Highland Funds Energy Master Limited Partnerships Post Significant Losses

The New York securities and investment fraud attorneys at Malecki Law are interested in hearing from investors in Highland Funds’ series Energy Master Limited Partnerships (MLPs).

Highland Funds’ four Energy MLPs have declined by approximately 23% in the year to date, per Morningstar.  These funds include:

  • Highland Energy MLP C (HEFCX)
  • Highland Energy MLP Y (HEFYX)
  • Highland Energy MLP A (HEFAX)
  • Highland Energy MLP R (HEFRX)

For example, HEFCX, a fund that reportedly manages approximately $21.67 million in net assets, has had its net asset value decline significantly in the past year, from approximately $11.04 in February 2015 to approximately $2.63 in February 2016, according to recent reported pricing data provided by Morningstar.  Also per Morningstar, each of the Highland Fund Energy MLPs has had a three month decrease in NAV of approximately 48% and a three year decline of NAV of approximately 25%.

These Highland Fund Energy MLPs were said to have been marketed to securities investors and sold by financial advisors at brokerages such as Mid Atlantic Capital Corp., Raymond James, Fidelity and RBC Wealth Management.

Given that MLPs and other energy sector funds are non-traditional products and typically focus on one sector with significant historical volatility, great care should be taken by an advisor to ensure that the investment is appropriate for the investor in light of their specific risk tolerance, investment objectives and other factors.  When a product is sold to an investor, despite being unsuitable for that investor, the financial advisor’s firm may be liable to the investor in Financial Industry Regulatory Authority (FINRA) Arbitration or New York State Courts for those recommendations.

Investments in these Highland Energy MLP funds have proven to be risky, and only suitable to certain investors.  If you were promised good returns with safety to your principal over a short investment horizon, yet were not informed of the many risks associated with energy sector investments, you may have a claim premised on suitability.

The New York Malecki Law firm takes a proactive and informed approach to the financial news of today: actively engaging in fact-finding analysis on prospective cases from around the world. Our thorough knowledge of securities law’s history and industry FINRA rules makes us ideal consultants for investors who have suffered losses due to misadvice from their broker or other financial counsel.