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Dynamic Income Fund
Prospectus
Summary Prospectus
Fact Sheet
Analytics & Distributions
Market Environments
Market Volatility
Intro to Alternative Fixed Income
Fund Holdings
Performance

Ticker Symbols:

Class A

ASFFX

Class C

ASFTX

Class I

ASFNX

CUSIP Numbers:

Class A

042765107

Class C

042765206

Class I

042765305

Minimum Investment:

• $5,000 non-qualified accounts

• $2,000 retirement accounts

• $250 subsequent investments

• Class I minimum initial investment $1 million

Operating Expenses*Total Fund Expenses
Class A1.80%2.02%
Class C2.50%2.77%
Class I1.50%1.77%

*Plus acquired fund fees of 0.27%.

Fund Type:
Nontraditional Bond

Definitions:
Standard deviation is a statistical measurement of volatility based on historical returns.

Correlation measures how closely two securities' movements are associated, ranging from 1.0 (highly correlated) to -1.0 (inversely correlated).

Absolute Returns are generally positive returns in any market environment. There is no guarantee that any investment will achieve this objective.


AD-071520

 
Arrow Dynamic Income Fund
Seeks Absolute Returns with Alternative Income
Investment Strategy
Investments that seek to produce income and total return while preserving capital.
Fund Highlights
  • Exposure to a diversified tactical fixed     
         income strategy
  • Core holding for fixed income
  • Systematic buy and sell discipline
  • Capable of hedging exposure in periods
         of market corrections
  • Diversification Across Fixed Income Strategies
    The Arrow Dynamic Income Fund is a mutual fund that delivers unique risk and return characteristics. Alternative strategies have historically exhibited relatively low correlation to traditional investments, such as equities & bonds. The fund uses a systematic methodology to tactically provide exposure to High Yield, Corporate, International and Convertible bonds, Inflation Protected Notes and Long-Term and Short-Term bonds.

    The fund optimizes the exposure to each of the underlying directional strategies depending on market conditions. The strategy balances risk and reward. When fixed income markets are performing well, exposure will be tilted toward the sectors with the strongest trends. When markets are weak, exposure will be tilted more defensively. During risk-off environments, it is possible for the majority of the strategy to be invested in the U.S. Treasury market. The directional positions are based on a series of proprietary indicators that are customized for each specific market segment. The nature of the fund provides the ability for each of the strategies to act independently from one another, providing an additional layer of potential diversification and the ability to respond to changing market and interest rate environments.

    Tactical Exposure to Fixed Income Segments
    The Arrow Dynamic Income Fund’s returns are derived across distinct fixed income market segments.
    The chart below presents different investment characteristics for the various fixed income segments from
    year-to-year.


    2015 2016 2017 2018 2019 SC*
    Return
    Standard
    Deviation*
    Corr.*
    (vs. Bonds)
    ASFNX
    5.40%
    High Yield
    15.33%
    Emerg Mkt
    16.87%
    ST Bonds 1.56% Convertible
    23.15%
    Convertible
    8.23%
    LT Bond
    11.30%
    U.S. Agg.
    1.00
    ST Bonds
    0.56%
    ASFNX
    11.17%
    Convertible
    13.70%
    Convertible
    0.15%
    LT Bond
    15.11%
    LT Bond
    6.70%
    Convertible
    8.58%
    LT Bond
    0.93
    U.S. Agg.
    0.55%
    Convertible
    10.43%
    LT Bond
    8.98%
    U.S. Agg.
    0.01%
    High Yield
    14.65%
    High Yield
    4.78%
    Emerg Mkt
    6.60%
    Corporate
    0.91

    Emerg Mkt
    -0.22%

    Corporate
    5.96%
    Corporate
    6.48%
    ASFNX
    -0.63%
    Corporate
    14.23%
    Corporate
    4.77%
    High Yield
    5.20%
    ST Bonds
    0.86
    Corporate
    -0.63%
    Emerg Mkt
    4.47%
    High Yield
    6.34%
    High Yield
    -1.51%
    Emerg Mkt
    13.38%
    Emerg Mkt
    4.47%
    ASFNX
    4.14%
    TIPS
    0.81
    LT Bond
    -1.59%
    TIPS
    3.05%
    U.S. Agg.
    3.54%
    LT Bond
    -2.00%
    U.S. Agg
    8.72%
    ASFNX
    3.52%
    TIPS
    3.81%
    High Yield
    0.16
    TIPS
    -2.06%
    U.S. Agg.
    2.65%
    TIPS
    1.41%
    Corporate
    -2.25%
    TIPS
    6.89%
    U.S. Agg.
    3.36%
    Corporate
    3.79%
    Convertible
    -0.03
    Convertible
    -2.99%
    LT Bond
    1.43%
    ST Bonds
    0.42%
    TIPS
    -3.92%
    ASFNX
    4.60%
    ST Bonds
    1.30%
    U.S. Agg.
    2.97%
    Emerg Mkt
    -0.07
    High Yield
    -5.03%
    ST Bonds
    0.86%
    ASSFNX
    -2.14%
    Emerg Mkts
    -10.16%
    ST Bonds
    3.59%
    TIPS
    1.00%
    ST Bonds
    0.91%
    ASFNX
    -0.13

    Performance displayed represents past performance, which is no guarantee of future results. Index performance assumes reinvestment of dividends, but does not include fees. Indexes are not available for direct investment. Index data is shown for illustrative purposes and is not intended to reflect fund performance. Index proxies: High Yield (IBOXX Liquid HY Index), LT Bond (Barclays UST 20+Yr Index). Corporate (ICE BofA US Corporate Index), U.S. Agg. (BBgBarc US Agg Bond Index), Emerg Mkt (Credit Suisse EM Index), Convertible (ICE BofA All US Convertible Index), TIPS (Markit iBoxx TIPS Infln-Lnkd Index), and ST Bonds (BBgBarc US Treasury 1-3 Yr Index). ASFNX is the institutional share class of the Arrow Dynamic Income Fund. *Standard Deviation (a measure of volatility) is based on averages from 4/1/2014 through 12/31/2019. Data for the Since Strategy Change (SC) Return and Correlation based upon 4/1/2014-12/31/2019 data. Bonds are represented by the returns of the Bloomberg Barclays U.S. Aggregate Bond Index. Source: Morningstar Direct, calculated by Arrow.

    The Arrow Dynamic Income Fund may not be suitable for all investors. The fund's use of derivatives such as futures, options and swap agreements may expose the fund to additional risks that it would not be subject to if it invested directly in the securities underlying those derivatives. Investing in leveraged instruments will magnify any gains or losses on those instruments. The fund's use of short selling involves increased risks and additional costs. The fund may invest in fixed income securities, which are subject to risks including interest rate, credit and inflation. The fund may invest in mortgage-backed securities, which are subject to additional risks including higher volatility, real estate market risk and possible illiquidity and default risk.