Date: 2/26/2015
Source: Incapital
Author: Incapital

Incapital and KKM Financial Announce Strategic Partnership for Distribution of KKM's Liquid Alt ARMOR Funds

CHICAGO — February 26, 2015 — Incapital LLC, a leading underwriter and distributor of securities to financial professionals, today announced a distribution partnership with KKM Financial for two liquid alternative funds.

KKM Financial is a SEC Registered Investment Advisory and asset management firm specializing in liquid alternative investments. The firm provides alternative asset management strategies utilizing dynamic hedging and volatility strategies that seek higher risk-adjusted returns with minimal market correlation.

“This agreement is a significant opportunity for Incapital, KKM and our clients,” said Phil Johnson, Incapital’s President. “As we expand the number of products we offer, this partnership gives our clients access to KKM’s liquid alts funds, while KKM will have access to our network of over 800 broker-dealers, advisory firms, institutions and banks.” Under the terms of this agreement, Incapital will be KKM’s distribution partner for KKM’s two liquid alternative funds; the Armor Fund and the U.S. Equity Armor Fund.

KKM’s U.S. Equity ARMOR Fund seeks to track the U.S. Equity ARMOR Index (Ticker “USARM”). The USARM Index aims to provide investors with lower risk methods of participating in the U.S. equity   market. Equity exposure is gained through the SPDR S&P 500 ETF (SPY) and a corresponding long volatility position based on the ARMOR Index. These two components are combined and rebalanced monthly. The USARM Index is calculated by the Chicago Board Options Exchange on a daily basis.

KKM’s ARMOR Fund seeks to track the ARMOR Index (Ticker “ARMOR”), an investable, long volatility portfolio that seeks to highly correlate with VIX* (CBOE Volatility Index) total return over all time frames by searching for relative value between VIX futures (S&P 500 Volatility Futures) and S&P 500 Index Options. The ARMOR Index is calculated by the Chicago Board Options Exchange on a daily basis.

“We are excited to have an industry-leading distribution partner like Incapital to help bring our innovative liquid alternative strategies to advisors and their clients,” said Jeff Kilburg, Founder and Chief Executive Officer of KKM Financial. “Incapital’s well-regarded platform and nationwide network made them the perfect choice for us.” For more information about the KKM’s Armor funds, please visit kkmarmorfunds.com.

About Incapital

Incapital LLC is an underwriter and distributor of a wide range of investment products offered to financial professionals. Incapital partners with financial institutions to provide a leading distribution platform which includes fixed income, unit trusts, annuities, market-linked CDs and equity hybrid securities. For more information, visit incapital.com.

For media inquiries, please contact Kris Kagel, JCPR, at (973) 850- 7312 or kkagel@jcprinc.com.




Securities are offered through, and unit investment trusts sponsored by Incapital LLC, Member FINRA/SIPC. Annuities, insurance products and third-party funds offered through Incapital Insurance Services LLC, Member FINRA/SIPC. 200 South Wacker Drive, Chicago, IL 60606. Ph: (312) 379- 3700. Incapital and KKM 

Investors should carefully consider the investment objectives, risks, charges and expenses of the KKM ARMOR Funds. This and other important information about the Fund is contained in the prospectus, which can be obtained by calling (312) 253‐0425. The prospectus should be read carefully before investing. The KKM ARMOR Funds are distributed by Northern Lights Distributors, LLC, Member FINRA/SIPC. KKM Financial is not affiliated with Northern Lights Distributors, LLC. Mutual Funds involve risk including the possible loss of principal. 

This fund seeks investment results generally correlated to the movement of the VIX, which is negatively correlated to the broader U.S. equities market, but with less volatility. Accordingly, the ARMOR Fund may not be suitable for all investors and should be used only by knowledgeable investors who understand the potential consequences of seeking inverse investment results. Mutual Funds involve risk including the possible loss of principal. Domestic economic growth and market conditions, interest rate levels and political events are among the factors affecting the securities markets in which the Fund invests. A higher portfolio turnover due to active and frequent trading will result in higher transactional and brokerage costs. Large-capitalization companies usually cannot respond as quickly as smaller companies to competitive challenges, and their growth tends to lag the growth of well‐managed smaller companies during strong economic periods. When the Fund purchases a call option on a security or index it may lose the entire premium paid if the underlying security or index does not increase in value.

When the Fund purchases a put option on a security or index it may lose the entire premium if the underlying security or index does not decrease in value. Investments in futures involve leverage, which means a small percentage of assets invested in futures can have a disproportionately large impact on the Fund. Futures contracts may become mispriced or improperly valued when compared to the adviser’s expectation and may not produce the desired investment results.

Investments linked to equity volatility indexes can be highly volatile compared to investments in traditional securities and the Funds may experience large losses. In general, the price of a fixed income security falls when interest rates rise. Hedging is a strategy which uses a derivative to offset the risks associated with other Fund holdings. There can be no assurance the hedging strategy will reduce risk or that hedging transactions will be either available or cost effective.

ETF’s are subject to specific risks, depending on the nature of the underlying strategy of the fund. These risks could include liquidity risk, sector risk, as well as risks associated with fixed income securities, real estate investments, and commodities, to name a few. ETNs are subject to credit risk and their value will be influenced by time to maturity, supply and demand, volatility and lack of liquidity in underlying commodities markets, changes in interest rates, changes in the issuer’s credit rating, and economic, legal, or political events. To the extent the Fund invests in ETFs that seek to provide investment results that are the inverse of the performance of an underlying index, the Fund will indirectly be subject to the risk that the performance of such ETF will fall as the performance of that ETF’s benchmark rises. The use of leverage to acquire underlying portfolio investments may exaggerate changes in an ETF’s share price and the return on its investments. Investments by the Fund in inverse and leveraged ETFs may magnify changes in the Fund’s share price and thus result in increased volatility of returns.

Derivative instruments involve risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. The use of leverage by the Fund or an Underlying Fund, such as borrowing money to purchase securities or the use of derivatives, will indirectly cause the Fund to incur additional expenses and magnify the Fund’s gains or losses. Non‐diversification risk, as the Funds are more vulnerable to events affecting a single issuer. Changes in the laws or regulations of the United States or other countries, including any changes to the applicable tax laws and regulations, could impair the ability of the Fund to achieve its investment objective and could increase the operating expenses of the Fund.

No assurance can be given that the U.S. Government will provide financial support to its agencies and authorities if it is not obligated by law to do so. The value of U.S. Government securities may be affected by changes in the credit rating of the U.S. Government. There is no guarantee that the Portfolio’s income will be exempt from federal or state income taxes. The Fund will incur a loss as a result of a sold option, also referred to as a short position, if the price of the sold option instrument increases in value between the date when the Fund sells the option and the date on which the Fund purchases an offsetting position. Similarly, the Fund will incur a loss as a result of a written option if the price of the written option instrument increases in value between the date when the Fund writes the option and the date on which the Fund purchases an offsetting position.