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ESG Screens

The Issachar Fund is committed to clean, institutional ESG validation. We believe this is the right thing to do, both for the world and for portfolio returns. We are proud to partner with Inspire, a leading faith-based ESG screen provider to ensure we are investing in companies with positive ESG scores and avoiding companies with negative scores due to problematic issues.  To accomplish this, we use the Inspire Impact Score methodology to screen our fund.

How the Inspire Impact Score Works

The ­Inspire Impact Score is a faith-based ESG (environment, social, governance) security selection methodology that seeks to identify the most inspiring, biblically aligned companies in the world. The Inspire Impact Score utilizes both positive inclusionary and negative exclusionary screens in the scoring process. The result is a rules-based system of finding companies which are operating as blessings to their customers, communities, workforce and the world, and excluding companies which are operating at odds with biblical values.

Following are definitions of the positive and negative screens used in the Inspire Impact Score methodology.

Step 1.

Every company starts with zero points 

Step 2.

Exclusionary screens are applied to companies which operate at odds with biblical values.  Negative points are assigned to the impact score if any violations are found. These companies are always excluded from investment.

Step 3.

Companies with no negative violations are then positively scored across nine categories based on how they operate as blessings to their customers, communities, workforce and the world. Positive points are assigned based on the extent to which the company has above average scores in those positive categories.

Result

Companies are scored on a scale between -100 and +100, with scores above zero representing better alignment with biblical values. Issachar only invests in companies with scores of zero or higher, making Issachar a Biblically Responsible Investing Fund .

Positive Screens

Points are awarded for above average “best in class” practices in the following areas.

Business products, services and operations structured in a way to benefit rather than exploit customers.

Creates products and services which are helpful and create value rather than extract value or harm users.

Policies and behaviors regarding executive comp, ethical dealings, board management, etc.

Policies and behaviors regarding equitable employee management.

Impact and influence on society and communities in which the company operates.

Measures the ethical integrity throughout supply chain, including issues such as human trafficking, fair compensation and labor conditions.

Measures company’s impact on the environment, including air, water and land.

Measures company’s use and production of sustainable energy.

Negative Screens

Companies with exposure to any of the following issues will always score below zero and are excluded from investment.

  • Providing abortion procedures.
  • Procurement or use of embryonic stem cells.
  • Corporate guided philanthropy to organizations that advocate for or provide abortions. (Excludes employee matching programs.)
  • Corporate sponsored political, legal or other activism that advocates for or provides abortions.
  • Manufacture, sale, distribution or consumption of any product or service which involves or is designed specifically to support abortion procedures.

Manufacture, sale or distribution of pornographic content.

  • Known use of slave labor, child labor, forced labor, and other unjust labor exploitation, directly or indirectly throughout the supply chain, including partnerships and subsidiaries.
  • Purposeful neglect or abuse of people, including employees, suppliers, contractors and others in the supply chain.
  • Manufacture, sale, distribution or consumption of any product or service which involves or is designed specifically to support terrorist or terrorist sponsoring organizations and governments.
  • Discrimination against any people group, including employees, customers, suppliers and others.
  • Manufacture, sale, distribution or consumption of any product or service which purposefully exploits and/or harms people through addiction or other predatory practices.
  • Corporate guided philanthropy to organizations that advocate for hate, exploitation and/or human rights violations.
  • Corporate sponsored legal, political and social activism that advocates for hate, exploitation and/or human rights violations.

  • Corporate guided philanthropy to organizations that advocate for the promotion and acceptance of the LGBT lifestyle. (Excludes employee match programs).
  • Corporate sponsored legal, political or other activism that advocates for the promotion and acceptance of the LGBT lifestyle.
  • Manufacture, sale, distribution or consumption of any product or service which involves or is designed specifically to support the LGBT lifestyle.

*Note: There is an important difference between support for the LGBT lifestyle and support and care for LGBT individuals. The Inspire Impact Score is carefully designed to support LGBT individuals, while opposing advocacy for the LGBT lifestyle. Providing employee benefits to LGBT employees, for instance, shows support and love for LGBT people but does not necessarily support LGBT as an acceptable lifestyle. Likewise, there may be other actions that companies can take that support LGBT individuals, but not the LGBT lifestyle, and it should not be considered a violation of Inspire Impact Score screens for them doing so.

Manufacture or sale of alcoholic beverages.

Manufacture or sale of tobacco products.

Ownership or operation of gambling facilities, either physical or Internet-based.

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Issachar Fund
c/o Gemini Fund Services, LLC
17605 Wright Street, Suite 2
Omaha, NE 68130
866‐787‐8355
337‐983‐0676

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Important Risk Information

Investors should carefully consider the investment objectives, risks, charges and expenses of the Issachar Fund. This and other important information about the Fund are contained in the prospectus, which can be obtained by calling 1-866-787-8355 or going to the Documents page.  The prospectus should be read carefully before investing. The Issachar Fund is distributed by Northern Lights Distributors, LLC., member FINRA/SIPC

The Issachar Fund involves risks including the possible loss of principal, and may not be suitable for all investors.

The Fund may engage in frequent trading, leading to increased portfolio turnover, higher transaction costs, and the possibility of increased net capital gains, including net short-term capital gains that will be taxable to shareholders as ordinary income when distributed.  The Fund may hold cash positions and there is a risk that the sections of the market in which the Fund invests will begin to rise or fall rapidly and the Fund will not be able to sell stocks quickly enough to avoid losses, or reinvest its cash positions into areas of the advancing market quickly enough to capture the initial returns of changing market conditions.  The Fund’s investments in large capitalization stocks may underperform Funds that invest primarily in the stocks of lower quality, smaller capitalization companies during periods when the stocks of such companies are in favor.  Investments in small-capitalization and mid-capitalization companies involve greater risks and volatility than investing in larger capitalization companies.  Small and medium-size companies often have narrower markets for their goods and/or services and more limited managerial and financial resources than larger, more established companies.

The Fund invests in debt instruments which have varying levels of sensitivity to changes in interest rates, credit risk and other factors.  Many debt instruments are subject to prepayment risk, which is the risk that the issuer of the security will repay principal prior to the maturity date.  The Fund could lose money if the issuer or guarantor of a debt security goes bankrupt or is unable or unwilling to make interest payments and/or repay principal.  Changes in an issuer’s financial strength or credit rating also may affect a security’s value and have an impact on Fund performance.  The value of the Fund’s investment in fixed income securities will fall when interest rates rise and the effect of increased interest rates is more pronounced for intermediate-term or longer-term fixed income obligations owned by the Fund.  The Fund will invest a significant portion of its assets in securities that are rated below investment grade or “junk bonds.”  Junk bonds may be sensitive to economic changes, political changes, or adverse developments specific to a company.  These securities generally involve greater risk of default or price changes than other types of fixed-income securities and the Fund’s performance may vary significantly as a result.  The floating rate loans in which the Fund invests are usually rated below investment grade and are generally considered speculative because they present a greater risk of loss, including default, than higher quality debt securities and may be less liquid than higher rated debt securities.

The value of the Fund’s asset-backed securities may be affected by changes in interest rates, the availability of information concerning the interests in and structure of the pools of purchase contracts, financing leases or sales agreements that are represented by these securities, the creditworthiness of the servicing agent for the pool, the originator of the loans or receivables, or the entities that provide any supporting letters of credit, surety bonds, or other credit enhancements.  The Fund’s investment in municipal securities carries additional risk including changes in federal, state or local laws that may make a municipal issuer unable to make interest payments when due. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the inability to collect revenue, for the project or from the assets. Moreover, an adverse interpretation of the tax status of municipal securities may make such securities decline in value.  In addition to the risks typically associated with fixed income securities, loan participations carry other risks, including the risk of insolvency of the lending bank or other intermediary.  Loan participations may be unsecured or not fully collateralized, may be subject to restrictions on resale and sometimes trade infrequently on the secondary market.

The Fund uses investment techniques, including investments in futures contracts, forward contracts, options and swaps, which may be considered to be an aggressive investment technique.  Investments in such derivatives may general be subject to market risks that may cause their prices to fluctuate over time and may increase the volatility of the Fund.  The use of derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives, such as counterparty risk and the risk that the derivatives may become illiquid.  The use of derivatives may result in larger losses or smaller gains than investing in the underlying securities directly.   Interest rate swaps are subject to interest rate and credit risk.  Total return swaps are subject to counterparty risk, which relate to credit risk of the counterparty and liquidity risk of the swaps themselves.  There may be an imperfect correlation between the prices of options, futures, and/or forward contract and movements in the price of the securities (or indices) hedged or used for cover which may cause a given hedge not to achieve its objective.  There may not be a liquid secondary market for futures contracts and Forward currency transactions include the risks associated with fluctuations in currency.   If the Fund uses a hedging instrument at the wrong time or judges the market conditions incorrectly, the hedge might be unsuccessful, reduce the Fund’s investment return, or create a loss.  Use of leverage can magnify the effects of changes in the value of the Fund and makes them more volatile and increases the risk for loss in adverse environments.  Short positions are designed to profit from a decline in the price of particular securities, baskets of securities or indices.  The Fund will lose value if the instrument’s price rises – a result that is the opposite from traditional mutual funds.

Investments in foreign securities and securities that provide exposure to foreign securities involve greater risks than investing in domestic securities.  As a result, the Fund’s returns and NAVs may be affected to a large degree by fluctuations in currency exchange rates, political, diplomatic or economic conditions and regulatory requirements in other countries. The Fund also may invest in depositary receipts, including ADRs, which are traded on exchanges and provide an alternative to investing directly in foreign securities.  Investments in ADRs are subject to many of the risks associated with investing directly in foreign securities.  The laws and accounting, auditing, and financial reporting standards in foreign countries typically are not as strict as they are in the U.S., and there may be less public information available about foreign companies.  Investments in emerging markets instruments involve greater risks than investing in foreign instruments in general. Risks of investing in emerging market countries include political or social upheaval, nationalization of businesses, restrictions on foreign ownership and prohibitions on the repatriation of assets and risks from an economy’s dependence on revenues from particular commodities or industries among others.

No-Load mutual funds are sold without a sales charge, however other fees and expenses do apply to an investment in the Fund.

Total annual fund operating expenses are 1.86% for Class N and 1.74% for Class I. Total annual fund operating expenses after fee waiver and expense reimbursement are 1.90% for Class N and 1.65% for Class I. The Fund’s adviser has contractually agreed to waive management fees and make payments to limit Fund expenses until February 1, 2023 so that total annual operating expenses do not exceed 1.90% for Class N and 1.65% for Class.

NLD Review Code: 5119-NLD-3/16/2021

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