XXXXX | CLO Income Fund

Key Risks

Risks of Investing in the Neuberger Berman CLO Income Fund

The following list of risk factors is a summary only and is qualified in its entirety by the more detailed description of the risk factors described in the ‘investment risk’ section of the prospectus.

Market Risk: The risk of a change in the value of a position as a result of underlying market factors, including among other things, the overall performance of companies and the market perception of the global economy.

Volatility in Market: In recent years, securities issued in securitization transactions have experienced significant fluctuations in market value and accordingly high price volatility relative to historical experience. There is no assurance that such volatility will not continue or (to the extent it has eased) return.

Liquidity Risk: The risk that the fund may be unable to sell an investment readily at its fair market value. In extreme market conditions this can affect the fund’s ability to meet redemption requests upon demand. CLO securities are generally illiquid and dealer marks and valuations provided may not represent prices where assets can actually be purchased or sold in the market from time to time. Accordingly, the mark-to-market value of CLOs maybe volatile and the value of the relevant interests could likewise be volatile.

Credit Risk: The risk that debt instrument issuers may fail to meet their interest repayments, or repay debt, resulting in temporary or permanent losses to the fund.

Interest Rate Risk: The risk of interest rate movements affecting the value of fixed-rate bonds.

Operational Risk: The risk of direct or indirect loss resulting from inadequate or failed processes, people and systems including those relating to the safekeeping of assets or from external events.

Counterparty Risk: The risk that a counterparty will not fulfil its payment obligation for a trade, contract or other transaction, on the due date.

Currency Risk: Investors who subscribe in a currency other than the base currency of the fund are exposed to currency risk. Fluctuations in exchange rates may affect the return on investment.

Risk Retention: Beginning 1 January 2019, the fund will become subject to certain risk retention and due diligence requirements. Amongst other things, these requirements will restrict the fund from investing in a CLO unless: (i) the originator, sponsor or original lender in respect of the relevant CLO has explicitly disclosed that it will retain, on an ongoing basis, a net economic interest of not less than 5% in respect of certain specified credit risk tranches or securitised exposures; and (ii) the fund is able to demonstrate that it has undertaken certain due diligence in respect of various matters. The fund may be required to dispose of any CLOs that are non-compliant. Under such circumstances, the fund could sustain losses.