Closed-End Funds

NexPoint Strategic Opportunities Fund

The NexPoint Strategic Opportunities Fund (NYSE:NHF) is a closed-end fund managed by NexPoint Advisors, L.P. that is in the process of converting to a diversified REIT. On August 28, 2020, shareholders approved the Conversion proposal and amended the Company’s fundamental investment policies and restrictions to permit the Company to pursue its new business. The Company is in the process of realigning its portfolio so that it is no longer an “investment company” under the Investment Company Act of 1940 (the “1940 Act”) and continues to expect the Company to be able to transition its investment portfolio sufficient to qualify as a REIT for tax purposes by the first quarter of 2021 and to apply to the Securities and Exchange Commission (the “SEC”) for an order under the 1940 Act declaring that the Company has ceased to be an investment company (the “Deregistration Order”) in the first quarter of 2021.

Please consider the investment objectives, risks, charges and expenses of NexPoint Strategic Opportunities Fund carefully before investing. A prospectus with this and other information about NexPoint Strategic Opportunities Fund may be found at www.nexpointadvisors.com/fund/ under the Fund Literature tab. You may also obtain a prospectus by calling 1-866-351-4440. Please read the prospectus carefully before investing.

NexPoint Advisors, L.P. (the “Investment Adviser”) is an SEC-registered adviser on the NexPoint alternative investment platform. NexPoint’s platform provides differentiated access to alternatives through a range of investment solutions, including public and private real estate investment trusts, tax-advantaged real estate vehicles, closed-end funds, and other private investment solutions. NexPoint is based in Dallas, Texas and is part of a network of affiliates with expertise across the asset management and financial services spaces.

Shares of closed-end investment companies frequently trade at a discount to net asset value. The price of the Company‘s Common Shares is determined by a number of factors, several of which are beyond the control of the Company. Therefore, the Company cannot predict whether its Common Shares will trade at, below or above net asset value. Past performance does not guarantee future results.

No assurance can be given that the Company will achieve its investment objectives.

RISK SUMMARY

Closed-End Fund Risk. The Company is a closed-end investment company designed primarily for long-term investors and not as a trading vehicle. No assurance can be given that a shareholder will be able to sell his or her Common Shares or Preferred Shares on the NYSE or another national stock exchange when he or she chooses to do so, and no assurance can be given as to the price at which any such sale may be effected.

Non-Payment Risk. Senior Loans, like other corporate debt obligations, are subject to the risk of non-payment of scheduled interest and/or principal. Non-payment would result in a reduction of income to the Fund, a reduction in the value of the Senior Loan experiencing non-payment and a potential decrease in the NAV of the Fund.

Credit Risk. The Fund may invest all or substantially all of its assets in Senior Loans or other securities that are rated below investment grade and unrated Senior Loans deemed to be of comparable quality. Securities rated below investment grade are commonly referred to as “high yield securities” or “junk securities.” They are regarded as predominantly speculative with respect to the issuing company’s continuing ability to meet principal and interest payments. Investments in high yield Senior Loans and other securities may result in greater NAV fluctuation than if the Fund did not make such investments.

Interest Rate Risk. The Fund’s NAV will usually change in response to interest rate fluctuations. When interest rates decline, the value of fixed rate securities already held by the Fund can be expected to rise. Conversely, when interest rates rise, the value of existing fixed rate securities can be expected to decline.

Senior Loans Risk. The risks associated with Senior Loans are similar to the risks of below investment grade securities, although Senior Loans are typically senior and secured in contrast to other below investment grade securities, which are often subordinated and unsecured.

Risk of Restrictions on Resale. Senior Loans may not be readily marketable and may be subject to restrictions on resale. As a result, the ability of the Fund to dispose of its investments in a timely fashion and at an advantageous price may be restricted.

Ongoing Monitoring Risk. On behalf of the several Lenders, the Agent generally will be required to administer and manage the Senior Loans and, with respect to collateralized Senior Loans, to service or monitor the collateral.

Leverage Risk. Leverage may increase the risk of loss, cause fluctuations in the market value of the Fund’s portfolio to have disproportionately large effects or cause the net asset value (“NAV”) of the Fund generally to decline faster than it would otherwise.