Important Disclosures
Review important information regarding Lyons Wealth Management, investment strategies, performance reporting, awards, compensation, risks, and regulatory disclosures.
Industry Recognition & Performance Awards
Lyons Wealth Management and its affiliated strategies have received industry recognition from leading investment research and analysis organizations. Please review the disclosures below for important information regarding methodology, rankings, ratings, and awards.
General Disclosures
Advisory services are provided by Lyons Wealth Management, which is registered with the U.S. Securities and Exchange Commission (SEC) and only transacts business in the United States in states where it is properly notice filed or is excluded or exempted from registration requirements.
Registration as an investment adviser does not constitute an endorsement of the firm by the SEC or any other securities regulator and does not mean the adviser has attained a particular level of skill or ability.
Different types of investments involve varying degrees of risk. Past performance may not be indicative of future results.
No current or prospective client should assume that the future performance of any specific investment or strategy will be profitable or equal to past performance levels.
All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals, and economic conditions may materially alter the performance of your portfolio.
You should consult with a professional adviser to discuss your specific investment needs.
Content should not be viewed as personalized investment advice nor as an offer to buy or sell any securities referenced herein.
Enhanced Yield
The Lyons Income Overlay is intended for holders of large equity or other concentrated holdings who seek to earn option premium income over and above the dividends or interest payments generated from their existing underlying holdings.
The strategy utilizes the available margin capacity of such holdings to purchase options on indices, exchange-traded funds or listed equity options that are different from the client's underlying holdings.
The option strategy employed in Overlay may vary and depends on LWM's view of the market as being bullish, bearish or neutral. Please see ADV Part 2 for a detailed descriptive list of the various option strategies that may be utilized and their associated risks.
Unlike covered call or other strategies in which the underlying stock is pledged and at risk of assignment or forced sale by the Options Clearing Corporation, clients in the Lyons Income Overlay are not exposed to the risk of assignment because their underlying holdings are not incorporated into an options strategy, but are instead used only for their margin borrowing capacity.
Important Risk Disclosure
However, this is not to say that the program is not without risks. Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses.
Prior to investing in listed options, you should read and understand the Options Disclosure Document (ODD) published by the Options Clearing Corporation.
For a copy of the ODD please email k.falconer@lyonswealth.com or visit the OCC website.
Additionally, prior to investing in any options strategies, you should consult with a tax advisor to understand the tax implications of such transactions.
Specific to the Lyons Income Overlay are the risks associated with margin accounts and margin borrowing.
Margin policies and rates are subject to change at any time, and losses that result in account balances below required minimums are subject to liquidation by the custodian or broker-dealer.
A decrease in value of the underlying stock position could result in a margin call which may jeopardize the overall strategy's performance.
Before trading stocks or other securities on margin, you should carefully review the margin agreement provided by your custodian.
Margin Account Risks
- You can lose more funds than you deposit in the margin account.
- The firm can force the sale of securities or other assets in your account(s).
- The firm can sell your securities without contacting you.
- You are not entitled to choose which securities or other assets in your account(s) are liquidated or sold to meet a margin call.
- The firm can increase its house maintenance margin requirements at any time and is not required to provide advance written notice.
- You are not entitled to an extension of time on a margin call.
Leveraged Collared Stock Portfolio Disclosure
This material is confidential and intended for the exclusive use of the person to whom it has been delivered. It may not be copied, distributed, or otherwise disclosed to any person other than your authorized representatives.
This material was prepared exclusively for information and discussion purposes and to give insight into the mechanics of a possible investment strategy.
This material is not meant to be nor shall it be construed as an attempt to define all terms and conditions of any transaction or to contain all information that is or may be material to an investor.
Lyons Wealth Management, LLC ("LWM") is not soliciting any action based upon this material, and this material is not meant to be nor shall it be construed as an offer or solicitation of an offer for the purchase or sale of any security or advisory or other service.
Performance Illustration Disclosure
Rates of return used in this presentation, and the resulting performance statistics, are provided solely as examples to illustrate a potential strategy.
All of the data provided in the example are assumptions that are believed to be reasonable but LWM offers no assurance of their accuracy or current relevance.
No representation is made that any investor will achieve results similar to those shown in the examples.
Bond & Leverage Risks
Bonds, in particular, are subject to a number of risks including, but not limited to, market fluctuations.
Such fluctuations in value can occur for many reasons, including interest rates, rating upgrades or downgrades, and other economic factors.
You may lose the entire value of your investment in a specific bond if the issuer defaults.
Because the strategy involves the use of leverage, you may lose your entire investment as a result of a margin call.
You may also realize losses on callable bonds that are valued below your purchase price at the time the issuer calls them away.
Important Considerations
- Bond values fluctuate due to market and interest-rate changes.
- Credit rating changes may significantly affect bond prices.
- Issuer default may result in a total loss of invested capital.
- Use of leverage increases risk and may trigger margin calls.
- Callable bonds may be redeemed below your purchase price.
- Strategy examples are illustrative only and do not guarantee future performance.
The examples provided in this presentation may not reflect the impact of material market or economic factors that might ultimately influence an adviser’s decision making.
There are numerous other factors related to the markets in general or to the implementation of any specific trading program that cannot be fully accounted for in the preparation of the examples provided herein.
Accordingly, clients should focus on the strategy described rather than the results shown herein.
Lyons Wealth Management, LLC is not affiliated with Interactive Brokers, LLC, or any other FINRA broker-dealer.
Lyons Tactical Allocation Separate Account
Lyons Wealth Management ("LWM") began formally tracking its portfolio performance as of April 30th, 2012.
Portfolio composite returns are preliminary and are presented on a time-weighted, size-weighted, total return basis using monthly portfolio valuations.
The composite returns presented herein include all eligible LWM accounts.
To be eligible for inclusion in the LWM composite, an account must be fee paying, fully discretionary, and not part of a broker wrap program.
New portfolios that are managed to the Tactical Allocation Portfolio investment strategy and meet the composite definition will be added to the composite when fully invested.
The composite is not representative of all accounts managed by LWM.
All returns are expressed in U.S. Dollars and are presented net of all fees and expenses.
The returns reflect the reinvestment of all dividends and interest.
Past performance does not guarantee future results.
Performance & Investment Risk Disclosure
No current or prospective client should assume future performance in any specific investment strategy will be profitable or equal to past performance levels.
All investment strategies have the potential for profit or loss.
Changes in investment strategies, contributions or withdrawals may cause performance results of your portfolio to differ materially from the reported composite return.
Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client's investment portfolio.
Benchmark & Historical Performance Disclosure
Historical performance results for market indices and/or categories generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment management fee.
Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark.
Quantitative Risk Indicator (QRI)
- The QRI is a quantitative approach to risk management based on market and economic factors.
- Such data may not accurately predict price movements.
- No system or methodology has ever been developed that can guarantee profits or ensure freedom from losses.
- No representation or implication is being made that using the QRI will generate profits or ensure freedom from losses.
Benchmark Change Disclosure
Lyons Wealth Management officially changed the benchmark of the Lyons Tactical Allocation Portfolio strategy ("LTAP") from the S&P 500 Index to the Lipper Flexible Portfolio Funds Index during the second quarter of 2017.
Lyons believes this Index is a more appropriate and accurate benchmark against which to compare the strategy's performance.
The Lipper Index measures the unweighted average total return performance, net of fund management fees, of the thirty largest share classes available within the Flexible Portfolio Funds classification.
The Flexible Portfolio Funds classification serves as the Lipper peer group for LTAP's mutual fund counterpart.
Unlike the S&P 500 Index and similar all-equity indexes, the Lipper Index accounts for LTAP's monthly tactical allocation decisions and ability to shift asset classes from stocks to Treasuries.
The full list of Lipper Index components is available directly from Lipper.
Lipper Indices are unmanaged.
CLTAX Disclosure Page
Important Investor Information
Past performance is not a guarantee of future results.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Catalyst Funds.
This and other important information about the Fund is contained in the prospectus, which can be obtained by calling 866-447-4228 or visiting www.CatalystMF.com.
The prospectus should be read carefully before investing.
The Catalyst Funds are distributed by Northern Lights Distributors, LLC, member FINRA/SIPC.
Catalyst Capital Advisors, LLC is not affiliated with Northern Lights Distributors, LLC.
Risk Considerations
Investing in the Fund carries certain risks.
The value of the Fund may decrease in response to the activities and financial prospects of an individual security in the Fund's portfolio.
The Fund is non-diversified and may invest a greater percentage of its assets in a particular issue and may own fewer securities than other mutual funds.
The performance of the Fund may be subject to substantial short-term changes.
Interest rate risk is the risk that bond prices overall, including the prices of securities held by the Fund, will decline due to rising interest rates.
These factors may affect the value of your investment.
Morningstar Ratings
As of 7/31/2022, CLTAX received 3-stars for 3 years, 3-stars for 5 years, 5-stars for 10 years, and 4-stars Overall in the Tactical Allocation Category.
As of 7/31/2022, CLTCX received 3-stars for 3 years, 3-stars for 5 years, 5-stars for 10 years, and 4-stars Overall in the Tactical Allocation Category.
As of 7/31/2022, CLTIX received 4-stars for 3 years, 3-stars for 5 years, 5-stars for 10 years, and 3-stars Overall in the Tactical Allocation Category.
Morningstar Methodology
- Morningstar ratings are based on risk-adjusted returns.
- Funds with at least a three-year history are eligible.
- Ratings do not include adjustments for sales loads.
- Past performance is not a guarantee of future results.
- Morningstar data may not be copied or redistributed.
Lipper Awards Methodology
The Thomson Reuters Lipper Fund Awards, granted annually, highlight funds and fund companies that have excelled in delivering consistently strong risk-adjusted performance relative to their peers.
The awards are based on the Lipper Leader for Consistent Return rating calculated over 36, 60 and 120 months.
The fund with the highest Lipper Leader for Consistent Return value within an eligible classification receives the award.
Although Lipper makes reasonable efforts to ensure accuracy, reliability is not guaranteed.
The Lipper award is for the A Share class only.
Investors Choice Awards Methodology
All funds reporting to Allocator.com are considered for the awards.
The Top Performer Awards are granted to funds that outperform their peer groups.
Winners are determined using quantitative risk-adjusted return calculations.
The 2021 Top Performer Awards were based on absolute returns from January 1, 2020 through December 31, 2020.
Long-Term categories considered returns from January 2018 through December 2020.
Compensation for the Sale of Securities or Other Investment Products
Conflict of Interest Disclosure
Persons providing investment advice on behalf of our firm are registered representatives with XYZ BD, a securities broker-dealer and member of FINRA and SIPC.
In their capacity as registered representatives, these persons receive compensation in connection with the purchase and sale of securities or other investment products.
Compensation earned as registered representatives is separate from and in addition to advisory fees.
This practice presents a conflict of interest because persons providing investment advice have an incentive to recommend investment products based on compensation received rather than solely based upon client needs.
Persons providing investment advice may recommend mutual fund share classes that pay 12b-1 fees even when clients may be eligible for less expensive share classes that do not pay such fees.
Registrations with Broker-Dealer
Persons providing investment advice on behalf of our firm are registered representatives with XYZ BD, a securities broker-dealer and member of FINRA and SIPC.
See the Fees and Compensation section of this brochure for additional information regarding compensation received by affiliated registered representatives.
Real Estate
Real estate is increasingly being used as part of a long-term core strategy due to increased market efficiency and concerns about future variability of stock and bond returns.
Real estate may provide diversification benefits and serve as an inflation hedge.
Real Estate Risk Factors
Despite diversification benefits, real estate remains subject to substantial market risk.
Real estate markets are cyclical and may mirror broader economic conditions.
Changes in employment trends, demographics, interest rates and credit availability can significantly impact property values.
Additional Real Estate Risks
- Geographic concentration risk.
- Property-type concentration risk.
- Local market fluctuations.
- Interest rate sensitivity.
- Credit market disruptions.
- Reduced diversification benefits when overly concentrated.
Private Placements
Important Risk Disclosure
A private placement is an illiquid security sold to qualified investors and is not publicly traded nor registered with the SEC.
Private placements generally carry a higher degree of risk due to limited liquidity.
Most securities acquired through private placements are restricted securities and must be held for extended periods of time.
These investments may not be sold easily and investors should be prepared for limited liquidity.
Risks vary depending on the structure of the offering and are fully described in the applicable offering documents.
Awards & Recognition References
- The Catalyst Lyons Tactical Allocation Fund has been awarded 5 Stars by Morningstar for 10 years through December 2022.
- "America's Top Performers" by Thompson Reuters Lipper Fund Awards for 5 years, 2019.
- "REFINITIV" Lipper Fund Award for 2016, 2018, 2019 for highest consistent return value among 351 funds for the five years ending 11/30/2017.
- "Investors Choice – 10 Year Anniversary" Award. 2021 Top Performers Award – Equity Category Best Fund Under $100M.