BTS Tactical Fixed Income Fund Reaches 15-Year Milestone

    LEXINGTON, MA, January 23, 2016 /24-7PressRelease/ -- The retail share class of BTS Asset Management's flagship mutual fund, the BTS Tactical Fixed Income Fund (NASDAQ: BTFAX), recently marked the 15-year anniversary of the strategy's inception.

The Class A shares of the BTS Tactical Fixed Income Fund were first traded in May 2013; the Fund's predecessor strategy, offered in a limited liability company format, was launched on January 1, 2000. Performance details, including comparisons to the Barclays Aggregate Bond Index and the S&P 500 BarCap Aggregate 50-50 since inception of the strategy, appear after the following Q&A.

In this Q&A, Matt Pasts, CEO of BTS Asset Management, discusses tactical fixed-income strategies and the Fund's current positioning. He co-manages the BTS Tactical Fixed Income Fund with Vilis Pasts, founder of BTS Asset Management.

Q. What distinguishes the BTS Tactical Fixed Income Fund from other investment approaches conservative investors might consider?

This fund offers a distinct strategy for dealing with today's environment, especially for investors focused on preservation of capital such as retirees and those nearing retirement. Against a backdrop of rising rates, we may see some negative bond returns. In that context, capital preservation is especially important.

Our approach stands in contrast to so-called unconstrained bond funds, many of which are basically trying to add some value over the returns of a benchmark index. Although investors in these unconstrained bond funds may be exposed to a broad range of fixed-income investments, the overall exposure is typically still duration-sensitive regardless of the specific investments.

In that way, many unconstrained bond funds are similar to traditional bond funds, strategic income funds or total return funds. And as we saw in 2013--the last significant interest rate increase--those approaches may not have preserved capital.

The BTS Tactical Fixed Income Fund takes a completely different approach. Our strategy is designed to invest 100% in one of three asset types based on current market conditions and opportunity:

- High yield bonds when risk is on, thus seeking to capture equity-like exposure;
- Treasuries and other government bonds when risk is off, taking advantage of the flight to quality;
- Cash (money markets) if there is not a risk-on / risk-off opportunity, in an effort to preserve capital.

Having the ability to shift entirely to cash gives us control over duration sensitivity in the portfolio. In addition, we also incorporate stop losses within the strategy to further emphasize capital preservation.

Q. What are your views on current opportunities and risks in fixed-income markets?

In the high yield bond area, we've seen credit spreads widen across the board--not just in Energy--as credit risk is reassessed. In some cases, we are now seeing companies' equity valuations trading at low, attractive valuations and also strong cash flow coverage for their debt obligations. That combination, together with a relatively strong economy with 2-3% expected GDP growth and low unemployment, may lead to opportunity to enter the high yield market at highly attractive valuations.

Historically, yield spreads widen for only a limited period of time--a window opens and then a key opportunity is gone. Finding that window can be delicate. It is not a perfect science and we understand we may trigger an occasional loss--something we always aim to limit with stop-losses and other risk control mechanisms--in order to find this trading opportunity.

At present, the strategy is invested in Treasuries and government bonds. We are watching credit spreads and other indicators carefully for an opportune time to reinvest in high yield bonds.

Q. Many investors wouldn't equate high yield bonds with capital preservation. Are they right to be nervous given what's happened in energy and other sectors' high yield bond markets?

Investors are right to be wary, and in our case we are currently out of high-yield bonds. Our approach is sensitive to the risks of the asset class as we recognize most of our investors are tuned in to capital preservation.

In general, high yield bonds have done well during non-recessionary economies. The sector may bounce back as factors such as oil prices, unemployment levels, GDP growth, stock market prices, and many others play out. We think it's much wiser for conservative investors to apply a tactical strategy, with stop losses and the ability to navigate duration sensitivity, than to stay in cash and miss out on potential gains.

Following are performance highlights for the BTS Tactical Fixed Income Fund and its predecessor strategy since inception, relative the Barclays Aggregate Bond Index and S&P 500 BarCap Aggregate 50-50:
- From inception January 1, 2000 through December 31, 2015, the BTS Tactical Fixed Income Fund Class A shares and predecessor strategy returned 9.00% on an annualized basis, compared with 5.37% for the Fund's benchmark, the Barclays Aggregate Bond Index.
- The Fund and predecessor strategy also outperformed the 5.17% posted by the S&P 500 BarCap Aggregate 50-50, a blended benchmark made up of 50% S&P 500 Total Return and 50% Barclays Capital Aggregate Bond Index, representing a stock/bond allocation that a conservative or moderate investor might have.

Fund Performance: BTS Tactical Fixed Income Fund
As of December 31, 2015
Average Annualized Total Returns
______________________YTD(2)_1 Year__3 Years__5 Years__10 Years_Since Incep.1/1/00
Class(1) A (NAV)_________-2.31%__-2.31%__0.13%__1.57%___7.94%___9.00%
Class A (max. 5% load)____-7.22%__-7.22%__-1.57%__0.53%__7.38%____8.65%
Class C_________________-3.02%__-3.02%____-______-_______-_______-___
Class I (Inception 5/28/15)___-_______-_______-______-_______-_______- ___
Class R (Inception 5/5/15) ___-_______-_______-______-_______-_______-___
Barclays Agg Bond Index___0.55%___0.55%__1.44%___3.25%___4.51%___5.37%
S&P 500 BarCap Agg 50-50_1.13%___1.13%___8.25%__8.10%___6.33%___5.17%

The performance data quoted here represents past performance. Current performance may be lower or higher than the performance data quoted above. Investment return and principle value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Past performance is no guarantee of future results. A Fund's performance, especially for very short periods of time, should not be the sole factor in making your investment decisions. For performance information current to the most recent month-end, please call toll-free 1-877-287-9820.

Total Expense Ratios: Class A: 2.08%; Class C: 2.83%; Class I: 1.83%; Class R: 2.33%

(1) The BTS Tactical Fixed Income Fund does not have performance as a mutual fund prior to May 31, 2013. The prior performance shown above is for the Fund's predecessor limited liability company (BTS Tactical Fixed Income Fund LLC, formerly known as BTS Asset Allocation/High Yield Fund LLC). The prior performance is net of management fees and other expenses. The predecessor limited liability company had been managed in the same style and by the same portfolio manager since the predecessor limited liability company's inception on January 1, 2000. The Fund's investment goals, policies, guidelines and restrictions are, in all material respects, equivalent to the predecessor limited liability company's investment goals, policies, guidelines and restrictions. The following information shows the predecessor limited liability company's annual returns and long-term performance reflecting the actual fees and expenses that were charged when the Fund was a limited liability company. From its inception on January 1, 2000 through the date of the prospectus, the predecessor limited liability company was not subject to certain investment restrictions, diversification requirements and other restrictions of the 1940 Act, which if they had been applicable, might have adversely affected its performance. In addition, the predecessor limited liability company was not subject to sales loads that would have adversely affected performance. The predecessor limited liability company's past performance is not necessarily an indication of how the BTS Tactical Fixed Income Fund will perform in the future.

(2) Performance for periods less than one year are not annualized.

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

About BTS Asset Management

Founded by Vilis Pasts in 1979, BTS Asset Management is one of the oldest risk managers, managing traditional assets with a nontraditional approach. BTS has a multi-year track record in tactical fixed income and equity management. Our goal is to find opportunities with the potential to take advantage of rising markets while working to manage losses during downturns. BTS seeks to preserve capital; aims to offer downside protection and upside potential; and strives to reduce volatility while delivering consistent long-term returns.

Barclays Capital Aggregate Bond Index is comprised of government securities, mortgage-backed securities, asset-backed securities and corporate securities with maturities of one year or more to simulate the universe of bonds in the market. Mutual funds involve risk, including possible loss of principal.

S&P 500 BarCap Agg 50-50 is a blended benchmark made up of 50% S&P 500TR and Barclays Capital Aggregate Bond Index and uses indexes to represent a stock/bond allocation that a conservative or moderate investor might have.

Unconstrained bond funds typically have flexibility to invest tactically across individual sectors, including high-yield and foreign debt, and have freedom to manage interest-rate sensitivity.

The use of Credit Default Swaps involves investment techniques and risks different from those associated with ordinary portfolio security transactions, such as potentially heightened counterparty, concentration and exposure risks. There is a risk that issuers and counterparties will not make payments on securities and other investments held by the Fund, resulting in losses to the Fund. The Fund may invest in derivatives. Even a small investment in options may give rise to leverage risk, and can have a significant impact on the Fund's performance. Derivatives are subject to credit risk and liquidity risk. The values of foreign investments may be affected by changes in exchange control regulations, application of foreign tax laws changes in governmental administration or economic or monetary policy or changed circumstances in dealings between nations. In addition to the risks generally associated with investing in securities of foreign companies, countries with emerging markets also may have relatively unstable governments, social and legal systems that do not protect shareholders, economies based on only a few industries, and securities markets that trade a small number of issues.

The Fund invests in fixed income securities, derivatives on fixed income securities or Underlying Funds that invest in fixed income securities. The value of the Fund will fluctuate with changes in interest rates. Defaults by fixed income issuers in which the Fund invests could also harm performance. Lower-quality bonds known as "high yield" or "junk" bonds, present greater risk than bonds of higher quality, including an increased risk of default. An economic downturn or period of rising interest rates could adversely affect the market for these bonds and reduce the Fund's ability to sell its bonds. The lack of a liquid market for these bonds could decrease the Fund's share price. The use of leverage by the Fund or an Underlying Fund will indirectly cause the Fund to incur additional expenses and magnify the Fund's gains or losses. The Fund may engage in short selling activities which are significantly different from the investment activities commonly associated with conservative fixed income funds. Underlying Funds are subject to investment advisory and other expenses, which will be indirectly paid by the Fund. As a result, your cost of investing in the Fund will be higher than the cost of investing directly in the Underlying Funds.

Investors should carefully consider the investment objectives. risks, charges, and expenses of the BTS Tactical Fixed Income Fund. This and other information about the Fund is contained in the prospectus and should be read carefully before investing. The prospectus can be obtained on our web site, www.btsfunds.com, by calling toll free 1-877-287-9820 (1-877-BTS-9820), or by calling your financial representative. The BTS Tactical Fixed Income Fund is distributed by Northern Lights Distributors, LLC, Member FINRA/SIPC. BTS Asset Management, Inc. is not affiliated with Northern Lights Distributors, LLC.

Investors cannot directly invest in an index and unmanaged index returns do not reflect any fees, expenses, or sales charges.

Not FDIC Insured. May Lose Value. No Bank Guarantee

2064-NLD-1/21/2016

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