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united
states
securities and exchange commission
washington, d.c. 20549
form n-csr
certified shareholder report of registered management
investment companies
Investment Company Act file number 811-21720
Northern Lights Fund Trust
(Exact name of registrant as specified
in charter)
17605 Wright Street, Omaha, Nebraska 68130
(Address of principal executive offices) (Zip
code)
Stephanie Shearer, Gemini Fund Services, LLC.
80 Arkay Drive, Hauppauge, NY 11788
(Name and address of agent for service)
Registrant’s telephone number, including area code: 631-470-2633
Date of fiscal year end: 4/30
Date of reporting period: 10/31/18
Item 1. Reports to Stockholders.
Chadwick & DAmato Fund |
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Ticker Symbol: CDFFX |
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Semi-Annual Report |
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October 31, 2018 |
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Investor Information: 1-877-610-1671 |
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This report and the financial statements contained herein are submitted for the general information of shareholders and are not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. Nothing herein contained is to be considered an offer of sale or solicitation of an offer to buy shares of the Chadwick & DAmato Fund. Such offering is made only by prospectus, which includes details as to offering price and other material information. |
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Distributed by Northern Lights Distributors, LLC |
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Member FINRA |
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Dear
Shareholder:
During
the six-month period ended October 31, 2018, the Chadwick & DAmato Fund (the Fund) continued to pursue
a disciplined, risk-managed and historically informed investment approach focused on the complete market cycle. The global economy
that appeared to be gaining strength at the beginning of the year has noticeably weakened over the past 6-months ended October
31, 2018. Time will tell whether this is due to investor perception and sentiment toward the global trade war, the
slow reduction of stimulus from Central Banks, the unprecedented expansion of debt as interest rates rise or the natural ebb and
flow of the business cycle.
Investing
is an activity in which consumption today is sacrificed to allow greater consumption in the future. Risk is the
possibility that this objective wont be achieved. The time between savings, investing and consumption is non- linear. The
world changes around us and we must adapt to ensure that future consumption is possible. The financial media and much of academia
would have us believe markets are linear – contribute X amount to your 401k for X number of years earning a historical rate
of return and you will have a nicely calculated future amount. There have been many studies conducted on this topic with (in our
opinion) the best identifying the most non-linear variable of them all, human emotion and psychology.
The
purpose of this brief review in non-linear markets and investor psychology is to emphasize that markets are generally rational,
but occasionally do crazy things. We think there will be more crazy than rational in the coming months. Those of us that keep
our head, stay calm and are ready to adapt will emerge from this investment cycle with greater financial security than most.
The
Fund returned -3.79% versus -1.58% for its benchmark, the S&P Target Risk Moderate Index* over the six- months ended October
31, 2018. The primary detractor from performance was the expiration of hedge positions. We will continue working with the evidence
and will remain rational and disciplined as we translate evidence into investment policy that best serves your needs and goals
over the long-term.
Historically
we believe that patient investors have achieved better results by evaluating their goals, diversifying their assets globally and
maintaining a disciplined investment program. These are the hallmarks of the Chadwick & DAmato investment philosophy.
We
thank you for investing with us, welcome your questions and comments and look forward to serving your investment needs in the
years ahead.
Sincerely,
Thomas M. Chadwick, CFP® |
Anthony J. DAmato, CFP® |
Principal |
Principal |
* | The Standard & Poors Target Risk Index Series is comprised of four multi-asset class indices, each corresponding to a particular risk level. The asset class mix is determined once per year through a process designed to reflect the overall opportunity of the markets represented, adjusted for specific risk levels. Each index is fully investable, with varying levels of exposure to equities and fixed income through a family of exchange-traded funds (ETFs). |
* | Investors cannot invest directly in an index. |
2184-NLD-12/27/2018
Chadwick & DAmato Fund |
PORTFOLIO REVIEW (Unaudited) |
October 31, 2018 |
Total
Returns as of October 31, 2018
Annualized | ||||
Chadwick & DAmato Fund |
Six Months |
One Year |
Five Years |
Since Inception* |
(3.79)% | (7.35)% | (0.14)% | 3.09% | |
S&P Target Risk Moderate Index** |
(1.58)% | (1.25)% | 3.89% | 5.62% |
Dow Jones Global Dow Index TR*** |
(4.22)% | 0.03% | 6.07% | 8.41% |
* | Commencement of operations is June 25, 2010. |
** | The S&P Target Risk Moderate Index provides exposure to a diversified array of financial assets corresponding to a moderate risk level. This index offers significant exposure to fixed income, while also increasing opportunities for higher returns through equities. The asset class mix is determined once a year through a process designed to reflect the overall investment opportunity of the represented markets. Investors cannot invest directly in an index. |
*** | The Global DowSM is a 150-stock index of corporations from around the world. The underlying philosophy of The Global DowSM is much like that of the Dow Jones Industrial Average. For example, the index includes companies with a long history of success, and a wide following among investors. Its components, like those of The Dow, are selected by the Averages Committee, which is comprised of the Managing Editor of The Wall Street Journal, the head of Dow Jones Indexes research and the head of CME Group research. While stock selection is not governed by quantitative rules, a stock typically is added only if the company has an excellent reputation, demonstrates sustained growth and is of interest to a large number of investors. Maintaining adequate sector representation within the index is also a consideration in the selection process. Investors cannot invest directly in an index. |
Past
performance is not predictive of future results. The investment return and principal value of an investment will fluctuate. An
investors shares, when redeemed, may be worth more or less than the original cost. Total return is calculated assuming
reinvestment of all dividends and distributions. The Funds total gross annual operating expenses, including underlying
funds, are 2.72%, as per the prospectus dated August 28, 2018. The returns shown do not reflect the deduction of taxes that a
shareholder would have to pay on Fund distributions or the redemption of Fund shares. For performance information current to the
most recent month-end, please call 1- 877-610-1671.
Portfolio
Composition as of October 31, 2018 (Unaudited)
Percent of Net | Percent of Net | |||||||||
Assets | Assets | |||||||||
Closed End Funds | 2.30 | % | International Equity | 7.8 | % | |||||
Common Stock | 0.1 | % | Money Market Fund | 22.4 | % | |||||
Exchange-Traded Funds | 24.7 | % | Options Purchased | 3.9 | % | |||||
Broad Based | 4.6 | % | Call Options Purchased | 3.2 | % | |||||
Large-Cap Growth Funds | 20.1 | % | Put Options Purchased | 0.7 | % | |||||
Mutual Funds | 46.8 | % | Liabilities Less Other Assets | (0.2 | )% | |||||
Asset Allocation | 39.0 | % | Net Assets | 100.0 | % | |||||
Please
refer to the Portfolio of Investments in this report for a detailed listing of the Funds holdings.
Chadwick & DAmato Fund |
PORTFOLIO OF INVESTMENTS (Unaudited) |
October 31, 2018 |
Shares | Value | |||||||
CLOSED END FUNDS – 2.3% | ||||||||
100,000 | Nuveen AMT-Free Municipal Credit Income Fund | $ | 1,340,000 | |||||
TOTAL CLOSED END FUNDS (Cost – $1,495,640) |
||||||||
COMMON STOCK – 0.1% | ||||||||
400,000 | Global BlockChain Mining Corp. | 7,080 | ||||||
400,000 | Global Blockchain Technologies Corp.* | 36,800 | ||||||
TOTAL COMMON STOCK (Cost – $302,500) |
43,880 | |||||||
EXCHANGE-TRADED FUNDS – 24.7% | ||||||||
BROAD BASED – 4.6% | ||||||||
150,000 | Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF | 2,661,000 | ||||||
LARGE-CAP GROWTH FUNDS – 20.1% | ||||||||
40,000 | ProShares UltraPro Dow30 | 3,678,400 | ||||||
75,000 | ProShares UltraPro QQQ * | 3,915,750 | ||||||
90,000 | ProShares UltraPro S&P 500 | 4,083,300 | ||||||
11,677,450 | ||||||||
TOTAL EXCHANGE-TRADED FUNDS (Cost – $3,879,924) |
14,338,450 | |||||||
MUTUAL FUNDS – 46.8% | ||||||||
ASSET ALLOCATION – 39.0% | ||||||||
1,008,365 | Calvert Ultra-Short Duration Income Fund – Class I | 10,063,486 | ||||||
1,015,352 | Fidelity Conservative Income Bond Fund – Institutional Class | 10,183,983 | ||||||
60,445 | Permanent Portfolio – Class I | 2,369,439 | ||||||
22,616,908 | ||||||||
INTERNATIONAL EQUITY – 7.8% | ||||||||
164,639 | Tweedy Browne Global Value Fund | 4,540,747 | ||||||
TOTAL MUTUAL FUNDS (Cost – $26,838,393) |
27,157,655 | |||||||
SHORT-TERM INVESTMENT – 22.4% | ||||||||
MONEY MARKET FUND – 22.4% | ||||||||
12,979,637 | Dreyfus Government Cash Management Fund – Class I 2.05%** | 12,979,637 | ||||||
TOTAL SHORT-TERM INVESTMENT (Cost – $12,979,637) |
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Contracts ^ | Exercise Price | Expiration Date | Notional Amount | |||||||||||||||
OPTIONS PURCHASED * – 3.9% | ||||||||||||||||||
CALL OPTIONS PURCHASED – 3.2% | ||||||||||||||||||
1,267 | 3D Systems Corp | $ | 20.00 | January 2020 | $ | 2,534,000 | 177,380 | |||||||||||
1,000 | 3D Systems Corp | 30.00 | January 2020 | 3,000,000 | 50,000 | |||||||||||||
2,500 | Arconic, Inc. | 30.00 | January 2020 | 7,500,000 | 62,500 | |||||||||||||
500 | Cloudera, Inc. | 25.00 | November 2018 | 1,250,000 | 1,250 | |||||||||||||
100 | Facebook, Inc. | 170.00 | January 2019 | 1,700,000 | 24,500 | |||||||||||||
2,000 | General Electric Co. | 15.00 | January 2020 | 3,000,000 | 106,000 | |||||||||||||
2,000 | General Mills, Inc. | 50.00 | January 2020 | 10,000,000 | 372,000 | |||||||||||||
1,000 | Invitae Corp. | 15.00 | March 2019 | 1,500,000 | 265,000 | |||||||||||||
3,000 | ProShares Ultra VIX Short-Term Futures ETF | 50.00 | January 2019 | 15,000,000 | 157,500 | |||||||||||||
1,000 | Pure Storage, Inc. | 30.00 | January 2020 | 3,000,000 | 187,500 | |||||||||||||
3,000 | Rite Aid Corp. | 20.00 | January 2020 | 6,000,000 | 57,000 | |||||||||||||
250 | S&P 500 Index | 3,000.00 | December 2018 | 75,000,000 | 55,000 | |||||||||||||
633 | Snap, Inc. | 15.00 | January 2020 | 949,500 | 16,458 | |||||||||||||
500 | Southwest Airlines Co. | 60.00 | January 2020 | 3,000,000 | 140,000 | |||||||||||||
400 | Twitter, Inc. | 50.00 | January 2020 | 2,000,000 | 149,600 | |||||||||||||
500 | United States Steel Corp. | 40.00 | January 2019 | 2,000,000 | 5,000 | |||||||||||||
10,000 | VanEck Vectors Gold Miners ETF | 35.00 | January 2019 | 35,000,000 | 10,000 | |||||||||||||
TOTAL CALL OPTIONS PURCHASED (Cost – $5,000,812) | 1,836,688 | |||||||||||||||||
PUT OPTIONS PURCHASED – 0.7% | ||||||||||||||||||
100 | Facebook, Inc. | 150.00 | January 2019 | 1,500,000 | 69,700 | |||||||||||||
40 | Tesla, Inc. | 200.00 | January 2020 | 800,000 | 107,800 | |||||||||||||
500 | United States Steel Corp. | 30.00 | January 2019 | 1,500,000 | 225,000 | |||||||||||||
TOTAL PUT OPTIONS PURCHASED (Cost – $415,316) | 402,500 | |||||||||||||||||
TOTAL OPTIONS PURCHASED (Cost – $5,416,128) | 2,239,188 | |||||||||||||||||
TOTAL INVESTMENTS – 100.2% (Cost – $50,912,222) |
$ | 58,098,810 | ||||||||||||||||
LIABILITIES LESS OTHER ASSETS – (0.2)% | (89,378 | ) | ||||||||||||||||
NET ASSETS – 100.0% | $ | 58,009,432 | ||||||||||||||||
* | Non-Income producing security. |
** | Money Market Fund; interest rate reflects seven-day effective yield on October 31, 2018. |
^ | Each equity option contract allows the holder of the option to purchase or sell 100 shares of the underlying security. |
The
accompanying notes are an integral part of these financial statements.
Chadwick & DAmato Fund |
STATEMENT OF ASSETS AND LIABILITIES (Unaudited) |
October 31, 2018 |
Assets: | ||||
Investments at Value (identified cost $50,912,222) | $ | 58,098,810 | ||
Dividend and Interest Receivable | 44,335 | |||
Prepaid Expenses and Other Assets | 3,754 | |||
Total Assets | 58,146,899 | |||
Liabilities: | ||||
Accrued Investment Advisory Fees | 51,873 | |||
Accrued Distribution Fees | 19,431 | |||
Payable for Fund Shares Redeemed | 55,000 | |||
Accrued Expenses and Other Liabilities | 11,163 | |||
Total Liabilities | 137,467 | |||
Net Assets (Unlimited shares of no par value interest authorized/ 5,442,777 shares outstanding) |
$ | 58,009,432 | ||
Net asset value, offering and redemption price per share ($58,009,432 / 5,442,777 shares of beneficial interest outstanding) |
$ | 10.66 | ||
Composition of Net Assets: | ||||
At October 31, 2018, Net Assets consisted of: | ||||
Paid-in Capital | $ | 47,281,073 | ||
Accumulated Earnings | 10,728,359 | |||
Net Assets | $ | 58,009,432 | ||
The
accompanying notes are an integral part of these financial statements.
Chadwick & DAmato Fund |
STATEMENT OF OPERATIONS (Unaudited) |
For the Six Months Ended October 31, 2018 |
Investment Income: | ||||
Dividend Income | $ | 492,245 | ||
Total Investment Income | 492,245 | |||
Expenses: | ||||
Investment Advisory Fees | 334,363 | |||
Distribution Fees | 76,903 | |||
Administration Fees | 25,938 | |||
Transfer Agent Fees | 15,749 | |||
Fund Accounting Fees | 15,651 | |||
Compliance Officer Fees | 10,889 | |||
Audit Fees | 8,571 | |||
Legal Fees | 7,058 | |||
Registration Fees | 5,042 | |||
Trustees Fees | 3,168 | |||
Printing Fees | 3,092 | |||
Custody Fees | 2,635 | |||
Insurance Fees | 1,008 | |||
Miscellaneous Expenses | 1,009 | |||
Total Expenses | 511,076 | |||
Net Investment Loss | (18,831 | ) | ||
Net Realized and Unrealized Gain (Loss) on Investments: | ||||
Net Realized Loss from: | ||||
Options Contracts | (1,283,741 | ) | ||
Net Change in Unrealized Appreciation (Depreciation) on: | ||||
Investments | 146,100 | |||
Options Contracts | (955,494 | ) | ||
(809,394 | ) | |||
Net Realized and Unrealized Loss on Investments | (2,093,135 | ) | ||
Net Decrease in Net Assets Resulting From Operations | $ | (2,111,966 | ) | |
The
accompanying notes are an integral part of these financial statements.
Chadwick & DAmato Fund |
STATEMENTS OF CHANGES IN NET ASSETS |
Six Months | Year | |||||||
Ended | Ended | |||||||
October 31, 2018 | April 30, 2018 | |||||||
(Unaudited) | ||||||||
Operations: | ||||||||
Net Investment Loss | $ | (18,831 | ) | $ | (721,900 | ) | ||
Net Realized Gain (Loss) from Investments and Options Contracts | (1,283,741 | ) | 4,922,380 | |||||
Distributions of Realized Gains from Underlying Investment Companies | — | 296,778 | ||||||
Net Change in Unrealized Depreciation on Investments and Options Contracts | (809,394 | ) | (1,725,832 | ) | ||||
Net Increase (Decrease) in Net Assets Resulting From Operations | (2,111,966 | ) | 2,771,426 | |||||
Distributions to Shareholders From: | ||||||||
Net Realized Gains | — | (3,009,438 | ) | |||||
Total Distributions to Shareholders | — | (3,009,438 | ) | |||||
Beneficial Interest Transactions: | ||||||||
Proceeds from Shares Issued | 51,014 | 1,647,449 | ||||||
Distributions Reinvested | — | 3,009,428 | ||||||
Cost of Shares Redeemed | (10,365,989 | ) | (11,027,893 | ) | ||||
Total Beneficial Interest Transactions | (10,314,975 | ) | (6,371,016 | ) | ||||
Decrease in Net Assets | (12,426,941 | ) | (6,609,028 | ) | ||||
Net Assets: | ||||||||
Beginning of Period | 70,436,373 | 77,045,401 | ||||||
End of Period ** | $ | 58,009,432 | $ | 70,436,373 | ||||
** Net Assets- End of Period includes accumulated net investment loss of $158,453 as of April 30, 2018. | ||||||||
Share Activity: | ||||||||
Shares Issued | 4,511 | 143,801 | ||||||
Shares Reinvested | — | 251,414 | ||||||
Shares Redeemed | (916,373 | ) | (950,860 | ) | ||||
Net Decrease in Shares of Beneficial Interest Outstanding | (911,862 | ) | (555,645 | ) | ||||
The
accompanying notes are an integral part of these financial statements.
Chadwick & DAmato Fund |
FINANCIAL HIGHLIGHTS |
The table below sets forth financial data for one share of beneficial interest outstanding throughout each period presented |
Six Months | Year | Year | Year | Year | Year | |||||||||||||||||||
Ended | Ended | Ended | Ended | Ended | Ended | |||||||||||||||||||
October 31, 2018 | April 30, 2018 | April 30, 2017 | April 30, 2016 | April 30, 2015 | April 30, 2014 | |||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 11.08 | $ | 11.15 | $ | 10.53 | $ | 11.76 | $ | 11.70 | $ | 11.53 | ||||||||||||
From Operations: | ||||||||||||||||||||||||
Net investment loss(a) | 0.00 | (e) | (0.11 | ) | (0.03 | ) | (0.12 | ) | (0.11 | ) | (0.10 | ) | ||||||||||||
Net gain (loss) (both realized and unrealized) | (0.42 | ) | 0.51 | 0.65 | (1.11 | ) | 0.26 | 0.94 | ||||||||||||||||
Total from operations | (0.42 | ) | 0.40 | 0.62 | (1.23 | ) | 0.15 | 0.84 | ||||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||||||
Net realized gains | — | (0.47 | ) | — | — | (0.09 | ) | (0.67 | ) | |||||||||||||||
Total distributions | — | (0.47 | ) | — | — | (0.09 | ) | (0.67 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 10.66 | $ | 11.08 | $ | 11.15 | $ | 10.53 | $ | 11.76 | $ | 11.70 | ||||||||||||
Total Return (b) | (3.79 | )% (f) | 3.30 | % | 5.89 | % | (10.46 | )% | 1.23 | % | 7.36 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Net assets, end of period (in 000s) | $ | 58,009 | $ | 70,436 | $ | 77,045 | $ | 83,049 | $ | 101,217 | $ | 100,573 | ||||||||||||
Ratio of expenses to average net assets (c) | 1.53 | % (g) | 1.55 | % | 1.51 | % | 1.47 | % | 1.48 | % | 1.45 | % | ||||||||||||
Ratio of net investment loss to average net assets (c,d) | (0.06 | )% (g) | (0.94 | )% | (0.27 | %) | (1.08 | )% | (0.93 | )% | (0.83 | )% | ||||||||||||
Portfolio turnover rate | 9 | % (f) | 70 | % | 27 | % | 24 | % | 14 | % | 149 | % | ||||||||||||
(a) | Per share amounts are calculated using the average shares method, which more appropriately presents the per share data for the period. |
(b) | Total returns are historical in nature and assume changes in share price, reinvestment of dividends and capital gains distributions, if any. |
(c) | Does not include expenses of underlying investment companies in which the Fund invests. |
(d) | Recognition of net investment loss by the Fund is affected by the timing and declaration of dividends by the underlying investment companies in which the Fund invests. |
(e) | Amount represents less than $0.01 per share. |
The
accompanying notes are an integral part of these financial statements.
Chadwick
& DAmato Fund
NOTES
TO FINANCIAL STATEMENTS (Unaudited)
October
31, 2018
The
Chadwick & DAmato Fund (the Fund), is a diversified series of shares of beneficial interest of Northern
Lights Fund Trust (the Trust), a Delaware statutory trust organized on January 19, 2005. The Trust is registered
under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company.
The primary investment objective of the Fund is capital appreciation with a secondary objective of capital preservation. The Fund
commenced operations on June 25, 2010.
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The
following is a summary of significant accounting policies followed by the Fund in preparation of its financial statements. These
policies are in conformity with accounting principles generally accepted in the United States of America (GAAP).
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses for the period. Actual results could differ from those estimates. The Fund is an investment
company and accordingly follows the Investment Company accounting and reporting guidance of the Financial Accounting Standards
Board (FASB) Accounting Standard Codification Topic 946 Financial Services – Investment Companies
including FASB Accounting Standard Update (ASU) 2013-08.
Security
Valuation – Securities listed on an exchange are valued at the last reported sale price at the close of the regular
trading session of the primary exchange on the business day the value is being determined, or in the case of securities listed
on NASDAQ at the NASDAQ Official Closing Price (NOCP). In the absence of a sale, such securities shall be valued
at the mean between the current bid and ask prices on the primary exchange on the day of valuation. Exchange traded options, futures
and options on futures are valued at the final settle price or, in the absence of a settle price, at the last sale price on the
day of valuation. Index options shall be valued at the mean between the current bid and ask prices on the day of valuation. Investments
valued in currencies other than the U.S. dollar are converted to U.S. dollars using exchange rates obtained from pricing services.
Short-term investments that mature in 60 days or less, at the time of purchase, may be valued at amortized cost.
Valuation
of Fund of Funds – The Fund may invest in portfolios of open-end or closed-end investment companies (the
underlying funds). Underlying open-end investment companies are valued at their respective net asset values as
reported by such investment companies. The underlying funds value securities in their portfolios for which market quotations
are readily available at their market values (generally the last reported sale price) and all other securities and assets at
their fair value by the methods established by the boards of the underlying funds.
The
shares of many closed-end investment companies, after their initial public offering, frequently trade at a price per share, which
is different than the net asset value per share. The difference represents a market premium or market discount of such shares.
There can be no assurances that the market discount or market premium on shares of any closed-end investment company purchased
by the Fund will not change.
The
Fund may hold securities, such as private investments, interests in commodity pools, other non-traded securities or temporarily
illiquid securities, for which market quotations are not readily available or are determined to be unreliable. These securities
will be valued using the fair value procedures approved by the Trusts Board of Trustees (the Board).
The Board has delegated execution of these procedures to a fair value team composed of one or more representatives from each of
the (i) Trust, (ii) administrator, and (iii) adviser. The team may also enlist third party consultants such as a valuation specialist
at a public accounting firm, valuation consultant or financial officer of a security issuer on an as-needed basis to assist in
determining a security-specific fair value. The Board has also engaged a third party valuation firm to attend valuation meetings
held by the Trust, review minutes of such meetings and report to the Board on a quarterly basis. The Board reviews and ratifies
the execution of this process and the resultant fair value prices at least quarterly to assure the process produces reliable results.
Chadwick
& DAmato Fund
NOTES
TO FINANCIAL STATEMENTS (Continued) (Unaudited)
October
31, 2018
Fair
Valuation Process – As noted above, the fair value team is composed of one or more representatives from each of the
(i) Trust, (ii) administrator, and (iii) adviser. The applicable investments are valued collectively via inputs from the fair
value team. For example, fair value determinations are required for the following securities: (i) securities for which market
quotations are insufficient or not readily available on a particular business day (including securities for which there is a short
and temporary lapse in the provision of a price by the regular pricing source), (ii) securities for which, in the judgment of
the adviser, the prices or values available do not represent the fair value of the instrument. Factors which may cause the adviser
to make such a judgment include, but are not limited to, the following: only a bid price or an ask price is available; the spread
between bid and ask prices is substantial; the frequency of sales; the thinness of the market; the size of reported trades; and
actions of the securities markets, such as the suspension or limitation of trading; (iii) securities determined to be illiquid;
(iv) securities with respect to which an event that will affect the value thereof has occurred since the closing prices were established
on the principal exchange on which they are traded, but prior to the Funds calculation of its net asset value. Specifically,
interests in commodity pools or managed futures pools are valued on a daily basis by reference to the closing market prices of
each futures contract or other asset held by a pool, as adjusted for pool expenses. Restricted or illiquid securities, such as
private investments or non-traded securities are valued via inputs from the adviser based upon the current bid for the security
from two or more independent dealers or other parties reasonably familiar with the facts and circumstances of the security (who
should take into consideration all relevant factors as may be appropriate under the circumstances). If the adviser is unable to
obtain a current bid from such independent dealers or other independent parties, the fair value team shall determine the fair
value of such security using the following factors: (i) the type of security; (ii) the cost at date of purchase; (iii) the size
and nature of the Funds holdings; (iv) the discount from market value of unrestricted securities of the same class at the time
of purchase and subsequent thereto; (v) information as to any transactions or offers with respect to the security; (vi) the nature
and duration of restrictions on disposition of the security and the existence of any registration rights; (vii) how the yield
of the security compares to similar securities of companies of similar or equal creditworthiness; (viii) the level of recent trades
of similar or comparable securities; (ix) the liquidity characteristics of the security; (x) current market conditions; and (xi)
the market value of any securities into which the security is convertible or exchangeable.
The
Fund utilizes various methods to measure the fair value of most of its investments on a recurring basis. GAAP establishes a hierarchy
that prioritizes inputs to valuation methods. The three levels of input are:
Level
1 – Unadjusted quoted prices in active markets for identical assets and liabilities that the Fund has the ability to
access.
Level
2 – Observable inputs other than quoted prices included in Level 1 for the asset or liability, either directly or indirectly.
These inputs may include quoted prices for the identical instrument in an inactive market, prices for similar instruments, interest
rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Level
3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing
the Funds own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would
be based on the best information available.
The
availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including,
for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets,
and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less
observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment
exercised in determining fair value is greatest for instruments categorized in Level 3.
The
inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes,
the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the
lowest level input that is significant to the fair value measurement in its entirety.
Chadwick
& DAmato Fund
NOTES
TO FINANCIAL STATEMENTS (Continued) (Unaudited)
October
31, 2018
The
inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those
securities. The following table summarizes the inputs used as of October 31, 2018 for the Funds investments measured at
fair value:
Assets | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Closed End Funds | $ | 1,340,000 | $ | — | $ | — | $ | 1,340,000 | ||||||||
Common Stock | 43,880 | 43,880 | ||||||||||||||
Exchange-Traded Funds * | 14,338,450 | — | — | 14,338,450 | ||||||||||||
Mutual Funds* | 27,157,655 | — | — | 27,157,655 | ||||||||||||
Short-Term Investments | 12,979,637 | — | — | 12,979,637 | ||||||||||||
Options Purchased | 2,184,188 | 55,000 | — | 2,239,188 | ||||||||||||
Total Investments | $ | 58,043,810 | $ | 55,000 | $ | — | $ | 58,098,810 |
The
Fund did not hold any Level 3 securities during the period.
There
were no transfers among any Levels during the current period presented. It is the Funds policy to record transfers into
or out of any Levels at the end of the reporting period.
* | Please refer to the Portfolio of Investments for Industry Classification. |
Exchange
Traded Funds (ETFs) – The Fund may invest in ETFs. ETFs are a type of fund bought and sold on a securities
exchange. An ETF trades like common stock and represents a fixed portfolio of securities. The Fund may purchase an ETF to gain
exposure to a portion of the U.S. or a foreign market. There are risks of owning the underlying securities the ETFs are designed
to track, and the lack of liquidity of an ETF may result in it being more volatile. Additionally, ETFs have fees and expenses
that reduce their value.
Options
Transactions – The Fund is subject to equity price risk in the normal course of pursuing its investment objective and
may purchase or sell options to help hedge against risk. When the Fund writes put and call options, an amount equal to the premium
received is included in the Statement of Assets and Liabilities as a liability. The amount of the liability is subsequently marked-to-market
to reflect the current market value of the option. If an option expires on its stipulated expiration date or if the Fund enters
into a closing purchase transaction, a gain or loss is realized. If a written call option is exercised, a gain or loss is realized
for the sale of the underlying security and the proceeds from the sale are increased by the premium originally received. As writer
of an option, the Fund has no control over whether the option will be exercised and, as a result, retains the market risk of an
unfavorable change in the price of the security underlying the written option.
The
Fund may purchase put and call options. Put options are purchased to hedge against a decline in the value of securities held in
the Funds portfolio. If such a decline occurs, a put option will permit the Fund to sell the securities underlying such
options at the exercise price, or to close out the options at a profit. The premium paid for a put or call option plus any transaction
costs will reduce the benefit, if any, realized by the Fund upon exercise of the option, and, unless the price of the underlying
security or index rises or declines sufficiently, the option may expire worthless to the Fund. In addition, in the event that
the price of the security or index in connection with which an option was purchased moves in a direction favorable to the Fund,
the benefits realized by the Fund as a result of such favorable movement will be reduced by the amount of the premium paid for
the option and related transaction costs. Written and purchased options are non-income producing securities. With purchased options,
there is minimal counterparty risk to the Fund since these options are exchange traded and the exchanges clearinghouse,
as counterparty to all exchange traded options, guarantees against a possible default.
Chadwick
& DAmato Fund
NOTES
TO FINANCIAL STATEMENTS (Continued) (Unaudited)
October
31, 2018
Offsetting
of Financial Assets and Derivative Assets
The
following table presents the Funds asset derivatives available for offset under a master netting arrangement net of collateral
pledged as of October 31, 2018.
Gross Amounts Not Offset in the | ||||||||||||||||||||||||
Assets: | Statement of Assets and Liabilities | |||||||||||||||||||||||
Gross Amounts | Net Amounts | |||||||||||||||||||||||
Offset in the | Presented in | |||||||||||||||||||||||
Gross Amounts | Statement of | the Statement | ||||||||||||||||||||||
of Recognized | Assets and | of Assets and | Financial | Collateral | ||||||||||||||||||||
Description | Assets | Liabilities | Liabilities | Instruments | Pledged/Received | Net Amount | ||||||||||||||||||
Options contracts | $ | 2,239,188 | $ | — | $ | 2,239,188 | $ | — | $ | — | $ | 2,239,188 | ||||||||||||
Total | $ | 2,239,188 | $ | — | $ | 2,239,188 | $ | — | $ | — | $ | 2,239,188 |
As
of October 31, 2018, the change in unrealized depreciation and amount of realized loss on options contracts subject to equity
price risk amounted to $(955,494) and $(1,283,741), respectively. The value of the derivative instruments of $2,239,188 is included
in Investments at Value on the Statement of Assets and Liabilities. The notional value of the derivative instruments outstanding
as of October 31, 2018 as disclosed in the Portfolio of Investments and the realized loss amounts and changes in unrealized losses
on derivative instruments during the year as disclosed above and within the Statement of Operations serve as indicators of the
volume of derivative activity for the Fund.
Security
Transactions and Investment Income – Investment security transactions are accounted for on a trade date basis. Cost
is determined and gains and losses are based upon the specific identification method for both financial statement and federal
income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis.
Purchase discounts and premiums on securities are accreted and amortized over the life of the respective securities.
Expenses
– Expenses of the Trust that are directly identifiable to a specific fund are charged to that fund. Expenses, which
are not readily identifiable to a specific fund, are allocated in such a manner as deemed equitable, taking into consideration
the nature and type of expense and the relative sizes of the funds in the Trust.
Federal
Income Taxes – The Fund intends to continue to comply with the requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies and will distribute all of its taxable income, if any, to shareholders. Accordingly,
no provision for Federal income taxes is required in the financial statements.
The
Fund recognizes the tax benefits of uncertain tax positions only where the position is more likely than not to be
sustained assuming examination by tax authorities. Management has analyzed the Funds tax positions and has concluded that
no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open
tax years ended April 30, 2016 to April 30, 2018, or expected to be taken in the Funds April 30, 2019 year-end tax return.
The Fund identifies its major tax jurisdictions as U.S. federal, Nebraska and foreign jurisdictions where the Fund makes significant
investments. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized
tax benefits will change materially in the next twelve months.
Distributions
to Shareholders – Distributions from net investment income and capital gains, if any, are declared and paid at least
annually and are recorded on the ex-dividend date. The character of income and gains to be distributed is determined in accordance
with federal income tax regulations, which may differ from GAAP. These book/tax differences are considered either
temporary (i.e., deferred losses, capital loss carry forwards) or permanent in nature. To the extent these differences are permanent
in nature, such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment; temporary
differences do not require reclassification.
Chadwick
& DAmato Fund
NOTES
TO FINANCIAL STATEMENTS (Continued) (Unaudited)
October
31, 2018
Indemnification
– The Trust indemnifies its officers and Trustees for certain liabilities that may arise from the performance of their
duties to the Trust. Additionally, in the normal course of business, the Fund enters into contracts that contain a variety of
representations and warranties and which provide general indemnities. The Funds maximum exposure under these arrangements
is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on
experience, the Fund expects the risk of loss due to these warranties and indemnities to be remote.
3. | INVESTMENT ADVISORY AGREEMENT AND TRANSACTIONS WITH RELATED PARTIES |
Chadwick
& DAmato, LLC serves as the Funds investment adviser (the Adviser).
Advisory
Fees – Pursuant to an investment advisory agreement between the Trust and the Adviser with respect to the Fund, the Adviser,
under the oversight of the Board, directs the daily operations of the Fund and supervises the performance of administrative and
professional services provided by others. As compensation for its services and the related expenses borne by the Adviser, the
Fund pays the Adviser a management fee, computed and accrued daily and paid monthly, at an annual rate of 1.00% of the average
daily net assets of the Fund. For the six months ended October 31, 2018, the Adviser earned advisory fees of $334,363.
Distributor
– The distributor of the Fund is Northern Lights Distributors, LLC (the Distributor). The Board has adopted,
on behalf of the Fund, the Trusts Master Distribution and Shareholder Servicing Plan (the Plan), as amended,
pursuant to Rule 12b-1 under the 1940 Act, to pay for certain distribution activities and shareholder services. Under the Plan,
the Fund may pay up to 0.25% per year of its average daily net assets for such distribution and shareholder service activities.
The Fund is currently approved to pay 0.23% per year of its average daily net assets. For the six months ended October 31, 2018,
the Fund incurred distribution fees of $76,903.
In
addition, certain affiliates of the Distributor provide services to the Fund as follows:
Gemini
Fund Services, LLC (GFS) – GFS, an affiliate of the Distributor, provides administration, fund accounting,
and transfer agent services to the Fund. Pursuant to a separate servicing agreement with GFS, the Fund pays GFS customary fees
for providing administration, fund accounting, and transfer agency services to the Fund. Certain officers of the Trust are also
officers of GFS, and are not paid any fees directly by the Fund for serving in such capacities.
Northern
Lights Compliance Services, LLC (NLCS) – NLCS, an affiliate of GFS and the Distributor, provides a chief compliance
officer to the Trust, as well as related compliance services, pursuant to a consulting agreement between NLCS and the Trust. Under
the terms of such agreement, NLCS receives customary fees from the Fund.
Blu
Giant, LLC (Blu Giant) – Blu Giant, an affiliate of GFS and the Distributor, provides EDGAR conversion and
filing services as well as print management services for the Fund on an ad-hoc basis. For the provision of these services, Blu
Giant receives customary fees from the Fund.
4. | INVESTMENT TRANSACTIONS |
The
cost of purchases and proceeds from the sale of securities, other than U.S. Government securities and short- term investments,
for the six months ended October 31, 2018 amounted to $4,352,547 and $15,000,000, respectively.
Chadwick
& DAmato Fund
NOTES
TO FINANCIAL STATEMENTS (Continued) (Unaudited)
October
31, 2018
5. | AGGREGATE UNREALIZED APPRECIATION AND DEPRECIATION – TAX BASIS |
The
identified cost of investments in securities owned by the Fund for federal income tax purposes and its respective gross unrealized
appreciation and depreciation at October 31, 2018, were as follows:
Gross Unrealized | Gross Unrealized | Net Unrealized | ||||||||||||
Tax Cost | Appreciation | Depreciation | Appreciation | |||||||||||
$ | 49,368,141 | $ | 11,146,160 | $ | (2,415,491 | ) | $ | 8,730,669 |
6. | DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF CAPITAL |
There
were no distributions for the fiscal year ended April 30, 2017. The tax character of fund distributions paid for the year ended
April 30, 2018 was as follows:
Fiscal Year Ended | Fiscal Year Ended | |||||||
April 30, 2018 | April 30, 2017 | |||||||
Long-Term Capital Gain | $ | 3,009,438 | $ | — |
As
of April 30, 2018, the components of accumulated earnings/(deficit) on a tax basis were as follows:
Undistributed | Undistributed | Post October Loss | Capital Loss | Other | Unrealized | Total | ||||||||||||||||||||
Ordinary | Long-Term | and | Carry | Book/Tax | Appreciation/ | Accumulated | ||||||||||||||||||||
Income | Gains | Late Year Loss |
Forwards | Differences | (Depreciation) | Earnings/(Deficits) | ||||||||||||||||||||
$ | — | $ | 3,458,715 | $ | (158,453 | ) | $ | — | $ | — | $ | 9,540,063 | $ | 12,840,325 |
The
difference between book basis and tax basis undistributed net realized gains, and unrealized appreciation from investments is
primarily attributable to mark-to-market on open Section 1256 contracts.
Late
year losses incurred after December 31 within the fiscal year are deemed to arise on the first business day of the following fiscal
year for tax purposes. The Fund incurred and elected to defer such late year losses of $158,453.
Permanent
book and tax differences, primarily attributable to the re-class of net operating losses, resulted in reclassification for the
period ended April 30, 2018 as follows:
Paid | Undistributed | Accumulated | ||||||||
In | Net Investment | Net Realized | ||||||||
Capital | Income (Loss) | Gains (Loss) | ||||||||
$ | (925,213 | ) | $ | 925,212 | $ | 1 |
The
beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates presumption of
control of the fund under section 2(a)(9) of the 1940 Act. As of October 31, 2018 National Financial Services LLC, accounts holding
shares for the benefit of others, held approximately 99.24%, of the voting securities of the Fund.
8. | NEW ACCOUNTING PRONOUNCEMENTS |
In
August 2018, the FASB issued ASU No. 2018-13, which changes certain fair value measurement disclosure requirements. The new ASU,
in addition to other modifications and additions, removes the requirement to disclose the amount and reasons for transfers between
Level 1 and Level 2 of the fair value hierarchy, and the policy for the timing of transfers between levels. For investment companies,
the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods
within those fiscal years. Early adoption is allowed. At this time, management is evaluating the implications of the ASU and any
impact on the financial statement disclosures.
Chadwick
& DAmato Fund
NOTES
TO FINANCIAL STATEMENTS (Continued) (Unaudited)
October
31, 2018
In
August 2018, the Securities and Exchange Commission adopted amendments to certain disclosure requirements under Regulation S-X
to conform to US GAAP, including: (i) an amendment to require presentation of the total, rather than the components, of distributable
earnings on the Statement of Assets and Liabilities; and (ii) an amendment to require presentation of the total, rather than the
components, of distributions to shareholders, except for tax return of capital distributions, if any, on the Statement of Changes
in Net Assets. The amendments also removed the requirement for parenthetical disclosure of undistributed net investment income
on the Statement of Changes in Net Assets. These amendments have been adapted with these financial statements.
Subsequent
events after the date of the Statement of Assets and Liabilities have been evaluated through the date the financial statements
were issued. Management has determined that no events or transactions occurred requiring adjustment or disclosure in the financial
statements.
Chadwick
& DAmato Fund
DISCLOSURE
OF FUND EXPENSES (Unaudited)
October
31, 2018
As
a shareholder of the Fund, you incur ongoing costs, including management fees, distribution and/or service (12b-1 fees) fees and
other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund
and to compare these costs with the ongoing costs of investing in other mutual funds. Please note, the expenses shown in the tables
are meant to highlight ongoing costs only and do not reflect any transactional costs.
This
example is based on an investment of $1,000 invested for the period of time as indicated in the table below.
Actual
Expenses: The first line of the table provides information about actual account values and actual expenses. You may use
the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by
the number in the first line under the heading entitled Expenses Paid During the Period to estimate the expenses
you paid on your account during the period.
Hypothetical
Examples for Comparison Purposes: The second line of the table below provides information about hypothetical account values
and hypothetical expenses based on the Funds actual expense ratio and an assumed rate of return of 5% per year before expenses,
which is not the Funds actual return. The hypothetical account values and expenses may not be used to estimate the actual
ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other funds.
Please
note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional
costs which may be applicable to your account. Therefore, the second line of the table is useful in comparing ongoing costs only,
and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs
were included, your costs would have been higher.
Beginning | ||||||
Account | Ending Account | Expenses Paid During | ||||
Value | Value | the Period* | ||||
(5/1/18) | (10/31/18) | (5/1/18 to 10/31/18) | ||||
Actual | $1,000.00 | $962.10 | $7.57 | |||
Hypothetical | ||||||
(5% return before expenses) | $1,000.00 | $1,017.49 | $7.78 |
* | Expenses Paid During Period are equal to the average account value over the period, multiplied by the Funds annualized expense ratio of 1.53% multiplied by the number of days in the period (184) divided by the number of days in the fiscal year (365). |
Chadwick
& DAmato Fund
RENEWAL
OF ADVISORY AGREEMENT (Unaudited)
October
31, 2018
Chadwick
& DAmato Fund (Adviser – Chadwick & DAmato LLC)*
In
connection with the regular meeting held on March 28-29, 2018 of the Board of Trustees (the Trustees or the Board)
of Northern Lights Fund Trust (the Trust), including a majority of the Trustees who are not interested persons,
as that term is defined in the Investment Company Act of 1940, as amended, discussed the re-approval of an investment advisory
agreement (the Advisory Agreement) between Chadwick & DAmato, LLC (Adviser) and the Trust,
with respect to the Chadwick & DAmato Fund (referred to as the Fund). In considering the re-approval
of the Advisory Agreement, the Board received materials specifically relating to the Advisory Agreement.
The
Trustees were assisted by independent legal counsel throughout the Advisory Agreement review process. The Trustees relied upon
the advice of independent legal counsel and their own business judgment in determining the material factors to be considered in
evaluating the Advisory Agreement and the weight to be given to each such factor. The conclusions reached by the Trustees were
based on a comprehensive evaluation of all of the information provided and were not the result of any one factor. Moreover, each
Trustee may have afforded different weight to the various factors in reaching his conclusions with respect to the Advisory Agreement.
Nature,
Extent and Quality of Service. The Trustees noted that the Adviser was founded in 2000 and that it provided financial planning
and investment management services to individuals, business, municipalities and the Fund. They further noted that the Adviser
had assets under management of approximately $ 132 million. They discussed the backgrounds of the key personnel who service the
Fund, noting that the investment team members have had substantial careers in financial services. They noted that all research
and analysis used to manage the Fund was performed by the Advisers two principals, observing that they conduct a due diligence
process that involved gathering data, screening, discussion and implementation. They further noted that the Adviser monitored
market trends, business cycles and the micro-economy. The Trustees observed that the Adviser continued to focus on risk mitigation
and capital preservation, utilizing diversification, hedging strategies and defensive tactics. The Trustees considered that the
Adviser formally reviewed execution data received from brokers used to execute portfolio trades, and performed comparative analysis
to meet its duty to seek best execution. They noted that the Adviser reported no material compliance or litigation issues since
its previous advisory contract renewal. The Trustees further noted that the Adviser was a small boutique firm and that all Fund
shareholders were advisory clients of the Adviser who receive personalized service from the firms principals, and they
expressed their appreciation of the Advisers continued commitment to compliance and risk mitigation efforts. After discussion,
the Trustees concluded that the Adviser should continue to provide quality service to the Fund and its shareholders.
Performance.
The Trustees discussed the Funds investment objective and strategy, as well as its somewhat unfavorable historical
Morningstar ratings and rankings. They noted that the Fund had underperformed its benchmark, Morningstar category median and Broadridge
peer group median over the 3-year, 5-year, and since inception periods. They further discussed that the Fund had outperformed
its benchmark and peer group median and only slightly underperformed its Morningstar category over the 1-year period. They also
considered that the Adviser had taken steps to adjust its investment strategy in response to current market environments, and
they noted the Advisers consistency in its overall approach. The Trustees reiterated that all shareholders of the Fund
are also clients of the Adviser, and that the Adviser noted its belief that the shareholders needs were being met by the
Fund. After further discussion, the Trustees concluded that the Funds performance was adequate.
Fees
and Expenses. The Trustees noted the advisory fee charged by the Adviser to the Fund of 1.00%. They observed that the fee
was equal with its Broadridge peer group median and slightly higher than its
Chadwick
& DAmato Fund
RENEWAL
OF ADVISORY AGREEMENT (Unaudited) (Continued)
October
31, 2018
average
while also being equal to its Morningstar category median but higher than the category average. They acknowledged that the advisory
fee was well within the range of both comparable metrics. The Trustees also considered that all shareholders were advisory clients
of the Adviser and received individualized financial services from the Adviser, apart from those provided through the Fund, at
no additional cost. The Trustees also considered that the net expense ratio of the Fund was the highest among its peer group and
Morningstar category. The Trustees noted the Advisers belief that underlying funds in the portfolio, which tend to raise
the Funds net expense ratio, provide a cost effective means of executing the Funds strategy. After discussion, it
was the consensus of the Trustees that the advisory fee was not unreasonable.
Economies
of Scale. The Trustees considered whether economies of scale had been achieved with respect to the management of the Fund.
The Trustees considered the Advisers assertion that the Fund was relatively capacity constrained due to the Advisers
current personnel limitations. They further noted the Advisers willingness to consider breakpoints in the future at a higher
asset level. After discussion, the Trustees concluded that while no breakpoint levels or fee reductions had been negotiated at
this time, economies of scale would be revisited as the asset size of the Fund increases.
Profitability.
The Trustees considered the profits realized by the Adviser in connection with operation of the Fund and whether the amount of
profit was a fair entrepreneurial profit with respect to the advisory services provided to the Fund. The Trustees considered the
slight net profits realized by the Adviser with respect to the Fund over the past 12 months, and they concluded that such profits
were not excessive.
Conclusion.
Having requested and received such information from the Adviser as the Trustees believed to be reasonably necessary to evaluate
the terms of the Advisory Agreement, and as assisted by the advice of counsel, the Trustees concluded that the advisory fee structure
was reasonable and that renewal of the Advisory Agreement was in the best interests of the shareholders of the Fund.
* | Due to the timing of the contract renewal schedule, these deliberations may or may not relate to the current performance results of the Fund. |
PRIVACY
NOTICE
Northern
Lights Fund Trust
Rev.
February 2014
FACTS | WHAT DOES NORTHERN LIGHTS FUND TRUST DO WITH YOUR PERSONAL INFORMATION? |
Why? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some, but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
What? |
The
●
●
●
When |
How? | All financial companies need to share customers personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers personal information; the reasons Northern Lights Fund Trust chooses to share; and whether you can limit this sharing. |
Reasons we can share your personal information: |
Does Northern Lights Fund Trust share information? |
Can you limit this sharing? |
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus. |
YES | NO |
For our marketing purposes – to offer our products and services to you. |
NO | We dont share |
For joint marketing with other financial companies. |
NO | We dont share |
For our affiliates everyday business purposes – information about your transactions and records. |
NO | We dont share |
For our affiliates everyday business purposes – information about your credit worthiness. |
NO | We dont share |
For nonaffiliates to market to you |
NO | We dont share |
QUESTIONS? | Call 1-402-493-4603 |
PRIVACY
NOTICE
Northern
Lights Fund Trust
What we do: |
|
How |
To
Our |
How |
We ●
●
●
We |
Why |
Federal ●
●
●
State |
Definitions | |
Affiliates |
Companies
● |
Nonaffiliates |
Companies
● |
Joint marketing |
A
● |
How
to Obtain Proxy Voting Information
Information
regarding how the Fund voted proxies relating to portfolio securities for the 12 month period ended June 30th as well
as a description of the policies and procedures that the Fund used to determine how to vote proxies is available without charge,
upon request, by calling 1-877- 610-1671 or by referring to the Securities and Exchange Commissions (SEC)
website at http://www.sec.gov.
How
to Obtain 1st and 3rd Fiscal Quarter Portfolio Holdings
The
Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on
Form N-Q. Form N-Q is available on the SECs website at http://www.sec.gov and may be reviewed and copied at the
SECs Public Reference Room in Washington, DC (1-800- SEC-0330). The information on Form N-Q is available without
charge, upon request, by calling 1-877-610-1671.
Investment
Adviser
Chadwick
& DAmato, LLC
224
Main Street
New
London, NH 03257
Administrator
Gemini
Fund Services, LLC
80
Arkay Drive
Hauppauge,
NY 11788
Item 2. Code of Ethics. Not applicable.
Item 3. Audit Committee Financial Expert. Not applicable.
Item 4. Principal Accountant Fees and Services. Not applicable.
Item 5. Audit Committee of Listed Companies. Not applicable
to open-end investment companies.
Item 6. Schedule of Investments. Schedule of investments
in securities of unaffiliated issuers is included under Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for
Closed-End Funds. Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment
Companies. Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed-End Funds.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
None
Item 11. Controls and Procedures.
(a) Based on an evaluation
of the Registrant’s disclosure controls and procedures as of a date within 90 days of filing date of this Form N-CSR, the
principal executive officer and principal financial officer of the Registrant have concluded that the disclosure controls and procedures
of the Registrant are reasonably designed to ensure that the information required in filings on Form N-CSR is recorded, processed,
summarized, and reported by the filing date, including that information required to be disclosed is accumulated and communicated
to the Registrant’s management, including the Registrant’s principal executive officer and principal financial officer,
as appropriate to allow timely decisions regarding required disclosure.
(b) There
were no significant changes in the Registrant’s internal control over financial reporting that occurred during the Registrant’s
last fiscal half-year that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal
control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable.
(a)(2) Certifications required by Section
302 of the Sarbanes-Oxley Act of 2002 (and Item 11(a)(2) of Form N-CSR) are filed herewith.
(a)(3) Not applicable for open-end investment
companies.
(b) Certifications
required by Section 906 of the Sarbanes-Oxley Act of 2002 (and Item 11(b) of Form N-CSR) are filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
(Registrant) Northern Lights Fund Trust
By (Signature and Title)
/s/ Kevin E. Wolf
Kevin E. Wolf, President/Principal Executive
Officer
Date 1/8/19
Pursuant to the requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)
/s/ Kevin E. Wolf
Kevin E. Wolf, President/Principal Executive
Officer
Date 1/8/19
By (Signature and Title)
/s/ Jim Colantino
Jim Colantino, Treasurer/Principal Financial
Officer
Date 1/8/19
CERTIFICATIONS
I, Kevin E. Wolf, certify that:
1. I
have reviewed this report on Form N-CSR of the Chadwick & D’Amato Fund (a series of Northern Lights Fund Trust);
2. Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are
required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The
registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined
in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
a) designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
b) designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based
on such evaluation; and
d) disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal
quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5. The
registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):
a) all
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information;
and
b) any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
Date: 1/8/19 | /s/ Kevin E. Wolf |
Kevin E. Wolf | |
President/Principal Executive Officer |
I, Jim Colantino, certify that:
1. I
have reviewed this report on Form N-CSR of the Chadwick & D’Amato Fund (a series of Northern Lights Fund Trust);
2. Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are
required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The
registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined
in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
a) designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
b) designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based
on such evaluation; and
d) disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal
quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5. The
registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):
a) all
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information;
and
b) any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
Date: 1/8/19 | /s/ Jim Colantino |
Jim Colantino | |
Treasurer/Principal Financial Officer |
certification
Kevin E. Wolf, President/Principal
Executive Officer, and Jim Colantino, Treasurer/Principal Financial Officer of Northern Lights Fund Trust (the “Registrant”),
each certify to the best of his knowledge that:
1. The
Registrant’s periodic report on Form N-CSR for the period ended October 31, 2018 (the “Form N-CSR”) fully complies
with the requirements of Sections 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The
information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations
of the Registrant.
President/Principal Executive Officer | Treasurer/Principal Financial Officer |
Northern Lights Fund Trust | Northern Lights Fund Trust |
/s/ Kevin E. Wolf | /s/ Jim Colantino |
Kevin E. Wolf | Jim Colantino |
Date: 1/8/19 | Date: 1/8/19 |
A signed original of this written statement
required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Northern Lights Funds Trust and will be retained
by Northern Lights Fund Trust and furnished to the Securities and Exchange Commission (the “Commission”) or its staff
upon request.
This certification is being furnished to the
Commission solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Form N-CSR filed with the Commission.
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