NIAGARA INCOME OPPORTUNITIES FUND QUARTERLY REVIEW | As of June 30, 2025

NIAGARA INCOME OPPORTUNITIES QUARTERLY REVIEW

Dear Investors,

The Fund completed the second quarter of 2025 on a strong note, posting a return of 2.75%, bringing the year-to-date performance to 5.16%. Meanwhile, the Fund’s asset base also maintained a consistent growth trajectory with AUM increasing from approximately $90 million to $108 million by quarter’s end. The portfolio management team has been able to deliver steady results to its investors through the execution of our multi-strategy private lending approach. This success would not have been possible without the trust and confidence of our investors.

At Liquid Strategies, we prioritize accessibility and transparency, values that we hope you’ve seen reflected in our communications and team’s dedication. We would like to express our gratitude for your trust and support. We are constantly mindful of the responsibility that trust entails, and it shapes how we approach every decision we make with respect to managing the Niagara Income Opportunities Fund.

Sincerely,

Mark Garfinkel, Connor Allen and the Liquid Strategies Team

FUND SUMMARY

The Niagara Income Opportunities Fund is a continuously-offered, closed-end interval fund with a primary focus on current income generation through investment in a multi-strategy portfolio of private and public credit investments with high current cash yields. The Fund offers daily subscriptions and will offer to make quarterly repurchases at net asset value.

PORTFOLIO STRATEGY

The private credit space spans a broad spectrum of alternative lending opportunities. The Niagara portfolio combines different styles of private alternative lending strategies into a single portfolio solution. A top priority for the Niagara portfolio team is risk management across three key pillars: 1) diversification; 2) credit management; and 3) liquidity management. This focus enables the portfolio team to construct a portfolio with the proper balance of income and risk.

Diversification: The Niagara strategy mitigates the risk of capital loss through diversification by segment, strategy, and number of loans across the portfolio. In addition, we establish concentration limitations and monitor and evaluate risk exposures across key portfolio metrics

Credit Management: The portfolio team focuses on lending strategy partners who have a proven ability to minimize downside risk and preserve capital. The team is committed to seeking out the highest quality lending partners that align with our disciplined criteria, including stringent underwriting guidelines, risk mitigation with excess collateralization and strict loan terms and covenants, and a focus on niche, under-banked lending markets.

Liquidity Management: The portfolio team manages the liquidity of the portfolio utilizing a combination of cash equivalents, readily marketable publicly-traded securities, and short duration private investments in order to maintain adequate portfolio liquidity. In addition, the team strives to maintain a short average maturity of the portfolio investments to provide maximum flexibility with respect to liquidity, while achieving the strategy goals of delivering high income.*

PORTFOLIO DEVELOPMENTS

During the second quarter, the portfolio management team deployed new capital to the fund across a combination of  additions to existing positions and a couple of new investments to the portfolio, increasing the total number of private credit investments to over 30 across 18 different strategy partners, highlighting the increasing diversification of our underlying portfolio. This diversification across multiple investments, private credit asset classes, and strategy partners is a key to managing portfolio risk and a basic tenet of the Fund’s approach.

The team continued to build out its position in diamond finance participations, which are very short duration investments ranging from 3 to 6 months. the loans are heavily collateralized against the underlying diamond or jewelry assets at an average loan-to-value of 65% of liquidation value. Furthermore, the Fund is getting compensated with longer duration returns for short duration investments, while enhancing the liquidity profile of the portfolio.  The Fund also increased its real estate allocation, investing in a new loan participation consisting of an acquired portfolio of distressed real-estate loans, purchased at substantial discounts to the actual loan amounts. The lead lender on this has investment has a great track record of maximizing the value and the returns of these distressed assets. Both of these  investments are consistent with the team’s strategy of investing in asset-based, over-collateralized loans with the prospect of potentially outsized risk-adjusted returns.

MARKET OVERVIEW

US equity markets demonstrated some impressive pendulum action, swinging from wildly negative early in the quarter only to reverse and erase all of the losses, and then some, through the remainder of the quarter. The S&P 500 finished the quarter up 10.94%, ignoring any issues related to tariffs and trade policy and the accompanying fears of a global economic slowdown. While market volatility was running at high levels from the end of the 1st quarter and early into the 2nd, volatility (as measured by the VIX, the CBOE Volatility Index shown below) collapsed from a peak of 60 to near 17 by the end of the quarter, reflecting a high level of market complacency. Non-US markets continue to perform well year-to-date, significantly outperforming US markets as the ACWI non-US benchmark was up 18.5% for the first half of the year. However, the US technology sector made a strong comeback in the second quarter, with strong performance across the Nasdaq 100 (up 18%) and Mega Cap stocks (up 21%).

Interest rates during the quarter were far more stable than equities.  Ten-year Treasury rates trended modestly higher through the quarter, resulting in poor performance for treasury securities; however, corporate, mortgage-backed, and most other non-treasury, fixed-income securities fared well for the quarter. The US Aggregate Bond index was up 1.20% during the quarter while high yield bonds were up 3.74%. The Federal Reserve has remained patient, holding rates steady during the first half of the year, as  the outlook for inflation remains uncertain from the unknown pressure of U.S. tariffs. Currently, market participants are expecting 50 basis points* of rate cuts in the back half of the year. While the markets have provided a welcome reprieve from the recent volatility, we anticipate that round two of trade policy set for August 1st could spur a renewal of fears that impacted markets a few short months ago. We will watch closely as the markets digest the impacts of trade policies on inflation, consumption, and the overall impact on both the US and Global economies.

https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

*Basis points are a unit of measurement equal to one hundredth of a percent (0.01%)

PERFORMANCE UPDATE

For the 2nd quarter of 2025, the Niagara Income Opportunities Fund achieved a total return of 2.75%, bringing the trailing 12 month total return to 10.75%, compared to the Morningstar Leveraged Loan Index performance of 2.32% and 7.42% for the 2nd quarter and trailing 1 year, respectively. Over the course of the last year, credit spread and interest rate volatility have had very little impact (positive or negative) on the performance of the Niagara portfolio, highlighting the benefit of the Niagara strategy to the fixed-income portion of an investor’s total portfolio. See the table of returns for the Fund below.

*Since Inception 1/1/24

Niagara vs Bloomberg U.S Aggregate Bond Index –  Trailing 12 months through June 30, 2025

Past performance is no guarantee of future results

PORTFOLIO MANAGEMENT TEAM COMMENTARY AND OUTLOOK

While the equity markets have repelled the uncertainty associated with trade policy and geopolitical developments like water off a duck’s back, we know that the pendulum can swing back the other way just as quickly. Meanwhile, the landscape of private credit has also remained resilient in the face of the same challenges. Nonetheless, as we move into the 3rd quarter, we maintain a constructive yet cautious approach. The current trade uncertainty and associated economic impact reinforce our disciplined approach to our risk management process

As such, the portfolio management team continues to monitor and evaluate each portfolio investment to assess the impact of tariff’s on the underlying business of our portfolio’s borrowers. We remain confident in our investment thesis with all of our lending partners and the risk mitigation structures in place to be able to weather any potential economic turmoil. Also, keep in mind that a heavy component of the Niagara underlying portfolio is focused in asset-based loans with low loan-to-value ratios. This means that the loans are not necessarily tied to the cash flow of a business, but rather they are collateralized by a specific pool of cash flow, revenue, trade receivables or other assets.

At the same time, the team continues to actively source new investment opportunities that fit the strict criteria of our portfolio strategy. First, we participate in lending markets that are less efficient, where there is less competition for each loan. Here, lenders have an opportunity to identify smaller, high-quality borrowers where they can underwrite loans at higher rates, yet with tighter covenants and terms, along with better loan collateralization. Second, we identify lending partners that have in-depth experience underwriting and structuring loans, along with a proven ability to help minimize downside risk and preserve capital.

Enjoy the Summer…we thank all of our investors for their confidence in the Niagara Fund’s portfolio management team!

ASSET CATEGORY BREAKDOWN

PORTFOLIO CHARACTERISTICS

DISCLOSURES

An investment in the Fund’s shares is subject to risks. The value of the Fund’s investments will increase or decrease based on changes in the prices of the investments it holds. This will cause the value of the Fund’s shares to increase or decrease. You could lose money by investing in the Fund. By itself, the Fund does not constitute a complete investment program. Before investing in the Fund, you should consider carefully the following risks the Fund faces, together with the other information contained in this prospectus.

Since the Fund is non-diversified, it is subject to higher reduction of capital and volatility than a fund more proportionately allocated among a large number of securities. An investment in the Fund involves risk. The Fund is new with no significant operating history by which to evaluate its potential performance. There can be no assurance that the Fund’s strategy will be successful. The Fund may use leverage its investments by “borrowing.” The use of leverage increases both risk of loss and profit potential.

-*Shares of the Fund are not listed on any securities exchange, which makes them inherently illiquid.
There is no secondary market for the Fund’s shares, and it is not anticipated that a secondary market will develop.
- Shares of the Fund are not redeemable. Thus, an investment in the Fund may not be suitable for investors who may need the money they invest in a specified time frame.
- Although the Fund will offer to repurchase at least 5% of outstanding shares on a quarterly basis in accordance with the Fund’s repurchase policy, the Fund will not be required to repurchase shares at a shareholder’s option nor will shares be exchangeable for units, interests or shares of any security.
- The Fund is not required to extend, and shareholders should not expect the Fund’s Board of Trustees to authorize, repurchase offers in excess of 5% of outstanding shares.
- Regardless of how the Fund performs, an investor may not be able to sell or otherwise liquidate his, her or its shares whenever such investor would prefer and, except to the extent permitted under the quarterly repurchase offer, will be unable to reduce the shareholder’s exposure on any market downturn.

Liquid Strategies LLC (“Liquid”) is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Liquid, including our investment strategies, fees and objectives, can be found in our Form ADV Part 2A and our Form CRS.

The Fund’s’ investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company. For a prospectus or summary prospectus with this and other important information about the Fund, please visit www.lsfunds.com/funds or call 1-800-632-4027. Read the prospectus carefully before investing.

Distributed by Foreside Fund Services, LLC, which is not affiliated with the Adviser