken steps to support financial markets. The withdrawal of this support or failure of efforts in response to the crisis could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time.
MLP Units Risk. An investment in MLP units involves some risks which differ from a similar investment in equity securities, such as common stock, of a corporation. As compared to common shareholders of a corporation, holders of MLP units generally have limited control and voting rights on matters affecting the partnership. Holders of MLP interests also are exposed to the risk that they may be required to repay amounts to the MLP that are wrongfully distributed to them. Additional risks include cash flow risk, tax risk, risk associated with a potential conflict of interest between unit holders and the MLP’s general partner, and capital markets risk.
MLPs generally are organized by the owners of an existing business who determine that use of an MLP structure will allow the operations of the business to be conducted in a tax-efficient manner. As these owners may retain other businesses that are not transferred to the MLP, conflicts of interest may arise between the MLP and the other businesses retained by its sponsor. Business opportunities that arise that are desirable for both the MLP and the retained businesses, for example, may cause significant conflicts of interest. It is impossible to predict whether these conflicts will be resolved to the detriment of the limited partners of the MLP.
In addition, the use of capital to seek to increase incentive distribution payments to the general partner may conflict with the interests of limited partners. Generally, incentive distribution payments involve the general partner receiving an increasing progressive share of MLP distributions. Although limited partners will receive an increased total distribution if the general partner achieves its incentive benchmarks, the percentage of the increased distribution received by the limited partners generally decreases at each benchmark level. As a result, any increased risk associated with the management of the MLP for the purpose of increasing distributions may not correspond with the incremental benefit received by the limited partners.
In addition, the value of a Fund’s investment in MLPs depends largely on the MLPs being treated as partnerships for U.S. federal income tax purposes. If an MLP does not meet current legal requirements to maintain eligibility for tax treatment as a partnership, or if it is unable to do so because of tax law changes, it would be taxed as a corporation and there could be a material decrease in the value of its securities. In that case, the MLP would be subject to U.S. federal income taxation and distributions received by the Fund generally would be treated as dividend income. Thus, if any of the MLPs owned by a Fund were treated as corporations for U.S. federal income tax purposes, the after-tax return to the Fund with respect to its investment in such MLPs would be materially reduced, which could cause a substantial decline in the value of the Fund’s shares.
Non-Diversification Risk. Each Fund is classified as “non-diversified,” which means the Fund may invest a larger percentage of its assets in the securities of a smaller number of issuers than a diversified fund. Investment in securities of a limited number of issuers exposes the Fund to greater market risk and potential losses than if its assets were diversified among the securities of a greater number of issuers.
Preferred Stock Risk. Preferred stock represents an equity interest in a company that generally entitles the holder to receive, in preference to the holders of other stocks such as common stocks, dividends and a fixed share of the proceeds resulting from a liquidation of the company. Preferred stocks may pay fixed or adjustable rates of return. The market value of preferred stock is subject to issuer-specific and market risks applicable generally to equity securities and is sensitive to changes in the issuer’s creditworthiness, the ability of the issuer to make payments on the preferred stock and changes in interest rates, typically declining in value if interest rates rise. In addition, a company’s preferred stock generally pays dividends only after the company makes required payments to holders of its bonds and other debt. Therefore, the value of preferred stock will usually react more strongly than bonds and other debt to actual or perceived changes in the company’s financial condition or prospects.
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Small-Cap and Mid-Cap Company Risk. Investing in small-capitalization and mid-capitalization companies generally involves greater risks than investing in large-capitalization companies. Small- or mid-cap companies may have limited product lines, markets or financial resources or may depend on the expertise of a few people and may be subject to more abrupt or erratic market movements than securities of larger, more established companies or market averages in general. Many small capitalization companies may be in the early stages of development. Since equity securities of smaller companies may lack sufficient market liquidity and may not be regularly traded, it may be difficult or impossible to sell securities at an advantageous time or a desirable price.
Tax Risk. Each Fund has elected to be, and intends to qualify each year for treatment as, a “regulated investment company” under the Code. To maintain qualification for federal income tax purposes as a regulated investment company under the Code, each Fund must meet certain source-of-income, asset diversification and annual distribution requirements, as discussed in detail below under “Federal Income Tax Consequences.” If for any taxable year a Fund fails to qualify for the special federal income tax treatment afforded to regulated investment companies, all its taxable income will be subject to federal income tax at regular corporate rates (without any deduction for distributions to shareholders) and any income available for distribution will be reduced. Under certain circumstances, a Fund may be able to cure a failure to qualify as a regulated investment company, but in order to do so the Fund might incur significant Fund-level taxes and might be forced to dispose of certain assets. The Fund may make distributions in excess of the Fund’s investment company taxable income and net capital gains. Any such distributions to shareholders will be treated first, as a tax-advantaged return of capital, which is applied against and will reduce the adjusted tax basis of an investor’s shares and, after such adjusted tax basis is reduced to zero, will generally constitute capital gains. For additional information on the requirements imposed on regulated investment companies and the consequences of a failure to qualify, see “Federal Income Tax Consequences” below.
Depreciation or other cost recovery deductions passed through to a Fund from investments in MLPs in a given year will generally reduce the Fund’s taxable income, but those deductions may be recaptured in the Fund’s income in one or more subsequent years. When recognized and distributed, recapture income will generally be taxable to shareholders at the time of the distribution at ordinary income tax rates, even though those shareholders might not have held shares in the applicable Fund at the time the deductions were taken by that Fund, and even though those shareholders will not have corresponding economic gain on their shares at the time of the recapture. In order to distribute recapture income or to fund redemption requests, a Fund may need to liquidate investments, which may lead to additional recapture income.
Exclusion of Adviser from Commodity Pool Operator Definition
An exclusion from the definition of “commodity pool operator” (“CPO”) under the Commodity Exchange Act (“CEA”) and the rules of the Commodity Futures Trading Commission (“CFTC”) has been claimed with respect to the Tortoise MLP & Energy Income Fund and Tortoise MLP & Energy Infrastructure Fund, and, therefore, the Adviser is not subject to CFTC registration or regulation as a CPO with respect to the Funds. In addition, the Adviser will rely upon an exemption from the definition of “commodity trading advisor” (“CTA”) under the CEA and the rules of the CFTC.
Disclosure of Portfolio Holdings
A description of the Funds’ policies and procedures with respect to the disclosure of the Funds’ portfolio holdings is available in the SAI.
The Funds have entered into an investment advisory agreement (the “Advisory Agreement”) with Tortoise Capital Advisors, L.L.C., a SEC registered investment adviser (the “Adviser”). The principal business address of the Adviser is 11550 Ash Street, Suite 300, Leawood, Kansas 66211. The telephone number for the Adviser is (913) 981-1020 and the Adviser’s website is www.tortoiseadvisors.com.
The Adviser specializes in energy investing across the energy value chain, including infrastructure and MLPs and, as of May 31, 2019, the Adviser managed investments of approximately $16.0 billion in the energy sector, including the assets of publicly traded closed-end funds, these open-end funds and other accounts.
Pursuant to the Advisory Agreement, the Adviser provides the Funds with investment research and advice and furnishes each Fund with an investment program consistent with that Fund’s investment objective and policies, subject to the supervision of the Board of Trustees. The Adviser determines which portfolio securities will be purchased or sold, arranges for the placing of orders for the purchase or sale of portfolio securities, selects brokers or dealers to place those orders, maintains books and records with respect to the securities transactions and reports to the Board of Trustees on the Funds’ investments and performance. The Adviser is solely responsible for making investment decisions on behalf of the Funds. The Board of Trustees has sole responsibility for selecting, evaluating the performance of, and replacing as necessary, any of the service providers to the Funds, including the Adviser.
For its services, on a monthly basis, the MLP & Energy Income Fund pays the Adviser a management fee at an annualized rate of 1.00% of the Fund’s average daily net assets and the MLP & Energy Infrastructure Fund pays the Adviser a management fee at an annualized rate of 0.75% of the Fund’s average daily net assets. For the fiscal year ended November 30, 2018, the total annual advisory fees that the MLP & Energy Income Predecessor Fund and MLP & Energy Infrastructure Predecessor Fund paid the Predecessor Funds’ investment manager (as a percentage of the applicable Predecessor Fund’s average daily net assets) is as follows;
MLP & Energy Income Predecessor Fund | 1.00% |
MLP & Energy Infrastructure Predecessor Fund | 0.75% |
A discussion regarding the basis of the Board of Trustees’ approval of the Advisory Agreement will be available in the Funds’ annual report to shareholders dated November 30, 2019.
Conflicts of interest may arise because the Adviser and its affiliates generally will be carrying on substantial investment activities for other clients in which the Funds will have no interest. The Adviser or its affiliates may have financial incentives to favor certain of such accounts over a Fund. Any of the Adviser’s proprietary accounts or other customer accounts may compete with a Fund for specific trades. The Adviser or its affiliates may give advice and recommend securities to, or buy or sell securities for, other accounts and customers, which advice or securities recommended may differ from the advice given to, or securities recommended or bought or sold for the Funds, even though their investment objectives may be the same as, or similar to, those of the Funds.
Situations may occur in which a Fund could be disadvantaged because of the investment activities conducted by the Adviser and its affiliates for their other accounts. Certain of the Adviser’s managed funds and accounts may invest in the equity securities of a particular company, while other funds and accounts managed by the Adviser may invest in the debt securities of the same company. Such situations may be based on, among other things, the following: (1) legal or internal restrictions on the combined size of positions that may be taken for a Fund or the other accounts, thereby limiting the size of a Fund’s position; (2) the difficulty of liquidating an investment for a Fund or the other accounts where the market cannot absorb the sale of the combined position; or (3) limits on co-investing in direct placement securities under the 1940 Act. A Fund’s investment opportunities may be limited by affiliations of the Adviser or its affiliates with energy companies. Please see the “Statement of Additional Information”.
Fund Expenses. Each Fund is responsible for its own operating expenses. Pursuant to an Operating Expenses Limitation Agreement between the Adviser and the Trust, on behalf of the Funds, the Adviser has agreed to reimburse each Fund for its operating expenses, in order to ensure that each Fund’s Total Annual Fund Operating Expenses (excluding Rule 12b-1 fees, front-end or contingent deferred loads, taxes, leverage/borrowing interest, interest expense, dividends paid on short sales, brokerage commissions, acquired fund fees and expenses, expenses incurred in connection with any merger or reorganization, or extraordinary expenses) do not exceed 1.25% of the MLP & Energy Income Fund’s average daily net assets and 1.00% of the MLP & Energy Infrastructure’s average daily net assets. The Operating Expenses Limitation Agreement will be in effect and cannot be terminated through at least November 30, 2021. Expenses reimbursed by the Adviser may be recouped by the Adviser for a period of 36 months following the month during which such reimbursement was made, if such recoupment can be achieved without exceeding the expense limit in effect at the time the expense reimbursement occurred and at the time of the recoupment.
Portfolio Managers
James J. Cunnane, Jr. and Quinn T. Kiley are the co-portfolio managers of the Funds and are jointly and primarily responsible for the portfolio management of each Fund. Each portfolio manager has authority over all aspects of a Fund’s investment portfolio, including but not limited to, purchases and sales of individual securities, portfolio construction techniques, portfolio risk assessment and the management of daily cash flows. The portfolio managers work as a team in considering securities for selection and implementing portfolio strategies. Mr. Cunnane has final approval of all companies in the portfolios.
The price of each class of a Fund’s shares is based on its NAV. The NAV of each class of shares is calculated by dividing the total assets of each class, less the liabilities of each class, by the number of shares outstanding of each class. A Fund’s NAVs are calculated at the close of regular trading of the NYSE, which is generally 4:00 p.m., Eastern Time. The NAVs will not be calculated nor may investors purchase or redeem Fund shares on days that the NYSE is closed for trading, even though certain Fund securities (i.e., foreign or debt securities) may trade on days the NYSE is closed, and such trading may materially affect the NAV of each class of a Fund’s shares.
Each Fund’s assets are generally valued at their market price using valuations provided by independent pricing services. When market quotations are not readily available, a security or other asset is valued at its fair value as determined under fair value pricing procedures approved by the Board of Trustees. These fair value pricing procedures will also be used to price a security when corporate events, events in the securities market and/or world events cause the Adviser to believe that a security’s last sale price may not reflect its actual market value. The intended effect of using fair value pricing procedures is to ensure that the Funds are accurately priced. The Board of Trustees will regularly evaluate whether the Trust’s fair value pricing procedures continue to be appropriate in light of the specific circumstances of each Fund and the quality of prices obtained through the application of such procedures by the Trust’s valuation committee.
When fair value pricing is employed, security prices that each Fund uses to calculate its NAV may differ from quoted or published prices for the same securities. Due to the subjective and variable nature of fair value pricing, it is possible that the fair value determined for a particular security may be materially different (higher or lower) than the price of the security quoted or published by others, the value when trading resumes, and/or the value realized upon the security’s sale. Therefore, if a shareholder purchases or redeems Fund shares when a Fund holds securities priced at a fair value, the number of shares purchased or redeemed may be higher or lower than it would be if the Fund were using market value pricing.
Certain foreign securities may be valued at intraday market values in such foreign markets. Additionally, in the case of foreign securities, the occurrence of certain events (such as a significant surge or decline in the U.S. or other markets) after the close of foreign markets, but prior to the time each Fund’s NAV is calculated will often result in an adjustment to the trading prices of foreign securities when foreign markets open on the following business day. If such events occur, the affected Fund or Funds will value foreign securities at fair value, taking into account such events, in calculating the NAV. In such cases, use of fair value pricing can reduce an investor’s ability to profit by estimating each affected Fund’s NAV in advance of the time the NAV is calculated. In addition, a Fund’s investments in smaller or medium capitalization companies and certain debt securities are more likely to require a fair value determination because they may be more thinly traded and less liquid than securities of larger companies. It is anticipated that the Funds’ portfolio holdings will be fair valued only if market quotations for those holdings are unavailable or considered unreliable.
Shares of a Fund are purchased at the next NAV per share calculated plus any applicable sales charge after your purchase order is received in good order by a Fund (as defined below). Shares may be purchased directly from the Funds or through a financial intermediary, including but not limited to, certain brokers, financial planners, financial advisors, banks, insurance companies, retirement, benefit and pension plans or certain packaged investment products.
Shares of the Funds have not been registered and are not offered for sale outside of the United States. The Funds generally do not sell shares to investors residing outside the United States, even if they are United States citizens or lawful permanent residents, except to investors with United States military APO or FPO addresses or in certain other circumstances where the Chief Compliance Officer and Anti-Money Laundering Officer for the Trust conclude that such sale is appropriate and is not in contravention of United States law.
A service fee, currently $25, as well as any loss sustained by the Funds, will be deducted from a shareholder’s account for any purchases that do not clear. The Funds and U.S. Bancorp Fund Services, LLC, the Funds’ transfer agent (the “Transfer Agent”), will not be responsible for any losses, liability, cost or expense resulting from rejecting any purchase order.
Minimum Investments
To purchase shares of a Fund, you must invest at least the minimum amount indicated in the following tables:
MLP & Energy Income Fund
A Class and C Class Shares | To Open Your Account | To Add to Your Account |
Direct Regular Accounts | $2,500 | $500 |
Direct Retirement Accounts | $2,500 | $500 |
Automatic Investment Plans | $2,500 | $100 |
Gift Account for Minors | $2,500 | $500 |
Institutional Class Shares | ||
All Accounts | $1,000,000 | $100,000 |
MLP & Energy Infrastructure Fund
Institutional Class Shares | To Open Your Account | To Add to Your Account |
Direct Regular Accounts | $5,000,000 | $500 |
Direct Retirement Accounts | $5,000,000 | $500 |
Automatic Investment Plans | $5,000,000 | $100 |
Gift Account for Minors | $5,000,000 | $500 |
Each Fund reserves the right to waive the minimum initial or subsequent investment amounts at its discretion. Shareholders will be given at least 30 days’ written notice of any increase in the minimum dollar amount of initial or subsequent investments.
In light of the high minimum investment requirement, the MLP & Energy Infrastructure Fund is intended for institutional-sized investors. The Fund may, under exceptional circumstances, reduce or waive the minimum initial investment amounts. Examples of such circumstances include a small number of related accounts of an institution or family that in sum meet the minimum initial investment amount. The minimum initial investment may also be waived for accounts that expect to invest the minimum required amount within a specified period of time.
Purchases through Financial Intermediaries
For share purchases through a financial intermediary, you must follow the procedures established by your financial intermediary. Your financial intermediary is responsible for sending your purchase order and payment to the Transfer Agent. Your financial intermediary holds the shares in your name and receives all confirmations of purchases and sales from the Funds. Your financial intermediary may charge for the services that it provides to you in connection with processing your transaction order or maintaining an account with them.
If you place an order for a Fund’s shares through a financial intermediary that is authorized by the Fund to receive purchase and redemption orders on its behalf (an “Authorized Intermediary”), your order will be processed at the applicable price next calculated after receipt by the Authorized Intermediary, consistent with applicable laws and regulations. Authorized Intermediaries are authorized to designate other Authorized Intermediaries to receive purchase and redemption orders on the Fund’s behalf.
If your financial intermediary is not an Authorized Intermediary, your order will be processed at the applicable price next calculated after the Transfer Agent receives your order from your financial intermediary. Your financial intermediary must agree to send immediately available funds to the Transfer Agent in the amount of the purchase price in accordance with the Transfer Agent’s procedures. If payment is not received in a timely manner, the Transfer Agent may rescind the transaction and your financial intermediary will be held liable for any resulting fees or losses. Financial intermediaries that are not Authorized Intermediaries may set cut-off times for the receipt of orders that are earlier than the cut-off times established by the Fund.
For more information about your financial intermediary’s rules and procedures, and whether your financial intermediary is an Authorized Intermediary, you should contact your financial intermediary directly.
Purchase Requests Must be Received in Good Order
Your share price will be based on the next NAV per share, plus any applicable sales charge, calculated after the Transfer Agent or an Authorized Intermediary receives your purchase request in good order. “Good order” means that your purchase request includes:
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● | The name of the Fund(s); |
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● | The class of shares to be purchased; |
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● | The dollar amount of shares to be purchased; |
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● | Your Account Application or Invest By Mail form that is attached to your confirmation statement; and |
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● | A check payable to the name of each Fund or a wire transfer received by each Fund. |
An Account Application to purchase Fund shares is subject to acceptance by the Fund and is not binding until so accepted. Each Fund reserves the right to reject any Account Application or to reject any purchase order if, in its discretion, it is in the Funds’ best interest to do so. For example, a purchase order may be refused if it appears so large that it would disrupt the management of a Fund. Purchases may also be rejected from persons believed to be “market-timers,” as described under “Short Term Trading Policy,” below. Accounts opened by entities, such as corporations, limited liability companies, partnerships or trusts, will require additional documentation. Please note that if any information listed above is missing, your Account Application will be returned and your account will not be opened.
Upon acceptance by a Fund, all purchase requests received in good order before the close of the NYSE (generally 4:00 p.m., Eastern Time) will be processed at the applicable price next calculated after receipt. Purchase requests received after the close of the NYSE will be processed on the following business day and receive the next business day’s applicable price per share.
Purchase by Mail. To purchase Fund shares by mail, simply complete and sign the Account Application or investment stub and mail it, along with a check made payable to the Fund:
Regular Mail | Overnight or Express Mail | |
Name of the Fund(s) | Name of the Fund(s) | |
c/o U.S. Bank Global Fund Services | c/o U.S. Bank Global Fund Services | |
P.O. Box 701 | 615 East Michigan Street, 3rd Floor | |
Milwaukee, WI 53201-0701 | Milwaukee, WI 53202 |
The Funds do not consider the U.S. Postal Service or other independent delivery services to be their agents. Therefore, deposit in the mail or with such services, or receipt at the U.S. Bancorp Fund Services, LLC’s post office box, of purchase or redemption requests does not constitute receipt by the Transfer Agent. Receipt of purchase or redemption requests is determined at the time the order is received at the Transfer Agent’s offices. All purchase checks must be in U.S. dollars drawn on a domestic financial institution. The Funds will not accept payment in cash or money orders. To prevent check fraud, the Funds will not accept third party checks, Treasury checks, credit card checks, traveler’s checks or starter checks for the purchase of shares. The Funds are unable to accept post-dated checks or any conditional order or payment.
Purchase by Wire. If you are making your first investment in a Fund, the Transfer Agent must have a completed Account Application before you wire the funds. You can mail or use an overnight service to deliver your Account Application to the Transfer Agent at the above address. Upon receipt of your completed Account Application, the Transfer Agent will establish an account for you. Once your account has been established, you may instruct your bank to send the wire. Prior to sending the wire, please call the Transfer Agent at 855-TCA-FUND (855-822-3863) to advise them of the wire and to ensure proper credit upon receipt. Your bank must include the name of the Fund(s), the class of shares, your name and your account number so that your wire can be correctly applied. Your bank should transmit immediately available funds by wire to:
Wire to: | U.S. Bank, N.A. | |
ABA Number: | 075000022 | |
Credit: | U.S. Bancorp Fund Services, LLC | |
Account: | 112-952-137 | |
Further Credit: |
Name of the Fund(s)
[Class of shares to be purchased] [Shareholder Name/Account Registration)] [Shareholder Account Number] |
Wired funds must be received prior to the close of the NYSE (generally 4:00 p.m., Eastern Time) to be eligible for same day pricing. The Funds and U.S. Bank, N.A., the Funds’ custodian, are not responsible for the consequences of delays resulting from the banking or Federal Reserve wire system, or from incomplete wiring instructions.
Investing by Telephone. You may not make initial purchases of Fund shares by telephone. If you accepted telephone transactions on your Account Application or have been authorized to perform telephone transactions by subsequent arrangement in writing with the Fund and your account has been open for at least 15 calendar days, you may purchase additional shares by telephoning the Fund toll free at 855-TCA-FUND (855-822-3863). This option allows investors to move money from their bank account to their Fund account upon request. Only bank accounts held at domestic financial institutions that are Automated Clearing House (“ACH”) members may be used for telephone transactions. The minimum telephone purchase amount is $100. If your order is received prior to the close of the NYSE (generally 4:00 p.m., Eastern Time), shares will be purchased in your account at the applicable price determined on the day your order is placed. Shareholders may encounter higher than usual call waiting times during periods of high market activity. Please allow sufficient time to place your telephone transaction. The Funds are not responsible for delays due to communications or transmission outages or failure. Once a telephone transaction has been placed, it cannot be canceled or modified after the close of regular trading on the NYSE (generally 4:00 p.m., Eastern Time).
Subsequent Investments. Subject to the minimum investment amounts described above, you may add to your account at any time by purchasing shares by mail, telephone or wire. You must call to notify the Funds at 855-TCA-FUND (855-822-3863) before wiring. An Invest by Mail form, which is attached to your confirmation statement, should accompany any investments made through the mail. All subsequent purchase requests must include the Fund name and your shareholder account number. If you do not have the Invest by Mail form from your confirmation statement, include your name, address, Fund name and account number on a separate piece of paper.
Automatic Investment Plan. For your convenience, each Fund offers an Automatic Investment Plan (“AIP”). Under the AIP, after your initial investment, you may authorize the Fund to withdraw any amount of at least $100 that you wish to invest in the Fund, on a monthly or quarterly basis, from your personal checking or savings account. In order to participate in the AIP, your bank must be a member of the ACH network. If you wish to enroll in the AIP, the appropriate section in the Account Application must be completed. A Fund may terminate or modify this privilege at any time. You may terminate your participation in the AIP at any time by notifying the Transfer Agent five days prior to the next scheduled investment. A fee will be charged if your bank does not honor the AIP draft for any reason.
Anti-Money Laundering Program. The Trust has established an Anti-Money Laundering Compliance Program (the “Program”) as required by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”) and related anti-money laundering laws and regulations. To ensure compliance with these laws and regulations, the Account Application asks for, among other things, the following information for all “customers” seeking to open an “account” (as those terms are defined in rules adopted pursuant to the USA PATRIOT Act):
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● | Full name; |
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● | Date of birth (individuals only); |
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● | Social Security or taxpayer identification number; and |
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● | Permanent street address (a P.O. Box number alone is not acceptable). |
In compliance with the USA PATRIOT Act and other applicable anti-money laundering laws and regulations, the Transfer Agent will verify certain information on your account application as part of the Program. As requested on the account application, you must supply your full name, date of birth, social security number and permanent street address. If you are opening the account in the name of a legal entity (e.g., partnership, limited liability company, business trust, corporation, etc.), you must also supply the identity of the beneficial owners. Mailing addresses containing only a P. O. Box will not be accepted. The Funds reserve the right to request additional clarifying information and may close your account if such clarifying information is not received by the Funds within a reasonable time of the request or if the Funds cannot form a reasonable belief as to the true identity of a customer. If you require additional assistance when completing your application, please contact the Transfer Agent at 855-TCA-FUND (855-822-3863).
Cancellations and Modifications. The Funds will not accept a request to cancel or modify a written transaction once processing has begun. Please exercise care when placing a transaction request.
In general, orders to sell or “redeem” shares may be placed directly with the Funds or through a financial intermediary. You may redeem all or part of your investment in a Fund’s shares on any business day that a Fund calculates its NAV.
However, if you originally purchased your shares through a financial intermediary, your redemption order must be placed with the same financial intermediary in accordance with their established procedures. Your financial intermediary is responsible for sending your order to the Transfer Agent and for crediting your account with the proceeds. Your financial intermediary may charge for the services that they provide to you in connection with processing your transaction order or maintaining an account with them.
Shareholders who have an IRA or other retirement plan must indicate on their written redemption request whether to withhold federal income tax. Redemption requests failing to indicate an election not to have tax withheld will generally be subject to 10% withholding.
Shares held in IRA or other retirement plan accounts may be redeemed by telephone at 1-855-TCA-FUND (855-822-3863). Investors will be asked whether or not to withhold taxes from any distribution.
Payment of Redemption Proceeds. You may redeem your Fund shares at the NAV per share next determined after the Transfer Agent or an Authorized Intermediary receives your redemption request in good order. Your redemption request cannot be processed on days the NYSE is closed. All requests received by a Fund in good order after the close of the regular trading session of the NYSE (generally 4:00 p.m., Eastern Time) will generally be processed on the next business day. Under normal circumstances, the Funds expect to meet redemption requests through the sale of investments held in cash or cash equivalents. In situations in which investment holdings in cash or cash equivalents are not sufficient to meet redemption requests, the Funds will typically borrow money through the Funds’ bank line-of-credit. The Funds may also choose to sell portfolio assets for the purpose of meeting such requests. The Funds further reserve the right to distribute “in-kind” securities from the Funds’ portfolio in lieu (in whole or in part) of cash under certain circumstances, including under stressed market conditions. Redemptions-in-kind are discussed in greater detail below.
A redemption request will be deemed in “good order” if it includes:
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● | The shareholder’s name; |
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● | The name of the Fund; |
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● | The class of shares to be redeemed; |
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● | The account number; |
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● | The share or dollar amount to be redeemed; and |
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● | Signatures by all shareholders on the account and signature guarantee(s), if applicable. |
Additional documents are required for certain types of redemptions, such as redemptions from accounts held by credit unions, corporations, limited liability companies, or partnerships, or from accounts with executors, trustees, administrators or guardians. Please contact the Transfer Agent to confirm the requirements applicable to your specific redemption request. Redemption requests that do not have the required documentation will be rejected.
While redemption proceeds may be paid by check sent to the address of record, the Funds are not responsible for interest lost on such amounts due to lost or misdirected mail. Redemption proceeds may be wired to your pre-established bank account or proceeds may be sent via electronic funds transfer through the ACH network using the bank instructions previously established for your account. The Funds typically send the redemption proceeds on the next business day (a day when the NYSE is open for normal business) after the redemption request is received in good order and prior to market close, regardless of whether the redemption proceeds are sent via check, wire, or automated clearing house (ACH) transfer. Wires are subject to a $15 fee. There is no charge to have proceeds sent via ACH; however, funds are typically credited to your bank within two to three days after redemption. Except as set forth below, proceeds will be paid within seven calendar days after a Fund receives your redemption request.
Please note that if the Transfer Agent has not yet collected payment for the shares you are redeeming, it may delay sending the proceeds until the payment is collected, which may take up to 12 calendar days from the purchase date. Furthermore, there are certain times when you may be unable to sell Fund shares or receive proceeds. Specifically, a Fund may suspend the right to redeem shares or postpone the date of payment upon redemption for more than seven calendar days: (1) for any period during which the NYSE is closed (other than customary weekend or holiday closings) or trading on the NYSE is restricted; (2) for any period during which an emergency exists as a result of which disposal by the Fund of its securities is not reasonably practicable or it is not reasonably practicable for the Fund to fairly determine the value of its net assets; or (3) for such other periods as the SEC may, by order, permit for the protection of shareholders. Your ability to redeem shares by telephone will be restricted for 15 calendar days after you change your address. You may change your address at any time by telephone or written request, addressed to the Transfer Agent. Confirmations of an address change will be sent to both your old and new address.
Signature Guarantee. Redemption proceeds will be sent to the address of record. The Transfer Agent may require a signature guarantee for certain requests. A signature guarantee assures that your signature is genuine and protects you from unauthorized account redemptions. Signature guarantees can be obtained from domestic banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations, as well as from participants in the New York Stock Exchange Medallion Signature Program and the Securities Transfer Agents Medallion Program (“STAMP”), but not from a notary public. A signature guarantee, from either a Medallion program member or a non-Medallion program member, is required of each owner in the following situations:
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● | If ownership is being changed on your account; |
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● | When redemption proceeds are payable or sent to any person, address or bank account not on record; |
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● | When a redemption is received by the Transfer Agent and the account address has changed within the last 15 calendar days; and |
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● | For all redemptions in excess of $100,000 from any shareholder account. |
Non-financial transactions, including establishing or modifying the ability to purchase and redeem Fund shares by telephone and certain other services on an account, may require a signature guarantee, signature verification from a Signature Validation Program member, or other acceptable form of authentication from a financial institution source.
In addition to the situations described above, each Fund and/or the Transfer Agent reserve(s) the right to require a signature guarantee or other acceptable signature verification in other instances based on the circumstances relative to the particular situation.
Redemption by Mail. You may execute most redemptions by furnishing an unconditional written request to the Funds to redeem your shares at the next calculated NAV per share upon receipt by the Funds of such request. Written redemption requests should be sent to the Transfer Agent at:
Regular Mail | Overnight or Express Mail | |
Name of the Fund(s) | Name of the Fund(s) | |
c/o U.S. Bank Global Fund Services | c/o U.S. Bank Global Fund Services | |
P.O. Box 701 | 615 East Michigan Street, 3rd Floor | |
Milwaukee, WI 53201-0701 | Milwaukee, WI 53202 |
The Funds do not consider the U.S. Postal Service or other independent delivery services to be their agents. Therefore, deposit in the mail or with such services, or receipt at the U.S. Bancorp Fund Services, LLC’s post office box, of purchase or redemption requests does not constitute receipt by the Transfer Agent of the Funds. Receipt of purchase orders or redemption requests is based on when the order is received at the Transfer Agent’s offices
Wire Redemption. Redemption proceeds may be sent via wire transfer. However, the Transfer Agent charges a fee, currently $15, per wire redemption against your account on dollar specific trades, and from proceeds on complete redemptions and share-specific trades.
Telephone Redemption. If you have accepted telephone transactions on your Account Application or have been authorized to perform telephone transactions by subsequent arrangement in writing with the Funds, you may redeem shares, in amounts of $100,000 or less, by instructing the Funds by telephone at 855-TCA-FUND (855-822-3863). Investors in an IRA or other retirement plan will be asked whether or not to withhold federal income tax.
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In order to qualify for, or to change, telephone redemption privileges on an existing account, a signature guarantee, signature verification from a Signature Validation Program member, or other acceptable form of authentication from a financial institution source may be required of all shareholders in order to qualify for, or to change, telephone redemption privileges on an existing account. Telephone redemptions will not be made if you have notified the Transfer Agent of a change of address within 15 days before the redemption request. Shareholders may encounter higher than usual call waiting times during periods of high market activity. Please allow sufficient time to place your telephone transaction. The Funds are not responsible for delays due to communication or transmission outages or failures.
Note: Neither the Funds nor any of their service providers will be liable for any loss or expense in acting upon instructions that are reasonably believed to be genuine. To confirm that all telephone instructions are genuine, the Funds will use reasonable procedures, such as requesting that you correctly state:
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● | Your Fund account number; |
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● | The name in which your account is registered; or |
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● | The Social Security or taxpayer identification number under which the account is registered. |
If an account has more than one owner or authorized person, a Fund will accept telephone instructions from any one owner or authorized person.
Systematic Withdrawal Program. Each Fund offers a systematic withdrawal plan (“SWP”) whereby shareholders or their representatives may request a redemption in a specific dollar amount of at least $100 be sent to them each month, calendar quarter or annually. Investors may choose to have a check sent to the address of record, or proceeds may be sent to a pre-designated bank account via the ACH network. To start this program, your account must have Fund shares with a value of at least $10,000. This program may be terminated or modified by a Fund at any time. Any request to change or terminate your SWP should be communicated in writing or by telephone to the Transfer Agent no later than five days before the next scheduled withdrawal. A withdrawal under the SWP involves redemption of Fund shares, and may result in a gain or loss for federal income tax purposes. In addition, if the amount requested to be withdrawn exceeds the rate of growth of assets in your account, including any dividends credited to your account, the account will ultimately be depleted. To establish the SWP, shareholders must complete the SWP section of the Account Application, or contact the Fund for instructions. Please call 855-TCA-FUND (855-822-3863) for additional information regarding the SWP.
The Funds’ Right to Redeem an Account. Each Fund reserves the right to redeem the shares of any shareholder whose account balance is less than $2,500, other than as a result of a decline in the NAV of the Fund. Each Fund will provide a shareholder with written notice 30 days prior to redeeming the shareholder’s account.
Redemption-in-Kind. The Funds generally pay redemption proceeds in cash. However, under unusual conditions that make the payment of cash unwise (and for the protection of a Fund’s remaining shareholders), the Fund may pay all or part of a shareholder’s redemption proceeds in portfolio securities with a market value equal to the redemption price (redemption-in-kind).
Specifically, if the amount you are redeeming from a Fund during any 90-day period is in excess of the lesser of $250,000 or 1% of the Fund’s net assets, valued at the beginning of such period, the Fund has the right to redeem your shares by giving you the amount that exceeds this threshold in securities instead of cash. If a Fund pays your redemption proceeds by a distribution of securities, you may incur a taxable capital gain or loss as a result of the distribution. In addition, you may incur brokerage commissions or other charges in converting the securities to cash, and you will bear any market risks associated with such securities until they are converted into cash. A Fund potentially could distribute MLP interests. The tax reporting of MLP investments may be more complicated than the income tax reporting for stock and debt investments in that you would receive a K-1, the income or loss would be subject to the passive activity loss limitation provisions in the case of an individual or other non-corporate owners, and you may be subject to state income tax filings and unrelated business income tax.
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Cancellations and Modifications. The Funds will not accept a request to cancel or modify a written transaction once processing has begun. Please exercise care when placing a transaction request.
Reinstatement Privilege. A shareholder who has had his or her shares redeemed or repurchased and has not previously exercised this reinstatement privilege may, within 60 days after the date of the redemption or repurchase, reinstate any portion or all of the proceeds of such redemption or repurchase in shares of the Funds in the same Class from which such shares were redeemed or repurchased, at NAV next determined after a reinstatement request (made in writing to and approved by the Fund), together with the proceeds, is received by the Transfer Agent.
You may exchange all or a portion of your investment from the Funds to the other funds in the Trust that the Adviser, or an affiliate of the Adviser, manages within the same class provided those funds are accepting purchases. The Funds available for exchange may not be available for purchase in your state. Be sure to confirm with the Transfer Agent that the Fund into which you wish to exchange is available for purchase in your state. Any new account established through an exchange will be subject to the minimum investment requirements described above under “Buying Shares,” unless the account qualifies for a waiver of the initial investment requirement. Exchanges will be executed on the basis of the relative NAV of the shares exchanged. An exchange is considered to be a redemption of shares for federal income tax purposes on which you may realize a taxable capital gain or loss.
You may make exchanges only between identically registered accounts (name(s), address, and taxpayer ID number). There is currently no limit on exchanges, but the Funds reserve the right to limit exchanges (See “Short Term Trading Policy”).
Exchanges By Mail. To exchange Fund shares by mail, simply complete a written request and mail it to the Fund:
Regular Mail | Overnight or Express Mail | |
Name of the Fund | Name of the Fund | |
c/o U.S. Bank Global Fund Services | c/o U.S. Bank Global Fund Services | |
P.O. Box 701 | 615 East Michigan Street, 3rd Floor | |
Milwaukee, WI 53201-0701 | Milwaukee, WI 53202 |
The written request must contain the following information:
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● | Your account number; |
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● | The name of the Fund(s) and Share Class(es) you are exchanging; |
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● | The dollar amount or number of shares you want to sell (and exchange); and |
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● | A completed Account Application for the other funds in the Trust that the Adviser manages into which you want to exchange if you desire different account privileges than those currently associated with your Fund account. |
The Funds do not consider the U.S. Postal Service or other independent delivery services to be their agents. Therefore, deposit in the mail or with such services, or receipt at U.S. Bancorp Fund Services, LLC’s post office box, of purchase orders or redemption requests does not constitute receipt by the Transfer Agent of the Fund. Receipt of purchase orders or redemption requests is based on when the order is received at the Transfer Agent’s offices.
Exchanges by Telephone. If you accepted telephone transactions on your Account Application or have been authorized to perform telephone transactions by subsequent arrangement in writing with the Funds, you may exchange your Fund shares by telephone at 855-TCA-FUND (855-822-3863). Shareholders may encounter higher than usual call waiting times during periods of high market activity. Please allow sufficient time to place your telephone transaction. The Funds are not responsible for delays due to communications or transmission outages or failure.
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Note: Neither the Funds nor any of their service providers will be liable for any loss or expense in acting upon instructions that are reasonably believed to be genuine. To confirm that all telephone instructions are genuine, the Funds will use reasonable procedures, such as requesting that you correctly state:
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● | Your Fund account number(s); |
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● | The name in which your account is registered; or |
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● | The social security or taxpayer identification number under which the account is registered. |
Class Descriptions
The Tortoise MLP & Energy Income Fund offers three different share classes — A Class, Institutional Class, and C Class. The Tortoise MLP & Energy Infrastructure Fund offers one share class – Institutional Class. Sales charges and fees vary considerably between the MLP & Energy Income Fund’s classes. All of the Funds’ share classes are available direct through the Funds’ Transfer Agent and certain share classes may be available through select financial intermediaries. You should carefully consider the differences in the fee and sales charge structures as well as the length of time you wish to invest in a Fund before choosing which class to purchase. Please review the “Fees and Expenses of the Fund” section of this prospectus and the information below before investing. Consult with your financial intermediary to help you determine which class is most appropriate for you, subject to platform availability.
The following table lists the key features of each of the MLP & Energy Income Fund’s share classes.
A Class | Institutional Class | C Class | |
Minimum Initial Investment | $2,500 | $1,000,000 | $2,500 |
Subsequent Minimum Investment | $500 for direct accounts; $100 through automatic investment plans | $100,000 | $500 for direct accounts; $100 through automatic investment plans |
Waiver/Reduction of Investment Minimums
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At the Funds’ discretion |
Although not limited to the list below, the Funds may waive or reduce the initial or subsequent minimum investment amounts in any of following circumstances: ● Certain retirement, defined benefit and pension plans; ● Bank or trust companies investing for their own accounts or acting in a fiduciary or similar capacity; ● Institutional clients of the Adviser; ● Trustees and Officers of the Trust; and ● Employee retirement plans sponsored by, affiliates of, or employees (including their immediate families) of, the Adviser or its affiliates. |
At the Funds’ discretion |
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A Class | Institutional Class | C Class | |
Initial Sales Charge | 5.50% or less, with lower sales charges available for larger investments in a Fund. Additionally, A Class shares may be purchased at NAV by certain investors. See “A Class – Elimination of Initial Sales Load” below for additional information. | None | None |
Contingent Deferred Sales Charge |
No sales charge is payable at the time of purchase on investments of $1 million or more, although the Funds may impose a CDSC of 1.00% on certain redemptions of those investments made within 18 months of the purchase. If imposed, the CDSC applies to redemptions made within 18 months of purchase and will be assessed on an amount equal to the lesser of the initial value of the shares redeemed and the value of shares redeemed at the time of redemption. |
None | No sales charge is payable at the time of purchase, although the Funds impose a CDSC of 1.00% on redemptions of those investments made within 12 months of the purchase. The CDSC applies to redemptions made within 12 months of purchase and will be assessed on an amount equal to the lesser of the initial value of the shares redeemed and the value of shares redeemed at the time of redemption. |
Ongoing Distribution/ Shareholder Service Fees |
Rule 12b-1 fee of 0.25%
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None | Rule 12b-1 fee of 1.00% |
Annual Expenses | Higher than Institutional Class, and lower than C Class. | Lower than A Class and C Class. | Higher than A Class and Institutional Class. |
Additionally, you may be able to convert your shares to a different share class of the same Fund that has a lower expense ratio provided certain conditions are met. For shares held directly with the Transfer Agent, any shares that did not pay a sales load may be converted to Institutional Class shares of the same Fund, upon request to the Transfer Agent and provided you meet the requirements for investing in Institutional Class shares. For financial intermediaries, this conversion feature is intended for shares held through a fee-based or wrap fee program and applies only where there is an agreement in place between the financial intermediary and the Adviser and/or the Distributor or their affiliates specifically for this purpose; in such instances, your shares may be converted under certain circumstances. Generally, C Class shares are not eligible for conversion until the applicable CDSC period has expired. Shareholders who hold Institutional Class shares of a Fund through a fee-based program, but who subsequently become ineligible to participate in the program or withdraw from the program, may not purchase additional Institutional Class shares (except through dividend reinvestments) unless they otherwise meet the eligibility requirements of the share class. Also shareholders no longer participating in a fee-based program may be subject to conversion of their Institutional Class shares by their financial intermediary to another class of shares of the Fund having expenses (including Rule 12b-1 fees) that may be higher than the expenses of the Institutional Class shares. Please contact your financial intermediary or the Transfer Agent for additional information. Not all share classes are available through all intermediaries.
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If your shares of a Fund are converted to a different share class of the same Fund, the transaction will be based on the respective NAV of each class as of the trade date of the conversion. Consequently, you may receive fewer shares or more shares than originally owned, depending on that day’s NAVs. Your total value of the initially held shares, however, will equal the total value of the converted shares. Please contact your financial intermediary regarding the tax consequences of any conversion.
A Class
Sales Charges. Your purchase of A Class shares of the MLP & Energy Income Fund may be subject to a front-end sales charge (“sales load”) or in certain circumstances a CDSC. If applicable, a sales load will be charged on purchases of less than $1 million of A Class shares. The table below shows the percentage sales load that you will pay on purchases of A Class shares, which decreases as the amount of your current purchase reaches certain breakpoints. Sales load amounts are based on a percentage of the public offering price of your purchase. Because the sales load reduces the NAV of your resulting investment, the sales load expressed as a percentage of NAV is higher. You may be eligible under certain circumstances to aggregate existing and future investments in the Funds with your current purchase in order to achieve a more favorable sales load on your current purchase (see “Reduced Sales Load” below). No sales load is imposed on the reinvestment of distributions. A Class shares may be available for purchase by clients of certain financial intermediaries without the application of a front-end sales load as described in Appendix A to this Prospectus.
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(1) | Percentages may vary slightly for particular investors as a result of rounding. |
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(2) | No sales load is payable at the time of purchase on investments of A Class shares of $1 million or more, although for such investments the Funds may impose a CDSC of 1.00% on certain redemptions. If imposed, the CDSC applies to redemptions made within 18 months of purchase and will be assessed on an amount equal to the lesser of the initial value of the shares redeemed and the value of shares redeemed at the time of redemption. Accordingly, no sales load is imposed on increases in NAV above the initial purchase price. |
The commission or underwriter concessions paid to the Fund’s distributor (the “Distributor”) is the sales load less the dealer reallowance paid to certain financial intermediaries purchasing shares. In addition, the Distributor will receive all sales loads on accounts without a dealer of record and may, at its discretion, offset the compensation owed to the Distributor for its services with the sales load or underwriter concessions it receives. The Distributor may, at its discretion, reimburse the Adviser, the Adviser’s affiliates, or other dealers for distribution-related expenses they incur from the sales loads and underwriter concessions. The Distributor may pay broker-dealers up to 1.00% on investments made in the A Class with no sales load. This up-front sales commission is solely financed by the Adviser and not by investors or the Funds.
Reduced Sales Load. You may qualify for a reduced sales load on purchases of A Class shares under rights of accumulation (“ROA”) or a letter of intent (“LOI”). To receive a sales load reduction, you must, at the time of purchase, inform your financial intermediary or the Transfer Agent (for purchases made directly from the Funds) that you believe you qualify for a reduced sales load. You will also need to provide your financial intermediary or the Transfer Agent with the information necessary to verify your eligibility for a reduced sales load. Failure to provide such notification may result in you not receiving the sales load reduction to which you are otherwise entitled.
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ROA. Upon your request, your financial intermediary or the Transfer Agent will determine the applicable reduced sales load under ROA by combining the value of your current A Class purchase with the collective value of the A Class and C Class shares of the Funds (as of each Fund’s current day public offering price) that were purchased previously for accounts (1) in your name, (2) in the name of your spouse, (3) in the name of you and your spouse, (4) in the name of your minor child under the age of 21, and (5) sharing the same mailing address (“Accounts”). You must, at the time of purchase, provide your financial intermediary or the Transfer Agent with your account number(s) and, if applicable, the account numbers for your spouse, children (provide the children’s ages), or other household members. Certain financial intermediaries may permit aggregation of all Fund holdings regardless of share class for purposes of calculating sales load reductions under ROA as described in Appendix A.
The Funds may amend or terminate this right of accumulation at any time.
LOI. You may also enter into an LOI, which expresses your intent to invest $50,000 or more in the Funds’ A Class within the next thirteen months. Under an LOI, your individual purchases will be assessed the sales load applicable to the amount you intend to invest over a thirteen month period. Any shares purchased within 90 days prior to the date you sign the LOI may be used as credit toward your commitment, but the reduced sales load will only apply to new purchases made on or after the date you sign your LOI. Purchases resulting from the reinvestment of dividends and capital gains do not apply toward fulfillment of the LOI. Shares equal to 50% of the amount of the LOI will be held in escrow during the thirteen-month period. If, at the end of that time the total amount of purchases made is less than the amount intended, you will be required to pay the difference between the reduced sales load and the sales load applicable to the individual purchases had the LOI not been in effect. This amount will be obtained from redemption of the escrow shares. Any remaining escrow shares will be released to you.
If you establish an LOI, you can aggregate your accounts as well as the accounts of your immediate family members. You will need to submit to your financial intermediary or the Transfer Agent from which you established your LOI (1) written instruction with respect to the other accounts whose purchases should be considered in fulfillment of the LOI and (2) all subsequent purchases.
Elimination of Initial Sales Load. Certain investors are eligible to purchase or redeem A Class shares without a sales load. You must notify your financial intermediary or the Transfer Agent from which you make your purchase of your eligibility. Failure to provide such notification may result in you paying a sales load. No sales load is assessed on purchases or redemptions made for investment purposes by:
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● | A qualified retirement plan under Section 401(a) of the Code or a plan operating consistent with Section 403(b) of the Code, or certain qualified plans offered through a recordkeeping platform (financial intermediaries need to have an agreement in place with respect to such purchases with the Distributor or its affiliates in order for its clients to qualify); |
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Any bank, trust company, savings institution, registered investment adviser, financial planner or securities dealer on behalf of an account for which it provides advisory or fiduciary services pursuant to an account management fee
(financial intermediaries need to have an agreement in place with respect to such purchases with the Distributor or its affiliates in order for its clients to qualify);
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● | The Adviser and its affiliates; |
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● | Shareholders buying through select platforms and fund supermarkets where the broker/dealers, that have an agreement in place with respect to such purchases with the Distributor or its affiliates, customarily sell mutual funds without sales charges (check with your broker/dealer for availability and transaction charges and other fees that may be charged by the broker/dealer sponsoring the fund supermarket); |
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● | Purchases of C Class (i.e., level-load) shares that are no longer subject to a contingent deferred sales charge and are converted to A Class shares of the same fund pursuant to an agreement with a financial intermediary; |
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● | Financial intermediaries who have an agreement in place with respect to such purchases with the Distributor or its affiliates to offer shares to self-directed investment brokerage accounts that may or may not charge a transaction fee to its customers; and |
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● | Reinvestment of all or part of the proceeds of redemption of your A Class shares into the same Fund and account from which it had been redeemed, if the reinvestment is made within 60 calendar days of the receipt of your redemption request. |
Fund shares so purchased may not be resold except to the Funds. Sales load information is not separately posted on the Adviser’s website (www.tortoiseadvisors.com) because a copy of this Prospectus containing such information is already available for review, free of charge, on the website.
Purchases of $1 Million or More. No sales load is payable at the time of purchase on investments of $1 million or more of a Fund’s A Class, although the Distributor may pay broker-dealers 1.00% on investments with no initial sales load. Accordingly, each Fund may impose a CDSC of 1.00% on certain redemptions of those investments made within 18 months of the purchase. The CDSC is assessed on an amount equal to the lesser of the initial value of the shares redeemed and the value of shares redeemed at the time of redemption. No CDSC is imposed on increases in NAV above the initial purchase price or Fund shares acquired as reinvested Fund distributions. The CDSC will be waived in the event of the last surviving account holder’s death, provided the financial intermediary or the Transfer Agent through which the account is held is notified.
Rule 12b-1 Distribution Fees and Shareholder Service Plan Fees. The Trust has adopted a Rule 12b-1 plan under which the Funds are authorized to pay to the Distributor or such other entities as approved by the Board of Trustees, as compensation for the distribution-related and/or shareholder services provided by such entities, an aggregate fee of up to 0.25% of the average daily net assets of the A Class. The Distributor may pay any or all amounts received under the Rule 12b-1 Plan to other persons, including the Adviser or its affiliates, for any distribution service or activity designed to retain Fund shareholders. Because these fees are paid out of the Fund's assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.
C Class
Contingent Deferred Sales Charge. No sales load is payable by a shareholder at the time of purchase, although the Distributor advances broker-dealers the first year distribution and services fee at a rate of 1.00% on investments in a Fund’s C Class. This advancement is solely financed by the Adviser’s affiliated broker dealer and not by investors or that Fund. As a result, each Fund imposes a CDSC of 1.00% on redemptions of investments made within 12 months of purchase. The financing party receives the CDSC from the Distributor as reimbursement for the up-front sales commission that has been financed. The CDSC is assessed on an amount equal to the lesser of the initial value of the shares redeemed and the value of shares redeemed at the time of redemption. No CDSC is imposed on increases in NAV above the initial purchase price or Fund shares acquired as reinvested Fund distributions. The CDSC will be waived in the event of the last surviving account holder’s death, provided the financial intermediary or the Transfer Agent through which the account is held is notified.
Each Fund uses the first-in, first-out (“FIFO”) method to determine the 12 month holding period. Under this method, if a shareholder bought shares on different days, the shares purchased first will be redeemed first for the purpose of determining whether a CDSC applies. The CDSC will be applied on redemptions of each investment made by a shareholder that does not remain in a Fund for at least 12 months from the date of purchase. The CDSC does not apply to Fund shares acquired through reinvested distributions (net investment income and capital gains).
Sales Charge Waivers. C Class Shares may be available for purchase by clients of certain financial intermediaries without the application of a front-end sales load as described in Appendix A to this Prospectus.
Conversion to A Class Shares. Unless converted earlier pursuant to an agreement with a financial intermediary, C Class shares will automatically convert to A Class shares 10 years from the date of purchase (which includes time A Class shares were held in the Predecessor Fund if applicable).
Institutional Class
The Institutional Class is generally limited to institutional investors and/or certain other designated individuals or programs, including the following:
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● | Financial intermediaries that have an agreement in place with respect to such purchases with the Distributor or its affiliates, who charge clients an ongoing fee for advisory, investment, consulting or similar services; |
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● | Financial intermediaries that have an agreement in place with respect to such purchases with the Distributor or its affiliates, who charge their clients transaction fees with respect to their investments in the Funds; |
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● | Financial intermediaries with clients of a registered investment adviser (“RIA”) purchasing Fund shares in fee based advisory accounts, through certain broker-dealers utilizing omnibus accounts; |
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● | Individuals and institutional investors such as defined benefit plans, foundations or endowments, that meet the minimum initial investment set by the Fund; |
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● | Institutions and individuals that use trust departments or family/multi-family offices that exercise investment discretion; |
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● | Certain retirement and benefit plans, including pension plans and employer sponsored retirement plans established under Section 403(b) or Section 457 of the Internal Revenue Code, or qualified under Section 401, of the Internal Revenue Code; |
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● | Certain qualified plans under Section 529 of the Internal Revenue Code, as amended; |
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● | Certain insurance related products that have an agreement in place with respect to such purchases with the Distributor or its affiliates; |
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● | Certain advisory accounts of the Adviser or its affiliates; |
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● | Trustees and officers of the Trust; directors, officers and employees of the Adviser and its affiliates (including the spouse, life partner, or minor children under 21 of any such person); any trust or individual retirement account or self-employed retirement plan for the benefit of any such person; or the estate of any such person; and |
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● | Employee retirement plans sponsored by, affiliates of, or employees (including their immediate families) of, the Adviser or its affiliates. |
At the time you purchase shares of a Fund, you must inform your financial intermediary or the Transfer Agent of your qualifications to invest in Institutional Class shares. Institutional Class shares may also be offered through financial intermediaries that charge their customers transaction or other distribution or service fees with respect to their customers’ investments in the Funds. As indicated in the table above, the minimum initial investment for Institutional Class shares may be waived or reduced by the Funds at any time. In addition, a Fund may, in its sole discretion, accept investment in Institutional Class shares from purchasers not listed above.
The MLP & Energy Income Fund and MLP & Energy Infrastructure Fund will distribute net investment income, if any, quarterly. The Funds will also distribute net capital gains, if any, at least annually, typically during the fourth calendar quarter. The Funds may make additional distributions if deemed to be desirable at other times during the year. The MLP & Energy Income Fund and MLP & Energy Infrastructure Fund intend to make distributions that generally reflect the long-term expected total return of the MLP and energy infrastructure investments in which they invest, calculated so that their quarterly distributions grow at a rate determined by the Adviser and so that the distributions of all classes of their shares result in similar yields after adjustment for class-specific expenses. Each Fund may make additional payments of dividends or distributions if it deems it desirable at any other time during the year.
All distributions will be reinvested in Fund shares unless you choose to receive distributions in cash. If you wish to change your distribution option, notify the Transfer Agent in writing or by telephone at 855-TCA-FUND (855-822-3863) in advance of the payment date of the distribution. However, any such change will be effective only as to distributions for which the record date is five or more calendar days after the Transfer Agent has received the written request.
If you elect to receive distributions in cash and the U.S. Postal Service is unable to deliver your check, or if a check remains un-cashed for six months, each Fund reserves the right to reinvest the distribution check in your account at that Fund’s then current NAV per share and to reinvest all subsequent distributions.
The Funds are intended for long-term investors and is not designed for investors who are seeking short-term gains. Short-term “market-timers” who engage in frequent purchases and redemptions may disrupt the Funds’ investment program and create additional transaction costs that are borne by all of the Funds’ shareholders. The Board of Trustees has adopted policies and procedures that are designed to discourage excessive, short-term trading and other abusive trading practices that may disrupt portfolio management strategies and harm performance. The Funds take additional steps to reduce the frequency and effect of these activities in the Funds. These steps include, among other things, monitoring trading activity and using fair value pricing. Although these efforts are designed to discourage abusive trading practices, these tools cannot eliminate the possibility that such activity will occur. The Funds implement these tools to the best of their ability, and in a manner that they believe is consistent with shareholder interests. Except as noted herein, the Funds apply all restrictions uniformly in all applicable cases.
Monitoring Trading Practices. The Funds monitor selected trades in an effort to detect excessive short-term trading activities. If, as a result of this monitoring, a Fund believes that a shareholder has engaged in excessive short-term trading, it may, in its discretion, ask the shareholder to stop such activities or refuse to process purchases in the shareholder’s accounts. In making such judgments, each Fund seeks to act in a manner that it believes is consistent with the best interests of its shareholders. The Funds use a variety of techniques to monitor for and detect abusive trading practices. These techniques may change from time to time as determined by the Funds in their sole discretion. To minimize harm to each Fund and its shareholders, the Funds reserve the right to reject any purchase order (but not a redemption request), in whole or in part, for any reason and without prior notice. Each Fund may decide to restrict purchase and sale activity in its shares based on various factors, including whether frequent purchase and sale activity will disrupt portfolio management strategies and adversely affect Fund performance.
Fair Value Pricing. Each Fund employs fair value pricing selectively to ensure greater accuracy in its daily NAVs and to prevent dilution by frequent traders or market timers who seek to take advantage of temporary market anomalies. The Board of Trustees has developed procedures which utilize fair value pricing when reliable market quotations are not readily available or when corporate events, events in the securities market and/or world events cause the Adviser to believe that a security’s last sale price may not reflect its actual market value. Valuing securities at fair value involves reliance on judgment. Fair value determinations are made in good faith in accordance with procedures adopted by the Board of Trustees. There can be no assurance that a Fund will obtain the fair value assigned to a security if it were to sell the security at approximately the time at which a Fund determines its NAV per share. More detailed information regarding fair value pricing can be found in this Prospectus under the heading entitled “Shareholder Information – Pricing of Shares.”
Due to the complexity and subjectivity involved in identifying abusive trading activity and the volume of shareholder transactions the Funds handle, there can be no assurance that the Funds’ efforts will identify all trades or trading practices that may be considered abusive. In particular, since the Funds receive purchase and sale orders through Authorized Intermediaries that use group or omnibus accounts, the Funds cannot always detect frequent trading. However, the Funds will work with Authorized Intermediaries as necessary to discourage shareholders from engaging in abusive trading practices and to impose restrictions on excessive trades. In this regard, the Funds may enter into information sharing agreements with Authorized Intermediaries pursuant to which these intermediaries are required to provide to the Funds, at the Funds’ request, certain information relating to their customers investing in the Funds through non-disclosed or omnibus accounts. The Funds will use this information to attempt to identify abusive trading practices. Authorized Intermediaries are contractually required to follow any instructions from the Funds to restrict or prohibit future purchases from shareholders that are found to have engaged in abusive trading in violation of the Funds’ policies. However, the Funds cannot guarantee the accuracy of the information provided to them from Authorized Intermediaries and cannot ensure that it will always be able to detect abusive trading practices that occur through non-disclosed and omnibus accounts. As a result, the Funds’ ability to monitor and discourage abusive trading practices in non-disclosed and omnibus accounts may be limited.
Distributions of each Fund’s investment company taxable income (which includes, but is not limited to, interest, dividends, operational income from investments in MLPs, and net short-term capital gains), if any, are generally taxable to the Fund’s shareholders as ordinary income. To the extent that the Funds’ distributions of net investment company taxable income are designated as attributable to “qualified dividend” income, such income may be subject to tax at the reduced rate of federal income tax applicable to non-corporate shareholders for net long-term capital gains, if certain holding period requirements have been satisfied by the shareholder. To the extent that a Fund’s distributions of investment company taxable income are attributable to net short-term capital gains or operational income from investments in MLPs, such distributions will be treated as ordinary dividend income for the purposes of income tax reporting and will not be available to offset a shareholder’s capital losses from other investments.
Distributions of net capital gains (net long-term capital gains less net short-term capital losses) are generally taxable as long-term capital gains (currently at a maximum federal rate of 20% for shareholders) regardless of the length of time that a shareholder has owned Fund shares, unless you are a tax-exempt organization or are investing through a tax-advantaged arrangement such as a 401(k) plan or individual retirement account. Any distributions to you in excess of a Fund’s investment company taxable income and net capital gains will be treated by you, first, as a tax-advantaged return of capital, which is applied against and will reduce the adjusted tax basis of your shares and, after such adjusted tax basis is reduced to zero, will generally constitute capital gains.
The Funds may derive “excess inclusion income” from certain equity interests in mortgage pooling vehicles either directly or through an investment in a U.S. REIT. Please see the SAI for a discussion of the risks and special tax consequences to shareholders in the event the Funds realize excess inclusion income in excess of certain threshold amounts.
Under the Tax Cuts and Jobs Act (“TCJA”), “qualified REIT dividends” (i.e., ordinary REIT dividends other than capital gain dividends and portions of REIT dividends designated as qualified dividend income) are treated as eligible for a 20% deduction by noncorporate taxpayers. This deduction, if allowed in full, equates to a maximum effective tax rate of 29.6% (37% top rate applied to income after 20% deduction). Proposed regulations issued by the IRS, which may be relied upon currently, enable the Fund to pass through the special character of “qualified REIT dividends” to a shareholder, provided both the Fund and the shareholder meet certain holding period requirements with respect to their shares. Neither the TCJA nor the proposed regulations permit conduit treatment of income from qualified publicly traded partnerships (income from MLPs) for purposes of the 20% deduction by noncorporate taxpayers. The IRS continues to study whether such treatment for RICs is appropriate in the context of publicly traded partnerships.
A 3.8% Medicare tax on net investment income (including capital gains and dividends) will also be imposed on individuals, estates and trusts, subject to certain income thresholds.
A Fund’s distributions, whether received in cash or reinvested in additional shares of the Funds, may be subject to federal income tax. You will be taxed in the same manner whether you receive your distributions (whether of net investment company taxable income or net capital gains) in cash or reinvest them in additional Fund shares. Distributions are generally taxable when received. However, distributions declared in October, November or December to shareholders of record on a date in such a month and paid the following January are taxable as if received on December 31.
Each Fund anticipates investing no more than 25% of its total assets in MLPs and other entities treated as qualified publicly traded partnerships. Unlike direct investments in MLPs, income and losses from a Fund’s investments in MLPs will not directly flow through to the personal tax returns of shareholders. A Fund will report distributions from its investments, including MLPs, made to shareholders annually on Form 1099. If additional information becomes available regarding the characterization of your distribution after 1099s have been printed and mailed, it may be necessary to provide you with a corrected 1099. Shareholders will not, solely by virtue of their status as Fund shareholders, be treated as engaged in the business conducted by underlying MLPs for federal or state income tax purposes or for purposes of the tax on unrelated business income of tax-exempt organizations.
Shareholders will be advised annually as to the federal tax status of all distributions made by the Funds for the preceding year. Distributions by the Funds and gains from the sale of Fund shares may also be subject to state and local taxes. Additional tax information may be found in the SAI.
This section assumes you are a U.S. shareholder and is also not intended to be a full discussion of federal tax laws and the effect of such laws on you. There may be other federal, state, foreign or local tax considerations applicable to a particular investor. You are urged to consult your own tax adviser.
Telephone Transactions. You may be responsible for fraudulent telephone orders made to your account as long as the Fund has taken reasonable precautions to verify your identity, unless you did not accept telephone transactions on your Account Application or by subsequent arrangement in writing with the Fund. In addition, once you place a telephone transaction request, it cannot be canceled or modified after the close of regular trading on the NYSE (generally, 4:00 p.m. Eastern Time).
Telephone transactions may be difficult to complete during periods of significant economic or market change. If you are unable to contact the Funds by telephone, you may also mail the requests to the Funds at the address listed previously in the “Shareholder Information – Buying Shares” section.
Telephone trades must be received by or prior to the close of the NYSE (generally 4:00 p.m., Eastern Time). During periods of high market activity, shareholders may encounter higher than usual call waiting times. Please allow sufficient time to ensure that you will be able to complete your telephone transaction prior to the close of the NYSE.
Policies of Other Financial Intermediaries. Financial intermediaries may establish policies that differ from those of the Funds. For example, the institution may charge transaction fees, set higher minimum investments or impose certain limitations or fees on buying or selling shares in addition to those identified in this Prospectus. The sales loads and waiver variations of certain financial intermediaries are described in Appendix A to this Prospectus. Please contact your financial intermediary for details.
Closing the Funds. The Board of Trustees retains the right to close (or partially close) each Fund to new purchases if it is determined to be in the best interest of the Fund’s shareholders. Based on market and Fund conditions, and in consultation with the Adviser, the Board of Trustees may decide to close a Fund to new investors, all investors or certain classes of investors (such as fund supermarkets) at any time. If a Fund is closed to new purchases it will continue to honor redemption requests, unless the right to redeem shares has been temporarily suspended as permitted by federal law.
Householding. In an effort to decrease costs, the Funds intend to reduce the number of duplicate prospectuses and annual and semi-annual reports you receive by sending only one copy of each to those addresses shared by two or more accounts and to shareholders the Funds reasonably believe are from the same family or household. If you would like to discontinue householding for your accounts, please call toll-free at 855-TCA-FUND (855-822-3863) to request individual copies of these documents. Once the Funds receive notice to stop householding, the Funds will begin sending individual copies 30 days after receiving your request. This householding policy does not apply to account statements.
Lost Shareholders, Inactive Accounts and Unclaimed Property. It is important that the Fund maintain a correct address for each shareholder. An incorrect address may cause a shareholder’s account statements and other mailings to be returned to the Fund. Based upon statutory requirements for returned mail, the Fund will attempt to locate the shareholder or rightful owner of the account. If the Fund is unable to locate the shareholder, then they will determine whether the shareholder’s account can legally be considered abandoned. Your mutual fund account may be transferred to the state government of your state of residence if no activity occurs within your account during the “inactivity period” specified in your state’s abandoned property laws. The Fund is legally obligated to escheat (or transfer) abandoned property to the appropriate state’s unclaimed property administrator in accordance with statutory requirements. The shareholder’s last known address of record determines which state has jurisdiction. Please proactively contact the Transfer Agent toll-free at 855-824-1355 at least annually to ensure your account remains in active status.
If you are a resident of the state of Texas, you may designate a representative to receive notifications that, due to inactivity, your mutual fund account assets may be delivered to the Texas Comptroller. Please contact the Transfer Agent if you wish to complete a Texas Designation of Representative form.
Quasar Distributors, LLC (the “Distributor”) is located at 777 East Wisconsin Avenue, Milwaukee, WI 53202, and serves as distributor and principal underwriter to the Funds. The Distributor is a registered broker-dealer and member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Shares of the Funds are offered on a continuous basis.
Payments to Financial Intermediaries
The Funds may pay service fees to intermediaries, such as banks, broker-dealers, financial advisers or other financial institutions, including affiliates of the Adviser, for sub-administration, sub-transfer agency and other shareholder services associated with shareholders whose shares are held of record in omnibus accounts, other group accounts or accounts traded through registered securities clearing agents.
The Adviser, out of its own resources and without additional cost to any Fund or its shareholders, may provide additional cash payments to intermediaries, including affiliates of the Adviser, for the sale of Fund shares and related services. These payments and compensation are in addition to service fees paid by the Funds, if any. Payments are generally made to intermediaries that provide shareholder servicing, marketing and related sales support or access to sales meetings, sales representatives and management representatives of the intermediary. Payments may also be paid to intermediaries for inclusion of a Fund or Funds on a sales list, including a preferred or select sales list or in other sales programs. Compensation may be paid as an expense reimbursement in cases in which the intermediary provides shareholder services to a Fund. The Adviser may also pay cash compensation in the form of finder’s fees that vary depending on the dollar amount of the shares sold.
The Financial Highlights information presented for the Funds is the financial history of the Predecessor Funds, which have been reorganized into the Funds. Prior to the Reorganization, each Fund was a “shell” fund with no assets and had not commenced operations.
The financial highlights table is intended to help you understand each Predecessor Fund’s financial performance for the past five fiscal years or shorter period as applicable. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Predecessor Funds (assuming reinvestment of all dividends and distributions). Except for the information for the six months ended May 31, 2019, the information has been audited by Tait, Weller & Baker LLP, each Predecessor Fund’s independent registered public accounting firm, whose report, along with the Predecessor Funds’ financial statements, are included in the Predecessor Funds’ annual report. Further information about the Predecessor Funds’ performance is contained in the annual and semi-annual reports, which are available upon request
Advisory Research MLP & Energy Income Predecessor Fund
Class A
Per share operating performance.
For a capital share outstanding throughout each period.
For
the 6
months ended May 31, 2019 (Unaudited) |
For the Year Ended November 30, | |||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||
Net asset value, beginning of period | $7.56 | $8.57 | $9.87 | $9.35 | $13.93 | $12.44 | ||||
Income from Investment Operations: | ||||||||||
Net investment income1 | 0.07 | 0.06 | 0.09 | 0.20 | 0.21 | 0.18 | ||||
Net realized and unrealized gain (loss) | 0.20 | (0.36) | (0.69) | 1.04 | (4.10) | 2.18 | ||||
Total from investment operations | 0.27 | (0.30) | (0.60) | 1.24 | (3.89) | 2.36 | ||||
Less distributions: | ||||||||||
From net investment income | (0.36) | (0.42) | (0.16) | (0.24) | (0.21) | (0.09) | ||||
From net realized gain | -– | – | – | – | – | (0.53) | ||||
From return of capital | – | (0.29) | (0.54) | (0.48) | (0.48) | (0.25) | ||||
Total distributions | (0.36) | (0.71) | (0.70) | (0.72) | (0.69) | (0.87) | ||||
Redemption fee proceeds1 | –2 | –2 | –2 | –2 | –2 | –2 | ||||
Net asset value, end of period | $7.47 | $7.56 | $8.57 | $9.87 | $9.35 | $13.93 | ||||
Total return3 | 3.62%4 | (3.95%) | (6.26%) | 14.74% | (28.82%) | 19.05% | ||||
Ratios and Supplemental Data: | ||||||||||
Net assets, end of period (in thousands) | $54,372 | $55,436 | $62,135 | $54,418 | $82,726 | $86,863 | ||||
Ratio of expenses to average net assets: | ||||||||||
Before fees waived/recovered | 1.41%5 | 1.41% | 1.39% | 1.40% | 1.40% | 1.40% | ||||
After fees waived/recovered | 1.41%5 | 1.41% | 1.39% | 1.40% | 1.40% | 1.43% | ||||
Ratio of net investment income to average net assets: | ||||||||||
Before fees waived/recovered | 1.89%5 | 0.74% | 0.98% | 2.36% | 1.68% | 1.30% | ||||
After fees waived/recovered | 1.89%5 | 0.74% | 0.98% | 2.36% | 1.68% | 1.27% | ||||
Portfolio turnover rate | 36%4 | 55% | 30% | 65% | 37% | 38% |
1 Calculated based on average shares outstanding for the period.
2 Amount represents less than $0.01 per share.
3 Total returns would have been lower/higher had expenses not been waived/recovered by the Adviser. Returns shown include Rule 12b-1 fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Returns shown do not include payment of sales load of 5.50% of offering price which is reduced on sales of $50,000 or more, or a Contingent Deferred Sales Charge (“CDSC”) of 1.00% on certain shares sold within 18 months. If the sales charges were included, total returns would be lower.
4 Not annualized.
5 Annualized.
Advisory Research MLP & Energy Income Predecessor Fund
Class C
Per share operating performance.
For a capital share outstanding throughout each period
For the 6 months ended May 31, 2019 (Unaudited) |
For the Year Ended November 30, | |||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||
Net asset value, beginning of period | $7.59 | $8.60 | $9.90 | $9.37 | $13.96 | $12.46 | ||||
Income from Investment Operations: | ||||||||||
Net investment income1 | 0.04 | –2 | 0.02 | 0.14 | 0.12 | 0.07 | ||||
Net realized and unrealized gain (loss) | 0.18 | (0.37) | (0.69) | 1.04 | (4.12) | 2.18 | ||||
Total from investment operations | 0.23 | (0.37) | (0.67) | 1.18 | (4.00) | 2.25 | ||||
Less distributions: | ||||||||||
From net investment income | (0.33) | (0.38) | (0.14) | (0.21) | (0.17) | –2 | ||||
From net realized gain | – | – | – | – | – | (0.53) | ||||
From return of capital | – | (0.26) | (0.49) | (0.44) | (0.42) | (0.22) | ||||
Total distributions | (0.33) | (0.64) | (0.63) | (0.65) | (0.59) | (0.75) | ||||
Redemption fee proceeds1 | –2 | –2 | –2 | –2 | –2 | –2 | ||||
Net asset value, end of period | $7.49 | $7.59 | $8.60 | $9.90 | $9.37 | $13.96 | ||||
Total return3 | 3.07%4 | (4.64%) | (6.95%) | 13.89% | (29.40%) | 18.12% | ||||
Ratios and Supplemental Data: | ||||||||||
Net assets, end of period (in thousands) | $52,442 | $55,341 | $68,541 | $92,873 | $98,460 | $115,033 | ||||
Ratio of expenses to average net assets: | ||||||||||
Before fees waived/recovered | 2.16%5 | 2.16% | 2.14% | 2.15% | 2.15% | 2.15% | ||||
After fees waived/recovered | 2.16%5 | 2.16% | 2.14% | 2.15% | 2.15% | 2.18% | ||||
Ratio of net investment income to average net assets: | ||||||||||
Before fees waived/recovered | 1.14%5 | (0.01%) | 0.23% | 1.61% | 0.93% | 0.55% | ||||
After fees waived/recovered | 1.14%5 | (0.01%) | 0.23% | 1.61% | 0.93% | 0.52% | ||||
Portfolio turnover rate | 36%4 | 55% | 30% | 65% | 37% | 38% |
1 Calculated based on average shares outstanding for the period.
2 Amount represents less than $0.01 per share.
3 Total returns would have been lower/higher had expenses not been waived/recovered by the Adviser. Returns shown include Rule 12b-1 fees of up to 1.00% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Returns shown do not include payment of Contingent Deferred Sales Charge (“CDSC”) of 1.00% on any shares sold within 12 months. If the sales charge was included, total returns would be lower.
4 Not annualized.
5 Annualized.
51
Advisory Research MLP & Energy Income Predecessor Fund
Class I
Per share operating performance.
For a capital share outstanding throughout each period.
For the 6 months ended May 31, 2019 (Unaudited) |
For the Year Ended November 30, | |||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||
Net asset value, beginning of period | $7.43 | $8.42 | $9.70 | $9.20 | $13.70 | $12.24 | ||||
Income from Investment Operations: | ||||||||||
Net investment income1 | 0.08 | 0.08 | 0.11 | 0.23 | 0.24 | 0.21 | ||||
Net realized and unrealized gain (loss) | 0.19 | (0.35) | (0.68) | 1.01 | (4.03) | 2.14 | ||||
Total from investment operations | 0.27 | (0.27) | (0.57) | 1.24 | (3.79) | 2.35 | ||||
Less distributions: | ||||||||||
From net investment income | (0.37) | (0.43) | (0.16) | (0.25) | (0.22) | (0.11) | ||||
From net realized gain | – | – | – | – | – | (0.53) | ||||
From return of capital | – | (0.29) | (0.55) | (0.49) | (0.49) | (0.25) | ||||
Total distributions | (0.37) | (0.72) | (0.71) | (0.74) | (0.71) | (0.89) | ||||
Redemption fee proceeds1 | –2 | –2 | –2 | –2 | –2 | –2 | ||||
Net asset value, end of period | $7.33 | $7.43 | $8.42 | $9.70 | $9.20 | $13.70 | ||||
Total return3 | 3.60%4 | (3.66%) | (6.03%) | 14.93% | (28.59%) | 19.32% | ||||
Ratios and Supplemental Data: | ||||||||||
Net assets, end of period (in thousands) | $722,338 | $748,415 | $735,670 | $733,365 | $592,034 | $594,964 | ||||
Ratio of expenses to average net assets: | ||||||||||
Before fees waived/recovered | 1.16%5 | 1.16% | 1.14% | 1.15% | 1.15% | 1.15% | ||||
After fees waived/recovered | 1.16%5 | 1.16% | 1.14% | 1.15% | 1.15% | 1.18% | ||||
Ratio of net investment income to average net assets: | ||||||||||
Before fees waived/recovered | 2.14%5 | 0.99% | 1.23% | 2.61% | 1.93% | 1.55% | ||||
After fees waived/recovered | 2.14%5 | 0.99% | 1.23% | 2.61% | 1.93% | 1.52% | ||||
Portfolio turnover rate | 36%4 | 55% | 30% | 65% | 37% | 38% |
1 |
Calculated based on average shares outstanding for the period. |
2 |
Amount represents less than $0.01 per share. |
3 |
Total returns would have been lower/higher had expenses not been waived/recovered by the Adviser. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
4 |
Not annualized. |
5 |
Annualized. |
52
Advisory Research MLP & Energy Infrastructure Predecessor Fund
Class I
Per share operating performance.
For a capital share outstanding throughout each period
For the 6 months ended May 31, 2019 (Unaudited) | For the Year Ended November 30, | |||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||
Net asset value, beginning of period |
$7.24 |
$8.23 | $9.51 | $9.31 | $13.97 | $12.45 | ||||
Income from Investment Operations: | ||||||||||
Net investment income1 | 0.09 | 0.11 | 0.13 | 0.25 | 0.26 | 0.23 | ||||
Net realized and unrealized gain (loss) | 0.22 | (0.38) | (0.69) | 0.68 | (4.20) | 2.23 | ||||
Total from investment operations | 0.31 | (0.27) | (0.56) | 0.93 | (3.94) | 2.46 | ||||
Less distributions: | ||||||||||
From net investment income | (0.37) | (0.48) | (0.27) | (0.25) | (0.20) | (0.40) | ||||
From net realized gain | - | - | - | - | - | (0.37) | ||||
From return of capital | - | (0.24) | (0.45) | (0.48) | (0.52) | (0.17) | ||||
Total distributions | (0.37) | (0.72) | (0.72) | (0.73) | (0.72) | (0.94) | ||||
Redemption fee proceeds1 | –2 | –2 | –2 | –2 | –2 | – | ||||
Net asset value, end of period | $7.18 | $7.24 | $8.23 | $9.51 | $9.31 | $13.97 | ||||
Total return3 | 4.24%4 | (3.71%) | (6.13%) | 11.45% | (29.18%) | 20.18% | ||||
Ratios and Supplemental Data: | ||||||||||
Net assets, end of period (in thousands) |
$154,929 |
$265,892 | $328,540 | $432,631 | $429,246 | $167,417 | ||||
Ratio of expenses to average net assets: | ||||||||||
Before fees waived/recovered | 0.92%5 | 0.93% | 0.90% | 0.90% | 0.94% | 1.18% | ||||
After fees waived/recovered | 0.92%5 | 0.93% | 0.90% | 0.94% | 1.00% | 1.00% | ||||
Ratio of net investment income to average net assets: | ||||||||||
Before fees waived/recovered | 2.38%5 | 1.32% | 1.42% | 3.01% | 2.23% | 1.49% | ||||
After fees waived/recovered | 2.38%5 | 1.32% | 1.42% | 2.97% | 2.17% | 1.67% | ||||
Portfolio turnover rate | 43%4 | 73% | 28% | 71% | 29% | 34% |
1 | Calculated based on average shares outstanding for the period. |
2 | Amount represents less than $0.01 per share. |
3 |
Total returns would have been lower/higher had expenses not been waived/recovered by the Adviser. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
4 | Not annualized. |
5 |
Annualized. |
INVESTMENT ADVISER
Tortoise Capital Advisors, L.L.C.
11550 Ash Street, Suite 300
Leawood, Kansas 66211
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
220 South Sixth Street, Suite 1400
Minneapolis, Minnesota 55402
LEGAL COUNSEL
Stradley Ronon Stevens & Young, LLP
2005 Market Street, Suite 2600
Philadelphia, Pennsylvania 19103
CUSTODIAN
U.S. Bank N.A.
Custody Operations
1555 North RiverCenter Drive, Suite 302
Milwaukee, Wisconsin 53212
TRANSFER AGENT, FUND ACCOUNTANT AND FUND ADMINISTRATOR
U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
DISTRIBUTOR
Quasar Distributors, LLC
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
PRIVACY NOTICE
The Funds collect only relevant information about you that the law allows or requires them to have in order to conduct their business and properly service you. The Funds collect financial and personal information about you (“Personal Information”) directly (e.g., information on account applications and other forms, such as your name, address, and social security number, and information provided to access account information or conduct account transactions online, such as password, account number, e-mail address, and alternate telephone number), and indirectly (e.g., information about your transactions with us, such as transaction amounts, account balance and account holdings).
The Funds do not disclose any non-public personal information about their shareholders or former shareholders other than for everyday business purposes such as to process a transaction, service an account, respond to court orders and legal investigations or as otherwise permitted by law. Third parties that may receive this information include companies that provide transfer agency, technology and administrative services to the Funds, as well as the Funds’ investment adviser who is an affiliate of the Funds. If you maintain a retirement/educational custodial account directly with the Funds, we may also disclose your Personal Information to the custodian for that account for shareholder servicing purposes. The Funds limit access to your Personal Information provided to unaffiliated third parties to information necessary to carry out their assigned responsibilities to the Funds. All shareholder records will be disposed of in accordance with applicable law. The Funds maintain physical, electronic and procedural safeguards to protect your Personal Information and requires their third party service providers with access to such information to treat your Personal Information with the same high degree of confidentiality.
In the event that you hold shares of the Funds through a financial intermediary, including, but not limited to, a broker-dealer, bank, credit union or trust company, the privacy policy of your financial intermediary governs how your non-public personal information is shared with unaffiliated third parties.
Tortoise Funds
Series of Managed Portfolio Series
FOR MORE INFORMATION
You can find more information about the Funds in the following documents:
Statement of Additional Information
Please refer to the SAI for additional information on the Funds. The SAI provides additional details about the investments and techniques of the Funds and certain other additional information. A current SAI is on file with the SEC and is incorporated into this Prospectus by reference. This means that the SAI is legally considered a part of this Prospectus even though it is not physically within this Prospectus.
Annual and Semi-Annual Reports
The Funds’ annual and semi-annual reports provide additional information about the Funds’ investments. The annual reports contain a discussion of the market conditions and investment strategies that affected the Funds’ performance during the Funds’ prior fiscal period.
You can obtain a free copy of these documents and the SAI, request other information, or make general inquiries about the Funds by calling the Funds (toll-free) at 855-TCA-FUND (855-822-3863), by visiting the Adviser’s website at www.tortoiseadvisors.com or by writing to:
Tortoise Funds
c/o U.S. Bank Global Fund Services
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
Reports and other information about the Funds are available:
|
● | Free of charge from the SEC’s EDGAR database on the SEC’s Internet website at http://www.sec.gov; or |
|
● | For a fee, by electronic request at the following e-mail address: publicinfo@sec.gov. |
(The Trust’s SEC Investment Company Act of 1940 file number is 811-22525)
APPENDIX A
Financial Intermediary-Specific Sales Charge Waivers and Discounts
Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”)
Shareholders purchasing Fund shares through a Merrill Lynch platform or account will be eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in the Funds’ prospectus or SAI.
Front-end Sales Load Waivers on A Class Shares available at Merrill Lynch |
Employer-sponsored retirement, deferred compensation and employee benefit plans (including health savings accounts) and trusts used to fund those plans, provided that the shares are not held in a commission-based brokerage account and shares are held for the benefit of the plan |
Shares purchased by or through a 529 Plan |
Shares purchased through a Merrill Lynch affiliated investment advisory program |
Shares purchased by third party investment advisors on behalf of their advisory clients through Merrill Lynch’s platform |
Shares of funds purchased through the Merrill Edge Self-Directed platform |
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family) |
Shares exchanged from C Class (i.e., level-load) shares of the same fund in the month of or following the 10-year anniversary of the purchase date |
Employees and registered representatives of Merrill Lynch or its affiliates and their family members |
Trustees of the Trust, and employees of each Fund’s investment adviser or any of its affiliates, as described in this prospectus |
Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within 90 days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (known as Rights of Reinstatement) |
CDSC Waivers on A Class, and C Class Shares available at Merrill Lynch |
Death or disability of the shareholder |
Shares sold as part of a systematic withdrawal plan as described in the Fund’s prospectus |
Return of excess contributions from an IRA Account |
Shares sold as part of a required minimum distribution for IRA and retirement accounts due to the shareholder reaching age 70½ |
Shares sold to pay Merrill Lynch fees but only if the transaction is initiated by Merrill Lynch |
Shares acquired through a right of reinstatement |
Shares held in retirement brokerage accounts, that are exchanged for a lower cost share class due to transfer to certain fee based accounts or platforms (applicable to A Class and C shares only) |
Front-end load Discounts Available at Merrill Lynch: Breakpoints, Rights of Accumulation & Letters of Intent |
Breakpoints as described in this prospectus. |
Rights of Accumulation (ROA) which entitle shareholders to breakpoint discounts will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Merrill Lynch. Eligible fund family assets not held at Merrill Lynch may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets |
Letters of Intent (LOI) which allow for breakpoint discounts based on anticipated purchases within a fund family, through Merrill Lynch, over a 13-month period of time |
Morgan Stanley Wealth Management
Effective July 1, 2018, shareholders purchasing Fund shares through a Morgan Stanley Wealth Management transactional brokerage account will be eligible only for the following front-end sales charge waivers with respect to A Class shares, which may differ from and may be more limited than those disclosed elsewhere in this Fund’s Prospectus or SAI.
Front-end Sales Charge Waivers on A Class Shares available at Morgan Stanley Wealth Management
|
● | Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans |
|
● | Morgan Stanley employee and employee-related accounts according to Morgan Stanley’s account linking rules |
|
● | Shares purchased through reinvestment of dividends and capital gains distributions when purchasing shares of the same fund |
|
● | Shares purchased through a Morgan Stanley self-directed brokerage account |
|
● | C Class (i.e., level-load) shares that are no longer subject to a contingent deferred sales charge and are converted to A Class shares of the same fund pursuant to Morgan Stanley Wealth Management’s share class conversion program |
Shares purchased from the proceeds of redemptions within the same fund family, provided (i) the repurchase occurs within 90 days following the redemption, (ii) the redemption and purchase occur in the same account, and (iii) redeemed shares were subject to a front-end or deferred sales charge.
Raymond James & Associates, Inc., Raymond James Financial Services & Raymond James affiliates (“Raymond James”)
Intermediary-Defined Sales Charge Waiver Policies
The availability of certain initial or deferred sales charge waivers and discounts may depend on the particular financial intermediary or type of account through which you purchase or hold Fund shares.
Intermediaries may have different policies and procedures regarding the availability of front-end sales load waivers or contingent deferred (back-end) sales load (“CDSC”) waivers, which are discussed below. In all instances, it is the purchaser’s responsibility to notify the Funds or the purchaser’s financial intermediary at the time of purchase of any relationship or other facts qualifying the purchaser for sales charge waivers or discounts. For waivers and discounts not available through a particular intermediary, shareholders will have to purchase Fund shares directly from the Funds or through another intermediary to receive these waivers or discounts.
Effective March 1, 2019, shareholders purchasing Fund shares through a Raymond James platform or account will be eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this Funds’ prospectus or SAI.
Front-end sales load waivers on A Class shares available at Raymond James
|
● | Shares purchased in an investment advisory program. |
|
● | Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same Fund (but not any other fund within the fund family). |
|
● | Employees and registered representatives of Raymond James or its affiliates and their family members as designated by Raymond James. |
|
● | Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within 90 days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (known as Rights of Reinstatement). |
|
● | A shareholder in the Funds’ C Class shares will have their shares converted at net asset value to A Class shares (or the appropriate share class) of the Funds if the shares are no longer subject to a CDSC and the conversion is in line with the policies and procedures of Raymond James. |
CDSC Waivers on A Class and C Class shares available at Raymond James
|
● | Death or disability of the shareholder. |
|
● | Shares sold as part of a systematic withdrawal plan as described in the Funds’ prospectus. |
|
● | Return of excess contributions from an IRA Account. |
|
● | Shares sold as part of a required minimum distribution for IRA and retirement accounts due to the shareholder reaching age 70½ as described in the fund’s prospectus. |
|
● | Shares sold to pay Raymond James’ fees but only if the transaction is initiated by Raymond James. |
|
● | Shares acquired through a right of reinstatement. |
Front-end load discounts available at Raymond James: breakpoints, and/or rights of accumulation
|
● | Breakpoints as described in this prospectus. |
Rights of accumulation which entitle shareholders to breakpoint discounts will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Raymond James. Eligible fund family assets not held at Raymond James may be included in the rights of accumulation calculation only if the shareholder notifies his or her financial advisor about such assets.
Waiver of Initial Sales Charge on Purchases of Class A Shares by Certain Financial Institutions:
No initial sales charge is imposed on purchases of Class A shares by the following financial institutions that (i) offer Fund shares in self-directed investment brokerage accounts, (ii) are compensated by clients on a fee-only basis, or (iii) have entered into an agreement with the Funds to offer Class A shares through no-load network or platforms as described in “Elimination of Sales Load” beginning on page 46 of this Prospectus:
Tortoise MLP & Energy Income Fund – Class A
American Enterprise Investment Services
Charles Schwab
LPL Financial Corporation
Merrill Lynch, Pierce, Fenner & Smith
National Financial Services Corporation
Oppenheimer & Co.
Pershing LLC
Raymond James Financial Services, Inc.
RBC Capital Markets LLC
Reliance Trust Company
TD Ameritrade Clearing, Inc.
UBS Financial Services, Inc.
Large Order Net Asset Value Purchase Privilege – Authorized Dealers
From its own profits and resources, the Adviser may pay a finder’s fee to the following authorized dealers that initiate or are responsible for purchases of $1 million or more of the Tortoise MLP & Energy Income Fund Class A shares:
Merrill Lynch, Pierce, Fenner & Smith
RBC Capital Markets LLC
1
|
|
2
|
|
34
|
|
35
|
|
35
|
|
36
|
|
36
|
|
37
|
|
37
|
|
39
|
|
41
|
|
41
|
|
42
|
|
43
|
|
45
|
|
47
|
|
49
|
|
50
|
|
50
|
|
50
|
|
51
|
|
53
|
|
55
|
|
55
|
|
55
|
|
56
|
|
56
|
|
58
|
|
59
|
59
|
|
59
|
|
60
|
|
60
|
|
61
|
|
61
|
|
61
|
|
67
|
|
68
|
|
(1) |
The Funds consider the following industries as making up the energy infrastructure sector: energy, materials, transportation and utilities.
|
|
|
|
|
· |
The Fund may not invest, in the aggregate, more than 15% of its net assets in securities with legal or contractual restrictions on resale, securities that are not readily marketable, repurchase agreements with more than seven days to
maturity, and securities that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the
securities
|
Name, Address and
Year of Birth
|
Position(s)
Held with
the Trust
|
Term of
Office and
Length of
Time
Served
|
Number of
Portfolios in
Trust
Overseen by
Trustee
|
Principal
Occupation(s) During
the Past Five Years
|
Other
Directorships
Held by Trustee
During the Past
Five Years
|
|
Independent Trustees
|
||||||
Leonard M. Rush, CPA
615 E. Michigan St.
Milwaukee, WI 53202
Year of Birth: 1946
|
Lead Independent Trustee and Audit Committee Chairman
|
Indefinite Term; Since April 2011
|
39
|
Retired, Chief Financial Officer, Robert W. Baird & Co. Incorporated (2000-2011).
|
Independent Trustee, ETF Series Solutions (49 Portfolios) (2012-Present).
|
Name, Address and
Year of Birth
|
Position(s)
Held with
the Trust
|
Term of
Office and
Length of
Time Served
|
Number of
Portfolios in
Trust
Overseen by
Trustee
|
Principal
Occupation(s) During
the Past Five Years
|
Other
Directorships
Held by Trustee
During the Past
Five Years
|
|
David A. Massart
615 E. Michigan St.
Milwaukee, WI 53202
Year of Birth: 1967
|
Trustee and Valuation Committee Chairman
|
Indefinite Term; Since April 2011
|
39
|
Co-Founder and Chief Investment Strategist, Next Generation Wealth Management, Inc. (2005-present).
|
Independent Trustee, ETF Series Solutions (49 Portfolios) (2012-Present).
|
|
David M. Swanson
615 E. Michigan St.
Milwaukee, WI 53202
Year of Birth: 1957
|
Trustee and Nominating & Governance Committee Chairman
|
Indefinite Term; Since April 2011
|
39
|
Founder and Managing Partner, SwanDog Strategic Marketing, LLC (2006-present); Executive Vice President, Calamos Investments (2004-2006).
|
Independent Trustee, ALPS Variable Investment Trust (10 Portfolios) (2006-Present);
Independent Trustee, RiverNorth Opportunities Closed-End Fund (2015-Present).
|
|
Interested Trustee
|
||||||
Robert J. Kern*
615 E. Michigan St.
Milwaukee, WI 53202
Year of Birth: 1958
|
Chairman and Trustee
|
Indefinite Term; Since January 2011
|
39
|
Retired (July 2018-present); Executive Vice President, U.S. Bancorp Fund Services, LLC (1994-2018).
|
None
|
|
Officers
|
||||||
Brian. R. Wiedmeyer
615 E. Michigan St.
Milwaukee, WI 53202
Year of Birth: 1973
|
President and Principal Executive Officer
|
Indefinite Term, Since November 2018
|
N/A
|
Vice President, U.S. Bancorp Fund Services, LLC (2005 -present).
|
N/A
|
|
Deborah Ward
615 E. Michigan St.
Milwaukee, WI 53202
Year of Birth: 1966
|
Vice President, Chief Compliance Officer and Anti-Money Laundering Officer
|
Indefinite Term; Since April 2013
|
N/A
|
Senior Vice President, U.S. Bancorp Fund Services, LLC (2004-present).
|
N/A
|
|
Benjamin Eirich
615 E. Michigan St.
Milwaukee, WI 53202
Year of Birth: 1981
|
Treasurer, Principal Financial Officer and Vice President
|
Indefinite Term; Since August 2019 (Treasurer); Since November 2018 (Vice President)
|
N/A
|
Assistant Vice President, U.S. Bancorp Fund Services, LLC (2008-present).
|
N/A
|
Name, Address and
Year of Birth
|
Position(s)
Held with
the Trust
|
Term of
Office and
Length of
Time Served
|
Number of
Portfolios in
Trust
Overseen by
Trustee
|
Principal
Occupation(s) During
the Past Five Years
|
Other
Directorships
Held by Trustee
During the Past
Five Years
|
Thomas Bausch, Esq.
615 E. Michigan St.
Milwaukee, WI 53202
Year of Birth: 1979
|
Secretary
|
Indefinite Term; Since November 2017
|
N/A
|
Vice President, U.S. Bancorp Fund Services, LLC (2016-present); Associate, Godfrey & Kahn S.C. (2012-2016).
|
N/A
|
Douglas Schafer
615 E. Michigan St.
Milwaukee, WI 53202
Year of Birth: 1970
|
Assistant Treasurer and Vice President
|
Indefinite Term;
Since May 2016 (Assistant Treasurer); Since November 2018 (Vice President)
|
N/A
|
Assistant Vice President, U.S. Bancorp Fund Services, LLC (2002-present). |
N/A
|
Michael Cyr
615 E. Michigan St.
Milwaukee, WI 53202
Year of Birth: 1992
|
Assistant Treasurer and Vice President
|
Indefinite Term; Since August 2019
|
N/A
|
Officer, U.S. Bancorp Fund Services, LLC (2013-Present)
|
N/A
|
Dollar Range of Fund Shares
Beneficially Owned (None, $1-$10,000, $10,001-
$50,000, $50,001-$100,000, Over $100,000)
|
|||
Name
|
MLP & Energy Income
Fund
|
MLP & Energy
Infrastructure Fund
|
Aggregate Dollar Range
of Shares in the Trust
|
Independent Trustees
|
|||
Leonard M. Rush
|
None
|
None
|
$50,001-$100,000
|
David A. Massart
|
None
|
None
|
None
|
David M. Swanson
|
None
|
None
|
$10,001-$50,000
|
Interested Trustee
|
|||
Robert J. Kern
|
None
|
None
|
None
|
Name of Person/Position
|
Aggregate
Compensation from
the MLP & Energy
Income Fund1
|
Aggregate
Compensation
from the MLP & Energy Infrastructure Fund1
|
Pension or
Retirement
Benefits Accrued
as Part of
Fund Expenses
|
Estimated
Annual
Benefits Upon
Retirement
|
Total
Compensation
from the Funds
and the Trust2
|
Leonard M. Rush,
Lead Independent Trustee and Audit
Committee Chairman
|
$795
|
$795
|
None
|
None
|
$31,000
|
David A. Massart,
Independent Trustee and Valuation
Committee Chairman
|
$731
|
$731
|
None
|
None
|
$28,500
|
David M. Swanson,
Independent Trustee and Nominating & Governance Committee Chairman
|
$731
|
$731
|
None
|
None
|
$28,500
|
Robert J. Kern,
Interested Trustee
|
$686
|
$686
|
None
|
None
|
$26,750
|
1 |
Trustee fees and expenses are allocated among the Funds and any other series comprising the Trust.
|
2 |
The Trust includes other series in addition to the Funds.
|
Name and Address
|
% Ownership
|
Jurisdiction
|
Type of Ownership(1)
|
Merrill Lynch Pierce Fenner and Smith
For the sole benefit of its customers
Jacksonville, FL 32246
|
36.70%
|
Florida
|
Record
|
Name and Address
|
% Ownership
|
Jurisdiction
|
Type of Ownership(1)
|
T. Rowe Price Retirement Plan Services
FBO
Owings Mills, MD 21117
|
62.21%
|
Maryland
|
Record
|
Name and Address
|
% Ownership
|
Type of Ownership(1)
|
Merrill Lynch Pierce Fenner and Smith
For the sole benefit of its customers
Jacksonville, FL 32246
|
58.30%
|
Record
|
Charles Schwab & Co., Inc.
Attn Mutual Funds
San Francisco, CA 94104
|
8.68%
|
Record
|
UBS WM USA
Weehawken, NJ 07086
|
8.50%
|
Record
|
Name and Address
|
% Ownership
|
Type of Ownership(1)
|
Merrill Lynch Pierce Fenner and Smith
For the sole benefit of its customers
Jacksonville, FL 32246
|
34.33%
|
Record
|
Charles Schwab & Co., Inc.
Attn Mutual Funds
San Francisco, CA 94104
|
19.59%
|
Record
|
UBS WM USA
Weehawken, NJ 07086
|
11.66%
|
Record
|
National Financial Services LLC
FEBO
New York, NY 10281
|
9.40%
|
Record
|
RBC Capital Markets LLC
Minneapolis, MN 55402
|
6.13%
|
Record
|
Name and Address
|
% Ownership
|
Type of Ownership(1)
|
Merrill Lynch Pierce Fenner and Smith
For the sole benefit of its customers
Jacksonville, FL 32246
|
45.58%
|
Record
|
UBS WM USA
Weehawken, NJ 07086
|
17.85%
|
Record
|
Pershing LLC
Jersey City, NJ 07399
|
9.22%
|
Record
|
Charles Schwab & Co., Inc.
Attn Mutual Funds
San Francisco, CA 94104
|
7.70%
|
Record
|
Name and Address
|
% Ownership
|
Type of Ownership(1)
|
T. Rowe Price Retirement Plan Services
FBO
Owings Mills, MD 21117
|
62.21%
|
Record
|
Charles Schwab & Co., Inc.
Attn Mutual Funds
San Francisco, CA 94104
|
19.23%
|
Record
|
JP Morgan Securities
For the exclusive benefit of its customers
Brooklyn, NY 11245
|
6.10%
|
Record
|
Advisory Fees Paid During the
Fiscal Years Ended November 30,
|
2018
|
2017
|
2016
|
Advisory Fees Accrued
|
$2,280,389
|
$2,949,751
|
$3,194,570
|
Advisory Fee Recouped
|
$0
|
$0
|
$197,630
|
Total Advisory Fees Paid to Adviser After Fee Wavier or Expense Reimbursement
|
$2,280,389
|
$2,949,751
|
$3,392,200
|
Name of Manager | Account Category | # of Accounts |
Total Assets
of Accounts
|
# of Accounts
Paying a
Performance Fee
|
Total
Assets of
Accounts
Paying a
Performance Fee
|
|
James J. Cunnane, Jr.
|
||||||
Registered investment companies
|
34
|
$1,369,555,653
|
0
|
$0
|
||
Other pooled investment vehicles
|
0
|
$0
|
0
|
$0
|
||
Other Accounts
|
285
|
$1,825,689,931
|
0
|
$0
|
||
Quinn T. Kiley
|
||||||
Registered investment companies
|
34
|
$1,369,555,653
|
0
|
$0
|
||
Other pooled investment vehicles
|
0
|
$0
|
0
|
$0
|
||
Other Accounts
|
285
|
$1,825,689,931
|
0
|
$0
|
Dollar Range of Fund Shares Beneficially Owned
(None, $1-$10,000, $10,001-$50,000, $50,001-$100,000, $100,001 -
$500,000, $500,001-$1,000,000, Over $1,000,000)
|
||
Name of Portfolio Manager
|
MLP & Energy Income
Predecessor Fund
|
MLP & Energy Infrastructure
Predecessor Fund
|
James J. Cunnane, Jr.
|
None
|
Over $1,000,000
|
Quinn T. Kiley
|
None
|
Over $1,000,000
|
2018
|
2017
|
2016
|
|
MLP & Energy Income Predecessor Fund
|
$485,904
|
$485,555
|
$398,358
|
MLP & Energy Infrastructure Predecessor Fund
|
$207,876
|
$252,639
|
$269,531
|
2018
|
2017
|
2016
|
|
Total Underwriting Commission
|
$355,461
|
$278,461
|
$323,141
|
Underwriting Commission Received by the Distributor
|
$2,635
|
$0
|
$35,446
|
MLP & Energy Income Predecessor Fund
|
|
Advertising/Marketing
|
$0
|
Printing/Postage
|
$0
|
Payment to distributor
|
$801,477
|
Payment to dealers
|
$0
|
Compensation to sales personnel
|
$0
|
Other
|
$0
|
Total
|
$801,477
|
2018
|
2017
|
2016
|
|
MLP & Energy Income Predecessor Fund
|
$687,656
|
$884,672
|
$699,206
|
MLP & Energy Infrastructure Predecessor Fund
|
$261,848
|
$379,637
|
$429,058
|
2018
|
2017
|
|
MLP & Energy Income Predecessor Fund
|
55%
|
30%
|
MLP & Energy Infrastructure Predecessor Fund
|
73%
|
28%
|
|
● |
The Investment Committee (or an employee of the Adviser designated by the Investment Committee) will be responsible for all decisions regarding proxy voting, including monitoring corporate actions, making voting decisions in the best
interest of the Funds, and ensuring that proxies are submitted in a timely manner.
|
|
● |
The Investment Committee will generally vote proxies according to the Adviser’s then-current Proxy Voting Policies and Procedures, which it believes are reasonably designed to ensure that proxies are voted in the best interests of
its clients. In pursuing this policy, proxies should be voted in a manner that is intended to maximize value to the client.
|
|
● |
Although the Adviser’s Proxy Voting Policies and Procedures are to be followed as a general policy, certain issues will be considered on a case-by-case basis based on the relevant facts and circumstances. Since corporate governance
issues are diverse and continually evolving, the Adviser shall devote an appropriate amount of time and resources to monitor these changes.
|
|
● |
In situations where there may be a conflict of interest in the voting of proxies between the interests of a Fund and its shareholders and those of the Adviser due to business or personal relationships that the Adviser maintains with
persons having an interest in the outcome of certain votes, the Adviser may (i) disclose the potential conflict to the Fund and obtain consent; or (ii) establish an ethical wall or other informational barriers between the person(s) that
are involved in the conflict and the persons at the Adviser making the voting decisions.
|
|
● |
All proxies will be voted in accordance with any applicable investment restrictions of the Funds and, to the extent applicable, any resolutions or other instructions approved by the Board.
|
Net Assets Per Share Class
|
=
|
Net Asset Value Per Share Class
|
Shares Outstanding Per Share Class
|
|
● |
The name of the Fund you are investing in;
|
|
● |
The dollar amount of shares to be purchased;
|
|
● |
The class of shares to be purchased;
|
|
● |
A check payable to the name of the Fund or a wire transfer received by the Fund.
|
|
● |
The shareholder’s name;
|
|
● |
The name of the Fund;
|
|
● |
The account number;
|
|
● |
The share or dollar amount to be redeemed;
|
|
● |
The class of shares to be redeemed; and
|
|
● |
Signatures by all shareholders on the account (with signature(s) guaranteed, if applicable).
|
|
● |
If ownership is changed on your account;
|
|
● |
When redemption proceeds are payable or sent to any person, address or bank account not on record;
|
|
● |
When a redemption is received by the Transfer Agent and the account address has changed within the last 15 calendar days; or
|
|
● |
For all redemptions in excess of $100,000 from any shareholder account.
|
|
● |
A citizen or individual resident of the United States (including certain former citizens and former long-term residents);
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A corporation or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;
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An estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
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A trust with respect to which a court within the United States is able to exercise primary supervision over its administration and one or more U.S. shareholders have the authority to control all of its substantial decisions or the
trust has made a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.
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(a)
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Quasar Distributors, LLC, the Registrant’s principal underwriter, acts as principal underwriter for the following investment companies:
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First American Funds, Inc.
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Provident Mutual Funds, Inc.
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FundX Investment Trust
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Rainier Investment Management Mutual Funds
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Glenmede Fund, Inc.
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RBB Fund, Inc.
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Glenmede Portfolios
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RBC Funds Trust
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GoodHaven Funds Trust
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Series Portfolios Trust
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Greenspring Fund, Inc.
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Sims Total Return Fund, Inc.
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Harding Loevner Funds, Inc.
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Thompson IM Funds, Inc.
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Hennessy Funds Trust
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TigerShares Trust
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Horizon Funds
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TrimTabs ETF Trust
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Hotchkis & Wiley Funds
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Trust for Professional Managers
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Intrepid Capital Management Funds Trust
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Trust for Advised Portfolios
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IronBridge Funds, Inc.
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USA Mutuals
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Jacob Funds, Inc.
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Wall Street EWM Funds Trust
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Jensen Quality Growth Fund Inc.
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Westchester Capital Funds
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Kirr Marbach Partners Funds, Inc.
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Wisconsin Capital Funds, Inc.
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LKCM Funds
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YCG Funds
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(b)
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To the best of Registrant’s knowledge, the directors and executive officers of Quasar Distributors, LLC are as follows:
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Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant certifies that this Post-Effective Amendment No. 434 to its Registration Statement meets all of the requirements for effectiveness pursuant to Rule 485(b) of the Securities Act of 1933, as amended, and the Registrant has duly caused this Post-Effective Amendment No. 434 to its Registration Statement on Form N-1A to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Milwaukee and State of Wisconsin, on the 12th day of September, 2019.
Signature
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Title
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||
Robert J. Kern*
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Trustee
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Robert J. Kern
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David A. Massart*
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Trustee
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David A. Massart
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Leonard M. Rush*
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Trustee
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Leonard M. Rush
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David M. Swanson*
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Trustee
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David M. Swanson
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/s/ Brian R. Wiedmeyer
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President and Principal Executive Officer
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Brian R. Wiedmeyer
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/s/ Benjamin Eirich
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Treasurer, Principal Financial Officer and Principal Accounting Officer
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Benjamin Eirich
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*By:
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/s/ Brian R. Wiedmeyer
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Brian R. Wiedmeyer, Attorney-In-Fact pursuant to Power of Attorney
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MANAGED PORTFOLIO SERIES:
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||
By:
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/s/ Brian R. Wiedmeyer | |
Brian R. Wiedmeyer
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||
President and Principal Executive Officer
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TORTOISE CAPITAL ADVISORS, L.L.C.
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By:
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/s/ P. Bradley Adams
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P. Bradley Adams
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Managing Director
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Series of Managed Portfolio Series
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Annual Fee Rate as % of
Current Net Assets
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Tortoise MLP & Pipeline Fund
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0.85%
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Tortoise Select Opportunity Fund
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0.85%
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Tortoise MLP & Energy Income Fund
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1.00%
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Tortoise MLP & Energy Infrastructure Fund
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0.75%
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MANAGED PORTFOLIO SERIES
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QUASAR DISTRIBUTORS, LLC
|
By: /s/ Brian R. Wiedmeyer
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By: /s/ Teresa Cowan
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Name: Brian R. Wiedmeyer
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Name: Teresa Cowan
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Title: President
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Title: President
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QUASAR DISTRIBUTORS, LLC
REGULATORY DISTRIBUTION SERVICES at October, 2019
|
Regulatory Distribution Annual Services per Fund
Base fee of $[…] on the first $[…]
.5 basis point on the next $[…]
.4 basis point on the balance
Default Sales Loads, and underwriter concessions, if any, payable to the Distributor.
Basic Distribution Fee Offset: Any Default Sales Loads will first be applied to offset Quasar's distribution fee. If the amount of Default Sales Loads exceed Quasar's distribution fee, Quasar will make the balance available for use by the
Fund and/or the Adviser for pre-approved marketing expenses. In the event Quasar's fee is not fully offset by Default Sales Loads, the Underwriter Concession will be applied to offset any remaining distribution fee payable to Quasar. If,
after Quasar's distribution fee is fully offset, there is a remaining Underwriter Concession balance; Quasar will make 80% of such balance available for use by the Fund and/or the Advisor for pre-approved marketing expenses. The remaining
20% of the Underwriter Concession balance is retained by Quasar.
Standard Advertising Compliance Review
◾ $[…] per communication piece for the first 10 pages
(minutes if audio or video); $[…] per page (minute if audio or video) thereafter.
◾ $[…] FINRA filing fee per communication piece for the first
10 pages (minutes if audio or video); $[…] per page (minute if audio or video) thereafter. FINRA filing fee subject to change. (FINRA filing fee may not apply to all communication pieces.)
Expedited Advertising Compliance Review
◾ $[…] for the first 10 pages (minutes if audio or video);
$[…] per page (minute if audio or video) thereafter, 24 hour initial turnaround.
◾ $[…] FINRA filing fee per communication piece for the first
10 pages (minutes if audio or video); $[…] per page (minute if audio or video) thereafter. FINRA filing fee subject to change. (FINRA filing fee may not apply to all communication pieces.)
Licensing of Investment Advisor’s Staff
◾ $[…] per year per registered representative
◾ Licenses sponsored: Series 6, 7, 24, 26, 63, 66
◾ All associated FINRA and state fees for registered
representatives, including license and renewal fees
Marketing Support Services
◾ The design and/ or production of fund fact sheets, commentaries, brochures and other sales support materials – Project priced
via proposal
Miscellaneous Expenses
All other miscellaneous fees and expenses, including but not limited to the following, will be separately billed as incurred:
◾ Production, printing, distribution, and
placement of advertising, sales literature, and materials
◾ Engagement of designers, free-lance
writers, and public relations firms
◾ Postage, overnight delivery charges
◾ FINRA registration fees and other costs to fulfill
regulatory requirements
◾ Travel, lodging, and meals
Additional services not included above shall be mutually agreed upon at the time of the service being added. In addition to the fees described above, additional fees may be charged to the extent that changes to applicable laws, rules or
regulations require additional work or expenses related to services provided (e.g., compliance with new liquidity risk management and reporting requirements).
Fees are calculated pro rata and billed monthly.
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MANAGED PORTFOLIO SERIES
|
U.S. BANK, N.A. |
By: /s/ Brian R. Wiedmeyer
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By: /s/ Anita M. Zagrodnik
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Name: Brian R. Wiedmeyer
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Name: Anita M. Zagrodnik
|
|
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Title: President
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Title: Senior Vice President
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Multiple Series Trust
DOMESTIC CUSTODY SERVICES
FEE SCHEDULE at October 2019
|
Annual Fee Based Upon Market Value Per Fund
Domestic: .40 basis points on average daily market value
Canadian: 1.5 basis points on average daily market value
Minimum annual fee per fund - $[…]
Plus portfolio transaction fees
Portfolio Transaction Fees
$[…] /book entry DTC transaction
$[…] per transaction through Federal Reserve
$[…] per transaction for GIC contracts/Physical Securities
$[…] per option contract
$[…] per paydown on mortgage backed securities
$[…] per Fed wire charge on Repurchase Agreement collateral in/out
$[…] per incoming wire transfers
$[…] per outgoing wire transfers
$[…] per dividend reinvestment
$[…] per futures contracts
$[…] per Canadian Trade
◾ A transaction is a purchase/sale of a security, free receipt/free delivery, maturity, tender or exchange.
◾ No charge for the initial conversion free receipt.
◾ Overdrafts – charged to the account at prime interest rate plus 2.
Chief Compliance Officer Support Fee
◾ […] /year (Waived)
Out-Of-Pocket Expenses
Including but not limited to expenses incurred in the safekeeping, delivery and receipt of securities, shipping, transfer fees, deposit withdrawals at custodian (DWAC) fees, and extraordinary expenses based upon complexity.
Fees are billed monthly
|
$[…] Annual Base Fee
1. 0-9 Global Holdings
2. Canadian Transaction Fee $[…]
3. Canadian Market Value Charge
1.5 bps
Any other countries are TBD. |
$[…] Annual Base Fee
1. 10 or more Global Holdings
2. Standard Global Custody Fee
Schedule Applies
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◾
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Euroclear – Eurobonds only. Eurobonds are held in Euroclear at a standard rate, but other types of securities (including but not limited to equities, domestic market debt and mutual funds)
will be subject to a surcharge. In addition, certain transactions that are delivered within Euroclear or from a Euroclear account to a third party depository or settlement system, will be subject to a surcharge.
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◾
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For all other markets specified above, surcharges may apply if a security is held outside of the local market.
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◾
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3rd Party Foreign Exchange – a Foreign Exchange transaction undertaken through a 3rd party will be charged $[…].
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◾
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Tax reclaims that have been outstanding for more than 6 (six) months with the client will be charged $[…] per claim.
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◾
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Charges incurred by U.S. Bank, N.A. directly or through sub-custodians for account opening fees, local taxes, stamp duties or other local duties and assessments, stock exchange fees, foreign exchange transactions,
postage and insurance for shipping, facsimile reporting, extraordinary telecommunications fees, proxy services and other shareholder communications, recurring administration fees, negative interest charges, overdraft charges or other
expenses which are unique to a country in which the client or its clients is investing will be passed along as incurred.
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◾
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A surcharge may be added to certain miscellaneous expenses listed herein to cover handling, servicing and other administrative costs associated with the activities giving rise to such expenses. Also, certain
expenses are charged at a predetermined flat rate.
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◾
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SWIFT reporting and message fees.
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MANAGED PORTFOLIO SERIES
|
U.S. BANCORP FUND SERVICES, LLC
|
By: /s/ Brian R. Wiedmeyer
|
By: /s/ Anita M. Zagrodnik
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|
|
Name: Brian R. Wiedmeyer
|
Name: Anita M. Zagrodnik
|
|
|
Title: President
|
Title: Senior Vice President
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|
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FUND ACCOUNTING, FUND ADMINISTRATION, PORTFOLIO COMPLIANCE, AND CHIEF COMPLIANCE OFFICER (CCO) SERVICES at October, 2019
|
Annual Fee Based Upon Average Net Assets per Fund
7 basis points on the first $[…]
5 basis points on the next $[…]
3.25 basis points on the balance
Minimum Annual Fee: $[…] per fund
◾ Additional fee of $[…] for each additional class,
Controlled Foreign Corporation (CFC), and/or sub-advisor
Services Included in Annual Fee Per Fund
◾ Advisor Information Source – On-line access to portfolio
management and compliance information.
◾ Daily Performance Reporting – Daily pre and post-tax fund
and/or sub-advisor performance reporting.
◾ U.S. Bank Legal Administration (e.g., registration
statement update)
◾ CoreTax Services – See Additional Services Fee Schedule
All schedules subject to change depending upon use of unique security types requiring special pricing or accounting arrangements.
Third Party Administrative Data Charges (descriptive data for each security)
◾ $[…] per security per month for fund administrative data
SEC Modernization Requirements
◾ Form N-PORT – $[…] per year, per Fund
◾ Form N-CEN – $[…] per year, per Fund
Miscellaneous Expenses
All other miscellaneous fees and expenses, including but not limited to the following, will be separately billed as incurred:
Fair Value Services, SWIFT processing, customized reporting, third-party data provider costs (including Bloomberg, S&P, Moody’s, Morningstar GICS, MSCI, Lipper, etc.), postage, stationery, programming, special reports, proxies,
insurance, EDGAR/XBRL filing, retention of records, federal and state regulatory filing fees, third party auditing and legal expenses, wash sales reporting (GainsKeeper), tax e-filing, PFIC monitoring, conversion expenses (if necessary) and
travel related costs.
Additional Services
Additional services not included above shall be mutually agreed upon at the time of the service being added. Additional legal administration (e.g., subsequent new fund launch), daily compliance testing, Section 18 compliance testing,
Section 15(c) reporting, equity & fixed income attribution reporting, and additional services mutually agreed upon.
In addition to the fees described above, additional fees may be charged to the extent that changes to applicable laws, rules or regulations require additional work or expenses related to services provided (e.g., compliance with new
liquidity risk management and reporting requirements).
Legal Administration Service Proposal – In support of external legal counsel
Subsequent new fund launch
$[…] per project – one fund (Tortoise MLP & Pipeline Fund)
$[…] per project – second fund (Tortoise North American Energy Independence Fund)
$[…] per project – each subsequent fund
(Includes MST external counsel fee, subject to services provided; if applicable)
Project fee waived for Advisory Research MLP & Energy Infrastructure Fund and Advisory Research MLP & Energy Income Fund
|
◾ Additional fee of $[…] per sub-advisor
◾ Additional fee of $[…] per drafting multi-manager exemptive application (does not
include outside legal costs)
◾ MST may require up to $[…] in escrow
Additional Legal Administration Services
◾ Subsequent new fund launch – $[…] per project
◾ Subsequent new share class launch – $[…] per project
◾ Multi-managed funds – as negotiated based upon specific requirements
◾ Proxy – as negotiated based upon specific requirements
All other miscellaneous fees and expenses, including but not limited to the following, will be separately billed as incurred:
Postage, Federal and state filing fees, expenses from Board of Trustee meetings, third party auditing and legal expenses, EDGAR/XBRL filing
The Fund start-up and registration services project fee is paid for by the advisor and not the Fund(s). This fee is not able to be recouped by the advisor under an expense waiver limitation or similar agreement. Fund startup and
registration service fees are billed 50% following the selection of U.S. Bank and 50% 75 days after the preliminary registration statement is filed with the SEC filings.
Extraordinary services – negotiated based upon specific requirements
◾ Multi-managed funds, proxy, expedited filings, asset conversion, fulcrum fee,
exemptive applications
Fund Chief Compliance Officer (CCO) Services Annual Fee Schedule
◾ $[…] for the first fund (subject to Board approval)
◾ $[…] for funds 2-5 (subject to change based on Board review and approval)
◾ $[…] for each additional fund over 5 (subject to change based on Board review and
approval)
◾ $[…] per sub-advisor per fund
◾ $[…] onboarding fee
◾ Per advisor relationship, and subject to change based upon board review and
approval.
Additional services not included above shall be mutually agreed upon at the time of the service being added. In addition to the fees described above, additional fees may be charged to the extent that changes to applicable laws, rules or
regulations require additional work or expenses related to services provided (e.g., compliance with new liquidity risk management and reporting requirements).
Fees are calculated pro rata and billed monthly.
|
FUND ADMINISTRATION & PORTFOLIO COMPLIANCE – Tortoise
ADDITIONAL SERVICES at October, 2019
|
Transfer In-Kind
◾ Tax Free Transfer In-Kind Cost Basis Tracking* – $[…] per
sub-account per year
Daily Compliance Services (if required)
◾ Base fee – $[…] per fund per year
◾ Setup – $[…] per fund group
Section 18 Compliance Testing
◾ $[…] set up fee per fund complex
◾ $[…] per fund per month
Section 15(c) Reporting
◾ $[…] per fund per standard reporting package*
*Standard reporting packages for annual 15(c) meeting
- Expense
reporting package: 2 peer comparison reports (adviser fee) and (net expense ratio w classes on one report) OR Full 15(c) report
- Performance reporting package:
Peer Comparison Report
◾ Additional
15c reporting is subject to additional charges
◾ Standard
data source – Morningstar; additional charges will apply for other data services
Equity & Fixed Income Attribution Reporting
◾ Fees are dependent upon portfolio makeup, services
required, and benchmark requirements.
Core Tax Services
M-1 book-to-tax adjustments at fiscal and excise year-end, prepare tax footnotes in conjunction with fiscal year-end audit, Prepare Form 1120-RIC federal income tax return and relevant schedules, Prepare Form 8613 and relevant schedules,
Prepare Form 1099-MISC Forms, Prepare Annual TDF FBAR (Foreign Bank Account Reporting) filing, Prepare state returns (Limited to two) and Capital Gain Dividend Estimates (Limited to two).
Optional Tax Services
◾ Prepare book-to-tax adjustments & Form 5471 for Controlled Foreign Corporations (CFCs) – $[…] per year
◾ Additional Capital Gain Dividend Estimates – (First two included in core services) – $[…] per additional estimate
◾ State tax returns - (First two included in core services) – $[…] per additional
return
Tax Reporting – MLP C-Corporations
Federal Tax Returns
◾ Prepare corporate Book to tax calculation, average cost analysis and cost basis role forwards, and federal income tax returns
for investment fund (Federal returns & 1099 Breakout Analysis) – $[…]
◾ Prepare Federal and State extensions (If Applicable) – Included in the return fees
◾ Prepare provision estimates – $[…] Per estimate
State Tax Returns
◾ Prepare state income tax returns for funds and blocker entities – $[…] per state return
− Sign state income tax returns – $[…] per state return
− Assist in filing state income tax returns – Included with preparation of returns
◾ State tax notice consultative support and resolution – $[…] per fund
|
MANAGED PORTFOLIO SERIES
|
U.S. BANCORP FUND SERVICES, LLC
|
By: /s/ Brian R. Wiedmeyer
|
By: /s/ Anita M. Zagrodnik
|
|
|
Name: Brian R. Wiedmeyer
|
Name: Anita M. Zagrodnik
|
|
|
Title: President
|
Title: Senior Vice President
|
|
|
FUND ACCOUNTING, FUND ADMINISTRATION, PORTFOLIO COMPLIANCE, AND CHIEF COMPLIANCE OFFICER (CCO) SERVICES at October, 2019
|
Annual Fee Based Upon Average Net Assets per Fund
7 basis points on the first $[…]
5 basis points on the next $[…]
3.25 basis points on the balance
Minimum Annual Fee: $[…] per fund
◾ Additional fee of $[…] for each additional class,
Controlled Foreign Corporation (CFC), and/or sub-advisor
Services Included in Annual Fee Per Fund
◾ Advisor Information Source – On-line access to portfolio
management and compliance information.
◾ Daily Performance Reporting – Daily pre and post-tax fund
and/or sub-advisor performance reporting.
◾ U.S. Bank Legal Administration (e.g., registration
statement update)
◾ CoreTax Services – See Additional Services Fee Schedule
All schedules subject to change depending upon use of unique security types requiring special pricing or accounting arrangements.
Miscellaneous Expenses
All other miscellaneous fees and expenses, including but not limited to the following, will be separately billed as incurred:
Fair Value Services, SWIFT processing, customized reporting, third-party data provider costs (including Bloomberg, S&P, Moody’s, Morningstar GICS, MSCI, Lipper, etc.), postage, stationery, programming, special reports, proxies,
insurance, EDGAR/XBRL filing, retention of records, federal and state regulatory filing fees, third party auditing and legal expenses, wash sales reporting (GainsKeeper), tax e-filing, PFIC monitoring, conversion expenses (if necessary) and
travel related costs.
Additional Services
Additional services not included above shall be mutually agreed upon at the time of the service being added. Additional legal administration (e.g., subsequent new fund launch), daily compliance testing, Section 18 compliance testing,
Section 15(c) reporting, equity & fixed income attribution reporting, and additional services mutually agreed upon.
In addition to the fees described above, additional fees may be charged to the extent that changes to applicable laws, rules or regulations require additional work or expenses related to services provided (e.g., compliance with new
liquidity risk management and reporting requirements).
Fund Chief Compliance Officer (CCO) Services Annual Fee Schedule
◾ $[…] for the first fund (subject to Board approval)
◾ $[…] for funds 2-5 (subject to change based on Board review
and approval)
◾ $[…] for each additional fund over 5 (subject to change
based on Board review and approval)
◾ $[…] per sub-advisor per fund
◾ $[…] onboarding fee
◾ Per advisor relationship, and subject to change based upon
board review and approval.
Additional services not included above shall be mutually agreed upon at the time of the service being added. In addition to the fees described above, additional fees may be charged to the extent that changes to applicable laws, rules or
regulations require additional work or expenses related to services provided (e.g., compliance with new liquidity risk management and reporting requirements).
Fees are calculated pro rata and billed monthly.
|
FUND ACCOUNTING SERVICES – Tortoise
SUPPLEMENTAL SERVICES
FEE SCHEDULE at October, 2019
|
Data Services
Pricing Services
◾ $[…] – Domestic Equities, Options, ADRs, Foreign Equities,
Futures, Forwards, Currency Rates, Mutual Funds, ETFs, Total Return Swaps
◾ $[…] – Domestic Corporates, Domestic Convertibles, Domestic
Governments, Domestic Agencies, Mortgage Backed, Municipal Bonds
◾ $[…] – CMOs, Money Market Instruments, Foreign Corporates,
Foreign Convertibles, Foreign Governments, Foreign Agencies, Asset Backed, High Yield
◾ $[…] – Interest Rate Swaps, Foreign Currency Swaps
◾ $[…] – Bank Loans
◾ $[…] – Swaptions, Intraday money market funds pricing, up
to 3 times per day
◾ $[…] – Credit Default Swaps
◾ $[…] per Month Manual Security Pricing (>25per day)
NOTE: Prices above are based on using U.S. Bank primary pricing service which may vary by security type and are subject to change. Use of alternative and/or additional sources may result in additional fees. Pricing vendors may designate
certain securities as hard to value or as a non-standard security type, such as CLOs and CDOs, which may result in additional fees.
Corporate Action and Factor Services (security paydown)
◾ $[…] per Foreign Equity Security per Month
◾ $[…] per Domestic Equity Security per Month
◾ $[…] per CMOs, Asset Backed, Mortgage Backed Security per Month
|
MANAGED PORTFOLIO SERIES
|
U.S. BANCORP FUND SERVICES, LLC
|
By: /s/ Brian R. Wiedmeyer
|
By: /s/ Anita M. Zagrodnik
|
|
|
Name: Brian R. Wiedmeyer
|
Name: Anita M. Zagrodnik
|
|
|
Title: President
|
Title: Senior Vice President
|
|
|
TRANSFER AGENT & SHAREHOLDER SERVICES at October, 2019 – Tortoise
|
◾
|
Base Fee per CUSIP $[…] for first CUSIP in Fund Complex
|
◾
|
Open Accounts $[…] per open account (NSCC Level 3)
|
◾
|
$[…] per other open account
|
◾
|
Closed (zero balance) Accounts $[…] per closed account
|
◾
|
Daily Accrual Fund Accounts $[…] per open account
|
◾
|
Telephone Calls
|
◾
|
Voice Response Calls
|
◾
|
Manual Shareholder Transaction & Correspondence
|
◾
|
Omnibus Account Transaction
|
◾
|
Daily Valuation/Manual 401k Trade
|
◾
|
Report Source – Client on-line access to fund and investor data. Includes set up and 2 user Ids.
|
◾
|
NSCC System Interface
|
◾
|
Short-Term Trader Reporting – Software application used to track and/or assess transaction fees that are determined to be short-term trades.
|
◾
|
Excessive Trader – Software application that monitors the number of trades (exchanges, redemptions) that meet fund family criteria for excessive trading and automatically prevents trades in excess of the fund
family parameters.
|
◾
|
12b-1 Aging – Aging shareholder account share lots in order to monitor and begin assessing 12b-1 fees after a certain share lot age.
|
Vision Electronic Statement Services
Online account access for broker/dealers, financial planners, and RIAs.
◾ Account
inquiry
- Inquiry - $[…] per event
- Vision ID -
$[…] per month per ID
◾ Transaction
Processing*
- Implementation Fee - $[…] per Management Company
- Transaction – purchase, redeem,
and exchange - $[…] per event
- Monthly Minimum Charge - $[…] per month
◾ Electronic
Statements*
- Implementation-
$[…] per fund group
- Load
charges-$[…] per image
- Archive
charge (for any image stored beyond 2 years)-$ […] per document
*Vision ID and event charges also apply.
Fund Source
Client Access to audited fund information, pricing, performance, literature, processing guidelines.
- $[…] per Month – Unlimited Users
Electronic Correspondence
Upon consent from shareholder caller, forms and fulfillment pieces can be sent via email through a secured service rather than mailed.
◾ $[…] per Email
Client Web Data Access
U.S. Bank client on-line access to fund and investor data through U.S. Bank technology applications and data delivery and security software.
◾ STAT – Statement and Tax Form Storage & Retrieval
- Setup: $[…] per user
- Support: $[…] per user per
month
◾ ReportSource – Report and Data File Storage & Retrieval
- Setup: Included in initial fund
setup on Transfer Agent system
- $[…] per user per month
Additional Data Delivery Services
◾ Ad Hoc/PowerSelect File Development
- Standard ad-hoc select: $[…] per
file
- Custom coded data for recurring,
scheduled delivery: $[…] per hour consultation and programming development
- Support: $[…] per file per month
for recurring files/reports scheduled for delivery via Report Source.
- Recurring files scheduled for
delivery via Report Source.
◾ Custom Electronic File Exchange (MFS delivery of standard
TIP files)
- Setup: $[…] one-time fee
- Support: $[…] per file per month
◾ File Delivery to Alternate Sales Reporting Provider
- Setup: $[…] one-time fee
- Maintenance Fee: $[…] per file
per month
Chat Services
◾ Implementation Fee – $[…]
◾ Monthly Fee – $[…] per month
◾ Per Chat Fee – $[…] per chat or $[…] per minute of chat
Outbound Calling & Marketing Campaigns
◾ Cost based on project requirements including hours, data
sourcing and reporting.
|
◾
|
Implementation fee – $[…] (includes 15 forms)
|
◾
|
Additional setup fee – $[…] for each additional form and email template
|
◾
|
Form and fund logo modifications – $[…] per form, $[…] per updated Fund Logo
|
◾
|
Monthly minimum fee – $[…] per month
|
◾
|
Per electronic envelope Fee – $[…]
|
◾
|
Internet VPN – Infrastructure to allow for application accessibility to host systems and file transfers
|
-
|
$[…] implementation
|
-
|
$[…] per month
|
◾
|
Physical Network – Infrastructure to allow for application accessibility to host systems and file transfers
|
-
|
Cost varies depending upon location and bandwidth
|
◾
|
TA2000 3270 Emulation (Mainframe Green Screen) – Account inquiry and ability to perform financial transactions or account maintenance depending upon user access.
|
-
|
$[…] implementation
|
-
|
$[…] per ID per month
|
◾
|
TA2000 Desktop (Graphic User Interface to the TA2000 Mainframe) – Account inquiry and ability to perform financial transactions or account maintenance depending upon
user access provisioning.
|
-
|
$[…] implementation
|
-
|
$[…] per ID per month
|
◾
|
TA2000 SmartDesk (Web Application to TA2000 Mainframe) – Account inquiry only.
|
-
|
$[…] implementation
|
-
|
$[…] per ID per month
|
◾
|
Automated Work Distributor (AWD) – Image and workflow application.
|
-
|
$[…] implementation
|
-
|
$[…] per ID per month
|
◾
|
Same Day Cash Management (SDCM) – Fund level transaction and cash reporting.
|
-
|
$[…] implementation
|
-
|
$[…] per ID per month
|
◾
|
PowerSelect – SQL database used for ad hoc reporting from the shareholder recordkeeping system.
|
-
|
$[…] per month
|
◾
|
$[…] per hour (subject to change)
|
◾
|
Charges incurred for customized services based upon fund family requirements including but not limited to:
|
-
|
Fund setup programming (transfer agent system, statements, options, etc.)
|
-
|
Customized service development
|
-
|
Voice response system setup (menu selections, shareholder system integration, testing, etc.)
|
-
|
All other client specific customization and/or development services
|
◾
|
$[…] per direct open account per year
|
◾
|
$[…] setup per fund group
|
◾
|
$[…] per month administration
|
◾
|
$[…] per received email correspondence
|
◾
|
$[…] – $[…] – Enhanced Services*
|
◾
|
$[…] – SalesForce.com Integration
|
◾
|
$[…] – Custom Data Interface
|
◾
|
$[…] – OmniSERV Setup
|
◾
|
$[…] – Standard Interface
|
◾
|
$[…] – Additional OmniSERV Interface
|
◾
|
$[…] – 22c-2 Compliance
|
◾
|
$[…] – CRM
|
◾
|
$[…] – SFDC
|
◾
|
$[…] – OmniSERV
|
◾
|
$[…] – Daily Transaction Load from Sales Portal
|
◾
|
$[…] – Monthly Asset Load from Sales Portal
|
◾
|
$[…] – SalesForce.com
|
◾
|
$[…]/month (AUM $[…] – $[…])
|
◾
|
$[…] (AUM $[…] – $[…])
|
◾
|
$[…]/month (AUM $[…] – $[…])
|
◾
|
$[…]/month (AUM $[…] – $[…])
|
◾
|
$[…] – Custom Data Interface
|
◾
|
$[…] – Standard Interface
|
◾
|
$[…] – OmniSERV Interface
|
◾
|
$[…] /day plus travel and out-of-pocket expenses.
|
◾
|
Document Loading, Storage, and Access – $[…] per statement
|
◾
|
Document Consent Processing, Suppression, and Notification – $[…] per suppressed statement
|
◾
|
Development & Implementation of Electronic Confirm Statements – $[…] initial setup fee
|
◾
|
Document Loading, Storage, and Access – $[…] per statement
|
◾
|
Document Consent Processing, Suppression, and Notification – $[…] per suppressed statement
|
◾
|
Development & Implementation of Electronic Investor Statements – $[…] initial setup fee
|
◾
|
Document Loading, Storage, and Access – $[…] per statement
|
◾
|
Document Consent Processing, Suppression, and Notification – $[…] per suppressed statement
|
◾
|
Development & Implementation of Electronic Tax Statements – $[…] initial setup fee
|
◾
|
Document Consent Processing, Suppression, and Notification – $[…] per suppressed statement
|
◾
|
Development & Implementation of Electronic Compliance Documents – $[…] initial setup fee
|
◾
|
View Consent Enrollment – $[…] per transaction
|
◾
|
Consent Enrollment – $[…] per transaction
|
◾
|
View Statements – $[…] per view
|
◾
|
Statements presented as PDF documents
|
◾
|
Statements will be loaded for all accounts, regardless of consent
|
◾
|
Three year minimum term
|
◾
|
Storage for two years included in Document Loading, Storage and Access fee. Archive fee of $[…] per document per year for three years and greater, if desired
|
MANAGED PORTFOLIO SERIES
on behalf of the series listed on Appendix A
|
TORTOISE CAPITAL ADVISORS, L.L.C.
|
|||
By:
|
/s/ Brian R. Wiedmeyer
|
By:
|
/s/ P. Bradley Adams
|
|
Name:
|
Brian R. Wiedmeyer
|
Name:
|
P. Bradley Adams
|
|
Title:
|
President and Principal Executive Officer
|
Title:
|
Managing Director
|
|
Series of Managed Portfolio Series
|
Operating Expense Limit as a Percentage
of Average Daily Net Assets of each Share Class
|
Tortoise MLP & Energy Income Fund
|
1.25%
|
Tortoise MLP & Energy Infrastructure Fund
|
1.00%
|
|
Stradley Ronon Stevens & Young, LLP
2005 Market Street, Suite 2600
Philadelphia, PA 19103-7098
Telephone: (215) 564-8000
Fax: (215) 564-8120
|
|
Subject: |
Post-Effective Amendment No. 434 to Registration Statement on Form N‑1A
File Nos. 811-22525; 333-172080
|
2.
|
RULE 12B-1 AGREEMENTS
|
Series of Managed Portfolio Series
|
Rule 12b-1 Fee
|
|
ATAC Rotation Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Great Lakes Small Cap Opportunity Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Green Square Tax Exempt High Income Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
Jackson Square All-Cap Growth Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Jackson Square Global Growth Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Jackson Square Select 20 Growth Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Jackson Square SMID-Cap Growth Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Jackson Square Large-Cap Growth Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Nuance Concentrated Value Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Nuance Concentrated Value Long-Short Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Nuance Mid Cap Value Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Reinhart Mid Cap PMV Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Reinhart Genesis PMV Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Smith Group Large Cap Core Growth Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
TorrayResolute Small/Mid Cap Growth Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Tortoise MLP & Energy Income Fund
|
||
A Class Shares
|
0.25% of average daily net assets
|
|
C Class Shares
|
1.00% of average daily net assets
|
|
Tortoise MLP & Pipeline Fund
|
||
A Class Shares
|
0.25% of average daily net assets
|
|
C Class Shares
|
1.00% of average daily net assets
|
Tortoise North American Pipeline Fund
|
||
Tortoise North American Pipeline Fund
|
0.25% of average daily net assets
|
|
Tortoise Global Water ESG Fund
|
||
Tortoise Global Water ESG Fund
|
0.25% of average daily net assets
|
|
Tortoise Cloud Infrastructure Fund
|
||
Tortoise Cloud Infrastructure Fund
|
0.25% of average daily net assets
|
|
Tortoise Digital Payments Infrastructure Fund
|
||
Tortoise Digital Payments Infrastructure Fund
|
0.25% of average daily net assets
|
|
Tortoise Select Opportunity Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Class C Shares
|
1.00% of average daily net assets
|
|
Series of Managed Portfolio Series
|
Rule 12b-1 Fee
|
|
ATAC Rotation Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Great Lakes Small Cap Opportunity Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Green Square Tax Exempt High Income Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Jackson Square All-Cap Growth Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Jackson Square Global Growth Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Jackson Square Select 20 Growth Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Jackson Square SMID-Cap Growth Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Jackson Square Large-Cap Growth Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Nuance Concentrated Value Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Nuance Concentrated Value Long-Short Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Nuance Mid Cap Value Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Reinhart Mid Cap PMV Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Reinhart Genesis PMV Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Smith Group Large Cap Core Growth Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
TorrayResolute Small/Mid Cap Growth Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Series of Managed Portfolio Series
|
Rule 12b-1 Fee
|
|
Tortoise MLP & Energy Income Fund
|
||
A Class Shares
|
0.25% of average daily net assets
|
|
C Class Shares
|
1.00% of average daily net assets
|
|
Tortoise MLP & Pipeline Fund
|
||
A Class Shares
|
0.25% of average daily net assets
|
|
C Class Shares
|
1.00% of average daily net assets
|
|
Tortoise North American Pipeline Fund
|
||
Tortoise North American Pipeline Fund
|
0.25% of average daily net assets
|
|
Tortoise Global Water ESG Fund
|
||
Tortoise Global Water ESG Fund
|
0.25% of average daily net assets
|
|
Tortoise Cloud Infrastructure Fund
|
||
Tortoise Cloud Infrastructure Fund
|
0.25% of average daily net assets
|
|
Tortoise Digital Payments Infrastructure Fund
|
||
Tortoise Digital Payments Infrastructure Fund
|
0.25% of average daily net assets
|
|
Tortoise Select Opportunity Fund
|
||
Investor Class Shares
|
0.25% of average daily net assets
|
|
Class C Shares
|
1.00% of average daily net assets
|
|
Tortoise VIP MLP & Pipeline Portfolio
|
||
Class II Shares
|
0.25% of average daily net assets
|
|
1. |
Front-end sales charges or CDSCs;
|
|
2. |
Rule 12b-1 plan distribution fees and shareholder servicing fees, if applicable to a particular Class;
|
|
3. |
Transfer agency and other recordkeeping costs to the extent allocated to a particular Class;
|
|
4. |
SEC and blue sky registration fees incurred separately by a particular Class;
|
|
5. |
Litigation or other legal expenses relating solely to a particular Class;
|
|
6. |
Printing and postage expenses related to the preparation and distribution of Class specific materials such as shareholder reports, prospectuses
and proxies to shareholders of a particular Class;
|
|
7. |
Expenses of administrative personnel and services as required to support the shareholders of a particular Class;
|
|
8. |
Audit or accounting fees or expenses relating solely to a particular Class;
|
|
9. |
Trustee fees and expenses incurred as a result of issues relating solely to a particular Class; and
|
|
10. |
Any other expenses, excluding advisory or custodial fees or other expenses related to the management of a Fund’s assets, subsequently identified
that should be properly allocated to a particular Class, which shall be approved by the Trust’s Board of Trustees (the “Board”) and a majority of the trustees of the Board who are not interested trustees (each, a “Disinterested
Trustee”).
|
Fund
|
Maximum Initial Sales Charge
|
Contingent Deferred Sales Charge
|
Maximum Annual Rule 12b-1 Distribution Fee
|
Maximum Annual Shareholder Servicing Fee
|
Conversion
Features
|
Exchange Privileges
|
Redemption Fees
|
ATAC Rotation Fund
|
None
|
None
|
0.25%
|
None
|
None
|
Yes
|
None
|
Cove Street Capital Small Cap Value Fund
|
None
|
None
|
0.25%
|
None
|
Yes
|
None
|
2.00%/60 days
|
Smith Group Large Cap Core Growth Fund
|
None
|
None
|
0.25%
|
None
|
Yes
|
Yes
|
None
|
TorrayResolute Small/Mid Cap Growth Fund
|
None
|
None
|
0.25%
|
0.15%
|
Yes
|
None
|
None
|
Fund
|
Maximum
Initial Sales
Charge
|
Contingent
Deferred Sales Charge
|
Maximum Annual Rule 12b-1 Distribution
Fee
|
Maximum
Annual Shareholder
Servicing Fee
|
Conversion
Features
|
Exchange
Privileges
|
Redemption
Fees
|
AC ONE China Fund
|
None
|
None
|
None
|
None
|
None
|
None
|
2.000%/60 days
|
Coho Relative Value Equity Fund
|
None
|
None
|
None
|
None
|
None
|
None
|
2.00%/60 days
|
Cove Street Capital Small Cap Value Fund
|
None
|
None
|
None
|
None
|
None
|
None
|
2.00%/60 days
|
LK Balanced Fund
|
None
|
None
|
None
|
None
|
None
|
None
|
None
|
Muhlenkamp Fund
|
None
|
None
|
None
|
None
|
None
|
None
|
None
|
Smith Group Large Cap Core Growth Fund
|
None
|
None
|
None
|
None
|
None
|
Yes
|
None
|
TorrayResolute Small/Mid Cap Growth Fund
|
None
|
None
|
None
|
0.15%
|
None
|
None
|
None
|
Tortoise MLP & Energy Income Fund
|
None
|
None
|
None
|
None
|
None
|
Yes
|
2.00%/90 days
|
Tortoise MLP & Energy Infrastructure Fund
|
None
|
None
|
None
|
None
|
None
|
Yes
|
2.00%/90 days
|
Tortoise MLP & Pipeline Fund
|
None
|
None
|
None
|
None
|
None
|
Yes
|
None
|
Tortoise North American Energy Independence Fund
|
None
|
None
|
None
|
None
|
None
|
Yes
|
None
|
Tortoise Select Opportunity Fund
|
None
|
None
|
None
|
None
|
None
|
Yes
|
None
|
Fund
|
Maximum
Initial Sales
Charge
|
Contingent
Deferred Sales Charge
|
Maximum Annual Rule 12b-1 Distribution
Fee
|
Maximum
Annual Shareholder
Servicing Fee
|
Conversion
Features
|
Exchange
Privileges
|
Redemption
Fees
|
Coho Relative Value Equity Fund
|
None
|
None
|
None
|
0.15%
|
None
|
None
|
2.00%/60 days
|
Fund
|
Maximum
Initial Sales
Charge
|
Contingent
Deferred Sales Charge
|
Maximum Annual Rule 12b-1 Distribution
Fee
|
Maximum
Annual Shareholder
Servicing Fee
|
Conversion
Features
|
Exchange
Privileges
|
Redemption
Fees
|
Tortoise MLP & Energy Income Fund
|
None(1)
|
1%/12 months
|
1.00%
|
None
|
Yes(2)
|
Yes
|
2.00%/90 days
|
Tortoise MLP & Pipeline Fund
|
None(1)
|
1%/12 months
|
1.00%
|
None
|
Yes(2)
|
Yes
|
None
|
Tortoise North American Energy Independence Fund
|
None(1)
|
1%/12 months
|
1.00%
|
None
|
Yes(2)
|
Yes
|
None
|
Tortoise Select Opportunity Fund
|
None(1)
|
1%/12 months
|
1.00%
|
None
|
Yes(2)
|
Yes
|
None
|
|
(1) |
No front-end sales charge is payable by a shareholder at the time of purchase, although the Distributor advances broker-dealers the first year distribution and
services fee at a rate of 1.00% on investments in C Class Shares. As a result, the Fund imposes a CDSC of 1.00% on redemptions of investments made within 12 months of purchase. The CDSC is assessed on an amount equal to the lesser of
the shareholder’s initial investment or the value of the shareholder’s investment at redemption. The first years’ Rule 12b-1 distribution fee is retained by the Distributor as reimbursement for the amount advanced. After the first
year, broker-dealers will receive ongoing 12b-1 fees associated with their clients’ investments.
|
|
(2) |
Generally, Class C shares are not eligible for conversion until the applicable CDSC period has expired.
|
Fund
|
Maximum
Initial Sales
Charge
|
Contingent
Deferred Sales Charge
|
Maximum Annual Rule 12b-1 Distribution
Fee
|
Maximum
Annual Shareholder
Servicing Fee
|
Conversion
Features
|
Exchange
Privileges
|
Redemption
Fees
|
Tortoise VIP MLP & Pipeline Portfolio
|
None
|
None
|
None
|
None
|
None
|
Yes
|
None
|
Fund
|
Maximum
Initial Sales
Charge
|
Contingent
Deferred Sales Charge
|
Maximum Annual Rule 12b-1 Distribution
Fee
|
Maximum
Annual Shareholder
Servicing Fee
|
Conversion
Features
|
Exchange
Privileges
|
Redemption
Fees
|
Tortoise VIP MLP & Pipeline Portfolio
|
None
|
None
|
0.25%
|
0.15%
|
None
|
Yes
|
None
|
Fund
|
Maximum
Initial Sales
Charge
|
Contingent
Deferred Sales Charge
|
Maximum Annual Rule 12b-1 Distribution
Fee
|
Maximum
Annual Shareholder
Servicing Fee
|
Conversion
Features
|
Exchange
Privileges
|
Redemption
Fees
|
Tortoise MLP & Pipeline Portfolio
|
2.50%
|
None
|
0.25%
|
None
|
None
|
None
|
None
|
Tortoise Select Income Bond Fund
|
2.50%
|
None
|
0.25%
|
None
|
None
|
None
|
None
|
Fund
|
Maximum
Initial Sales
Charge
|
Contingent
Deferred Sales Charge
|
Maximum Annual Rule 12b-1 Distribution
Fee
|
Maximum
Annual Shareholder
Servicing Fee
|
Conversion
Features
|
Exchange
Privileges
|
Redemption
Fees
|
Tortoise MLP & Energy Income Fund
|
5.50%
|
None(1)
|
0.25%
|
None
|
Yes
|
Yes
|
None
|
Tortoise MLP & Pipeline Portfolio
|
5.75%
|
None(1)
|
0.25%
|
None
|
Yes
|
Yes
|
None
|
Tortoise Select Income Bond Fund
|
5.75%
|
None(1)
|
0.25%
|
None
|
Yes
|
Yes
|
None
|
(1) |
No sales charge is payable at the time of purchase on investments of $1 million or more, although the Fund may impose a Contingent Deferred Sales Charge (“CDSC”) of 1.00%
on certain redemptions of those investments made within 12 months of the purchase. If imposed, the CDSC will be assessed on an amount equal to the lesser of the shareholder’s initial investment or the value of the shareholder’s
investment at redemption.
|