Before you invest, you may want to review the Fund’s Prospectus and Statement of
Additional Information, which contain more information about the Fund and its risks. You can find the Fund’s Prospectus, Statement of Additional Information and other information about the Fund online at
http://www.salientpartners.com/funds/
. You can also get this information at no cost by calling the Fund’s transfer agent at 1-866-667-9228 or by sending an email request to
Mutualfunds@salientpartners.com
. The Fund’s current
Prospectus dated January 28, 2013 and Statement of Additional Information dated November 19, 2012, as supplemented December 21, 2012 and January 28, 2013, are incorporated by reference into this summary prospectus
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(2)
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“Other expenses” have been estimated for the Fund’s first year of operations.
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(3)
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Salient Advisors, L.P. (“Salient Advisors” or “Advisor”) has contractually agreed to waive all or a portion of its management fee and reimburse or pay operating expenses of the Fund to the extent
necessary to maintain the Fund’s total operating expenses at 1.85% for Class A, 2.60% for Class C, and 1.60% for Class I shares, excluding certain expenses, such as taxes, brokerage commissions, interest, short dividend expense, any
acquired fund fees and expenses, litigation and extraordinary expenses. Management fee waivers are expressed in the table as a percentage of net assets, and are estimated for the Fund’s first year of operations. The expense limitation agreement
expires on December 31, 2013, unless renewed by mutual agreement of the Fund and the Advisor based upon a determination doing so would be appropriate under the prevailing circumstances. The Advisor shall be permitted to recover expenses
attributable to the Fund or a Class thereof that the Advisor has borne (whether through reduction of its management fee or otherwise) in later periods to the extent that the expenses for a Class of shares fall below the annual
rate in effect at the time of the actual waiver/reimbursement. Under the expense limitation agreement, the Fund is not obligated to reimburse such expenses beyond three years from the end of such year in which the Advisor waived a fee or reimbursed
an expense. Any such recovery by the Advisor will not cause a class to exceed the annual limitation rate in effect at the time of the actual waiver/reimbursement.
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Expense Example
This example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds. Please see below a hypothetical example showing the expenses of a $10,000 investment in the Fund for the time periods indicated (Kept column) and then assuming a redemption of
all of your shares at the end of those periods (Sold column). The example assumes a 5% average annual return. The example assumes Fund expenses will not change over the periods. Although your actual costs may be higher or lower, based on these
assumptions, your costs would be:
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Expenses ($)
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Class A
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Class A
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Class C
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Class C
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Class I
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Class I
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Shares
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Sold
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Kept
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Sold
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Kept
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Sold
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Kept
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1 Year
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$
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728
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$
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728
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$
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363
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$
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263
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$
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163
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$
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163
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3 Years
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$
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1,351
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$
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1,351
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$
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1,069
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$
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1,069
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$
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773
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$
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773
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Portfolio Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities and investments (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 annual Fund operating expenses or in the example, affect the Fund’s performance. Because the Fund did not commence operations during its most recent fiscal year ended
December 31, 2012, there is no portfolio turnover to report.
Principal Investment Strategies
The Fund invests primarily in exchange-traded global equities, and from time to time it may utilize various futures contracts and other financially-linked derivatives and
instruments in order to reduce or increase certain exposures.
Under normal market conditions, at least 80% of the value of the Fund’s net assets (plus any
borrowings made for investment purposes) will be invested in common stocks and other equity securities (such as preferred stock and/or convertible stock), and 40% of the value of the Fund’s net assets (plus any borrowings made for investment
purposes) will be invested in common stocks and other equity securities (such as preferred stock and/or convertible stock) of issuers located outside of the United States.
Investment Process
:
The Advisor utilizes a hybrid investment process that combines top-down thematic views with a fundamental bottom-up security selection
process to build a portfolio of approximately 40 to 70 stocks. The positions fall into three categories:
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Capital Growth:
companies with sustainable competitive advantages and attractive industry or thematic tailwinds which trade at reasonable valuations and are expected to compound value over time;
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Yield:
companies with above-average dividend yields and/or cash flow yields with modest growth expectations; and
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Opportunistic:
companies that are undergoing significant structural or cyclical changes (or companies within industries undergoing these types of changes) that are likely to transform the future value creation
potential of the underlying businesses.
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The Advisor applies fundamental research on these companies to construct a portfolio that is diversified across
sectors and geography. All selected securities are subjected to valuation discipline and have predetermined upside/downside valuation targets. In general, no individual position typically is more than 5% of the Fund’s portfolio (at cost) and
the top ten positions typically will not exceed approximately 40% of the portfolio. The Advisor also employs dynamic limits on maximum country and industry exposure. There are no limitations on the market capitalizations of the issuers in which the
Fund may invest.
Typically, the Advisor intends that approximately 70%-85% of the Fund will be invested in developed markets, with the remaining portfolio invested
in the emerging markets. The Fund may, however, invest less than 15% of its portfolio in emerging markets at any given time. The Fund selectively hedges its exposure to foreign currencies. The Advisor may employ systematic or “rules based”
overlays (for example using futures and other derivatives) designed to hedge the portfolio and reduce exposure in an attempt to control volatility and/or to supplement the portfolio and increase exposure.
Investment Types:
The Fund invests primarily in exchange-traded securities on a global basis, and from time to time it may utilize various futures contracts and
other financially-linked derivatives and instruments in order to reduce or increase certain exposures.
Under normal market conditions, at least 80% of the value of
the Fund’s net assets (plus any borrowings made for investment purposes) will be invested in common stocks and other equity securities (such as preferred stock and/or convertible stock), and 40% of the value of the Fund’s net assets (plus
any borrowings made for investment purposes) will be invested in common stocks and other equity securities (such as preferred stock and/or convertible stock) of issuers located outside of the United States.
Geographic Limitations:
The Fund has no geographic limits on where its investments may be located or where its assets may be exposed. This flexibility allows the
Fund to take advantage of investments and equity markets around the world, which include emerging markets.
Principal Investment Risks
An
investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. The Fund’s principal risk factors are listed below. The Fund’s
shares will go up and down in price, meaning that you could lose money by investing in the Fund. Many factors influence a mutual fund’s performance. An investment in the Fund is not intended to constitute a complete investment program and
should not be viewed as such. Before investing, be sure to read the additional descriptions of these risks beginning on page 70 of the prospectus.
As an overall
matter, instability in the financial markets has led many governments, including the United States government, to take a number of unprecedented actions designed to support certain financial institutions and segments of the financial markets that
have experienced extreme volatility and, in some cases, a lack of liquidity. Federal, state and other governments, and their regulatory agencies or self-regulatory organizations, may take actions that affect the regulation of the instruments in
which the Fund invests, or the issuers of such instruments, in ways that are unforeseeable. Legislation or regulation may also change the way in which the Fund itself is regulated. Such legislation or regulation could limit or preclude the
Fund’s ability to achieve its investment objective.
Risks of Investment Activities Generally:
All securities investing and trading activities risk the
loss of capital. No assurance can be given that the Fund’s investment activities will be successful or that the Fund’s shareholders will not suffer losses.
Currency Risk:
The risk that changes in currency exchange rates will negatively affect securities denominated in, and/or receiving revenues in, foreign currencies.
The liquidity and trading value of foreign currencies could be affected by global economic factors, such as inflation, interest rate levels, and trade balances among countries, as well as the actions of sovereign governments. Adverse changes in
currency exchange rates (relative to the U.S. dollar) may erode or reverse any potential gains from the Fund’s investments in securities denominated in a foreign currency or may widen existing losses. The Fund’s net currency positions may
expose it to risks independent of its securities positions.
Derivatives Risk:
The use of derivative instruments exposes the Fund to additional risks and
transaction costs. These instruments come in many varieties and have a wide range of potential risks and rewards, and may include futures contracts, options on futures contracts, options (both written and purchased), swaps, swaptions, and forward
currency exchange contracts. A risk of the Fund’s use of derivatives is that the fluctuations in their values may not correlate perfectly with the overall securities markets.
Emerging Market Risk:
The Fund intends to have exposure to emerging markets. Emerging markets are riskier than more developed markets because they tend to develop
unevenly and may never fully develop. Investments in emerging markets may be considered speculative. Emerging markets are more likely to experience hyperinflation and currency devaluations, which adversely affect returns to U.S. investors. In
addition, many emerging securities markets have far lower trading volumes and less liquidity than developed markets.
Equity Securities Risk:
Equity securities
may be subject to general movements in the stock market, and a significant drop in the stock market may depress the price of securities to which the Fund has exposure. The Fund may have exposure to or invest in equity securities of companies with
small or medium capitalization. Investments in securities of companies with small or medium capitalization involve certain risks that may differ from, or be greater than, those for larger companies, such as higher volatility, lower trading volume,
lack of liquidity, fewer business lines and lack of public information (See “Small and Mid-Capitalization Securities Risk”).
2
Foreign Securities Risk:
Foreign investments often involve special risks not present in U.S. investments that can
increase the chances that the Fund will lose money. These risks include:
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the Fund generally holds its foreign securities and cash in foreign banks and securities depositories, which may be recently organized or new to the foreign custody business and may be subject to only limited or no
regulatory oversight.
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changes in foreign currency exchange rates can affect the value of the Fund’s portfolio.
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the economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of
payments position.
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the governments of certain countries may prohibit or impose substantial restrictions on foreign investments in their capital markets or in certain industries.
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many foreign governments do not supervise and regulate stock exchanges, brokers and the sale of securities to the same extent as does the United States and may not have laws to protect investors that are comparable to
U.S. securities laws.
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settlement and clearance procedures in certain foreign markets may result in delays in payment for or delivery of securities not typically associated with settlement and clearance of U.S. investments.
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Interest Rate Risk:
Interest rate risk is the risk that prices of fixed income securities generally increase when interest rates decline and decrease when interest
rates increase. The Fund may decline in value or suffer losses if short term or long term interest rates rise sharply or otherwise change in a manner not anticipated by the Advisor.
Investment in Money Market Mutual Funds Risk:
The Fund invests in money market mutual funds. An investment in a money market mutual fund is not insured or
guaranteed by the FDIC or any other government agency. Although such funds seek to preserve the value of the fund’s investment at $1.00 per share, it is possible to lose money by investing in a money market mutual fund.
Leverage Risk:
The Fund may invest in futures contracts, forward currency contracts and other derivative instruments. The futures contracts and certain other
derivatives provide the economic effect of financial leverage by creating additional investment exposure, as well as the potential for greater loss. If the Fund uses leverage through activities such as borrowing, entering into short sales,
purchasing securities on margin or on a “when-issued” basis or purchasing derivative instruments in an effort to increase its returns, the Fund has the risk of magnified losses that occur when losses affect an asset base, enlarged by
borrowings or the creation of liabilities, that exceeds the net assets of the Fund. The net asset value of the Fund employing leverage will be more volatile and sensitive to market movements. Leverage may involve the creation of a liability that
requires the Fund to pay interest.
Liquidity Risk:
Certain securities may trade less frequently than those of larger companies due to their smaller
capitalizations. In the event certain securities experience limited trading volumes, the prices may display abrupt or erratic movements at times. Additionally, it may be more difficult for the Fund to buy and sell significant amounts of such
securities without an unfavorable impact on prevailing market prices. As a result, these securities may be difficult to dispose of at a fair price at the times when the Advisor believes it is desirable to do so. The Fund’s investment in
securities that are less actively traded or over time experience decreased trading volume may restrict its ability to take advantage of other market opportunities or to dispose of securities. This also may affect adversely the Fund’s ability to
make dividend distributions. The Fund will not purchase or otherwise acquire any security if, as a result, more than 15% of its net assets would be invested in illiquid investments.
Manager Risk:
If the Fund’s portfolio managers make poor investment decisions, it will negatively affect the
Fund’s investment performance.
Market Risk:
Market risk is the risk that the markets on which the Fund’s investments trade will increase or decrease
in value. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. If there is a general decline in the securities and
other markets, your investment in the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests.
New Fund Risk:
The Fund is newly-formed. Accordingly, investors in the Fund bear the risk that the Fund may not be successful in implementing its investment
strategy, and may not employ a successful investment strategy, any of which could result in the Fund being liquidated at any time without shareholder approval and at a time that may not be favorable for all shareholders. Such a liquidation could
have negative tax consequences for shareholders.
Short Sale Risk:
The Fund may take a short position in a derivative instrument, such as a future, forward or
swap. A short position on a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying instrument. The Fund may also from time to time sell securities short, which involves borrowing and selling a
security and covering such borrowed security through a later purchase. A short sale creates the risk of an unlimited loss, in that the price of the underlying security could theoretically increase without limit, thus increasing the cost of buying
those securities to cover the short position. There can be no assurance that the securities necessary to cover a short position will be available for purchase. The Fund must set aside “cover” for short sales to comply with applicable SEC
positions under the 1940 Act.
Small and Mid-Capitalization Securities Risk:
The Fund may invest its assets in the common stocks and other equity securities of
small and mid-capitalization companies with smaller market capitalizations. While the Advisor believes these investments may provide significant potential for appreciation, they involve higher risks in some respects than do investments in common
stocks and other equity securities of larger companies. For example, prices of such investments are often more volatile than prices of large-capitalization stocks and other equity securities. In addition, due to thin trading in some such
investments, an investment in these common stocks and other equity securities may be more illiquid than that of common stocks or other equity securities of larger market capitalization issuers (See “Liquidity Risk”). Smaller capitalization
companies also fail more often than larger companies and may have more limited management and financial resources than larger companies.
Volatility Risk:
The
Fund may have investments that appreciate or decrease significantly in value over short periods of time. This may cause the Fund’s net asset value per share to experience significant appreciations or decreases in value over short periods of
time.
Performance Information
This section normally shows how the
Fund’s total return has varied from year to year, along with a broad-based market index for reference. The Fund commenced operations on January 3, 2013. Because the Fund does not have a full year of performance as of the date of this
prospectus, performance information is not available and has not been presented for the Fund.
Investment Management
Investment advisor
— Salient Advisors, L.P. (“Salient Advisors” or “Advisor”). Salient Advisors is a wholly-owned subsidiary of Salient
Partners, L.P. (“Salient”).
3
Portfolio Management
Ajay
Mehra
— Director of Equities, Salient; Portfolio Manager of the Fund since inception.
Lee Partridge, CFA
— Chief Investment Officer, Salient;
Portfolio Manager of the Fund since inception.
Purchase and Sale of Fund Shares
Subject to certain exceptions, the minimum initial investment requirement for Class A and Class C shares of the Fund is $2,500, and the minimum initial investment
requirement for Class I shares of the Fund is $1,000,000. There are no subsequent investment requirements for any class of shares of the Fund. You may redeem shares of the Fund on any business day by mail: Salient MF Trust, P.O. Box 182607,
Columbus, Ohio 43218-2607; or by calling the Fund’s transfer agent at: 1-866
-
667-9228.
Taxes
The Fund’s
distributions are taxable, and will be taxed as ordinary income and/or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or individual retirement account. Withdrawals from such tax-deferred
arrangements may be subject to tax and/or penalties.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank, registered investment advisor, financial planner or retirement plan
administrator), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict 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 Web site for more information.
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