Neuberger Berman Absolute Return Multi-Manager Fund Hits 3 Years With Category Outperformance

NEW YORK, June 19, 2015 /PRNewswire/ -- Neuberger Berman, a private, independent, employee-owned investment firm, celebrated the third anniversary of its Absolute Return Multi-Manager Fund (tickers: NABIX, NABAX, NABCX, NRABX) ("ARMM") which, since inception, has outperformed peers on an absolute and risk-adjusted basis in the multi-alternative category, according to fund tracker Morningstar, Inc. [1]

Risk/Return Profile; Trailing 3 Years

Sources: Neuberger Berman, Morningstar. Data as of 5.31.2015.
Performance data quoted represent past performance, which is no guarantee of future results. Unless otherwise indicated, returns reflect reinvestment of dividends and distributions. Indexes are unmanaged and are not available for direct investment.

Given the prospect of rising rates, investors should consider complementing their existing fixed income allocations with low volatility hedge fund strategies. While bonds have historically performed poorly during periods of rising interest rates, certain hedge fund strategies have benefited.[2]  ARMM's diversified portfolio of assets subadvised by several seasoned hedge fund managers across multiple strategies may provide this alternative.

Some ARMM facts (as of 5/31/2015):

• ARMM celebrated its three-year anniversary on 5/15/15 and has delivered +5.1% annualized total return since inception versus a +2.5% return for the HFRX Absolute Return Index, +2.3% return for the Barclays U.S. Aggregate Bond Index (the "Barclays US Agg") with similar volatility and a +18.8% return for the S&P 500; 
• Year-to-date, ARMM ranks in the top quartile of the Multi-alternative category and is outperforming the Barclays US Agg by 271 bps;
• ARMM has outperformed on 95% of the days the S&P 500 has been negative and 85% of the days the Barclays US Agg has been negative since inception; 

ARMM seeks capital appreciation with an emphasis on absolute return. It pursues this goal by allocating capital among high quality hedge fund managers that employ various alternative investment strategies. Available to retail investors, this mutual fund does not charge performance fees, offers daily liquidity and has lower investment minimums than typical hedge funds.

David Kupperman and Jeffrey Majit, Neuberger Berman Managing Directors and co-heads of NB Alternative Investment Management, are the Fund's portfolio managers and lead a team of alternative investment professionals that support the Fund. Underlying hedge fund managers in the Fund currently include: Blue Jay Capital Management LLC for Healthcare Long/Short Equity; Cloud Gate Capital LLC for Long/Short Equity; GAMCO Asset Management Inc. for Merger Arbitrage; Cramer Rosenthal McGlynn, LLC and Lazard Asset Management LLC for Global Equity Long/Short and Japan Equity Long/Short; Good Hill Partners LP for Asset-Backed Securities; Levin Capital Strategies, L.P. and Visium Asset Management, LP for Event Driven; MacKay Shields, LLC and Sound Point Capital, L. P for Credit Long/Short; and SLS Management for Equity Restructurings Long/Short.

"We're delighted with the Fund's reception from advisors and sponsors of defined contribution plans, who increasingly recognize the need to find ways to improve the risk/return profile of investment options for investors in our challenging market environment," Kupperman said.

Neuberger Berman's Absolute Return Multi-Manager Fund is part of a growing suite of alternative mutual funds the firm offers U.S. investors. With a 20-year-plus history of managing alternatives portfolios, Neuberger Berman invests approximately $36 billion in alternatives globally, as of March 31, 2015, including more than $5.1 billion in liquid alternative mutual funds for U.S. investors.

About Neuberger Berman

Neuberger Berman, founded in 1939, is a private, independent, employee-owned investment firm. The firm manages equities, fixed income, private equity and hedge fund portfolios for institutions and advisors worldwide. With offices in 18 countries, Neuberger Berman's team is more than 2,100 professionals and the company was named by Pensions & Investments as a 2013 and 2014 Best Place to Work in Money Management. Tenured, stable and long-term in focus, the firm fosters an investment culture of fundamental research and independent thinking. It manages $251 billion in client assets as of March 31, 2015. For more information, please visit our website at www.nb.com.

An investor should consider the Fund's investment objectives, risks and fees and expenses carefully before investing. This and other important information can be found in the Fund's prospectus or summary prospectus, which you can obtain by calling 877.628.2583. Please read the prospectus or summary prospectus carefully before making an investment.

Absolute Return Multi-Manager Fund (Performance as of March 31, 2015)

Performance data quoted represent past performance, which is no guarantee of future results. Performance less than 1 year is not annualized. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month-end, please visit www.nb.com/performance. Average Annual Total Returns with sales charge reflect deduction of current maximum initial sales charge of 5.75% for Class A shares. Inception date of the fund is May 15, 2012.

*Neuberger Berman Management LLC contractually caps certain direct expenses of the Fund (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, dividend and interest expenses relating to short sales, and extraordinary expenses, if any; consequently, total (net) expenses may exceed the contractual cap) through 10/31/2018 at 2.33% for Class A and 1.97% for Institutional Class (each of average net assets). Absent such arrangements, which cannot be changed without Board approval, the returns may have been lower. Information as of the most recent prospectus dated 2/28/2015.

The Fund's performance will largely depend on what happens in the equity and fixed income markets. Shares of the Fund may be worth more or less upon redemption.  The actual risk exposure taken by the Fund will vary over time, depending on various factors, including, Neuberger Berman's methodology and decisions in allocating the Fund's assets to subadvisers, and its selection and oversight of subadvisers. The subadvisers' investment styles may not always be complementary, which could adversely affect the performance of the Fund. Some subadvisers have little experience managing registered investment companies which, unlike the hedge funds these managers have been managing, are subject to daily inflows and outflows of investor cash and are subject to certain legal and tax-related restrictions on their investments and operations.

The Fund's returns may deviate from overall market returns to a greater degree than other mutual funds that do not employ an absolute return focus. Thus, the Fund might not benefit as much as funds following other strategies during periods of strong market performance. A subadviser may use strategies intended to protect against losses (i.e., hedged strategies), but there is no guarantee that such hedged strategies will be used or, if used, that they will protect against losses, perform better than non-hedged strategies or provide consistent returns.

Event Driven Strategies that invest in companies in anticipation of an event carry the risk that the event may not happen or may take considerable time to unfold, it may happen in modified or conditional form, or the market may react differently than expected to the event, in which case the Fund may experience losses. Additionally, event-driven strategies may fail if adequate information about the event is not obtained or such information is not properly analyzed. The actions of other market participants may also disrupt the events on which event driven strategies depend. Arbitrage Strategies involve the risk that underlying relationships between securities in which investment positions are taken may change in an adverse manner or in a manner not anticipated, in which case the Fund may realize losses. The Fund's use of event-driven and arbitrage strategies will cause it to invest in actual or anticipated special situations—i.e., acquisitions, spin-offs, reorganizations and liquidations, tender offers and bankruptcies. These transactions may not be completed as anticipated or may take an excessive amount of time to be completed. They may also be completed on different terms than the subadviser anticipates, resulting in a loss to the Fund. Some special situations are sufficiently uncertain that the Fund may lose its entire investment in the situation.

Small- and mid-capitalization stocks trade less frequently and in lower volume than larger company stocks and thus may be more volatile and more vulnerable to financial and other risks.

Generally, bond values will decline as interest rates rise. You may have a gain or a loss if you sell your bonds prior to maturity. Bonds are subject to the credit risk of the issuer. The Fund's performance could be affected if borrowers pay back principal on certain debt securities, such as mortgage- or asset-backed securities, before or after the market anticipates such payments, shortening or lengthening their duration.

Foreign securities involve risks in addition to those associated with comparable U.S. securities, including exposure to less developed or less efficient trading markets; social, political or economic instability; fluctuations in foreign currencies; nationalization or expropriation of assets; settlement, custodial or other operational risks; and less stringent auditing and legal standards. Exchange rate exposure and currency fluctuations could erase or augment investment results. Because an investment strategy used by a subadviser invests primarily in companies in Japan, the Fund's performance may be closely tied to social, political, and economic conditions within Japan.

Derivatives involve risks different from, or greater than, the risks associated with investing in more traditional investments, as derivatives can be highly complex and volatile, difficult to value, highly illiquid, and a Fund may not be able to close out or sell a derivative position at a particular time or at an anticipated price. Non-U.S. currency forward contracts, options, swaps, or other derivatives contracts on non-U.S. currencies or securities involve a risk of loss, even if used for hedging purposes, if currency exchange rates move against the Fund. Investments in the over-the-counter market introduce counterparty risk due to the possibility that the dealer providing the derivative may fail to timely satisfy its obligations. Investments in the futures markets also introduce the risk that its futures commission merchant (FCM) may default on its obligations, which include returning margin posted a Fund. Derivative instruments can create leverage, which can amplify changes in the Fund's net asset value and can result in losses that exceed the amount originally invested.

The Fund's investments in ETFs subject it to such ETF's risks as well as expenses. ETFs are subject to tracking error and may be unable to sell poorly performing stocks that are included in their index. ETFs may trade in the secondary market at prices below the value of their underlying portfolios and may not be liquid.

The Fund may engage in active and frequent trading and may have a high portfolio turnover rate, which may increase its transaction costs and may adversely affect performance.

The Barclays U.S. Aggregate Bond Index represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.

The HFRX Absolute Return Index is designed to be representative of the overall composition of the hedge fund universe. It is comprised of all eligible hedge fund strategies; including but not limited to convertible arbitrage, distressed securities, equity hedge, equity market neutral, event driven, macro, merger arbitrage, and relative value arbitrage. As a component of the optimization process, the index selects constituents which characteristically exhibit lower volatilities and lower correlations to standard directional benchmarks of equity market and hedge fund industry performance.

The S&P 500 Index consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value-weighted index (stock price times number of shares outstanding), with each stock's weight in the Index proportionate to its market value. The S&P 500 Index is one of the most widely used benchmarks of U.S. equity performance

Standard Deviation (Risk) is a statistical measure of the historical volatility of a mutual fund or portfolio.

For each retail mutual fund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure that accounts for variations in a fund's monthly performance (including the effects of sales charges, loads and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive five stars, the next 22.5% receive four stars, the next 35% receive three stars, the next 22.5% receive two stars and the bottom 10% receive one star. (Each share class is counted as a fraction of one fund within this scale and is rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a retail mutual fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. Ratings are ©2015 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Neuberger Berman Management LLC, Distributor. Member FINRA.

The "Neuberger Berman" name and logo are registered service marks of Neuberger Berman Group LLC. "Neuberger Berman Management LLC" and the individual fund names in this piece are either service marks or registered service marks of Neuberger Berman Management LLC.©2015 Neuberger Berman Management LLC. All rights reserved.

[1] NABIX has an annualized return of +5.08% and an annualized Sharpe Ratio of 2.05 since inception through 5.31.15 versus +3.06% and 1.09 for Morningstar's Multialternative category average.
[2] Source: Bloomberg, PerTrac.  Since 2000, during periods when 10-Year Treasury Rates were rising, hedge funds, as represented by the HFRI Fund Weighted Composite, outperformed fixed income with an average return of +10.5% versus -0.32% for the Barclays U.S. Aggregate Bond Index.

Media Contact: Alex Samuelson, 212 476 5392, [email protected]

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