Kottke Commodity Strategies Fund uses commodities, cash strategies

By Toni Weeks

San Diego, Jan. 10 - Northern Lights Fund Trust II announced it has launched the Kottke Commodity Strategies Fund, according to an N-1A filing with the Securities and Exchange Commission.

The fund will offer four share classes. Along with their ticker symbols, they are class I (KCFIX), class A (KCFAX), class C (KDFCX) and class N (KCFNX).

The new fund seeks positive absolute returns by using both a commodities strategy and a cash management strategy.

For the commodities strategy, the fund will invest up to 25% of its total assets in a wholly owned and controlled subsidiary, which will invest in futures and options on futures on the 19 commodities that comprise the Dow Jones - UBS Commodity Index. The subsidiary will use a momentum indicator to reduce the volatility of the fund while producing the same or greater returns.

To pursue its cash strategy, the fund will invest about 75% of its assets directly or indirectly in money market instruments, including U.S. government agency securities, short-term fixed-income securities, overnight and/or fixed-term repurchases agreements, money market fund shares, cash and cash equivalents.

The portfolio managers will be J. Michael Crouch, Jonathan Markowitz, Ron Seliga and Neal Kottke.

Only class A shares will incur a sales charge, which will be a maximum of 5.75%. All four share classes are subject to a 2% redemption fee if shares are redeemed within 30 days of purchase.

Management fees are 1.29% for each share class. The investment adviser, Chicago-based Kottke Managed Commodities, LLC, has agreed to limit expenses and fees such that total annual fund operating expenses are no more than 1.8% for class N shares, 1.65% for class A shares, 2.4% for class C shares and 1.4% for class I shares.

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