Adding a Premium Topping to an Old Classic:

How Implementing MBXIX into Your Stock/ Bond Investment Approach Could Potentially Improve Your Portfolio

May 2024

It’s no secret that the right mix of stocks and bonds can lead to an investment approach that has been successful through many (but certainly not all) market cycles. In essence, the market figured out that combining just two ingredients could develop a time-tested classic – like cheese on a burger. But we at Catalyst want to share what would have happened if you added a premium topping (think bacon or avocado) to this classic combination. In this case, we’ll use the Catalyst/Millburn Hedge Strategy Fund (MBXIX) as our case study and premium topping to your investment approach.

We’ve shared below what would have happened if investors added MBXIX to a stock/bond blend at differing levels. In examining the 3-year annualized returns ending March 31, 2024, investors in every scenario displayed below would have seen more favorable returns and a lower standard deviation with an added allocation to MBXIX.


Source: YCharts and Catalyst Capital Advisors.

The top line represents the addition of MBXIX into various levels of stock/bond combinations, while the bottom line shows what would happen if investors didn’t include MBXIX. The Fund has also historically provided a downside hedge when the classic approach fails. In the following chart, you’ll see how MBXIX on its own has performed vs. the S&P 500 in recent structural bear markets.


Year MBXIX S&P 500
2001 +3.29% -11.89%
2002 +13.74% -22.10%
2008 +5.33% -37.00%
2022 +7.72% -18.11%
Past performance is not indicative of future results.


MBXIX uses machine learning in an attempt to provide small edges in forecasting that can add up over time. This investment technology learns from new environments, removing the human element and adding a potential to adapt as market conditions change.

The portfolio is split with active long/short managed futures as well as strategic equity exposure through ETFs. We outline the differences below:


Traditional asset allocation models, whether it be a 60/40 portfolio or another common combination, leave investors at the mercy of markets. As equities and bonds go up and down, so too does your portfolio. So how can MBXIX act as a “premium topping” to a classic with the potential to behave differently? The Fund’s use of machine learning and a portfolio of managed futures means that it can add during equity gains and lessen drawdowns during equity losses. The managed futures component of MBXIX also lowers investors’ correlation to broader markets, thereby potentially reducing portfolio volatility. These are the reasons why adding just a 10% allocation to MBXIX can result in a portfolio with potentially higher annualized returns and lower volatility.

MBXIX’s managed futures and machine learning strategy aren’t always at the will of the broader markets because of the active approach taken by the Fund’s sub-advisor. This active approach isn’t just a blip on the radar, as MBXIX’s sub-advisor has a long track record of success.


Millburn, the sub-advisor to the Fund, has roots in process-driven investing dating back to 1971, with a strong industry reputation and a 50+ year history of innovation. The firm has experience across a variety of global asset classes. The team continuously strives for institutional-quality processes and best-in-class technology, transparency and investor reporting, supported by quantitative expertise, deep technological infrastructure and a culture of compliance.

We thank you for reading this literature and considering the Catalyst/Millburn Hedge Strategy Fund (MBXIX) as an addition to your investment approach. We would be happy to speak with you more or provide additional information/data that showcases this Fund.

Data as of quarter end: 2024-06-30T00:00:00
Annualized if greater than a year

Share Class 1 Month 3 Months 6 Months YTD 1 Year 3 Years Annualized 5 Years Annualized 10 Years Annualized Since Inception Annualized
Class I 0.78% 3.86% 14.25% 14.25% 15.56% 6.71% 8.57% 9.23% 10.51%
Class A 0.76% 3.81% 14.09% 14.09% 15.26% 6.44% 8.30% N/A 8.94%
Class C 0.68% 3.60% 13.66% 13.66% 14.40% 5.65% 7.49% N/A 8.12%
Class C-1 0.68% 3.59% 13.67% 13.67% 14.39% 5.66% N/A N/A 13.28%
Class A w/Sales Load -5.04% -2.17% 7.52% 7.52% 8.62% 4.37% 7.02% N/A 8.18%

The Fund’s maximum sales charge for Class “A” shares is 5.75%. Investments in mutual funds involve risks. Performance is historic and does not guarantee future results. Investment return and principal value will fluctuate with changing market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month end performance information, please call the fund, toll free at 1-866-447-4228.

There is no assurance that the Fund will achieve its investment objective. You cannot invest directly in an index and unman- aged index returns do not reflect any fees, expenses or sales charges. Performance shown before December 28, 2015 is for the Fund’s Predecessor Fund (Millburn Hedge Fund, L.P.). Gross expense ratios for share classes A, C, and I are 2.24%, 2.99%, and 1.99%, respectively.

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 can be obtained by calling 866-447-4228. The Cata- lyst 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 Fund will invest a percentage of its assets in derivatives, such as futures and options contracts. The use of such derivatives and the resulting high portfolio turn-over may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities and commodities underlying those derivatives. The Fund may experience losses that exceed those experienced by funds that do not use futures contracts, options and hedging strategies. Investing in commodities markets may subject the Fund to greater volatility than investments in tradi- tional securities. Currency trading risks include market risk, credit risk and country risk. Foreign investing involves risks not typically associated with U.S. investments.

Changes in interest rates and the liquidity of certain investments could affect the Fund’s overall performance. The Fund is non-diversified and as a result, changes in the value of a single security may have significant effect on the Fund’s value. Other risks include U.S. Government securities risks and investments in fixed income securities. Typically, a rise in interest rates causes a decline in the value of fixed income securities or derivatives owned by the Fund. Furthermore, the use of leveraging can magnify the potential for gain or loss and amplify the effects of market volatility on the Fund’s share price. The Fund is subject to regulatory change and tax risks; changes to current rules could increase costs associated with an investment in the Fund. These factors may affect the value of your investment.

The adviser’s judgments about the growth, value or potential appreciation of an investment may prove to be incorrect or fail to have the intended results, which could adversely impact the Fund’s performance and cause it to underperform relative to other funds with similar investment goals or relative to its benchmark, or not to achieve its investment goal.

Millburn is not affiliated with Northern Lights Distributors, LLC.

Performance shown before December 28, 2015 is for the Fund’s Predecessor Fund (Millburn Hedge Fund, L.P.). The prior performance is net of management fees and other expenses including the effect of the performance fee. The Predecessor Fund had an investment objective and strategies that were, in all material respects, the same as those of the Fund, and was managed in a manner that, in all material respects, complied with the investment guidelines and restrictions of the Fund. From its inception through December 28, 2015, the Predecessor Fund was not subject to certain investment restrictions, diversification requirements and other restrictions of the 1940 Act or the Code, which if they had been applicable, might have adversely affected its performance. In addition, the Predecessor Fund was not subject to sales loads that would have adversely affected performance. Performance of the predecessor fund is not an indicator of future results.

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

There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses.

Index Definitions and Glossary

The Bloomberg Aggregate Bond Index or “the Agg” is a broad-based fixed-income index used by bond traders and the managers of mutual funds and exchange-traded funds (ETFs) as a benchmark to measure their relative performance.

The S&P 500 TR Index is an index consisting of 500 U.S. equities and is a broad-based benchmark used as a measurement of US stock market performance.

Bear markets are financial markes experiencing prolonged price declines, generally of 20% or more, and is often accom- panied by investor pessimism.

Long/short futures are investments that have the ability to be profitable through both market upswings and downturns. To “short” a position is to make an investment with the belief that a downturn is in the future which would allow the invest- ment to remain profitable, and “long” positions are backed by the belief that the investment will be successful.

“Long the market” is the belief that positioning will be profitable and the assets price will increase. Volatility is the amount a price will fluctuate in any given time.


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