Investors should carefully consider the investment objectives, risks, charges and expenses of the Sterling Capital ETFs. This and other important information about the Fund(s) is contained in each Fund's prospectus, which can be obtained at www.sterlingcapital.com/ETF or by calling 888.637.7798. The prospectus should be read carefully before investing. The Sterling Capital ETFs are not insured by the FDIC or any other government agency.
The Sterling Capital Enhanced Core Bond ETF is distributed by Northern Lights Distributors, LLC, member FINRA/SIPC. Sterling Capital Management is not affiliated with Northern Lights Distributors, LLC.
The Sterling Capital Multi-Strategy Income ETF, the Sterling Capital National Municipal Bond ETF, and the Sterling Capital Hedged Equity Premium Income ETF are distributed by Sterling Capital Distributors LLC.
Important Risks
Investing involves risk including loss of principal. Investment return and principal value of an investment will fluctuate, and an investor’s shares, when redeemed, may be worth more or less than their original cost. ETFs are subject to investment advisory and other expenses, which will be indirectly paid by the Fund(s). ETFs are subject to issuer risks and other risks specific to the Fund(s). There is no guarantee the Fund(s) will meet their investment objectives.
Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund(s). Brokerage commissions will reduce returns. The Fund(s) may face more risks than if it were diversified broadly over numerous industries or sectors.
The Sterling Capital ETFs are new and have a limited history of operations.
Diversification does not ensure a profit or guarantee against loss.
The Sterling Capital Enhanced Core Bond ETF may invest in high yield securities, also known as "junk bonds." High yield securities provide greater income and opportunity for gain, but entail greater risk of loss of principal.
Fixed income investments are affected by a number of risks, including fluctuation in interest rates, credit risk, and prepayment risk. In general, as prevailing interest rates rise, fixed income prices will fall.
An investment in a Sterling Capital ETF is not an deposit or obligation of any bank, is not endorsed or guaranteed by any bank, and is not insured by the Federal Deposit Insurance Corporation ("FDIC") or any other government agency.
AI Risk: The Fund’s portfolio managers, the Fund and the issuers in which they invest, service providers, and other market participants may utilize AI technologies in investment and business operations. It is possible that the information provided through use of AI could be insufficient, incomplete, inaccurate or biased leading to adverse effects for the Fund, including, potentially, operational errors and investment losses.
Credit Default Swaps Risk: A credit default swap enables an investor to buy or sell protection against a credit event with respect to an issuer, such as an issuer’s failure to make timely payments of interest or principal on its debt obligations, bankruptcy or restructuring.
Derivatives Risk: The possibility that the Fund will suffer a loss from its use of derivatives. The primary risk with many derivatives is that they can amplify a gain or loss, potentially earning or losing substantially more money than the actual cost of the derivative instrument. It is possible that the Fund’s liquid assets may be insufficient to support its obligations under its derivatives positions.
Investment-grade bonds are those deemed by credit rating agencies to have a lower risk of default, typically rated BBB- (or Baa3 by Moody's) or higher, and are often preferred by institutional investors.
ESG Factor Risk: Considering ESG factors when evaluating an investment may result in the selection or exclusion of certain investments based on the portfolio managers’ view of these factors and carries the risk that the Fund may underperform funds that do not take ESG factors into account.
Fixed Income Market Risk: Fixed income securities markets may, in response to governmental intervention, economic or market developments (including potentially a reduction in the number of broker-dealers willing to engage in market-making activity), or other factors, experience periods of increased volatility and reduced liquidity.
Focused Investment Risk: Investments focused in asset classes, countries, regions, sectors, industries, or issuers that are subject to the same or similar risk factors and investments whose prices are closely correlated are subject to greater overall risk than investments that are more diversified or whose prices are not as closely correlated.
High-yield bonds are debt securities that pay higher interest rates because they are deemed more likely to default.
Mid Capitalization Company Risk: Investments in middle capitalization companies may be riskier, more volatile and more vulnerable to economic, market and industry changes than investments in larger, more established companies.
Mortgage-Backed and Asset-Backed Securities Risk: Mortgage-backed and other asset-backed securities may be particularly sensitive to changes in prevailing interest rates. Rising interest rates tend to extend the duration of mortgage-backed securities, making them more sensitive to changes in interest rates, and may reduce the market value of the securities.
Municipal Securities Risk: Municipal obligations are issued by or on behalf of states, territories and possessions of the United States and their political subdivisions, agencies and instrumentalities and the District of Columbia to obtain funds for various public purposes. Municipal obligations are subject to more credit risk than U.S. government securities that are supported by the full faith and credit of the United States.
Options Risk: There are significant differences between the securities and options markets that could result in an imperfect correlation between these markets, causing an options transaction not to achieve its objectives. A decision as to whether, when and how to use options involves the exercise of skill and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events. There can be no assurance that a liquid secondary market will exist for any particular option at a particular time; as a result, it may be costly to liquidate options. There is also no assurance that a liquid market will exist for any particular option contract on an exchange.
Quantitative Model Risk: The Fund’s portfolio managers may use quantitative models as part of their investment process. Securities or other investments selected using quantitative methods may perform differently from the market as a whole or from their expected performance for many reasons, including factors used in building the quantitative analytical framework, the weights placed on each factor, and changing sources of market returns. There can be no assurance that these methodologies will produce the desired results or enable the Fund to achieve its objectives. A given model may be more effective with certain instruments or strategies than others, and there can be no assurance that any model can identify and incorporate all factors that will affect an investment’s price or performance.
The opinions contained on this website reflect those of Sterling Capital Management LLC (SCM), are for general information only, and are educational in nature. This information and the opinions expressed are as of the date of publication and are subject to change without notice. These opinions are not meant to be predictions and do not constitute an offer of individual or personalized investment advice. They are not intended as an offer or solicitation with respect to the purchase or sale of any security. All opinions and information herein have been obtained or derived from sources believed to be reliable. Any type of investing involves risk and there are no guarantees that these methods will be successful. SCM does not assume liability for any loss which may result from the reliance by any person upon such information or opinions.
SCM, an indirect, wholly-owned subsidiary of Guardian Capital Group Limited, serves as investment adviser to the Sterling Capital ETFs and is paid a fee for its services.
