Tactical Income Commentary

March 2022

Fixed income markets were lower in March almost across the board as the Fed embarked on its rate hike  campaign amid persistent and rising inflationary pressures. This initial 25 basis point hike by the Fed was its first  rate hike since December 2018, and was well telegraphed. It only moved the fed funds rate to 0.375% (at the  mid-point), and given how high headline inflation rates are currently this low fed funds rate implies many more rate hikes to come.

Before we discuss the market’s expectations for rates and inflation, let’s take a look at the FOMC itself. After the March rate hike, the median estimate for the fed funds rate increased to 1.90%. But Fed governors have been getting more hawkish by the day. To wit, Cleveland President Mester thinks a year-end target of 2.5% is reasonable. And St. Louis President Bullard upped that saying he thinks 3.0% this year looks right. There has also been increasing chatter about one or more 50 basis point hikes, rather than the usual 25 bps increments. So the Fed is looking to “front load” these rate hikes and get as many in as they can by year-end.

Past performance does not guarantee future results. The blue line above represents the 50-day moving average.

If you look at the chart above of the 10-year US Treasury yield, you can see that it broke out in March and rallied strongly. This coincided with continued record inflation readings, as well as moves higher in energy prices and most commodities. This is also leading to increased inflation expectation readings, and that is something that has the Fed very concerned. Above all else, the Fed does not want to see that inflation expectations become “anchored” in the minds of consumers.

As such, the Fed has said that it will do whatever is necessary to bring down rampant inflation to more moderate levels. But since the Fed can’t really directly affect the supply chain situation, it has to rely on the demand side of the equation. And by tightening monetary policy significantly, it can certainly dampen demand.

Under these sets of circumstances, we would expect the fixed income markets to experience continued headwinds. It’s not just the ratcheting up of the fed funds rate, or the inflationary pressures weighing on the market – there is also the “monetary cliff” that the economy is set to endure as the Fed shifts from QE to QT and starts to dramatically reduce its bloated balance sheet.

We will continue to touch upon all these issues in future missives, as markets never move in a straight line, but this year should have lots of twists and turns to pay attention to.

The ACM Tactical Income Fund (TINIX) held up well in March, as we continue to focus on playing defense in a difficult market. The Fund returned -0.22% in March, while the Barclays AGG returned -2.78%. That helped widen the spread over which the Fund is outpacing the AGG to more than +300 bps.

The Fund continues to hold a record cash balance, which keeps us in a defensive position. Should the trends change, and more areas of the income markets start to trend higher, we will look to invest that cash and recoup some or all of the early declines we have seen thus far in 2022.

We want to thank all of you for your continued support.

Sincerely,

Jordan L. Kahn, CFA
Chief Investment Officer

Sources: Standard & Poor’s, Stockcharts.com, Briefing.com

Risk Disclosure:

Investors should carefully consider the investment objectives, risks, charges and expenses of the ACM Dynamic Opportunity Fund. This and other important information about the Fund is contained in the prospectus, which can be obtained by calling 1-844- 798-3833. The prospectus should be read carefully before investing. The ACM Dynamic Opportunity Fund is distributed by Northern Lights Distributors, LLC, member.”http://www.finra.org/” FINRA. “http://www.sipc.org/” SIPC. Northern Lights Distributors, LLC and Ascendant Capital Management, LLC are not affiliated.

Investors are not able to invest directly in the indices referenced and unmanaged index returns do not reflect any fees, expenses or sales charges. For current performance information, please visit our performance page: http://acm-funds.com/tactical-income-performance/

There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses.

ETF’s are subject to specific risks, depending on the nature of the underlying strategy of the fund. These risks could include liquidity risk, sector risk, as well as risks associated with fixed income securities, real estate investments, and commodities, to name a few. Investments in foreign securities could subject the Fund to greater risks including, currency fluctuation, economic conditions, and different governmental and accounting standards.

6398-NLD-04/25/2022

March 2022 Fact Sheet

The ACM Tactical Income Fund is designed as a core investment for investors  seeking income generation, while also focusing on capital preservation. The  fund employs a tactical strategy which aims to capture attractive income opportunities and mitigate downside risk when markets experience downturns.

We strive to help our investors participate in the gains available from financial
markets, while mitigating the downside risk.

PERFORMANCE As of 3/31/2022
1-mth 3-mth YTD 1 Yr* 3 Yr* Since Inception*
TINIX -0.22% -2.84% -2.84% -3.38% 2.47% 2.80%
Bloomberg US Agg Bond -2.78% -5.93% -5.93% -4.15% 1.69% 2.47%
Morningstar NT Bond -0.72% -2.49% -2.49% -4.27% 1.62% 1.62%

*As of 3/31/22

Investments in mutual funds involve risks. Performance is historic and does not guarantee future results. Investment principal value will fluctuate with changing market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month end performance information or the Fund’s prospectus please call the fund at 1-844-798-3833. You can also obtain a prospectus at www.ACM-funds.com.

The fund’s maximum sales charges for Class “A” shares is 5.75%. Actual Total Annual Fund Operating Expenses are 2.36% for Class A and 2.11% for Class I shares. The adviser has contractually agreed to reduce its fees and reimburse expenses of the Fund, at least until April 30, 2022, to ensure that the net annual fund operating expenses will not exceed 2.07% for Class A shares and 1.82% for Class I shares, subject to possible recoupment from the Fund in future years.

Please review the fund’s prospectus for more information regarding the fund’s fees and expenses. For performance information current to the most recent month-end, please call tollfree 1-844-798-3833

Sector Weightings

As of 3/31/2022


There is no assurance that the Fund will achieve its investment objectives.

Risk Disclosure:

Investors should carefully consider the investment objectives, risks, charges and expenses of the ACM Dynamic Opportunity Fund. This and other important information about the Fund is contained in the prospectus, which can be obtained by calling 1-844- 798-3833. The prospectus should be read carefully before investing. The ACM Dynamic Opportunity Fund is distributed by Northern Lights Distributors, LLC, member.”http://www.finra.org/” FINRA. “http://www.sipc.org/” SIPC. Northern Lights Distributors, LLC and Ascendant Capital Management, LLC are not affiliated.


Mutual funds involve risk including possible loss of principal. Adverse changes in currency exchange rates may erode or reverse any potential gains from t he Fund s Investments. ETF s are subject to specific risks, depending on the nature of the underlying strategy of the fund. These risks include liquidity risk, sec to r risk, as well as risks associated with fixed income securities, real estate investments, and commodities, to name a few. Investments in underlying funds that own s mall and mid capitalization companies may be more vulnerable than larger, more established organizations. Derivative instruments involve risks different from, or possibly great er than, the risks associated with investing directly in securities and other traditional investments. Investments in foreign securities could subject the Fund to greater risks incl u ding, currency fluctuation, economic conditions, and different governmental and accounting standards. In addition to the risks generally associated with investing in securities of foreign companies, countries with emerging markets also may have relatively unstable governments, social and legal systems that do no t protect share holders, economies based on only a few industries, and securities markets that trade a small number of issues.

Investors bear the risk that the Fund may not be able to implement its investments strategies or attract sufficient assets. Purchased put options may decline in value or expire worthless and may have imperfect correlati0on to the value of the Fund’s portfolio securities. Written call and put options may limit the Funds paticipation in equity market gain s and may amplify losses in market de declines. The Fund’s losses are potentially large in a written put or call transaction. If unhedged, written calls expose the Fund to potentially unlimited losses. The Fund w ill incur a loss as a result of a short position if price of the short position instrument increases in value between the date of the short position sale and the date on which an off setting position is purchase. Short positions may be considered speculative transactions and involve special risks, including greater reliance on the ability to accurately anticipate the future value of a security of instrument. The Fund s losses are potentially large in a short position transaction.

Beta is a measure of systemic risk. Standard Deviation is a statistical measurement. It sheds light on the historical volatility of that investment. The greater the standard deviation of a security, the greater the variance between each price and the mean, indicating a larger price range.

The Bloomberg U.S. Aggregate Bond Index is an unmanaged, fixed income, market-value-weighted index generally representative of investment grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgagebacked securities with maturities of at least one year. The  Bloomberg U.S. Aggregate Bond Index figures do not reflect any fees,  expenses, or taxes. An investor cannot invest directly in an index.

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