2014 RiverNorth/Oaktree High Income Fund Review & 2015 Outlook

On 2.4.2015, Portfolio Specialist Allen Webb and CIO Patrick Galley discussed the 2014 year-in-review for the RiverNorth/Oaktree High Income Fund and the outlook for 2015.

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Video recorded 2/4/2015. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This information is provided for informational purposes only and should not be considered tax, legal, or investment advice. References to specific securities, asset classes, and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations. Opinions referenced are as of the day recorded and are subject to change due to changes in the market, economic conditions, or changes in the legal and/or regulatory environment and may not necessarily come to pass.

Fund Risks

Please see the prospectus for a more detailed description of these risks.

Borrowing Risk - borrowings increase fund expenses and are subject to repayment, possibly at inopportune times.

Closed-End Fund Risk - closed-end funds are exchange traded, may trade at a discount to their net asset values and may deploy leverage.

Convertible Security Risk - the market value of convertible securities adjust with interest rates and the value of the underlying stock.

Credit Derivatives Risk - the use of credit derivatives is high specialized, involves default, counterparty and liquidity risks and may not perfectly correlate to the underlying asset or liability being hedged.

Currency Risk - foreign currencies will rise or decline relative to the U.S. dollar.

Distressed and Defaulted Securities Risk - defaulted securities carry the risk of uncertainty of repayment.

Equity Risk - equity securities may experience volatility and the value of equity securities may move in opposite directions from each other and from other equity markets generally.

Fixed Income Risk - the market value of fixed income securities adjust with interest rates and are subject to issuer default.

Foreign/Emerging Market Risk - foreign securities may be subject to inefficient or volatile markets, different regulatory regimes or different tax policies. These risks may be enhanced in emerging markets.

Floating Interest Rate Risk - loans pay interest based on the London Interbank Offered Rate (LIBOR) and a decline in LIBOR could negatively impact the Fund's return.

Investment Style Risk - investment strategies may come in and out of favor with investors and may underperform or outperform at times.

Loans Risk - loans may be unrated or rated below investment grade and the pledged collateral may lose value. Secondary trading in loans is not fully-developed and may result in illiquidity.

Management Risk - there is no guarantee that the adviser's sub-adviser's investment decisions will produce the desired results.

Market Risk - economic conditions, interest rates and political events may affect the securities markets.

New Fund Risk - there can be no assurance that the Fund will grow to, or maintain an economically viable size.

Portfolio Turnover Risk - increased portfolio turnover results in higher brokerage expenses and may impact the tax status of distributions.

Preferred Stock Risk - preferred stocks generally pay dividends, but may be less liquid than common stocks, have less priority than debt instruments and may be subject to redemption by the issuer.

Security Risk - value of the Fund may increase or decrease in response to the prospects of the issuers of securities and loans held in the Fund.

Swap Risk - swap agreements are subject to counterparty default risk and may not perform as intended.

Underlying Fund Risk - underlying funds have additional fees, may utilize leverage, may not correlate to an intended index and may trade at a discount to their net asset values.

Valuation Risk - Loans and fixed-income securities are traded "over the counter" and because there is no centralized information regarding trading, the valuation of loans and fixed-income securities may vary.

Asset Class Definitions

Cash - Cash holding includes the value of assets that can be converted into cash immediately.

Government - Debt owed by the U.S. Federal government.

Preferred - A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock.

High Yield - A high paying bond with a lower credit rating than investment-grade corporate bonds, Treasury bonds and municipal bonds.

Bank Loan - A debt financing obligation issued by a bank or similar financial institution to a company or individual that holds legal claim to the borrower's assets above all other debt obligations.

CEF Preferred - Preferred closed-end funds are defined as funds that invest primarily in preferred and/or convertible preferred stocks.

BDC Baby Bonds - Unsecured debt issued by a business development company (BDC). Some are investment grade and others are unrated.

Emerging Market Debt - Emerging market debt (EMD) is a term used to encompass bonds issued by less developed countries.

Mortgage Backed Security - A type of asset-backed security that is secured by a mortgage or collection of mortgages.

IG/Corporates - Investment grade corporate credit. Bonds issued by corporations to raise money in order to expand its business. Credit distribution is determined from the highest available credit rating from any Nationally Recognized Statistical Rating Organization (S&P, Moody's, and Fitch). A bond rated BBB or higher would be considered Investment Grade.

Agency MBS - Mortgage securities whose principal and interest are effectively guaranteed by the U.S. Government agency including Fannie Mae (FNMA) or Freddie-Mac (FHLMC).

Non-Agency MBS - Mortgage loans securitized through private banking/lending institutions, not by the government. They have no government guarantee.

CMBS - Commercial Mortgage-Backed are mortgages on commercial property.

Other - Securities that do not fit into any of the other categories (i.e. Mortgage REITS).

Developed Foreign - Debt issued by governments of developed foreign countries.


The price at which a closed-end fund trades often varies from its NAV. Some funds have market prices below their net asset values - referred to as a discount. Conversely, some funds have market prices above their net asset values - referred to as a premium.

The BofA Merrill Lynch Developed Markets High Yield Constrained Index contains all securities in the BofA Merrill Lynch Global High Yield index from developed markets countries but cap issuer exposure at 2%. Developed markets is defined as an FX-G10 member, a Western European nation, or a territory of the U.S. or a Western European nation. The index tracks the performance of USD, CAD, GBP and EUR denominated below investment grade corporate debt publicly issued in the major domestic or Eurobond markets. Qualifying securities must have a below investment grade rating (based on an average of Moody's, S&P and Fitch). The index cannot be invested in directly and does not reflect fees and expenses.

The CS Leveraged Loan Index tracks the investable market of the U.S. dollar denominated leveraged loan market. It consists of issues rated "5B" or lower, meaning that the highest rated issues included in this index are Moody's/S&P ratings of Baa1/BB+ or Ba1/BBB+. All loans are funded term loans with a tenor of at least one year and are made by issuers domiciled in developed countries. The index cannot be invested in directly and does not reflect fees and expenses.

A credit spread is the difference in yield between two bonds of similar maturity but different credit quality. Widening credit spreads indicate growing concern about the ability of corporate (and other private) borrowers to service their debt. Narrowing credit spreads indicate improving private creditworthiness.

Past performance is not a guarantee of future results. Diversification does not ensure a profit or guarantee against loss.

Investing involves risk. Principal loss is possible.

An investor should consider the investment objectives, risks, charges and expenses of the Funds (or of the Investment Company) carefully before investing. To obtain a prospectus containing this or other information, please call (888) 848-7569 or download the file from www.rivernorth.com. Read the prospectus carefully before you invest.

The Funds are distributed by ALPS Distributors, Inc. Member FINRA.

ALPS Distributors, Inc. is not affiliated with RiverNorth Capital Management, LLC or Oaktree Capital Management, L.P.


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