0001193125-13-068930.txt : 20130221 0001193125-13-068930.hdr.sgml : 20130221 20130221132530 ACCESSION NUMBER: 0001193125-13-068930 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20130221 DATE AS OF CHANGE: 20130221 EFFECTIVENESS DATE: 20130221 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HIGHLAND FUNDS II CENTRAL INDEX KEY: 0000891079 IRS NUMBER: 061357778 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 033-51308 FILM NUMBER: 13629676 BUSINESS ADDRESS: STREET 1: 13455 NOEL ROAD STREET 2: SUITE 800 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 972-628-4100 MAIL ADDRESS: STREET 1: 13455 NOEL ROAD STREET 2: SUITE 800 CITY: DALLAS STATE: TX ZIP: 75240 FORMER COMPANY: FORMER CONFORMED NAME: PYXIS FUNDS II DATE OF NAME CHANGE: 20120109 FORMER COMPANY: FORMER CONFORMED NAME: HIGHLAND FUNDS II DATE OF NAME CHANGE: 20110222 FORMER COMPANY: FORMER CONFORMED NAME: GE FUNDS DATE OF NAME CHANGE: 19930328 0000891079 S000001613 Highland Fixed Income Fund C000004360 Class A HFBAX C000004361 Class B HFBBX C000004362 Class C HFBCX C000004363 Class Y HFBYX C000058416 Class R HFBRX 0000891079 S000001614 Highland Tax-Exempt Fund C000004364 Class A HTXAX C000004366 Class C HTXCX C000004367 Class Y HTXYX 0000891079 S000001616 Highland Core America Equity Fund C000004372 Class A HCOAX C000004373 Class B HCOBX C000004374 Class C HCOCX C000004375 Class Y HCOYX C000058418 Class R HCORX 0000891079 S000001617 Highland Global Select Equity Fund C000004376 Class A HGMAX C000004377 Class B HGMBX C000004378 Class C HGMCX C000004379 Class Y HGMYX C000058419 Class R HGMRX 0000891079 S000001619 Highland International Equity Fund C000004383 Class A HIQAX C000004384 Class B HIQBX C000004385 Class C HIQCX C000004386 Class Y HIQYX C000058420 Class R HIQRX 0000891079 S000001621 Highland Premier Growth Equity Fund C000004388 Class A HPEAX C000004389 Class B HPEBX C000004390 Class C HPECX C000004391 Class Y HPEYX C000058422 Class R HPERX 0000891079 S000001623 Highland Small-Cap Equity Fund C000004396 Class A HSZAX C000004397 Class B HSZBX C000004398 Class C HSZCX C000004399 Class Y HSZYX C000058424 Class R HSZRX 0000891079 S000001624 Highland Total Return Fund C000004400 Class A HTAAX C000004401 Class B HTABX C000004402 Class C HTACX C000004403 Class Y HTAYX C000058425 Class R HTARX 0000891079 S000033738 Highland Energy MLP Fund C000104241 Class A HEFAX C000104242 Class C HEFCX C000104243 Class R HEFRX C000104244 Class Y HEFYX 0000891079 S000033991 Highland Trend Following Fund C000104800 Class A HTFAX C000104801 Class C HTFCX C000104802 Class R HTFRX C000104803 Class Y HTFYX 0000891079 S000034354 Highland Dividend Equity Fund C000105766 Class A HDFAX C000105767 Class C HDFCX C000105768 Class R HDFRX C000105769 Class Y HDFYX 0000891079 S000034397 Highland Alpha Trend Strategies Fund C000105848 Class A HATAX C000105849 Class C HATCX C000105850 Class R HATRX C000105851 Class Y HATYX 0000891079 S000035623 Highland Alternative Income Fund C000109089 Class A HHFAX C000109090 Class C HHFCX C000109091 Class R HHFRX C000109092 Class Y HHFYX 497 1 d482764d497.htm 497 497

 

LOGO

February 21, 2013

VIA EDGAR

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

Attention:             Office of Filings, Information & Consumer Service

 

Re: Highland Funds II (formerly “Pyxis Funds II”) (“Trust”) (File Nos.033-51308 and 811-07142)

Ladies and Gentlemen:

This filing is for the purpose of submitting exhibits containing interactive data format risk/return summary information that mirrors the risk/return summary information in (i) the Prospectus dated February 1, 2013 as amended February 8, 2013 for the Highland Alpha Trend Strategies Fund, Highland Alternative Income Fund, Highland Trend Following Fund, Highland Core America Equity Fund, Highland Dividend Equity Fund, Highland Premier Growth Equity Fund, Highland Small-Cap Equity Fund, Highland Global Select Equity Fund, Highland International Equity Fund, Highland Fixed Income Fund, Highland Tax-Exempt Fund and Highland Total Return Fund, each a series of the Trust, and (ii) the Prospectus dated February 1, 2013 as amended February 8, 2013 for the Highland Energy MLP Fund, as filed electronically via EDGAR with the Securities and Exchange Commission on February 8, 2013 (Accession No. 0001193125-13-046647).

If you have any questions concerning this filing, you may contact me at (617) 662-3969.

 

Very truly yours,

/s/ Francine S. Hayes

Francine S. Hayes
Vice President and Managing Counsel

 

cc: E. Powell
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Fees and Expenses of the Fund Expense Example Shareholder Fees (fees paid directly from your investment) Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower. Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or &#8220;turns over&#8221; its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund&#8217;s performance. During the period of October 31, 2011 (the date the Fund commenced operations) through September 30, 2012, the Fund had a portfolio turnover rate of 2,624% (not annualized) of the average value of its portfolio. Principal Investment Strategies The Fund seeks to achieve its investment objective by allocating assets among proprietary technically-based trend following strategies. The Fund takes long and short positions in broad index based securities (primarily domestically-listed foreign equity exchange-traded funds (&#8220;ETFs&#8221;)) based on long and intermediate term trends. The Fund also employs short term counter trend strategies that seek to hedge the trend following strategy and mitigate risk, while seeking to profit from short term market volatility. The strategies are intended to have low correlation with market benchmarks and with each other. <br /><br />Anchor Capital Management Group, Inc. (&#8220;Anchor&#8221;), sub-adviser of the Fund, will allocate Fund assets among strategies that it believes offer the potential for attractive investment returns individually and that are expected to blend within the Fund&#8217;s portfolio so that it will have lower correlation and lower volatility relative to the market. In seeking to take advantage of increases or declines in the price of equity securities or indexes, the Fund may use stock baskets (groups of stocks that may be purchased through a single transaction) and exchange-traded notes (&#8220;ETNs&#8221;). In executing its counter trend strategy, the Fund may rotate investment positions among securities typically correlated to specific countries or regions. Security selection is determined through Anchor&#8217;s mathematical and statistical models; however, Anchor may alter such selection based on its assessment of current market conditions and other factors. <br/><br/> As part of its investment strategies, Anchor actively employs the use of cash and cash equivalents in an attempt to sidestep market declines and lower overall portfolio volatility. In particular, the Fund may invest all or substantially all of its assets in cash or cash equivalents when Anchor determines that market conditions so warrant. To the extent the Fund is invested heavily in cash, it may not achieve its investment objective and may experience negative returns.<br/><br/> The Fund may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes. <br /><br />The Fund may invest, directly and indirectly (through derivatives and other pooled investment vehicles (including ETFs)), in securities of issuers of any market capitalization. The Fund may invest without limitation in investments tied economically to any country in the world, including emerging countries. The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended (the &#8220;1940 Act&#8221;). The Fund is not intended to be a complete investment program. Principal Risks When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.<br /><br /> <b>Equity Securities Risk</b> is the risk that stock prices will fall over short or long periods of time. In addition, common stocks represent a share of ownership in a company, and rank after bonds and preferred stock in their claim on the company&#8217;s assets in the event of bankruptcy.<br /><br /> <b>Exchange-Traded Funds Risk</b> is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund&#8217;s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.<br /><br /> <b>Short Sales Risk</b> is the risk of loss associated with any appreciation on the price of a security borrowed in connection with a short sale. The Fund may engage in short sales that are not made &#8220;against-the-box,&#8221; which means that the Fund may sell short securities even when they are not actually owned or otherwise covered at all times during the period the short position is open. Short sales that are not made &#8220;against-the-box&#8221; theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase.<br /><br /> <b>Derivatives Risk</b> is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations.<br /><br /> <b>Counterparty Risk</b> is the risk that a counterparty (the other party to a transaction or an agreement or the party with whom the Fund executes transactions) to a transaction with the Fund may be unable or unwilling to make timely principal, interest or settlement payments, or otherwise honor its obligations.<br /><br /> <b>Currency Risk</b> is the risk that fluctuations in exchange rates will adversely affect the value of the Fund&#8217;s foreign currency holdings and investments denominated in foreign currencies.<br /><br /> <b>Foreign Investment Risk</b> is the risk that investing in foreign (non-U.S.) securities either directly or indirectly may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.<br /><br /> <b>Emerging Markets Risk</b> is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets.<br /><br /> <b>Securities Market Risk</b> is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.<br /><br /> <b>Hedging Risk</b> is the risk that, although intended to limit or reduce investment risk, hedging strategies may also limit or reduce the potential for profit. There is no assurance that hedging strategies will be successful.<br /><br /> <b>Illiquid and Restricted Securities Risk</b> is the risk that the Adviser may not be able to sell illiquid or restricted securities at the price it would like or may have to sell them at a loss. Securities of non-U.S. issuers, and emerging markets securities in particular, are subject to illiquidity risk.<br/><br/><b> Management Risk</b> is the risk that the Adviser or Anchor may be incorrect in its assessment of the intrinsic value of the securities the Fund holds which may result in a decline in the value of Fund shares and failure to achieve its investment objective. The Fund&#8217;s portfolio managers use quantitative analyses and/or models. Any imperfections or limitations in such analyses and models could affect the ability of the portfolio managers to implement strategies.<br /><br /> <b>Mid-Cap Company Risk</b> is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.<br /><br /> <b>Small-Cap Company Risk</b> is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in ETFs, closed-end funds or mutual funds (&#8220;Underlying Funds&#8221;) may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.<br /><br /> <b>Exchange-Traded Notes Risk</b> is the risk that ETNs in which the Fund may invest are subject to credit risk and the value of an ETN may vary and may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying commodities or other related markets, changes in the applicable interest rates, changes in the issuer&#8217;s credit rating, and economic, legal, political, or geographic events. ETNs are debt securities whose returns are linked to a particular index. The Fund will bear its proportionate share of any fees and expenses borne by the ETN.<br /><br /> <b>Model Risk</b> is the risk that the models used by the Fund to determine or guide investment decisions may not achieve the objectives of the Fund. Additionally, the portfolio manager of the Fund is able to adjust the models or, under certain adverse conditions, to deviate from the models employed by the Fund. Such adjustments or deviations may not achieve the objectives of the Fund and may produce lower returns and/or higher volatility compared to what the returns and volatility of the Fund would have been if the portfolio manager had not adjusted or deviated from the models.<br /><br /> <b>Non-Diversification Risk</b> is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund&#8217;s investment in fewer issuers may result in the Fund&#8217;s shares being more sensitive to the economic results of those issuers.<br /><br /> <b>Portfolio Turnover Risk</b> is the risk that the Fund&#8217;s high portfolio turnover will increase its transaction costs and may result in increased realization of net short-term capital gains (which are taxable to shareholders as ordinary income when distributed to them), higher taxable distributions and lower after-tax performance. <br /><br /> An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal. Performance The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund&#8217;s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds&#8212;Performance or by calling 1-877- 665-1287. <b>Annual Total Returns </b> The bar chart shows the performance of the Fund&#8217;s Class A shares as of December 31. The highest calendar quarter total return for Class A Shares of the Fund was 7.04% for the quarter ended March 31, 2012 and the lowest calendar quarter total return was -3.29% for the quarter ended June 30, 2012. The Fund&#8217;s year-to-date total return for Class A Shares through December 31, 2012 was 0.67%. Average Annual Total Returns <br/>(For the periods ended December 31, 2012) After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. <br/><br/>In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and the &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. 50000 The contingent deferred sales charge (&#8220;CDSC&#8221;) on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter. 26.24 When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. <b>Non-Diversification Risk</b> is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund&#8217;s investment in fewer issuers may result in the Fund&#8217;s shares being more sensitive to the economic results of those issuers. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. www.highlandfunds.com/Funds&#8212;Performance 1-877- 665-1287 After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. highest calendar quarter total return 2012-03-31 0.0704 lowest calendar quarter total return 2012-06-30 -0.0329 0.0575 0 0 0 0 0 0 0 0 0.01 0 0 0.02 0.02 0.02 0.02 -0.02 -0.02 -0.02 -0.02 0.02 0.02 0.02 0.02 0.0035 0.01 0.005 0 0.02 0.02 0.02 0.02 0.0023 0.0023 0.0023 0.0023 0.0458 0.0523 0.0473 0.0423 1008 622 474 425 1878 1564 1425 1284 2756 2600 2381 2156 4983 5170 4794 4396 522 1564 2600 5170 0.0067 Investment Objective -0.0507 -0.0537 To provide shareholders with above-average total returns over a complete market cycle primarily through capital appreciation and income generation. -0.0329 0.0056 0.01 0.1732 Fees and Expenses of the Fund Shareholder Fees (fees paid directly from your investment) -0.1195 -0.1219 -0.1028 -0.0729 -0.0699 0.0899 Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Expense Example This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower. Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or &#8220;turns over&#8221; its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund&#8217;s performance. During the period January 12, 2012 (the date the Fund commenced operations) through September 30, 2012, the Fund had a portfolio turnover rate of 1,081% (not annualized) of the average value of its portfolio. Principal Investment Strategies Principal Risks Performance 2011-11-01 2011-11-02 2011-11-02 2011-11-02 2011-11-09 2011-10-31 0.0575 0 0 0 0 0 0 0 0.02 0.02 0.02 0.02 0 0.01 0 0 -0.02 -0.02 -0.02 -0.02 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleNoRedemptionTransposedPyxisAlphaTrendStrategiesFund column period compact * ~</div> <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualTotalReturnsPyxisAlphaTrendStrategiesFundBarChart column period compact * ~</div> Highland Trend Following Fund<br><br/><b>(formerly &#8220;Pyxis Trend Following Fund&#8221;)</b> Investment Objective To provide long-term capital appreciation consistent with capital preservation. Fees and Expenses of the Fund 0.0575 0 0 0 0.02 0.02 0.02 0.02 0.0035 0.01 0.005 0 0.0142 0.0142 0.0142 0.0142 0.003 0.003 0.003 0.003 0.0407 0.0472 0.0422 0.0372 960 424 374 1742 1281 1138 2538 2152 1920 4594 4388 3967 0 0 0 0 0 0 0 0.02 0.02 0.02 0.02 0.01 <b>Shareholder Fees</b> (fees paid directly from your investment) <b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment) 0.02 0.02 0.02 0.02 0.0035 0.01 0.005 0 0.0033 0.0033 0.0033 0.0033 0.0038 0.0038 0.0038 0.0038 0.0306 0.0371 0.0321 0.0271 When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.<br /><br /><b>Equity Securities Risk</b> is the risk that stock prices will fall over short or long periods of time. In addition, common stocks represent a share of ownership in a company, and rank after bonds and preferred stock in their claim on the company&#8217;s assets in the event of bankruptcy.<br /><br /> <b>Exchange-Traded Funds Risk</b> is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund&#8217;s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.<br /><br /><b>High Yield Securities Risk</b> is the risk that high yield securities or unrated securities of similar credit quality (commonly known as &#8220;junk bonds&#8221;) are more likely to default than higher rated securities. High yield securities are regarded as speculative with respect to the issuer&#8217;s capacity to pay interest and to repay principal. The market value of these securities is more sensitive to corporate developments and economic conditions and can be volatile. Market conditions can diminish liquidity and make accurate valuations difficult to obtain.<br /><br /><b>Interest Rate Risk</b> is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.<br /><br /><b>Credit Risk</b> is the risk that the Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.<br /><br /><b>Short Sales Risk</b> is the risk of loss associated with any appreciation on the price of a security borrowed in connection with a short sale. The Fund may engage in short sales that are not made &#8220;against-the-box,&#8221; which means that the Fund may sell short securities even when they are not actually owned or otherwise covered at all times during the period the short position is open. Short sales that are not made &#8220;against-the-box&#8221; theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase.<br /><br /><b>Derivatives Risk</b> is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations.<br /><br /><b>Debt Securities Risk</b> is the risk that the issuer of a debt security may fail to pay interest or principal when due, and that changes in market interest rates may reduce the value of debt securities or reduce the Fund&#8217;s returns. The Fund may invest in debt securities, principally below investment grade securities, but also including investment grade securities and other debt obligations. During periods of economic uncertainty and change, the market price of the Fund&#8217;s investments in below investment grade securities may be particularly volatile.<br /><br /><b>Counterparty Risk</b> is the risk that a counterparty (the other party to a transaction or an agreement or the party with whom the Fund executes transactions) to a transaction with the Fund may be unable or unwilling to make timely principal, interest or settlement payments, or otherwise honor its obligations.<br /><br /><b>Currency Risk</b> is the risk that fluctuations in exchange rates will adversely affect the value of the Fund&#8217;s foreign currency holdings and investments denominated in foreign currencies.<br /><br /><b>Foreign Investment Risk</b> is the risk that investing in foreign (non-U.S.) securities either directly or indirectly may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.<br/><br/><b>Emerging Markets Risk</b> is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets.<br /><br /><b>Securities Market Risk</b> is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.<br /><br /><b>Hedging Risk</b> is the risk that, although intended to limit or reduce investment risk, hedging strategies may also limit or reduce the potential for profit. There is no assurance that hedging strategies will be successful.<br /><br /><b>Illiquid and Restricted Securities Risk</b> is the risk that the Adviser may not be able to sell illiquid or restricted securities at the price it would like or may have to sell them at a loss. Securities of non-U.S. issuers, and emerging markets securities in particular, are subject to illiquidity risk.<br /><br /><b>Management Risk</b> is the risk that the Adviser or Anchor may be incorrect in its assessment of the intrinsic value of the securities the Fund holds which may result in a decline in the value of Fund shares and failure to achieve its investment objective. The Fund&#8217;s portfolio managers use qualitative analyses and/or models. Any imperfections or limitations in such analyses and models could affect the ability of the portfolio managers to implement strategies.<br /><br /><b>Mid-Cap Company Risk</b> is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.<br /><br /><b>Small-Cap Company Risk</b> is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in ETFs, closed-end funds or mutual funds (&#8220;Underlying Funds&#8221;) may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.<br /><br /><b>Exchange-Traded Notes Risk</b> is the risk that ETNs in which the Fund may invest are subject to credit risk and the value of an ETN may vary and may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying markets, changes in the applicable interest rates, changes in the issuer&#8217;s credit rating, and economic, legal, political, or geographic events. ETNs are debt securities whose returns are linked to a particular index.<br /><br /><b>Model Risk</b> is the risk that the models used by the Fund to determine or guide investment decisions may not achieve the objectives of the Fund. Additionally, the portfolio manager of the Fund is able to adjust the models or, under certain adverse conditions, to deviate from the models employed by the Fund. Such adjustments or deviations may not achieve the objectives of the Fund and may produce lower returns and/or higher volatility compared to what the returns and volatility of the Fund would have been if the portfolio manager had not adjusted or deviated from the models.<br /><br /><b>Non-Diversification Risk</b> is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund&#8217;s investment in fewer issuers may result in the Fund&#8217;s shares being more sensitive to the economic results of those issuers.<br /><br /><b>Portfolio Turnover Risk</b> is the risk that the Fund&#8217;s high portfolio turnover will increase its transaction costs and may result in increased realization of net short-term capital gains (which are taxable to shareholders as ordinary income when distributed to them), higher taxable distributions and lower after-tax performance. <br /><br />An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal. <b>Non-Diversification Risk</b> is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund&#8217;s investment in fewer issuers may result in the Fund&#8217;s shares being more sensitive to the economic results of those issuers. When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. The contingent deferred sales charge ("CDSC") on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter. The Fund commenced operations on January 12, 2012. After the Fund has had operations for at least one full calendar year, its Prospectus will include a bar chart and a table that will provide an indication of the risks of investing in the Fund by showing changes in the Fund&#8217;s performance from year to year and by showing how the Fund&#8217;s average annual returns for the most recent one year, five years and ten years (or the life of the Fund, if shorter), compared to those of a broad measure of market performance. Although past performance of the Fund is no guarantee of how it will perform in the future, historical performance may give you some indication of the risks of investing in the Fund. The Fund commenced operations on January 12, 2012. After the Fund has had operations for at least one full calendar year, its Prospectus will include a bar chart and a table that will provide an indication of the risks of investing in the Fund by showing changes in the Fund&#8217;s performance from year to year and by showing how the Fund&#8217;s average annual returns for the most recent one year, five years and ten years (or the life of the Fund, if shorter), compared to those of a broad measure of market performance. Although past performance of the Fund is no guarantee of how it will perform in the future, historical performance may give you some indication of the risks of investing in the Fund. <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleTransposedPyxisAlternativeIncomeFund column period compact * ~</div> <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleNoRedemptionTransposedPyxisAlternativeIncomeFund column period compact * ~</div> The Fund seeks to achieve its investment objective under normal market conditions by allocating assets among proprietary technically-based trend following strategies. The Fund primarily takes long and short positions with respect to securities that are highly correlated to high yield corporate bonds (also known as &#8220;junk bonds&#8221;) based on long, intermediate, and short term trends. Such securities primarily will include domestically-listed exchange-traded funds (&#8220;ETFs&#8221;), exchange-traded notes (&#8220;ETNs&#8221;) and mutual funds with high yield corporate bond exposure in any industry or sector. Security selection is determined through Anchor Capital Management Group, Inc.&#8217;s (&#8220;Anchor&#8221; or the &#8220;Sub-Adviser&#8221;) mathematical and statistical models; however, the Sub-Adviser may alter such selection based on its assessment of current market conditions and other factors. <br /><br />The Sub-Adviser also actively employs the use of cash and cash equivalents as a strategic asset class in an attempt to both sidestep market declines as well as lower overall portfolio volatility, and the Fund may make investments in cash, cash equivalents and short-term debt securities and/or money market instruments in response to adverse market, economic or political conditions. In particular, the Fund may invest all or substantially all of its assets in cash or cash equivalents when the Sub-Adviser determines that market conditions so warrant. To the extent the Fund is invested heavily in cash, it may not achieve its investment objective and may experience negative returns. <br/><br/> The Fund may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes. <br/><br/> The Fund may invest, directly and indirectly (through derivatives and other pooled investment vehicles (including ETFs, ETNs, and mutual funds)), in securities of issuers of any credit quality. The Fund may invest without limitation in investments tied economically to any country in the world, including emerging market countries. <br /><br />The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended (the &#8220;1940 Act&#8221;). The Fund is not intended to be a complete investment program. 866 473 324 274 1466 1135 989 841 2089 1916 1678 1435 3755 3958 3512 3041 373 1135 1916 3958 0.0429 -0.1355 -0.0514 -0.1058 -0.1058 -0.0688 0.0051 -0.0372 -0.1219 -0.1028 0.0046 Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or &#8220;turns over&#8221; its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the Expense Example, affect the Fund&#8217;s performance. During the most recent fiscal year, the Fund&#8217;s portfolio turnover rate was 848% of the average value of its portfolio. Principal Investment Strategies Principal Risks Performance Calendar Year Total Return Expense Example This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower. The highest calendar quarter total return for Class A Shares of the Fund was 8.23% for the quarter ended December 21, 2010 and the lowest calendar quarter total return was -8.26% for the quarter ended December 31, 2011. The Fund&#8217;s year-to-date total return for Class A Shares through December 31, 2012 was -5.14%. After-tax returns in the table above are shown for Class A Shares only and will differ for Class C, Class R and Class Y Shares. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. <br/><br/>In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations. Under normal market conditions, the Fund is managed based on signals generated by a proprietary model maintained by the Fund&#8217;s sub-adviser (the &#8220;Model&#8221;). The Model is &#8220;technically weighted,&#8221; which means that it assigns a greater or lesser importance to asset classes based on signals derived from their price trends. For example, an individual asset class (such as stocks, bonds or commodities) may be assigned a heavier weighting in the portfolio based on its price being above its moving average or a lesser weighting if its price is below its moving average. The net effect being that the investment model switches in and out of broad asset classes based on their trends, providing investors an active asset allocation fund.<br/><br/>These proprietary, top-down strategies are intended to profit from market trends in both directions, with little regard for the prospects of individual equity or debt securities. Specifically, the portfolio manager will seek to take long positions (i.e., buy securities) during upward trends in certain securities prices and conversely sell and/or take short positions during downward trends in the price of such securities. The portfolio manager seeks to lower overall Fund volatility through diversification of asset classes, as well as the use of cash. Additionally, the portfolio manager&#8217;s trend-following methods seek to provide returns which are un-correlated to traditional managers and investment &#8220;styles,&#8221; such as growth and value.<br/><br/>The Fund primarily invests in exchange-traded funds (&#8220;ETFs&#8221;) which represent these broad asset classes as opposed to securities representing the debt or equity of individual companies. These ETFs invest primarily in (1) U.S. and foreign equity securities; (2) U.S. Government fixed income securities; (3) commodities; and (4) the U.S. dollar. ETFs are investment companies that seek to track the performance of securities indices or baskets of securities. The Fund&#8217;s portfolio may include ETFs that invest in both developed and emerging markets in Europe, the Far East, the Middle East, Africa, Australia, Latin America and North America. The Fund also may invest in exchange traded notes (&#8220;ETNs&#8221;), in much the same manner in which it invests in ETFs. The Fund may also invest directly in the securities which comprise the ETFs and ETNs discussed above, such as individual equities and government obligations, but excluding physical commodities. The Fund&#8217;s investments in U.S. fixed income markets may include other investment companies, such as closed-end funds and other open-end mutual funds (together with ETFs, &#8220;Underlying Funds&#8221;).<br/><br/>The Fund may employ both leveraged investment techniques as well as short positions, which allows the Fund a market exposure which can range from 150% net long (i.e., the Fund has more long (purchased) positions than short (borrowed) positions) to 50% net short (i.e., the Fund has more short (borrowed) positions than long (purchased) positions). Such extremes however, will be uncommon. The Fund may take a &#8220;short position&#8221; where the portfolio manager believes that the price of a security or value of an index will decline. The Fund may &#8220;short&#8221; a particular security by borrowing the security and selling it with the intent of later purchasing the security at a lower price. The Fund may also gain short exposure to an index by buying an ETF that has an inverse exposure to the index. The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended (the &#8220;1940 Act&#8221;). The Fund is not intended to be a complete investment program.<br/><br/>The Fund may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.<br/><br/>In general, under normal market conditions, the portfolio manager makes investment decisions based on signals generated by the Model. Following the Model, the portfolio manager will generally buy investments during upward trends in the price of securities and sell investments or take short positions during downward trends in the price of securities. The portfolio manager also actively employs the use of cash and cash equivalents as a strategic asset class in an attempt to both sidestep market declines as well as lower overall portfolio volatility. During adverse market, economic or political conditions, as defined by the portfolio manager, the portfolio manager may deviate from the Model, including investing up to 100% of the portfolio in cash, cash equivalents, short-term debt securities and/or money market instruments, moving from a long exposure to a short exposure or from a short exposure to a long exposure in the various asset classes, when they feel doing so will help the Fund achieve its objectives of long-term capital appreciation or capital preservation. The sub-adviser may also adjust the Model from time-to-time to change the component constituents of the Model or in an attempt to improve the Model&#8217;s ability to implement a trend-following strategy. The Fund is not intended to be a complete investment program. When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objectives, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.<br/><br/><b>Currency Risk </b>is the risk that fluctuations in exchange rates will adversely affect the value of the Fund&#8217;s foreign currency holdings and investments denominated in foreign currencies.<br/><br/><b>Exchange-Traded Funds Risk </b>is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund&#8217;s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company. A Fund&#8217;s investments in certain commodities-linked ETFs may be limited by tax considerations, including the Fund&#8217;s intention to qualify annually as a regulated investment company (&#8220;RIC&#8221;) under the Internal Revenue Code of 1986, as amended (the &#8220;Code&#8221;). See &#8220;Taxation&#8221; below.<br/><br/><b>Exchange-Traded Notes Risk</b> is the risk that ETNs in which the Fund may invest are subject to credit risk and the value of an ETN may vary and may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying commodities or other related markets, changes in the applicable interest rates, changes in the issuer&#8217;s credit rating, and economic, legal, political, or geographic events. ETNs are debt securities whose returns are linked to a particular index. The Fund will bear its proportionate share of any fees and expenses borne by the ETN. A Fund&#8217;s investments in certain commodities-linked ETNs may be limited by tax considerations, including the Fund&#8217;s intention to qualify annually as a RIC under the Code. See &#8220;Taxation&#8221; below.<br/><br/><b>Tax Status Risk</b> is the risk that the Fund&#8217;s ability to invest in certain commodity-related instruments, including in certain commodity-linked ETFs and ETNs, is or may be limited by the Fund&#8217;s intention to qualify as a RIC under the Code, and, if the Fund does not appropriately limit such investments or if such investments (or the income earned on such investments) were to be recharacterized for U.S. tax purposes, the Fund could fail to qualify as a RIC under one or more of the qualification tests applicable to RICs under the Code. If the Fund were to fail to qualify as a RIC in any taxable year, and were ineligible to or otherwise did not cure such failure, the Fund would be subject to tax on its taxable income at corporate rates, and all distributions from earnings and profits, including any distributions of net long-term capital gains, would be taxable to shareholders as dividend income. See &#8220;Taxation&#8221; below.<br/><br/><b>Foreign Investment Risk</b> is the risk that investing in foreign (non-U.S.) securities either directly or indirectly through investments in Underlying Funds may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.<br/><br/><b>Government Securities Risk</b> is the risk associated with U.S. Government obligations. U.S. Government obligations include securities issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities, such as the U.S. Treasury. Payment of principal and interest on U.S. Government obligations may be backed by the full faith and credit of the U.S. or may be backed solely by the issuing or guaranteeing agency or instrumentality itself. There can be no assurance that the U.S. Government would provide financial support to its agencies or instrumentalities (including government-sponsored enterprises) where it is not obligated to do so.<br/><br/><b>Interest Rate Risk</b> is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.<br/><br/><b>Derivatives Risk </b> is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations.<br/><br/><b>Leverage Risk </b> is the risk associated with the use of leverage for investment purposes to create opportunities for greater total returns. Any investment income or gains earned with respect to the amounts borrowed that are in excess of the interest that is due on the borrowing will augment the Fund&#8217;s income. Conversely, if the investment performance with respect to the amounts borrowed fails to cover the interest on such borrowings, the value of the Fund&#8217;s shares may decrease more quickly than would otherwise be the case, and dividends on Fund shares could be reduced or eliminated. Interest payments and fees incurred in connection with such borrowings will reduce the amount of net income available for payment to Fund shareholders.<br/><br/><b>Mid-Cap Company Risk</b> is the risk of investing either directly or indirectly through investments in Underlying Funds in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.<br/><br/><b>Model Risk </b> is the risk that the Model used by the Fund to determine or guide investment decisions may not achieve the objectives of the Fund. Additionally, the portfolio manager of the Fund is able to adjust the Model or, under certain adverse conditions, to deviate from the Model employed by the Fund. Such adjustments or deviations may not achieve the objectives of the Fund and may produce lower returns and/or higher volatility compared to what the returns and volatility of the Fund would have been if the portfolio manager had not adjusted or deviated from the Model.<br/><br/><b>Non-Diversification Risk</b> is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund&#8217;s investment in fewer issuers may result in the Fund&#8217;s shares being more sensitive to the economic results of those issuers.<br/><br/><b>Portfolio Turnover Risk</b> is the risk that the Fund&#8217;s high portfolio turnover will increase its transaction costs and may result in increased realization of net short-term capital gains (which are taxable to shareholders as ordinary income when distributed to them), higher taxable distributions and lower after-tax performance.<br /><br /><b>Securities Market Risk</b> is the risk that the value of securities owned by the Fund either directly or indirectly through investments in Underlying Funds may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.<br /><br /><b>Short Sales Risk</b> is the risk of loss associated with any appreciation on the price of a security borrowed in connection with a short sale. The Fund may engage in short sales that are not made &#8220;against-the-box,&#8221; which means that the Fund may sell short securities even when they are not actually owned or otherwise covered at all times during the period the short position is open. Short sales that are not made &#8220;against-the-box&#8221; theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase.<br /><br /><b>Small-Cap Company Risk</b> is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in Underlying Funds may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.<br/><br/> <b>Underlying Funds Risk </b> is the risk that ETFs, mutual funds and closed-end funds in which the Fund may invest are subject to investment advisory and other expenses, which will be paid indirectly by the Fund and its shareholders. As a result, the cost of investing in the Fund will be higher than the cost of investing directly in ETFs, mutual funds and closed-end funds and may be higher than other mutual funds that invest directly in stocks and bonds. The closed-end fund shares may differ from their net asset value. Underlying Funds are subject to specific risks, depending on the nature of the fund.<br /><br />An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal. The Fund was organized to acquire the assets and liabilities of the Incline Capital Trend Following Fund (the &#8220;Predecessor Fund&#8221;) in exchange for Class A Shares of the Fund. Accordingly, the Fund is the successor to the Predecessor Fund, and the following information was derived from the performance records of the Predecessor Fund through September 23, 2011. The Fund has substantially similar objectives, strategies and policies as the Predecessor Fund, which was advised by the Fund&#8217;s sub-adviser.<br/><br/>The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year since the Predecessor Fund&#8217;s inception and by showing how the average annual returns for the Fund&#8217;s Class A Shares compared to those of a broad-based securities market index. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. Class C, Class R and Class Y Shares of the Predecessor Fund were not offered, and Class C, Class R and Class Y Shares were not sold, prior to the date of this Prospectus. The returns of Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highland.com/Funds&#8212;Performance or by calling 1-877-665-1287. The bar chart shows the performance of the Fund&#8217;s Class A shares as of December 31. Average Annual Total Returns<br/>(For the periods ended December 31, 2012) 50000 You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and the &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. The contingent deferred sales charge (&#8220;CDSC&#8221;) on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter. 8.48 When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. <b>Non-Diversification Risk</b> is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund&#8217;s investment in fewer issuers may result in the Fund&#8217;s shares being more sensitive to the economic results of those issuers. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year since the Predecessor Fund&#8217;s inception and by showing how the average annual returns for the Fund&#8217;s Class A Shares compared to those of a broad-based securities market index. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. Class C, Class R and Class Y Shares of the Predecessor Fund were not offered, and Class C, Class R and Class Y Shares were not sold, prior to the date of this Prospectus. The returns of Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. www.highland.com/Funds&#8212;Performance 1-877-665-1287 After-tax returns in the table above are shown for Class A Shares only and will differ for Class C, Class R and Class Y Shares. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. 2009-03-31 2009-03-31 2009-03-31 2009-03-31 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleNoRedemptionTransposedPyxisTrendFollowingFund column period compact * ~</div> Investment Objective <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualTotalReturnsPyxisTrendFollowingFundBarChart column period compact * ~</div> Long-term growth of capital and future income. (Future income means the ability to pay dividends in the future.) Fees and Expenses of the Fund 0.0575 0 0 0 0 0 0 0 0.02 0.02 0.02 Expense Example This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower. Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or &#8220;turns over&#8221; its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund&#8217;s performance. During the most recent fiscal year, the Fund&#8217;s portfolio turnover rate was 47% of the average value of its portfolio. 0 Principal Investment Strategies 0 0 0.02 -0.02 -0.02 -0.02 -0.02 0.01 0.012 0.012 0.012 0.012 0.0035 0.01 0.005 0 0.0105 0.0105 0.0105 0.0105 0.0002 0.0002 0.0002 0.0002 0.0262 0.0327 0.0277 0.0227 -0.0125 -0.0125 -0.0125 -0.0125 Principal Risks 0.0137 0.0202 0.0152 0.0102 0.0575 0 0 0 0 Long-term growth of capital. Fees and Expenses of the Fund Shareholder Fees (fees paid directly from your investment) Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) 0 0 0 0 0 Expense Example -0.02 -0.02 -0.02 -0.02 0 0 0 0 This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower. 0 Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or &#8220;turns over&#8221; its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund&#8217;s performance. During the most recent fiscal year, the Fund&#8217;s portfolio turnover rate was 24% of the average value of its portfolio. Principal Investment Strategies 0 50000 -0.02 -0.02 -0.02 -0.02 -0.02 0.0575 Principal Risks <br /><br /> 0 0 0 0 Performance 0 0 0 0 0 Calendar Year Total Returns Calendar Year Total Returns 0 0.04 0 0 245 195 The bar chart shows the performance of the Fund&#8217;s Class A shares as of December 31. 792 The highest calendar quarter total return for Class A Shares of the Fund was 21.25% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -27.95% for the quarter ended December 31, 2008. The Fund&#8217;s year-to-date total return for Class A Shares through December 31, 2012 was 13.56%. The highest calendar quarter total return for Class A Shares of the Fund was 16.72% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -21.47% for the quarter ended December 31, 2008. The Fund&#8217;s year-to-date total return for Class A Shares through December 31, 2012 was 13.21%. 0 0 0 0 0 1244 755 603 1720 1291 1037 0 0 0 0 0 3030 2756 2243 0.0095 0.0095 0.0095 0.0095 0.0095 0.0025 0.01 0.01 0.005 0 0.008 0.008 0.008 0.008 0.008 0.02 0.0275 0.0225 0.0275 0.0175 0.01 0.0575 0 0 0 0 0.0075 0.0075 0.0075 0.0075 0.0075 0.01 0 0.01 0 0 0.005 0 0 0 0.01 0.0124 0.0124 0.0124 0.0124 0 0.04 0.1227 0 0.006 0 0.006 0.006 0.006 0.006 0.0025 0.01 0.0001 0.01 0.0001 0.005 0.0001 0.0001 0 0 0 0 0 0 0.1751 0.1268 0.1053 0.0421 0.0548 0.03 0.0582 0.03 0.025 0.02 0.1322 0.1288 0.1123 0.132 0.1439 0.1822 0.0025 0.0025 0.0025 0.0025 0.0025 0.0001 0.0001 0.0001 0.0001 0.0001 0.0111 0.0186 0.0186 0.0136 0.0086 0.07 0.0579 0.0608 0.086 0.1359 0.1168 0.1381 0.1635 0.0252 0 0.0192 0 0.0199 0 0.0297 0 0.0297 0 0.0405 0.0356 0.01 0.0736 0.0605 0.0605 0.0753 0.0718 0.0829 0.0972 2011-11-23 2011-11-15 2011-11-14 766 2011-12-01 678 378 0.004 228 0.004 178 0.004 790 0.004 703 0.004 403 253 203 0.087 0.069 0.0683 0.0881 0.0741 0.0514 0.0944 0.0754 0.0025 1166 0.01 1053 0.01 0.005 853 0 551 703 1238 1127 927 779 627 0.0061 0.0061 0.0061 0.0061 0.0061 1591 1454 1454 0.0001 0.0001 1205 0.0001 0.0001 0.0001 949 2768 2736 0.0127 3080 0.0202 2585 2062 0.0202 0.0152 0.0102 1711 1577 1577 1331 1078 3011 2982 3318 2836 2327 2011-11-23 2011-11-23 395 904 1538 3242 697 295 904 1538 955 3242 1232 2021 605 834 year-to-date total return 2012-12-31 908 0.0067 785 1088 585 431 1978 274 305 155 104 1151 1006 634 480 1006 325 745 477 1088 829 563 1849 1804 2180 1635 1061 2348 1813 1248 682 589 289 138 88 0.2397 0.1511 0.0926 0.0575 0 0 0 0 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleNoRedemptionTransposedPyxisDividendEquityFund column period compact * ~</div> 0.1298 205 0.0192 634 -0.3775 1088 0.3025 1978 205 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualTotalReturnsPyxisDividendEquityFundBarChart column period compact * ~</div> 0 0 0 0 634 0 1088 2348 189 189 0 0.04 0 0 0.2683 303 303 0.0293 585 585 927 927 0.1356 1006 1006 1804 2180 0.02 0.02 0.02 0.02 0.02 0.2365 0.0907 0.02 0.0369 0.02 0.02 0.02 0.02 0.1731 0.0965 0.01 -0.3322 0.2548 1577 0.1117 1577 -0.0145 0.1321 3318 2982 0.2809 0.0672 0.0623 0.0501 0.0832 0.1128 0.1046 0.1317 0.1301 0.1351 0.1599 0.2064 0.196 -0.4353 -0.02 -0.02 -0.02 -0.02 -0.02 0.2663 0.1133 -0.1363 0.1628 0.1329 0.132 0.0876 0.1535 0.1832 0.1995 0.2056 0.1599 0.1526 0.0214 0.0186 0.0172 0.0258 0.0258 0.0361 0.0166 0.0312 0.008 0.008 0.008 0.008 0.008 0.058 0.0524 0.0497 0.0595 0.0563 0.0669 0.071 0.0752 0.0025 0.01 0.01 0.005 0 0.0063 0.0063 0.0063 0.0063 0.0063 0.0652 0.0592 0.0564 0.0662 0.0243 0.0465 0.0719 0.0608 0.051 0.0168 0.0243 0.0243 0.0193 0.0143 -0.0042 -0.0068 -0.004 0.0002 0.0002 0.0102 0.0166 You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. 50000 0.0583 0.0505 0.0502 0.0581 0.0566 0.0681 0.071 0.0756 0.0616 0.0611 0.0759 0.0226 0.0525 0.0221 0.0806 278 278 Class C shares are subject to a 1% contingent deferred sales charge (&#8220;CDSC&#8221;) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan. 853 853 0.24 1454 1454 When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. 2736 3080 An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. www.highlandfunds.com/Funds&#8212;Performance 1-877-665-1287 After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. 0.096 0.096 0.0624 0.1138 0.1438 0.1614 0.1587 0.1613 0.1583 In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. Highland Dividend Equity Fund<br/><br/><b>(formerly &#8220;Pyxis Dividend Equity Fund&#8221;)</b> Investment Objective -0.055 -0.0573 -0.0465 -0.0509 -0.0508 To provide above average dividend yields with the potential for long-term capital appreciation. -0.0413 -0.0116 Fees and Expenses of the Fund -0.0118 The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and the &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. Shareholder Fees (fees paid directly from your investment) <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualTotalReturnsPyxisSmall-CapEquityFundBarChart column period compact * ~</div> Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) 0.0568 0.0535 0.0499 0.0584 0.0561 0.0659 0.0811 0.0751 Expense Example This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower. Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or &#8220;turns over&#8221; its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund&#8217;s performance. During the period November 14, 2011 (the date the Fund commenced operations) through September 30, 2012, the Fund had a portfolio turnover rate of 6% (not annualized) of the average value of its portfolio. Principal Investment Strategies The Fund seeks to achieve its investment objective under normal market conditions by investing, directly and indirectly (e.g., through investments in derivatives or other pooled investment vehicles), at least 80% of its net assets, plus any borrowings for investment purposes, in equity investments that pay or expect to pay dividends. The term &#8220;equity investments&#8221; refers to direct and indirect investments in common stocks, preferred stocks and convertible securities. The Fund may invest without limitation in equity investments tied economically to any country in the world, including emerging countries.<br/><br/>In addition to dividend-paying equity investments, the Fund may invest up to 20% of its assets, plus any borrowings for investment purposes, in a variety of other instruments including fixed income securities (including &#8220;junk bonds&#8221;), exchange-traded funds (&#8220;ETFs&#8221;), exchange-traded notes (&#8220;ETNs&#8221;), and warrants. The Fund may use derivatives, primarily swaps, options and futures, to an unlimited extent to hedge various investments for risk management and for speculative purposes. The Fund&#8217;s investments in derivatives and other types of pooled investment vehicles that invest in equity investments that pay or expect to pay dividends are intended to provide substantially similar economic exposure to direct investments in such dividend-paying equity investments.<br/><br/>The Fund seeks to invest in high-quality, income generating stocks that offer attractive valuations with below-market risk profiles. The Fund may invest in securities of any market capitalization.<br/><br/>In selecting investments for the Fund, Brookmont Capital Management, LLC (&#8220;Brookmont&#8221;), sub-adviser of the Fund, reviews macroeconomic data to determine the allocation of investments among various economic sectors. Brookmont seeks to avoid making large sector bets or focusing on individual issuers. Instead, investments are made in securities in all ten economic sectors defined by the S&amp;P 500 Index. Once the sector allocations are determined, Brookmont reviews the investment universe and selects investments based on factors such as dividend yield, the issuer&#8217;s debt level, projected cash flow, history of dividend increases, and earnings potential.<br/><br/>The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended (the &#8220;1940 Act&#8221;). The Fund is not intended to be a complete investment program. 0.068 0.0541 -0.0279 0.015 0.0461 736 0.045 0.0459 646 0.0542 346 196 Principal Risks 146 When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.<br/><br/><b>Dividend-Paying Stock Risk </b>is the risk that companies that have paid regular dividends to shareholders may decrease or eliminate dividend payments in the future. A decrease in dividend payments by an issuer may result in a decrease in the value of the security held by the Fund or the Fund receiving less income. Additionally, a fund pursuing a dividend-oriented investment strategy may at times underperform other funds that invest more broadly or that have different investment styles.<br/><br/><b>Equity Securities Risk </b>is the risk that stock prices will fall over short or long periods of time. In addition, common stocks represent a share of ownership in a company, and rank after bonds and preferred stock in their claim on the company&#8217;s assets in the event of bankruptcy. The value of equity securities paying dividends at high rates may be more sensitive to changes in interest rates than are other equity securities.<br/><br/><b>Securities Market Risk</b> is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.<br/><br/><b>Mid-Cap Company Risk</b> is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.<br/><br/><b>Small-Cap Company Risk</b> is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in ETFs, closed-end funds or mutual funds (&#8220;Underlying Funds&#8221;) may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.<br/><br/><b>Foreign Investment Risk</b> is the risk that investing in foreign (non-U.S.) securities either directly or indirectly may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.<br/><br/><b>Currency Risk</b> is the risk that fluctuations in exchange rates will adversely affect the value of the Funds foreign currency holdings and investments denominated in foreign currencies.<br/><br/><b>Derivatives Risk </b>is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations.<br/><br/><b>Exchange-Traded Funds Risk </b>is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund&#8217;s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.<br/><br/><b>Exchange-Traded Notes Risk</b> is the risk that ETNs in which the Fund may invest are subject to credit risk and the value of an ETN may vary and may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying commodities or other related markets, changes in the applicable interest rates, changes in the issuer&#8217;s credit rating, and economic, legal, political, or geographic events. ETNs are debt securities whose returns are linked to a particular index. The Fund will bear its proportionate share of any fees and expenses borne by the ETN.<br/><br/><b>Counterparty Risk </b>is the risk that a counterparty (the other party to a transaction or an agreement or the party with whom the Fund executes transactions) to a transaction with the Fund may be unable or unwilling to make timely principal, interest or settlement payments, or otherwise honor its obligations.<br/><br/><b>Hedging Risk</b> is the risk that, although intended to limit or reduce investment risk, hedging strategies may also limit or reduce the potential for profit. There is no assurance that hedging strategies will be successful.<br/><br/><b>Interest Rate Risk</b> is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.<br/><br/><b>High Yield Securities Risk </b>is the risk that high yield securities or unrated securities of similar credit quality (commonly known as &#8220;junk bonds&#8221;) are more likely to default than high rated securities. High Yield securities are regarded as speculative with respect to the issuer&#8217;s capacity to pay interest and repay principal. The market value of these securities is more sensitive to corporate developments and economic conditions and can be volatile. Market conditions can diminish liquidity and make accurate valuations difficult to obtain.<br/><br/><b>Management Risk </b>is the risk that the Adviser or Brookmont may be incorrect in its assessment of the intrinsic value of the securities the Fund holds which may result in a decline in the value of Fund shares and failure to achieve its investment objective. The Fund&#8217;s portfolio manager uses qualitative analyses and/or models. Any imperfections or limitations in such analyses and models could affect the ability of the portfolio managers to implement strategies.<br/><br/><b>Non-Diversification Risk</b> is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund&#8217;s investment in fewer issuers may result in the Fund&#8217;s shares being more sensitive to the economic results of those issuers.<br/><br/><b>Portfolio Turnover Risk</b> is the risk that the Fund&#8217;s high portfolio turnover will increase its transaction costs and may result in increased realization of net short-term capital gains (which are taxable to shareholders as ordinary income when distributed to them), higher taxable distributions and lower after-tax performance.<br/><br/>An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal. Performance The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund&#8217;s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds&#8212;Performance or by calling 1-877- 665-1287. 1074 958 The bar chart shows the performance of the Fund&#8217;s Class A shares as of December 31. Annual Total Returns 758 606 452 Average Annual Total Returns<br/>(For the periods ended December 31, 2012) The bar chart shows the performance of the Fund&#8217;s Class A shares as of December 31. The Fund seeks to achieve its investment objectives by investing at least 80% of its net assets under normal circumstances in equity securities, such as common and preferred stocks, plus borrowing for investment purposes.<br/><br/>Highland Capital Management Fund Advisors, L.P. (&#8220;HCMFA&#8221;), the Fund&#8217;s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (&#8220;GEAM&#8221;), the Fund&#8217;s sub-adviser. The Fund invests primarily in a limited number of large- and medium-sized companies (meaning companies with a market capitalization of $2 billion or more) that the portfolio manager believes have above-average growth histories and/or growth potential. The portfolio manager selects equity securities from a number of industries based on the merits of individual companies. In seeking to satisfy the Fund&#8217;s investment objective with respect to future income, the portfolio manager will also consider companies that have the potential to pay dividends in the future. Stock selection is key to the performance of the Fund.<br/><br/>The portfolio manager seeks to identify securities of companies with characteristics such as:<ul type="square"><li style="margin-left:-20px"> above-average annual growth rates</li></ul><ul type="square"><li style="margin-left:-20px">financial strength (favorable debt ratios and other financial characteristics)</li></ul><ul type="square"><li style="margin-left:-20px">leadership in their respective industries</li></ul><ul type="square"><li style="margin-left:-20px">high quality management focused on generating shareholder value</li></ul>The portfolio manager may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.<br/><br/>The Fund also may invest to a lesser extent in securities of foreign (non-U.S.) issuers and debt securities. The Fund may also invest in exchange-traded funds (&#8220;ETFs&#8221;), and it may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes. 1435 1296 1296 1042 When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.<br/><br/><b>Securities Market Risk</b> is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.<br/><br/><b>Growth Investing Risk</b> is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company&#8217;s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.<br/><br/><b>Mid-Cap Company Risk </b> is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.<br/><br/><b>Foreign Investment Risk</b> is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.<br/><br/><b>Currency Risk</b> is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.<br/><br/><b>Credit Risk</b> is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.<br/><br/><b>Interest Rate Risk</b> is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.<br/><br/><b>Exchange-Traded Funds Risk </b> is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund&#8217;s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.<br/><br/><b>Derivatives Risk</b> is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.<br/><br/>It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. 1993-09-08 782 1993-09-08 1993-09-08 1999-09-30 1998-01-05 2008-01-29 1993-08-31 The highest calendar quarter total return for Class A Shares of the Fund was 6.74% for the quarter ended March 31, 2012 and the lowest calendar quarter total return was -0.90% for the quarter ended June 30, 2012. The Fund&#8217;s year-to-date total return for Class A Shares through December 31, 2012 was 12.27%. <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleNoRedemptionTransposedPyxisSmall-CapEquityFund column period compact * ~</div> 2448 2411 2766 Long-term growth of capital and future income rather than current income. 2254 1713 Fees and Expenses of the Fund You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and the &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. 0.0425 50000 Shareholder Fees (fees paid directly from your investment) 0 0 Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Other Expenses&#8221; are based on estimated amounts for the current fiscal year. Average Annual Total Returns <br/>(For the periods ended December 31, 2012) The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.<br/><br/>In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations. Expense Example When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. 0 0 0 This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower. <b>Non-Diversification Risk</b> is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund&#8217;s investment in fewer issuers may result in the Fund&#8217;s shares being more sensitive to the economic results of those issuers. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or &#8220;turns over&#8221; its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund&#8217;s performance. During the most recent fiscal year, the Fund&#8217;s portfolio turnover rate was 16% of the average value of its portfolio. The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. Principal Investment Strategies Principal Risks 0 0 As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. Calendar Year Total Returns 0.01 1993-09-08 www.highlandfunds.com/Funds&#8212;Performance 1-877- 665-1287 Highland Core America Equity Fund<br/><br/><b>(formerly &#8220;Pyxis Core America Equity Fund&#8221;)</b> After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. 0 0 After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. 0 Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in the Fund or in other Highland Funds II alternative funds, equity funds and/or asset allocation funds or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. highest calendar quarter total return 0 50000 0 0 2012-03-31 <b>Shareholder Fees</b> (fees paid directly from your investment) <b>Annual Fund Operating Expenses</b> (expenses that you pay each year as a percentage of the value of your investment) 0.0674 lowest calendar quarter total return 2012-06-30 -0.009 0.47 246 year-to-date total return 246 2012-12-31 The Fund seeks to achieve its investment objectives by investing at least 80% of its net assets under normal circumstances in domestic equity securities, such as common and preferred stocks, plus borrowing for investment purposes.<br/><br/>Highland Capital Management Fund Advisors, L.P. (&#8220;HCMFA&#8221;), the Fund&#8217;s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (&#8220;GEAM&#8221;), the Fund&#8217;s sub-adviser. The Fund invests primarily in U.S. companies that the portfolio managers believe are undervalued by the market but have solid growth prospects. The portfolio managers employ a relative value approach to identify companies across all economic sectors which are undervalued relative to the market, their peers, their historical valuation or their growth rate. This approach results in a portfolio more broadly diversified across economic sectors and contrasts with other investing approaches that focus on low absolute valuations and often result in a portfolio concentrated in fewer sectors. A company may be undervalued for reasons such as market overreaction to recent company, industry or economic events. In seeking to satisfy the Fund&#8217;s investment objective with respect to future income, the portfolio managers will also consider companies that have the potential to pay dividends in the future. Stock selection is key to the performance of the Fund. <br/><br/>The portfolio managers seek to identify securities of companies with characteristics such as: <ul type="square"><li style="margin-left:-20px">low valuations in relation to their peers and the overall market</li><li style="margin-left:-20px">the potential for long-term earnings growth</li><li style="margin-left:-20px">above-average free cash flow yields</li><li style="margin-left:-20px">high quality management focused on generating shareholder value</li><li style="margin-left:-20px">financial strength (favorable debt ratios and other financial characteristics)</li><li style="margin-left:-20px">attractive upside potential and limited downside risk</li><li style="margin-left:-20px">a catalyst such as changing industry fundamentals, introduction of a new product, a company restructuring, or a change in management</li></ul>The portfolio managers may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.<br/><br/>The Fund also may invest to a lesser extent in securities of foreign (non-U.S.) issuers and debt securities. The Fund may also invest in exchange-traded funds (&#8220;ETFs&#8221;), and it may use derivatives primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes. year-to-date total return 0.1227 2012-12-31 When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.<br/><br/><b>Securities Market Risk</b> is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.<br/><br/><b>Value Investing Risk</b> is the risk of investing in undervalued stocks that may not realize their perceived value for extended periods of time or may never realize their perceived value. Value stocks may respond differently to market and other developments than other types of stocks. Value-oriented funds will typically underperform when growth investing is in favor.<br/><br/><b>Foreign Investment Risk</b> is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.<br/><br/><b>Currency Risk</b> is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.<br/><br/><b>Credit Risk</b> is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.<br/><br/><b>Interest Rate Risk</b> is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.<br/><br/><b>Exchange-Traded Funds Risk </b> is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund&#8217;s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.<br/><br/><b>Derivatives Risk</b> is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.<br/><br/>It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. 758 758 0.1356 Performance highest calendar quarter total return 1296 1296 2009-06-30 The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. 2411 2766 As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. 0.2125 lowest calendar quarter total return 2008-12-31 -0.2795 The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. www.highlandfunds.com/Funds&#8212;Performance 1-877-665-1287 Average Annual Total Returns<br/>(For the periods ended December 31, 2012) After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For Example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.<br/><br/>In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 the Fund&#8217;s Statement of Additional Information. 50000 0.16 Class C shares are subject to a 1% contingent deferred sales charge (&#8220;CDSC&#8221;) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan. When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of two broad-based securities market indices. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. 0.0035 After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. 0.0035 The Fund seeks to achieve its investment objective by investing at least 80% of its net assets under normal circumstances in equity securities, such as common and preferred stocks, of small-cap companies, plus borrowing for investment purposes. <br /><br />The Fund uses an investment strategy that combines growth, value and core investment management styles. The Fund defines a small-cap company as one with a market capitalization that falls between (a) the bottom range of the Russell 2000<sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">&#174;</sup> Index (&#8220;Russell 2000 Index&#8221;) and (b) the greater of either the top range of the Russell 2000 Index or $3.0 billion. As of May 31, 2012 the market capitalization of companies in the Russell 2000 Index ranged from $101 million to $2.61 billion.* The portfolio manager will not sell a stock merely because the market capitalization of a company in the portfolio moves outside its capitalization range or because the index capitalization range changes. Stock selection is key to the performance of the Fund.<br/><br/>The portfolio manager seeks to identify securities of companies with characteristics such as: <ul type="square"><li style="margin-left:-20px"> high quality management focused on generating shareholder value </li></ul><ul type="square"><li style="margin-left:-20px">attractive products or services</li></ul><ul type="square"><li style="margin-left:-20px">appropriate capital structure</li></ul><ul type="square"><li style="margin-left:-20px">strong competitive positions in their industries</li></ul>*&nbsp;&nbsp;The Russell 2000 Index is constructed to provide an unbiased small-cap barometer and is reconstituted annually. The capitalization range, however, may change significantly intra-year due to changes in the market capitalization of securities in the Index.<br/><br/>The portfolio manager may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified. <br /><br />The Fund also may invest to a lesser extent in securities with capitalizations outside the Fund&#8217;s small-cap range, debt securities and foreign (non-U.S.) securities. The portfolio manager may also invest in exchange-traded funds (&#8220;ETFs&#8221;) and it may invest in index futures, options on index futures and index options to gain exposure to certain types of securities as a substitute to investing directly in such securities. The Fund is not intended to be a complete investment program. 0.0035 Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For Example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.<br/><br/><b>Securities Market Risk</b> is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.<br/><br/><b>Small-Cap Company Risk</b> is the risk that investing in the securities of small-cap companies may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.<br/><br/><b>Growth Investing Risk </b>is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company&#8217;s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.<br /><br /><b>Value Investing Risk </b>is the risk of investing in undervalued stocks that may not realize their perceived value for extended periods of time or may never realize their perceived value. Value stocks may respond differently to market and other developments than other types of stocks. Value-oriented funds will typically underperform when growth investing is in favor.<br /><br /><b>Allocation Risk </b>is the risk that HCMFA may not allocate assets of the Fund among strategies or asset classes in an optimal manner, if, among other reasons, it does not correctly assess the attractiveness of a strategy or asset class.<br /><br /><b>Foreign Investment Risk </b>is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.<br /><br /><b>Currency Risk </b>is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.<br /><br /><b>Credit Risk </b>is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.<br /><br /><b>Interest Rate Risk </b>is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.<br /><br /><b>Exchange-Traded Funds Risk </b>is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund&#8217;s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.<br /><br /><b>Derivatives Risk </b>is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology. <br /><br />It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. 0.0025 0.01 0 1993-02-28 1993-02-28 1993-11-29 0.3003 2008-01-29 1999-09-30 1993-12-22 1993-02-22 1993-02-22 1993-02-22 0.1534 0.1827 0.2411 0.2282 0.0058 0.0058 0.0058 -0.4992 0.2952 0.0423 0.0118 -0.1746 0.0193 0.0093 0.1864 year-to-date total return 2012-12-31 0.1321 highest calendar quarter total return 2009-06-30 0.1672 lowest calendar quarter total return 2008-12-31 -0.2147 540 296 95 highest calendar quarter total return 2010-12-21 0.0823 lowest calendar quarter total return 2011-12-31 -0.0826 year-to-date total return 296 After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.<br/><br/>In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations. 2012-12-31 606 784 Investment Objective -0.0514 Maximum total return (total return includes both income and capital appreciation). 1042 1046 515 1796 2254 1143 Fees and Expenses of the Fund Shareholder Fees (fees paid directly from your investment) Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) 0.1186 0.1197 Expense Example 0.0782 This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower. 0.1852 0.1897 0.1732 0.1684 0.1375 Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or &#8220;turns over&#8221; its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund&#8217;s performance. During the most recent fiscal year, the Fund&#8217;s portfolio turnover rate was 169% of the average value of its portfolio. Principal Investment Strategies -0.0726 Principal Risks -0.0771 -0.0687 -0.0594 196 -0.0681 -0.0591 606 -0.0369 1042 2254 The contingent deferred sales charge (&#8220;CDSC&#8221;) on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter. Performance 0.0637 0.0578 0.0597 0.0649 0.0627 0.0821 0.0726 The highest calendar quarter total return for Class A Shares of the Fund was 12.15% for the quarter ended June 30, 2003 and the lowest calendar quarter total return was -16.91% for the quarter ended December 31, 2008. The Fund&#8217;s year-to-date total return for Class A Shares through December 31, 2012 was 11.04%. 0.0338 0.0261 After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. <br /><br />In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.<br /><br /> 0.0278 0.0347 -0.0467 0.0085 0.0043 0.0399 0.0043 0.0115 0.0445 0.03 0.0509 0.057 0.039 1994-03-02 1994-03-02 0.039 1994-03-02 0.0379 1994-03-02 0.0403 1999-09-30 2008-01-29 0.0506 1994-02-28 1994-03-02 0.0662 0.0328 0.0328 0.0329 0.0296 0.0546 0.0829 0.0428 0.0428 0.0425 0.0381 0.0944 0.0584 highest calendar quarter total return 1998-09-30 1998-09-30 1998-09-30 2009-06-30 1998-09-30 1999-09-30 2008-01-29 1998-09-30 0.2015 lowest calendar quarter total return 2008-12-31 -0.273 year-to-date total return 2012-12-31 0.2022 The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. www.highlandfunds.com/Funds&#8212;Performance 1-877-665-1287 After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The bar chart shows the performance of the Fund&#8217;s Class A shares as of December 31. 0.2832 0.0679 0.011 0.0866 0.0498 -0.364 0.3853 0.1129 0.0005 0.2022 0.0414 0.024 0.0114 0.0301 0.0267 0.0006 0.0942 0.0114 Investment Objective 0.0897 0.0485 Highland Small-Cap Equity Fund<br/><br/><b>(formerly &#8220;Pyxis Small-Cap Equity Fund&#8221;)</b> <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualTotalReturnsPyxisGlobalSelectEquityFundBarChart column period compact * ~</div> Highland Global Select Equity Fund<br/><br/><b>(formerly &#8220;Pyxis Global Equity Fund&#8221;)</b> Investment Objective Long-term growth of capital. Fees and Expenses of the Fund Shareholder Fees (fees paid directly from your investment) Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) highest calendar quarter total return 2009-09-30 When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.<br /><br /> <b>Securities Market Risk</b> is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.<br /><br /> <b>Mid-Cap Company Risk </b> is the risk that investing in the securities of mid-cap companies could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.<br /><br /> <b>Small-Cap Company Risk</b> is the risk that investing in the securities of small-cap companies may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.<br/><br/> <b>Growth Investing Risk</b> is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company&#8217;s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.<br/><br/> <b>Value Investing Risk</b> is the risk of investing in undervalued stocks that may not realize their perceived value for extended periods of time or may never realize their perceived value. Value stocks may respond differently to market and other developments than other types of stocks. Value-oriented funds will typically underperform when growth investing is in favor.<br/><br/> <b>Foreign Investment Risk</b> is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S., and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.<br/><br/> <b>Currency Risk</b> is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.<br/><br/> <b>Interest Rate Risk</b> is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.<br/><br/> <b>Credit Risk</b> is the risk that the Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.<br/><br/> <b>Prepayment Risk </b>is the risk that during periods of falling interest rates, issuers of debt securities may repay higher rate securities before their maturity dates. This may cause the Fund to lose potential price appreciation and to be forced to reinvest the unanticipated proceeds at lower interest rates.<br/><br/> <b>Allocation Risk</b> is the risk that HCMFA may not allocate assets of the Fund among strategies or asset classes in an optimal manner, if, among other reasons, it does not correctly assess the attractiveness of a strategy or asset class.<br/><br/> <b>Valuation Risk</b> is the risk that the portfolio securities that have been valued using techniques other than market quotations, may have valuations that are different from those produced using other methodology, and that the security may be sold at a discount to the value established by the Fund.<br/><br/> <b>Illiquid and Restricted Securities Risk</b> is the risk that the Adviser may not be able to sell illiquid or restricted securities at the price it would like or may have to sell them at a loss. Securities of non-U.S. issuers, and emerging markets securities in particular, are subject to illiquidity risk.<br/><br/> <b>High Yield Securities Risk </b> is the risk that high yield securities or unrated securities of similar credit quality (commonly known as &#8220;junk bonds&#8221;) are more likely to default than higher rated securities. The market value of these securities is more sensitive to corporate developments and economic conditions and can be volatile. Market conditions can diminish liquidity and make accurate valuations difficult to obtain.<br/><br/> <b>Emerging Markets Risk </b> is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets. <br/><br/> <b>REIT-Specific Risk </b> includes the risk that an investment in the stocks of real estate investment trusts (&#8220;REITs&#8221;) will decline because of adverse developments affecting the real estate industry and real property values. An investment in a REIT also may be adversely affected or lost if the REIT fails to qualify as a REIT for tax purposes.<br/><br/> <b>Real Estate Securities Risk </b>is the risk that an investment in real estate securities will be closely linked to the performance of the real estate markets. Property values or income may fall due to increasing vacancies or declining rents resulting from economic, legal, cultural or technological developments.<br/><br/> <b>Exchange-Traded Funds Risk </b>is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund&#8217;s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.<br/><br/> <b>Derivatives Risk</b> is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology. <br/><br/> It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. 0.0516 Expense Example This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower. Highland International Equity Fund<br/><br/><b>(formerly &#8220;Pyxis International Equity Fund&#8221;)</b> Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or &#8220;turns over&#8221; its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund&#8217;s performance. During the most recent fiscal year, the Fund&#8217;s portfolio turnover rate was 94% of the average value of its portfolio. Principal Investment Strategies Investment Objective Long-term growth of capital. Fees and Expenses of the Fund Shareholder Fees (fees paid directly from your investment) Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Expense Example This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower. Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or &#8220;turns over&#8221; its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund&#8217;s performance. During the most recent fiscal year, the Fund&#8217;s portfolio turnover rate was 48% of the average value of its portfolio. <br /><br /> Principal Investment Strategies 0.0575 0 0 0 0 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleNoRedemptionTransposedPyxisCoreAmericaEquityFund column period compact * ~</div> 0 0 0 0 0 0 0.04 0 0 0 0 0 0 0 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualTotalReturnsPyxisCoreAmericaEquityFundBarChart column period compact * ~</div> 0 0 0 0 The Fund seeks to achieve its investment objective by investing at least 80% of its net assets under normal circumstances in equity securities, such as common and preferred stocks, plus borrowings for investment purposes. <br/><br/>Highland Capital Management Fund Advisors, L.P. (&#8220;HCMFA&#8221;), the Fund&#8217;s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (&#8220;GEAM&#8221;), the Fund&#8217;s sub-adviser. The Fund invests in companies in both developed and emerging market countries, including the United States, but will invest at least 25% of its total assets in non-U.S. issuers. The portfolio manager focuses on companies that are expected to grow faster than their relevant peers/markets and whose security prices do not fully reflect their potential for growth. When valuations are low, the portfolio managers may also invest in companies that are not expected to grow faster than their relevant peers/markets. Under normal circumstances, the Fund&#8217;s assets are invested primarily in countries included in the Morgan Stanley Capital International<sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">SM</sup> (MSCI<sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">&#174;</sup>) All Country World Index (&#8220;MSCI<sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">&#174;</sup> World Index&#8221;) and in no fewer than three different countries (not including the United States). As of December 31, 2012, U.S. companies represented 45% of the MSCI<sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">&#174;</sup> All Country World Index, but the portion of the Fund&#8217;s portfolio represented by U.S. companies may vary materially from that level. Stock selection is key to the performance of the Fund. <br/><br/>The portfolio managers seek to identify securities of growth companies with the following characteristics: <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;low prices relative to their long-term cash earnings potential </li></ul> <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;potential for significant improvement in the company&#8217;s business</li></ul> <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;financial strength (favorable debt ratios and other financial characteristics)</li></ul> <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;sufficient liquidity</li></ul> <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp; emerging markets exposure</li></ul>The portfolio manager may consider selling a security when one or more of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified. The Fund may invest in securities of issuers of any market capitalization and in any industry or sector. <br/><br/>The Fund also may invest in pooled investment vehicles, including ETFs, and it may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes. <br/><br/>The Fund may invest to a lesser extent in debt securities of any kind, including debt securities of varying maturities, debt securities paying a fixed or fluctuating rate of interest, inflation-indexed bonds, structured notes, loan assignments, loan participations, debt securities, convertible into equity securities and securities issued or guaranteed by the U.S. Government.<br/><br/> Although the Fund is classified as a &#8220;diversified&#8221; fund under the Investment Company Act of 1940, as amended (the &#8220;1940 Act&#8221;), the Fund will typically invest in approximately 30-50 different issuers, resulting in a more concentrated portfolio than a more widely diversified Fund. The Fund is not intended to be a complete investment program. 0 1996-12-31 1996-12-31 1996-12-31 1996-12-31 1999-09-30 2008-01-29 1996-12-31 1996-12-31 1996-12-31 Performance Calendar Year Total Returns The bar chart shows the performance of the Fund&#8217;s Class A shares as of December 31. The highest calendar quarter total return for Class A Shares of the Fund was 25.15% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -23.59% for the quarter ended September 30, 2011. The Fund&#8217;s year-to-date total return for Class A Shares through December 31, 2012 was 18.64%. When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.<br/><br/><b>Securities Market Risk</b> is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.<br/><br/><b>Foreign Investment Risk</b> is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S., and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.<br/><br/><b>Currency Risk</b> is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.<br/><br/><b>Growth Investing Risk</b> is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company&#8217;s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.<br/><br/><b>Focused Investment Risk</b> is the risk of investing in securities of a limited number of issuers in an effort to achieve a potentially greater investment return than a fund that invests in a larger number of issuers. While the Fund is classified as a &#8220;diversified&#8221; fund under the 1940 Act, the limited number of issuers in which the Fund will invest means that price movements of a single issuer&#8217;s securities will possibly have a greater impact on the Fund&#8217;s net asset value. As a result, the Fund&#8217;s value may fluctuate more than that of a more widely diversified fund.<br/><br/><b>Mid-Cap Company Risk </b> is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.<br/><br/><b>Emerging Markets Risk</b> is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets.<br/><br/><b>Credit Risk</b> is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.<br/><br/><b>Interest Rate Risk</b> is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.<br/><br/><b>Exchange-Traded Funds Risk</b> is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund&#8217;s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.<br/><br/><b>Derivatives Risk</b> is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology. <br/><br/>It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Principal Risks The Fund seeks to achieve its investment objective by investing primarily in a combination of U.S. and foreign equity and debt securities and cash. The Fund&#8217;s asset allocation process utilizes information from the Fund&#8217;s sub-adviser, GE Asset Management Incorporated (&#8220;GEAM&#8221;), to diversify holdings across these asset classes. The Fund adjusts its weightings based on market and economic conditions to meet its objectives. The Fund may also invest in various types of derivatives to gain exposure to certain types of securities as an alternative to investing directly in such securities, to manage currency exposure and interest rate exposure (also known as duration), and to manage exposure to credit quality. <br/><br/>Highland Capital Management Fund Advisors, L.P. (&#8220;HCMFA&#8221;), the Fund&#8217;s investment adviser, has allocated all the assets of the Fund to be managed/advised by GEAM, the Fund&#8217;s sub-adviser. The Fund invests in equity securities, such as common and preferred stocks, principally for their capital appreciation potential and investment-grade debt securities principally for their income potential. The Fund invests in cash principally for the preservation of capital, income potential or maintenance of liquidity. Within each asset class, the portfolio managers primarily use active security selection to choose securities based on the perceived merits of individual issuers, although portfolio managers of different asset classes or strategies may place different emphasis on the various characteristics of a company (as identified below) during the selection process.<br/><br/> The portfolio managers seek to identify equity securities of companies with characteristics such as: <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;strong earnings growth</li></ul> <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp; favorable valuation</li></ul> <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp; a presence in successful industries</li></ul> <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;high quality management focused on generating shareholder value</li></ul> <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp; large or medium capitalization (meaning a market capitalization of $2 billion or more)</li></ul>The portfolio managers seek to identify debt securities with characteristics such as: <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;attractive yields and prices</li></ul><ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;the potential for capital appreciation</li></ul><ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;reasonable credit quality (typically investment grade debt securities, such as mortgage-backed securities, corporate bonds, U.S. Government securities and money market instruments)</li></ul>The portfolio managers may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified. <br/><br/>The portion of the Fund invested in debt securities normally has a weighted average maturity of approximately five to ten years, but is subject to no limitation with respect to the maturities of the instruments in which it may invest.<br/><br/> The Fund may also invest to a lesser extent in high yield securities (also known as &#8220;junk bonds&#8221;), equity and debt securities of companies that are located in emerging market countries, and exchange -traded funds (&#8220;ETFs&#8221;) to gain exposure to securities including those of U.S. issuers that are principally engaged in or related to the real estate industry. Performance When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.<br/><br/> <b>Municipal Obligations Risk</b> is the risk of investing in municipal securities, and includes interest rate risk and the credit risk of the issuers of municipal securities. The municipal securities market is volatile and may be significantly affected by adverse tax, legislative or political changes. To the extent that the Fund remains relatively small, it may have fewer favorable investment opportunities.<br/><br/> <b>Securities Market Risk</b> is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.<br/><br/> <b>Interest Rate Risk</b> is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.<br/><br/> <b>Credit Risk</b> is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.<br/><br/> <b>Exchange-Traded Funds Risk </b>is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund&#8217;s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.<br/><br/> <b>Derivatives Risk</b> is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.<br/><br/> It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Calendar Year Total Returns The bar chart shows the performance of the Fund&#8217;s Class A shares as of December 31. The highest calendar quarter total return for Class A Shares of the Fund was 19.72% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -24.38% for the quarter ended December 31, 2008. The Fund&#8217;s year-to-date total return for Class A Shares through December 31, 2012 was 16.28%. The Fund seeks to achieve its investment objective by investing primarily in investment-grade municipal obligations. Under normal circumstances, the portfolio manager manages the Fund so that at least 80% of the Fund&#8217;s income is exempt from both regular federal income taxes and the federal alternative minimum tax.<br/><br/> Highland Capital Management Fund Advisors, L.P. (&#8220;HCMFA&#8221;), the Fund&#8217;s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (&#8220;GEAM&#8221;), the Fund&#8217;s sub-adviser. The Fund generally will have an effective duration of 75% to 125% of the duration of the Barclays Capital 10-Year Municipal Bond Index. As of December 31, 2012, the effective duration of the Barclays Capital 10-Year Municipal Bond Index was 5.88 years. Portfolio duration is one measure of risk, as noted under &#8220;Interest Rate Risk&#8221; below.<br/><br/> The portfolio manager seeks to identify municipal obligations with characteristics such as: <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;attractive yields and prices</li></ul> <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;the potential for income generation</li></ul> <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp; the potential for capital appreciation</li></ul> <ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;reasonable credit quality</li></ul> The portfolio manager may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.<br/><br/> The Fund also may invest to a lesser extent in tax-free or taxable money market instruments and may hold cash. The portfolio manager may also invest in various types of derivatives to manage interest rate exposure (also known as duration) and to manage exposure to credit quality. The Fund may also invest in exchange-traded funds (&#8220;ETFs&#8221;).<br/><br/>The Fund&#8217;s policy that at least 80% of its income be exempt from both regular federal income taxes and the federal alternative minimum tax may only be changed with shareholder approval. 0.005 Average Annual Total Returns<br/>(For the periods ended December 31, 2012) 0.005 0.005 0.005 0.005 0.0025 0.01 0.01 lowest calendar quarter total return 0.005 0 2010-12-31 -0.0417 year-to-date total return 0.01 2012-12-31 0.0485 0.0107 0.0107 Investment Objective 0.0107 As high a level of income exempt from federal income taxation as is consistent with preservation of capital. 0.0107 0.0107 Fees and Expenses of the Fund 751 Shareholder Fees (fees paid directly from your investment) 662 362 0.0002 0.0002 0.0002 0.0002 0.0002 162 Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Expense Example 0.0184 This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower. 1120 0.0259 1005 Portfolio Turnover 805 0.0259 The Fund pays transaction costs, such as commissions, when it buys and sells securities (or &#8220;turns over&#8221; its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund&#8217;s performance. During the most recent fiscal year, the Fund&#8217;s portfolio turnover rate was 26% of the average value of its portfolio. <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualTotalReturnsPyxisTax-ExemptFundBarChart column period compact * ~</div> 502 Principal Investment Strategies 0.0209 0.0159 Principal Risks <b>Performance </b> 1513 1375 1375 866 After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. <br/><br/> In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations. Calendar Year Total Returns The bar chart shows the performance of the Fund&#8217;s Class A shares as of December 31. The highest calendar quarter total return for Class A Shares of the Fund was 5.16% for the quarter ended September 30, 2009 and the lowest calendar quarter total return was -4.17% for the quarter ended December 31, 2010. The Fund&#8217;s year-to-date total return for Class A Shares through December 31, 2012 was 4.85%. Average Annual Total Returns <br/>(For the periods ended December 31, 2012) When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.<br /><br /> <b>Securities Market Risk</b> is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.<br /><br /> <b>Foreign Investment Risk</b> is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S., and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.<br /><br /> <b>Currency Risk</b> is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.<br /><br /> <b>Growth Investing Risk</b> is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company&#8217;s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.<br /><br /> <b>Mid-Cap Company Risk </b> is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.<br /><br /> <b>Emerging Markets Risk</b> is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets.<br /><br /> <b>Credit Risk</b> is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.<br /><br /> <b>Interest Rate Risk</b> is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.<br /><br /> <b>Exchange-Traded Funds Risk </b> is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund&#8217;s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.<br /><br /> <b>Derivatives Risk</b> is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology. <br/><br/> It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The Fund seeks to achieve its investment objective by investing at least 80% of its net assets under normal circumstances in equity securities, such as common and preferred stocks, plus borrowings for investment purposes. <br /><br /> Highland Capital Management Fund Advisors, L.P. (&#8220;HCMFA&#8221;), the Fund&#8217;s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (&#8220;GEAM&#8221;), the Fund&#8217;s sub-adviser. The Fund invests primarily (meaning at least 65%) in companies in both developed and emerging market countries outside the U.S. An issuer is considered to be located outside the U.S. if at least 50% of its revenues or profits are from business activities located outside the U.S., at least 50% of its assets are located outside the U.S., or the principal trading market for its securities is located outside the U.S. The portfolio managers focus on companies whose security prices they believe do not fully reflect their potential for growth. Under normal circumstances, the Fund&#8217;s assets are invested in securities of foreign (non-U.S.) companies representing at least three different countries. Stock selection is key to the performance of the Fund.<br/><br/> The portfolio managers seek to identify securities of companies with characteristics such as:<ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;low valuation relative to their long term cash earnings potential </li></ul><ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;potential for significant improvement in the company&#8217;s business</li></ul><ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;financial strength (favorable debt ratios and other financial characteristics)</li></ul><ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;sufficient liquidity</li></ul><ul type="square"><li style="margin-left: -20px">&nbsp;&nbsp;&nbsp;large or medium capitalization (meaning a market capitalization of $2 billion or more)</li></ul> The portfolio managers may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified. <br/><br/> The Fund also may invest to a lesser extent in debt securities and may invest in securities of companies located in the U.S. The Fund may also invest in exchange-traded funds (&#8220;ETFs&#8221;), and it may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes. Average Annual Total Returns<br/>(For the periods ended December 31, 2012) After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.<br/><br/>In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations. Highland Premier Growth Equity Fund<br/><br/><b>(formerly &#8220;Pyxis Premier Growth Equity Fund&#8221;)</b> You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. 50000 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleNoRedemptionTransposedPyxisTax-ExemptFund column period compact * ~</div> 0.94 When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. www.highlandsfunds.com/Funds&#8212;Performance 1-877-665-1287 After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. 2609 2575 2925 1889 year-to-date total return 2012-12-31 0.1628 highest calendar quarter total return 2009-06-30 0.1972 lowest calendar quarter total return 2008-12-31 -0.2438 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleNoRedemptionTransposedPyxisPremierGrowthEquityFund column period compact * ~</div> 0.48 Class C shares are subject to a 1% contingent deferred sales charge (&#8220;CDSC&#8221;) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. 50000 When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. 1-877-665-1287 www.highlandsfunds.com/Funds&#8212;Performance As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualTotalReturnsPyxisPremierGrowthEquityFundBarChart column period compact * ~</div> The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. year-to-date total return 2012-12-31 0.1864 highest calendar quarter total return 2009-06-30 0.2515 2011-09-30 -0.2359 lowest calendar quarter total return You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. 50000 262 262 Class C shares are subject to a 1% contingent deferred sales charge (&#8220;CDSC&#8221;) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan. 805 805 0.26 When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. 1375 An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. 1375 The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. 2575 As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. 2925 The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. www.highlandfunds.com/Funds&#8212;Performance 0.06 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleShareholderFeesPyxisInternationalEquityFund column period compact * ~</div> <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualFundOperatingExpensesPyxisInternationalEquityFund column period compact * ~</div> 1-877-665-1287 After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleTransposedPyxisInternationalEquityFund column period compact * ~</div> After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleNoRedemptionTransposedPyxisInternationalEquityFund column period compact * ~</div> <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualTotalReturnsPyxisInternationalEquityFundBarChart column period compact * ~</div> 0.0575 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAverageAnnualTotalReturnsTransposedPyxisInternationalEquityFund column period compact * ~</div> 0 0 0 0 0 0 0 0 0.04 0 0 0.0464 0.0448 0.0323 0.0623 0.0919 0.1134 0.1599 0.0422 After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.<br/><br/>In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations. -0.0143 -0.0186 -0.0133 -0.01 -0.01 -0.0002 0.0166 0.0595 1993-09-08 1993-09-08 1993-09-08 1999-09-30 1997-09-26 1993-08-31 0.0025 After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. 0.0124 0.0001 0.0225 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleNoRedemptionTransposedPyxisGlobalSelectEquityFund column period compact * ~</div> 0.0478 0.0395 0.0398 0.0463 0.0573 0.071 0.0518 Principal Risks <br /><br /> <b>Performance</b> The highest calendar quarter total return for Class A Shares of the Fund was 20.15% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -27.30% for the quarter ended December 31, 2008. The Fund&#8217;s year-to-date total return for Class A Shares through December 31, 2012 was 20.22%. Class C shares are subject to a 1% contingent deferred sales charge (&#8220;CDSC&#8221;) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan. 0 Calendar Year Total Returns Average Annual Total Returns<br/>(For the periods ended December 31, 2012) 212 655 1124 2421 0.1077 1993-02-22 1993-02-22 1993-02-22 1993-12-22 1999-09-30 2008-01-29 1993-11-29 1993-02-28 1993-02-28 0.2062 0.0798 0.0356 0.1389 0.1156 Investment Objective -0.3064 Maximum income consistent with prudent investment management and the preservation of capital. 0.2114 Fees and Expenses of the Fund 0.096 -0.0345 0.1104 highest calendar quarter total return 2003-06-30 0.1215 lowest calendar quarter total return 2008-12-31 -0.1691 The bar chart shows the performance of the Fund's Class A shares as of December 31. After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. 50000 Class C shares are subject to a 1% contingent deferred sales charge (&#8220;CDSC&#8221;) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan. 1.69 When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of two broad-based securities market indices. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. www.highlandfunds.com/Funds&#8212;Performance 1-877-665-1287 After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations. 0.0425 0 0 0 0 0 0 0 0 0 0 0.03 0 0 0 0 0 0 0 0 0 0 0 0 0.003 0.003 0.003 0.003 0.003 0.0025 0.01 0.01 0.005 0 0.0054 0.0054 0.0054 0.0054 0.0054 0.0003 0.0003 0.0003 0.0003 0.0003 0.0112 0.0187 0.0187 0.0137 0.0087 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleShareholderFeesPyxisFixedIncomeFund column period compact * ~</div> <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualFundOperatingExpensesPyxisFixedIncomeFund column period compact * ~</div> 534 490 290 139 89 766 788 588 434 278 1016 1011 1011 750 482 1730 1815 2190 1646 1073 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleNoRedemptionTransposedPyxisTotalReturnFund column period compact * ~</div> 190 190 588 588 1011 1011 1815 2190 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualTotalReturnsPyxisTotalReturnFundBarChart column period compact * ~</div> Expense Example This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower. Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or &#8220;turns over&#8221; its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund&#8217;s performance. During the most recent fiscal year, the Fund&#8217;s portfolio turnover rate was 350% of the average value of its portfolio. Principal Investment Strategies Principal Risks Performance Calendar Year Total Returns The bar chart shows the performance of the Fund&#8217;s Class A shares as of December 31. The highest calendar quarter total return for Class A Shares of the Fund was 4.37% for the quarter ended September 30, 2009 and the lowest calendar quarter total return was -2.56% for the quarter ended June 30, 2004. The Fund&#8217;s year-to-date total return for Class A Shares through December 31, 2012 was 4.58%. Average Annual Total Returns<br/>(For the periods ended December 31, 2012) After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. <br /><br />In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.<br /><br /> 0.0654 0.0533 0.0526 0.0645 0.0328 0.0074 0.0703 0.0816 0.062 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleTransposedPyxisFixedIncomeFund column period compact * ~</div> <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleNoRedemptionTransposedPyxisFixedIncomeFund column period compact * ~</div> 0.0336 0.035 0.0202 0.0409 0.0566 -0.0128 0.0735 0.0726 0.0759 0.0458 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualTotalReturnsPyxisFixedIncomeFundBarChart column period compact * ~</div> When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.<br /><br /><b>Securities Market Risk </b>is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.<br /><br /><b>Interest Rate Risk </b>is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.<br /><br /><b>Credit Risk </b>is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.<br /><br /><b>Prepayment Risk </b>is the risk that during periods of falling interest rates, issuers of debt securities may repay higher rate securities before their maturity dates. This may cause the Fund to lose potential price appreciation and to be forced to reinvest the unanticipated proceeds at lower interest rates.<br /><br /><b>Mortgaged-Backed Securities Risk </b>is the risk of investing in mortgaged-backed securities, and includes interest rate risk, prepayment risk and the risk that the Fund could lose money if there are defaults on the mortgage loans underlying these securities.<br /><br /><b>Foreign Investment Risk </b>is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.<br /><br /><b>Currency Risk </b>is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.<br /><br /><b>High Yield Securities Risk </b>is the risk that high yield securities or unrated securities of similar credit quality (commonly known as &#8220;junk bonds&#8221;) are more likely to default than higher rated securities. The market value of these securities is more sensitive to corporate developments and economic conditions and can be volatile. Market conditions can diminish liquidity and make accurate valuations difficult to obtain.<br /><br /><b>Asset-Backed Securities Risk</b> is the risk of investing in asset-backed securities, and includes interest rate risk, prepayment risk and the risk that the Fund could lose money if there are defaults on the loans underlying these securities.<br /><br /><b>Exchange-Traded Funds Risk </b>is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund&#8217;s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.<br /><br /><b>Derivatives Risk</b> is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology. <br /><br />It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. 0.001 0.0016 -0.0044 0.0083 0.0282 0.0429 0.0485 0.0422 0.0414 0.0296 0.0283 0.0427 0.0426 0.0527 0.0595 0.0393 0.0251 0.0251 0.0391 0.0362 0.0463 0.0518 0.0516 0.0328 0.0324 0.0513 0.0454 0.0449 0.0561 0.062 The Fund seeks to achieve its investment objective by investing at least 80% of its net assets under normal circumstances in debt securities.<br/><br/>Highland Capital Management Fund Advisors, L.P. (&#8220;HCMFA&#8221;), the Fund&#8217;s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (&#8220;GEAM&#8221;), the Fund&#8217;s sub-adviser. The Fund invests primarily in a variety of investment-grade debt securities, such as mortgage-backed securities, corporate bonds, U.S. Government securities and money market instruments. The Fund normally has a weighted average maturity of approximately five to ten years, but is subject to no limitation with respect to the maturities of the instruments in which it may invest. <br/><br/>U.S. Government securities are securities that are issued or guaranteed as to principal and interest by the U.S. Government or one of its agencies or instrumentalities. Some U.S. Government securities are backed by the full faith and credit of the U.S. Government, such as U.S. Treasury bills and notes and obligations of the Government National Mortgage Association (Ginnie Mae). Other U.S. Government securities are backed by the issuer&#8217;s right to borrow from the U.S. Treasury, such as Federal National Mortgage Association (Fannie Mae) securities, while some are backed only by the credit of the issuing organization, such as obligations of the Federal Home Loan Mortgage Corporation (Freddie Mac). <br/><br/>The portfolio managers seek to identify debt securities with characteristics such as: <ul type="square"><li style="margin-left: -20px"> attractive yields and prices</li></ul><ul type="square"><li style="margin-left: -20px"> the potential for capital appreciation</li></ul><ul type="square"><li style="margin-left: -20px">reasonable credit quality</li></ul>The portfolio managers may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified. <br /><br />The Fund also may invest to a lesser extent in asset-backed securities, high yield securities (also known as &#8220;junk bonds&#8221;), foreign (non-U.S.) debt securities and equity securities, such as exchange-traded funds (&#8220;ETFs&#8221;). <br /><br />The portfolio managers may also invest in various types of derivatives to manage interest rate risk (also known as duration) and to manage exposure to credit quality. Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) 0.01 The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Investment Objective 3.5 50000 Class C shares are subject to a 1% contingent deferred sales charge (&#8220;CDSC&#8221;) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. www.highlandfunds.com/Funds&#8212;Performance 1-877-665-1287 After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAverageAnnualTotalReturnsTransposedPyxisFixedIncomeFund column period compact * ~</div> Highland Fixed Income Fund<br/><br/><b>(formerly &#8220;Pyxis Fixed Income Fund&#8221;)</b> 1993-02-22 1993-02-22 1993-02-22 1993-12-22 1999-09-30 2008-01-29 1993-11-29 1993-02-28 You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. highest calendar quarter total return 2009-09-30 0.0437 lowest calendar quarter total return 2004-06-30 -0.0256 year-to-date total return 2012-12-31 0.0458 The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of two broad-based securities market indices. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund&#8217;s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds&#8212;Performance or by calling 1-877-665-1287. year-to-date total return 2012-12-31 0.1104 10.81 473 1422 2377 4787 573 1422 2377 4787 Average Annual Total Returns<br/>(For the periods ended December 31, 2012) Shareholder Fees (fees paid directly from your investment) 1998-09-30 0 0 0 0 0 0 0.04 0 0 0.01 HIGHLAND FUNDS II Highland Alternative Income Fund<br/><br/><b>(formerly &#8220;Pyxis Alternative Income Fund&#8221;)</b> 2013-02-11 Other 2013-02-11 The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and the &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and the &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund&#8217;s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds&#8212;Performance or by calling 1-877-665-1287. The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in the Fund or in other Highland Funds II alternative funds, equity funds and/or asset allocation funds or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 the Fund&#8217;s Statement of Additional Information. 0.0575 0 0 0 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleShareholderFeesHighlandEnergyMLPFund column period compact * ~</div> <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualFundOperatingExpensesHighlandEnergyMLPFund column period compact * ~</div> <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleTransposedHighlandEnergyMLPFund column period compact * ~</div> <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAverageAnnualTotalReturnsTransposedHighlandEnergyMLPFund column period compact * ~</div> The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund&#8217;s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds&#8212;Performance or by calling 1-877-665-1287. The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of two broad-based securities market indices. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund&#8217;s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds&#8212;Performance or by calling 1-877-665-1287. Highland Energy MLP Fund<br/><br/>(Formerly Pyxis Energy MLP Fund) Investment Objective The investment objective of Highland Energy MLP Fund (the &#8220;Fund&#8221;) is to provide investors with current income and capital appreciation. Fees and Expenses of the Fund The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 31 of the Fund&#8217;s Prospectus and the &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 34 of the Fund&#8217;s Statement of Additional Information. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 31 of the Fund&#8217;s Prospectus and the &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 34 of the Fund&#8217;s Statement of Additional Information. 50000 Shareholder Fees (fees paid directly from your investment) 0 0 0 0 0.02 0.02 0.02 0.02 Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) 0 0.01 0 0 0.012 0.012 0.012 0.012 0.0035 0.01 0.005 0 0.0245 0.0245 0.0245 0.0245 0.001 0.001 0.001 0.001 0.041 0.0475 0.0425 0.0375 0.0155 0.022 0.017 0.012 -0.0255 -0.0255 -0.0255 The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. -0.0255 The contingent deferred sales charge (&#8220;CDSC&#8221;) on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter. &#8220;Other Expenses&#8221; are based on estimated amounts for the current fiscal year. January 31, 2014 Expense Example This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower. 963 576 427 377 The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. 1750 1430 1289 1146 2551 2390 2165 1934 4618 4810 4413 3993 476 1430 The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund&#8217;s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandsfunds.com/Funds&#8212;Performance or by calling 1-877-665-1287. 2390 4810 Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or &#8220;turns over&#8221; its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may increase the tax liability of the Fund. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund&#8217;s performance. During the period December 1, 2011 (the date the Fund commenced operations) through September 30, 2012, the Fund had a portfolio turnover rate of 254% (not annualized) of the average value of its portfolio. 2.54 Effective February 1, 2013, the Fund revised its investment strategy to focus on master limited partnership ("MLP") investments. Under normal market conditions, the Fund seeks to achieve its objective by investing at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of MLP investments. MLPs typically are characterized as "publicly traded partnerships" that qualify to be treated as partnerships for U.S. federal income tax purposes and are principally engaged in one or more aspects of the exploration, production, processing, transmission, marketing, storage or delivery of energy-related commodities, such as natural gas, natural gas liquids, coal, crude oil or refined petroleum products (collectively, the energy industry). The Fund's MLP investments include investments that offer economic exposure to public MLPs in the form of common or subordinated units issued by MLPs, securities of entities holding primarily general partner or managing member interests in MLPs, debt securities of MLPs, and securities that are derivatives of interests in MLPs, including I-Shares, and derivative instruments in which the Fund may invest that have economic characteristics of MLP securities. Certain of the benefits Fund shareholders are expected to derive from the Fund's MLP investments depend largely on the MLPs' treatment as partnerships for U.S. federal income tax purposes. See "MLP Tax Risk" below for additional details.<br/><br/>After the Fund implements its revised strategy to concentrate in MLP investments, retroactive to the beginning of the Fund's current taxable year, which began on October 1, 2012 and ends on September 30, 2013, and continuing for future taxable years, the Fund will no longer be eligible for treatment as a regulated investment company under the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, the Fund will be treated as a regular corporation, or "C" corporation, for U.S. federal income tax purposes. As a result, the Fund will be subject to U.S. federal income tax on its taxable income at the graduated rates applicable to corporations (currently at a maximum rate of 35%) as well as state and local income taxes. However, based on a review of the historic results of the types of MLPs in which the Fund intends to invest, Highland Capital Management, L.P. ("HCM"), sub-adviser of the Fund, currently expects that, at least in the early years of the Fund's life, the cash distributions it receives with respect to its investments in equity securities of MLPs will typically exceed the net taxable income allocated to the Fund from such MLPs, due to a variety of factors, including significant non-cash deductions such as depreciation and depletion. Any such excess in a taxable year will not be treated as income to the Fund, but rather will be treated as a tax-deferred return of capital to the Fund for U.S. federal income tax purposes, to the extent of the Fund's basis in the MLP securities. Distributions the Fund receives from a MLP that exceed the Fund's basis in the securities of that MLP are treated as taxable income or gains in the Fund's hands. Thus, HCM expects that the Fund would experience relatively more tax deferral (and thus lower corporate income tax expense) during the early years of the Fund's operations than during its later years. See "Taxation" in this Prospectus and "Fund-Related Tax Risks: C Corporation Structure Tax Risks" below for additional details, including information on distributions, redemptions and the tax consequences of C corporation status. <br/><br/>In addition, the Fund may invest up to 20% of the value of its total assets in a wide variety of securities and financial instruments, of all kinds and descriptions, that are not MLP investments, such as equity securities, equity-linked securities, fixed income securities (including "junk bonds"), and money market securities. The Fund may invest without limitation in Exchange Traded Funds ("ETFs") and may invest up to 20% of the value of its total assets in ETFs that do not provide exposure to MLPs. The Fund may invest in securities of issuers of any market capitalization. The Fund may invest in securities of any credit quality.<br/><br/>The Fund may invest in securities of non-U.S. issuers, which may include, without limitation, emerging market issuers. Such securities may be denominated in U.S. dollars, non-U.S. currencies or multinational currency units (such as the Euro). At times, the Fund intends to hedge currency exposure resulting from investments denominated in non U.S. currencies. <br/><br/>Derivatives, which are instruments that have a value based on another instrument, exchange rate or index, may be used as substitutes for securities in which the Fund can invest. The Fund may use derivatives, primarily options and foreign currency transactions (e.g., foreign currency swaps, futures, and forwards), as tools in the management of portfolio assets. The Fund may also use such derivatives to hedge various investments for risk management and for speculative purposes.<br/><br/> The Fund may borrow an amount up to 33 1/3% (or such other percentage permitted by law) of its total assets (including the amount borrowed) less all liabilities other than borrowings. The Fund may borrow for investment purposes, to meet redemption requests and for temporary, extraordinary or emergency purposes. The use of borrowing for investment purposes (i.e., leverage) increases both investment opportunity and investment risk. However, the Fund has no present intention to use borrowing for investment purposes. <br/><br/>The Fund's investment strategy utilizes the analytical models of HCM to evaluate potential investments. In selecting investments for the Fund, HCM typically focuses on MLP issuers that it believes: (i) have stable cash flows and pay regular distributions; (ii) have potential for long-term distribution growth; (iii) may be subject to a value catalyst, such as industry developments, regulatory changes, changes in management, acquisitions, sale or spin-off of a division; (iv) are well-managed; (v) will benefit from favorable demand and supply dynamics for its products and services; (vi) are best in class; and/or (vii) are underappreciated by market analysts. HCM will typically focus on companies that are exhibiting one or more of these indicators. Technical analysis may also be used to help in the decision making process.<br/><br/> HCM may sell short securities of a company that it believes: (i) is overvalued relative to normalized business and industry fundamentals or to the expected growth that HCM believes the company will achieve; (ii) has a weak competitive position relative to peers; (iii) engages in questionable accounting practices; (iv) shows declining cash flow and/or liquidity; (v) has distribution estimates that HCM believes are too high; (vi) has weak competitive barriers to entry; (vii) suffers from deteriorating industry and/or business fundamentals; (viii) has a weak management team; (ix) will see multiple contraction; (x) is not adapting to changes in technological, regulatory or competitive environments; or (xi) provides a hedge against the Fund's long exposure, such as a broad based market ETF. Technical analysis may be used to help in the decision making process. The Fund may engage in short sales that are not made "against-the-box," which means that the Fund may sell short securities even when they are not actually owned or offset at all times during the period the short position is open. Short sales that are not made "against-the-box" could result in unlimited loss.<br/><br/> HCM generates investment ideas from a variety of different sources. These include, but are not limited to, screening software that analyzes both fundamental and technical factors, industry contacts, consultants, company press releases, company conference calls, conversations with company management teams, buy-side contacts, sell-side contacts, brokers, third-party research, independent research of financial and corporate information, third-party research databases, and news services. HCM will make investment decisions based on its analysis of the security's value, and will also take into account its view of macroeconomic conditions and industry trends. HCM will make investments without regard to a company's level of capitalization. HCM is an affiliated of the Adviser.<br/><br/> The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended, (the "1940 Act"). The Fund is not intended to be a complete investment program. The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. Under normal market conditions, the Fund seeks to achieve its objective by investing at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of MLP investments. MLPs typically are characterized as "publicly traded partnerships" that qualify to be treated as partnerships for U.S. federal income tax purposes and are principally engaged in one or more aspects of the exploration, production, processing, transmission, marketing, storage or delivery of energy-related commodities, such as natural gas, natural gas liquids, coal, crude oil or refined petroleum products (collectively, the energy industry). The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund&#8217;s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds&#8212;Performance or by calling 1-877-665-1287. The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.<br/><br/> <b>Industry Concentration Risk </b>is the risk that the Fund may be particularly susceptible to economic, political or regulatory events affecting those industries in which the Fund focuses its investments. Because the Fund normally invests at least 80% of the value of its assets in MLP investments, the Fund's performance largely depends on the overall condition of these industries and the Fund is susceptible to economic, political and regulatory risks or other occurrences associated with these industries. <br/><br/><b>MLP Risk</b> is the risk of investing in MLP units, which involves some risks that differ from an investment in the equity securities of a company. The Fund intends to invest substantially in MLP units. Holders of MLP units have limited control and voting rights on matters affecting the partnership. Holders of units issued by a MLP are exposed to a remote possibility of liability for all of the obligations of that MLP in the event that a court determines that the rights of the holders of MLP units to vote to remove or replace the general partner of that MLP, to approve amendments to that MLP's partnership agreement, or to take other action under the partnership agreement of that MLP would constitute "control" of the business of that MLP, or a court or governmental agency determines that the MLP is conducting business in a state without complying with the partnership statute of that state. Holders of MLP units are also exposed to the risk that they will be required to repay amounts to the MLP that are wrongfully distributed to them. Investments in MLP units also present special tax risks. See "MLP Tax Risk" below. <br/><br/><b>MLP Tax Risk</b> is the risk that the MLPs in which the Fund invests will fail to be treated as partnerships for U.S. federal income tax purposes. The Fund's ability to meet its investment objective will depend, in large measure, on the level of dividends, distributions or income it receives from the MLPs in which it invests and on the MLPs' continued treatment as partnerships for U.S. federal income tax purposes. If a MLP does not meet current legal requirements to maintain its partnership status, or if it is unable to do so because of tax or other law changes, it would be treated as a corporation for U.S. federal income tax purposes. In that case, the MLP would be obligated to pay U.S. federal income tax (as well as state and local taxes) at the entity level on its taxable income and distributions received by the Fund would be taxable to the Fund as dividend income to the extent of the MLP's current and accumulated earnings and profits for federal tax purposes. The classification of a MLP as a corporation for U.S. federal income tax purposes could have the effect of reducing the amount of cash available for distribution by the MLP and the value of the Fund's investment in any such MLP. As a result, the value of the Fund's shares and the cash available for distribution to Fund shareholders could be materially reduced. <br/><br/><b>Fund-Related Tax Risks</b> are tax risks related to an investment in the Fund, including, but not limited to: <ul type="square"><li style="margin-left:-20px">C Corporation Structure Tax Risks. Unlike most mutual funds, the Fund will not be entitled to pass-through tax treatment as a regulated investment company. Instead, the Fund will be treated as a regular corporation, or "C" corporation, for U.S. federal income tax purposes. Accordingly, the Fund generally will be subject to U.S. federal income tax on its investment income and gains at the graduated rates applicable to corporations as well as state and local taxes. However, based on a review of the historic results of the types of MLPs in which the Fund intends to invest, HCM currently expects that, at least in the early years of the Fund's life, the cash distributions it receives with respect to its investments in equity securities of MLPs will typically exceed the taxable income allocated to the Fund from such MLPs, due to a variety of factors, including significant non-cash deductions such as depreciation and depletion. Any such excess in a taxable year will not be treated as income to the Fund, but rather will be treated as a tax-deferred return of capital to the Fund for U.S. federal income tax purposes, to the extent of the Fund's basis in the MLP securities. Distributions the Fund receives from a MLP that exceed the Fund's basis in the securities of that MLP are treated as taxable income or gains in the Fund's hands.<br/><br/>Thus, HCM expects that the Fund would experience relatively more tax deferral (and thus lower corporate income tax expense) during the early years of the Fund's operations than during its later years.<br/><br/>The Fund's receipt of return-of-capital distributions from MLPs also will cause the Fund's taxable income or gains to be higher, or losses to be lower, upon the ultimate sale of the MLP security by the Fund, and may cause taxable income or gains to be higher upon receipt of subsequent distributions from the MLP security by the Fund in later periods. The Fund's corporate income tax liability may be materially affected by, and may fluctuate materially from year to year depending on, a number of factors relating to the Fund and/or its MLP or other investments, including the length of time the Fund has owned the MLP equity securities in its portfolio and the extent to which the Fund disposes of MLP equity securities during a particular year, including, if necessary, to meet Fund shareholder redemption requests.<br/><br/> The Fund's tax liability will not be finally known until the Fund completes its annual tax return. The Fund's tax estimates could vary substantially from the actual liability and therefore the final determination of the Fund's actual tax liability may have a material impact on the Fund's net asset value. See "Calculation of NAV Risk" below. The payment of corporate income taxes imposed on the Fund will decrease the value of the Fund's shares and the amount of cash available for distribution to shareholders. <br/><br/>Due to the tax treatment of the Fund's allocations and distributions from MLPs, as described above, HCM currently expects that a significant portion of the Fund's distributions to shareholders will typically be treated as a return of capital in the hands of shareholders for U.S. federal income tax purposes (i.e., as distributions in excess of the Fund's current and accumulated earnings and profits) and thus would not be subject U.S. federal income tax to the extent of the shareholder's basis in its Fund shares. However, no assurance can be given in this regard and the extent to which the Fund is able to make return of capital distributions can vary materially from year to year.</li></ul><ul type="square"><li style="margin-left:-20px">Calculation of NAV Risk. In calculating the Fund's daily net asset value in accordance with generally accepted accounting principles, the Fund will account for its deferred tax liability and/or asset balances. The Fund will accrue a deferred income tax liability balance, at the currently effective statutory U.S. federal income tax rate (currently at a maximum rate of 35%) plus an estimated state and local income tax rate, for its future tax liability associated with the capital appreciation of its investments and the distributions received by the Fund on equity securities of MLPs considered to be return of capital and for any net operating gains. Any deferred tax liability balance will reduce the Fund's net asset value. Upon the Fund's sale of a portfolio security, the Fund may be liable for previously deferred taxes. If the Fund is required to sell portfolio securities to meet redemption requests, the Fund may recognize income and gains for U.S. federal, state and local income tax purposes, which will result in corporate income taxes imposed on the Fund.</li></ul><ul type="square"><li style="margin-left:-20px">The Fund will accrue a deferred tax asset balance, which reflects an estimate of the Fund's future tax benefit associated with net operating losses, capital loss carryforwards and unrealized losses. Any deferred tax asset balance will increase the Fund's net asset value. To the extent the Fund has a deferred tax asset balance, the Fund will assess whether a valuation allowance, which would offset the value of some or all of the Fund's deferred tax asset balance, is required, considering all positive and negative evidence related to the realization of the Fund's deferred tax asset. The Fund intends to assess whether a valuation allowance is required to offset some or all of any deferred tax asset balance in connection with the calculation of the Fund's daily net asset value; however, to the extent the final valuation allowance differs from the estimates of the Fund used in calculating the Fund's daily net asset value, the application of such final valuation allowance could have a material impact on the Fund's net asset value. From time to time, the Fund may modify its estimates or assumptions regarding its deferred tax liability and/or asset balances as new information becomes available. Such modifications, changes in generally accepted accounting principles or related guidance or interpretations thereof, limitations imposed on net operating and capital losses (if any) and changes in applicable tax law could result in increases or decreases in the Fund's net asset value per share, which could be material.</li></ul><ul type="square"><li style="margin-left:-20px">Tax Law Changes Risk. Changes in tax laws, regulations or interpretations of those laws or regulations in the future could adversely affect the Fund or its MLPs or other investments, and could adversely affect the Fund and its shareholders. In some cases, such changes could have retroactive effect.</li></ul><b>Equity Securities Risk</b> is the risk that stock prices will fall over short or long periods of time. In addition, common stocks represent a share of ownership in a company, and rank after bonds and preferred stock in their claim on the company's assets in the event of bankruptcy.<br/><br/><b>Short Sales Risk </b>is the risk of loss associated with any appreciation on the price of a security borrowed in connection with a short sale. The Fund may engage in short sales that are not made "against-the-box," which means that the Fund may sell short securities even when they are not actually owned or otherwise covered at all times during the period the short position is open. Short sales that are not made "against-the-box" theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase.<br/><br/><b>Derivatives Risk </b>is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations. In addition, recent legislation has called for a new regulatory framework for the derivatives market. The impact of the new regulations are still unknown, but has the potential to increase the costs of using derivatives, may limit the availability of some forms of derivatives or the Fund's ability to use derivatives, and may adversely affect the performance of some derivative instruments used by the Fund as well as the Fund's ability to pursue its investment objective through the use of such instruments.<br/><br/><b>Counterparty Risk </b>is the risk that a counterparty (the other party to a transaction or an agreement or the party with whom the Fund executes transactions) to a transaction with the Fund may be unable or unwilling to make timely principal, interest or settlement payments, or otherwise honor its obligations.<br/><br/><b>Leverage Risk </b>is the risk associated with the use of leverage for investment purposes to create opportunities for greater total returns. 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.<br/><br/><b>Debt Securities Risk</b> is the risk that the issuer of a debt security may fail to pay interest or principal when due, and that changes in market interest rates may reduce the value of debt securities or reduce the Fund's returns. The Fund may invest in debt securities, principally below investment grade securities, but also including investment grade securities and other debt obligations. The Fund's investments in high yield debt securities generally subject the Fund to greater risk than investments in securities with higher ratings. Such securities are regarded by the rating organizations as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation.<br/><br/><b>Senior Loans Risk </b>is the risk that the issuer or a senior may fail to pay interest or principal when due, and changes in market interest rates may reduce the value of the senior loan or reduce the Fund's returns. The risks associated with senior loans are similar to the risks of high yield debt securities. Senior loans and other debt securities are also subject to the risk of price declines and to increases in prevailing interest rates. The Fund's investments in senior loans are typically below investment grade and are considered speculative because of the credit risk of their issuers.<br/><br/><b>Mid-Cap Company Risk </b>is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.<br/><br/><b>Small-Cap Company Risk </b>is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in Underlying Funds may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.<br/><br/><b>Foreign Investment Risk </b>is the risk that investing in foreign (non-U.S.) securities either directly or indirectly may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.<br/><br/><b>Currency Risk </b>is the risk that fluctuation in exchange rates will adversely affect the value of the Fund's foreign currency holdings and investments denominated in foreign currencies.<br/><br/><b>Hedging Risk</b> is the risk that, although intended to limit or reduce investment risk, hedging strategies may also limit or reduce the potential for profit. There is no assurance that hedging strategies will be successful.<br/><br/><b>Market Risk</b> is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. The Fund's share price will fluctuate with changes in the market value of its portfolio securities. Many factors can affect this value and you may lose money by investing in the Fund.<br/><br/><b>Emerging Markets Risk </b>is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. Emerging markets countries may have unstable governments and/or economies that are subject to sudden change, and may also lack the legal, business and social framework to support securities markets, which tends to make investments less liquid and more volatile.<br/><br/><b>Portfolio Turnover Risk </b>is the risk that the Fund's high portfolio turnover will increase its transaction costs and may result in increased realization by the Fund and thus lower after-tax performance, as well as reduce the amount of cash available for distribution to Fund shareholders.<br/><br/><b>Fixed Income Securities Risk </b>is the risk that fixed income securities will decline in value because of changes in interest rates. The value of fixed income securities typically changes as interest rates fluctuate. During periods of rising interest rates, fixed income securities generally decline in value. Conversely, during periods of falling interest rates, fixed income securities generally rise in value. This kind of market risk is generally greater for a fund investing in fixed income securities with longer durations.<br/><br/><b>Credit Risk </b>is the risk that the Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.<br/><br/><b>Exchange-Traded Funds Risk </b>is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund's expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.<br/><br/><b>Interest Rate Risk </b>is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration. <br/><br/><b>Illiquid and Restricted Securities Risk</b> is the risk that the Adviser or Sub-Adviser, as applicable, may not be able to sell illiquid or restricted securities at the price it would like or may have to sell them at a loss. Securities of non-U.S. issuers, and emerging markets securities in particular, are subject to illiquidity risk.<br/><br/><b>Legislation Risk </b>is the risk that to the extent that state, federal or international regulators impose additional requirements or restrictions with respect to MLPs, the availability of MLP investments may be adversely affected.<br/><br/><b>Management Risk </b>is the risk that the Adviser or Sub-Adviser may be incorrect in its assessment of the intrinsic value of the securities the Fund holds which may result in a decline in the value of Fund shares and failure to achieve its investment objective. The Fund's portfolio managers use quantitative analyses and/or models. Any imperfections or limitations in such analyses and models could affect the ability of the portfolio managers to implement strategies.<br/><br/><b>Non-Diversification Risk </b>is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund's investment in fewer issuers may result in the Fund's shares being more sensitive to the economic results of those issuers.<br/><br/><b>Market Disruption Risk </b>is the risk of unusual and extreme volatility in the equity and debt markets and in the prices of individual investments resulting from a period of acute stress recently experienced by domestic and international markets starting in the real estate and financial sectors and then moving to other sectors of the world economy. These market conditions could add to the risk of short-term volatility of the Fund.<br/><br/><b>Non-Payment Risk </b>is the risk of non-payment of scheduled interest and/or principal with respect to debt securities. Non-payment would result in a reduction of income to the Fund, a reduction in the value of the obligation experiencing non-payment and a potential decrease in the NAV of the Fund.<br/><br/><b>Prepayment Risk </b>is the risk that part or all of the principal of a debt security will be paid prior to the scheduled maturity. Pursuant to the relevant debt agreement, a borrower may be required, and may have the option at any time, to prepay the principal amount of a debt security, in some instances without incurring a prepayment penalty. In the event that like-yielding debt is not available in the marketplace, the prepayment of and subsequent reinvestment by the Fund in high yield debt could have a materially adverse affect on the yield of the Fund's investment portfolio. Prepayments may have a beneficial impact on income due to receipt of prepayment penalties, if any, and any facility fees earned in connection with reinvestment.<br/><br/><b>Industry Specific Risk </b>is the risk that the MLPs in which the Fund invests will be impacted by risks specific to the industry MLPs serve, including the following:<ul type="square"><li style="margin-left:-20px">Fluctuations in commodity prices may impact the volume of commodities transported, processed, stored or distributed.</li></ul><ul type="square"><li style="margin-left:-20px">Reduced volumes of natural gas or other energy commodities available for transporting, processing, storing or distributing may affect the profitability of an MLP.</li></ul><ul type="square"><li style="margin-left:-20px">Slowdowns in new construction and acquisitions can limit growth potential.</li></ul><ul type="square"><li style="margin-left:-20px">A sustained reduced demand for crude oil, natural gas and refined petroleum products that could adversely affect MLP revenues and cash flows.</li></ul><ul type="square"><li style="margin-left:-20px">Depletion of the natural gas reserves or other commodities if not replaced, which could impact an MLP's ability to make distributions.</li></ul><ul type="square"><li style="margin-left:-20px">Changes in the regulatory environment could adversely affect the profitability of MLPs.</li></ul><ul type="square"><li style="margin-left:-20px">Extreme weather and environmental hazards could impact the value of MLP securities.</li></ul><ul type="square"><li style="margin-left:-20px">Rising interest rates which could result in a higher cost of capital and drive investors into other investment opportunities.</li></ul><ul type="square"><li style="margin-left:-20px">Threats of attack by terrorists on energy assets could impact the market for MLPs.</li></ul><b>Securities Market Risk </b>is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.<br/><br/>An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal. Highland Tax-Exempt Fund<br/><br/><b>(formerly &#8220;Pyxis Tax-Exempt Fund&#8221;)</b> When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. <b>Non-Diversification Risk </b>is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund's investment in fewer issuers may result in the Fund's shares being more sensitive to the economic results of those issuers. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund&#8217;s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class C and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds&#8212;Performance or by calling 1-877-665-1287. <b>Performance </b> The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund&#8217;s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds&#8212;-Performance or by calling 1-877- 665-1287. The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. 1-877- 665-1287 www.highlandfunds.com/Funds&#8212;-Performance As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The bar chart shows the performance of the Fund&#8217;s Class A shares as of December 31. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The highest calendar quarter total return for Class A Shares of the Fund was 7.54% for the quarter ended September 30, 2012 and the lowest calendar quarter total return was -0.55% for the quarter ended December 31, 2012. The Fund&#8217;s year-to-date total return for Class A Shares through December 31, 2012 was 8.40%. Average Annual Total Returns<br/>(For the periods ended December 31, 2012) 0.084 0.0214 0.0679 0.0834 0.0139 0.0902 0.048 0.0313 0.0059 0.0823 0.0877 0.0951 0.0996 After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. <br/><br/>In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor&#8217;s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. year-to-date total return 2012-12-31 0.084 highest calendar quarter total return 2012-09-30 0.0754 lowest calendar quarter total return 2012-12-31 -0.0055 2011-12-01 2011-12-01 2011-12-01 2011-12-01 2011-12-01 2011-12-01 2011-12-01 <div style="display:none">~ http://www.pyxisais.com/role/ScheduleExpenseExampleNoRedemptionTransposedHighlandEnergyMLPFund column period compact * ~</div> The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in &#8220;Reduced Sales Charges for Class A Shares&#8221; section on page 87 of the Fund&#8217;s Prospectus and &#8220;Programs for Reducing or Eliminating Sales Charges&#8221; section on page 62 of the Fund&#8217;s Statement of Additional Information. <div style="display:none">~ http://www.pyxisais.com/role/ScheduleAnnualTotalReturnsHighlandEnergyMLPFundBarChart column period compact * ~</div> The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund&#8217;s Class A Shares for each full calendar year and by showing how the Fund&#8217;s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund&#8217;s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund&#8217;s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandsfunds.com/Funds&#8212;Performance or by calling 1-877-665-1287. Principal Investment Strategies <b>Principal Risks</b> Annual Total Returns -0.0175 -0.005 -0.02 -0.02 -0.02 -0.02 Highland Total Return Fund<br/><br/><b>(formerly &#8220;Pyxis Total Return Fund&#8221;)</b> The contingent deferred sales charge ("CDSC") on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter. The contingent deferred sales charge ("CDSC") on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter. The contingent deferred sales charge (“CDSC”) on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter. The BofA Merrill Lynch US Dollar LIBOR Month Constant Maturity Index tracks the interest rate offered by a specific group of London banks for U.S. dollar deposits with a three-month maturity. Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan. "Other Expenses" include indirect fees and expenses of Acquired Funds less than 0.01%. "Acquired Fund" means any investment company in which the Fund invests or has invested during the period. "Other Expenses" are based on estimated amounts for the current fiscal year. Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan. "Other Expenses" include indirect fees and expenses of Acquired Funds less than 0.01%. "Acquired Fund" means any investment company in which the Fund invests or has invested during the period. Class C shares are subject to a 1% contingent deferred sales charge (“CDSC”) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan. Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan. "Other Expenses" include indirect fees and expenses of Acquired Funds less than 0.01%. "Acquired Fund" means any investment company in which the Fund invests or has invested during the period. Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan. After Expense Reimbursement (as a % of redemption proceeds on redemptions within 90 days; currently suspended) (as a % of redemption proceeds on redemptions within 90 days; currently suspended) Effective February 1, 2012, the Fund changed its benchmark from MSCI World Index to the MSCI All Country World Index because the Adviser believes that the MSCI All Country World Index is a more appropriate comparative, broad-based market index for the Fund. (as % of amount redeemed within two months or less after date of purchase) Highland Capital Management Fund Advisors, L.P. (the "Adviser") has contractually agreed to limit the total annual operating expenses (exclusive of fees paid by the Fund pursuant to its distribution plan under Rule 12b-1 under the Investment Company Act of 1940, as amended, taxes, brokerage commissions and other transaction costs, acquired fund fees and expenses and extraordinary expenses) of the Fund to 1.00% of average daily net assets attributable to any class of the Fund. The Expense Cap will continue through at least January 31, 2014, and may not be terminated prior to this date without the action or consent of the Fund's Board of Trustees. The Trust, on behalf of the Fund, has contractually agreed to pay the Adviser all amounts previously paid, waived or reimbursed by the Adviser with respect to the Fund pursuant to the Expense Cap, provided that the amount of such additional payment in any year, together with all other expenses of the Fund, in the aggregate, would not cause the Fund's total annual operating expenses in any such year to exceed the amount of the Expense Cap, and provided further that no additional payments by the Trust will be made with respect to amounts paid, waived or reimbursed by the Adviser more than 36 months after the date the Fund accrues a liability with respect to such amounts paid, waived or reimbursed by the Adviser. "Other Expenses" are based on estimated amounts for the current fiscal year. Other Expenses" does not reflect deferred and current income tax liability, if any, incurred by the Fund. The Fund accrues deferred income tax liability for its future tax liability associated with the capital appreciation of its investments and the distributions received by the Fund on equity securities of MLPs considered to be return of capital and for any net operating gains. The Fund's accrued deferred tax liability is reflected each day in the Fund's net asset value per share. The Fund's current and deferred tax liability, if any, depends upon the Fund's net investment gains and losses and realized and unrealized gains and losses on investments and therefore may vary greatly from year to year depending on the nature of the Fund's investments, the performance of those investments and general market conditions. Actual income tax expense, if any, will be incurred over many years, depending on if and when investment gains and losses are realized, the then-current basis of the Fund's assets and other factors. See "Net Asset Value" in the Fund's prospectus. Highland Capital Management Fund Advisors, L.P. (the "Adviser") has contractually agreed to limit the total annual operating expenses (exclusive of fees paid by the Fund pursuant to its distribution plan under Rule 12b-1 under the Investment Company Act of 1940, as amended, taxes, such as deferred tax expenses, brokerage commissions and other transaction costs, acquired fund fees and expenses, and extraordinary expenses) of the Fund to 1.10% of average daily net assets of the Fund (the "Expense Cap"). The Expense Cap will continue through at least January 31, 2014, and may not be terminated prior to this date without the action or consent of the Fund's Board of Trustees. The Trust, on behalf of the Fund, has contractually agreed to pay the Adviser all amounts previously paid, waived or reimbursed by the Adviser with respect to the Fund pursuant to the Expense Cap, provided that the amount of such additional payment in any year, together with all other expenses of the Fund, in the aggregate, would not cause the Fund's total annual operating expenses in any such year to exceed the amount of the Expense Cap, and provided further that no additional payments by the Trust will be made with respect to amounts paid, waived or reimbursed by the Adviser more than 36 months after the date the Fund accrues a liability with respect to such amounts paid, waived or reimbursed by the Adviser. After reimbursement. Effective February 1, 2013, the Fund revised its investment strategy to focus on MLP investments. Returns through September 30, 2012 reflect the Fund's treatment as a regulated investment company under the Code. Returns after September 30, 2012 reflect the Fund's treatment as a regular corporation, or "C" corporation, for U.S. federal income tax purposes. As a result, returns after September 30, 2012 generally will be reduced by the amount of entity-level income taxes paid by the Fund as a regular corporation and thus will not necessarily be comparable to returns reported while the Fund still qualified as a regulated investment company. 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Label Element Value
Risk/Return: rr_RiskReturnAbstract  
Registrant Name dei_EntityRegistrantName HIGHLAND FUNDS II
Prospectus Date rr_ProspectusDate Feb. 01, 2013
Highland Dividend Equity Fund
 
Risk/Return: rr_RiskReturnAbstract  
Risk/Return [Heading] rr_RiskReturnHeading Highland Dividend Equity Fund

(formerly “Pyxis Dividend Equity Fund”)
Objective [Heading] rr_ObjectiveHeading Investment Objective
Objective, Primary [Text Block] rr_ObjectivePrimaryTextBlock To provide above average dividend yields with the potential for long-term capital appreciation.
Expense [Heading] rr_ExpenseHeading Fees and Expenses of the Fund
Expense Narrative [Text Block] rr_ExpenseNarrativeTextBlock The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and the “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees Caption [Text] rr_ShareholderFeesCaption Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Text] rr_OperatingExpensesCaption Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Portfolio Turnover [Heading] rr_PortfolioTurnoverHeading Portfolio Turnover
Portfolio Turnover [Text Block] rr_PortfolioTurnoverTextBlock The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the period November 14, 2011 (the date the Fund commenced operations) through September 30, 2012, the Fund had a portfolio turnover rate of 6% (not annualized) of the average value of its portfolio.
Portfolio Turnover, Rate rr_PortfolioTurnoverRate 6.00%
Expenses Deferred Charges [Text Block] rr_ExpensesDeferredChargesTextBlock The contingent deferred sales charge (“CDSC”) on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
Expense Breakpoint Discounts [Text] rr_ExpenseBreakpointDiscounts You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and the “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Expense Breakpoint, Minimum Investment Required [Amount] rr_ExpenseBreakpointMinimumInvestmentRequiredAmount 50,000
Other Expenses, New Fund, Based on Estimates [Text] rr_OtherExpensesNewFundBasedOnEstimates Other Expenses” are based on estimated amounts for the current fiscal year.
Expense Example [Heading] rr_ExpenseExampleHeading Expense Example
Expense Example Narrative [Text Block] rr_ExpenseExampleNarrativeTextBlock This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Strategy [Heading] rr_StrategyHeading Principal Investment Strategies
Strategy Narrative [Text Block] rr_StrategyNarrativeTextBlock The Fund seeks to achieve its investment objective under normal market conditions by investing, directly and indirectly (e.g., through investments in derivatives or other pooled investment vehicles), at least 80% of its net assets, plus any borrowings for investment purposes, in equity investments that pay or expect to pay dividends. The term “equity investments” refers to direct and indirect investments in common stocks, preferred stocks and convertible securities. The Fund may invest without limitation in equity investments tied economically to any country in the world, including emerging countries.

In addition to dividend-paying equity investments, the Fund may invest up to 20% of its assets, plus any borrowings for investment purposes, in a variety of other instruments including fixed income securities (including “junk bonds”), exchange-traded funds (“ETFs”), exchange-traded notes (“ETNs”), and warrants. The Fund may use derivatives, primarily swaps, options and futures, to an unlimited extent to hedge various investments for risk management and for speculative purposes. The Fund’s investments in derivatives and other types of pooled investment vehicles that invest in equity investments that pay or expect to pay dividends are intended to provide substantially similar economic exposure to direct investments in such dividend-paying equity investments.

The Fund seeks to invest in high-quality, income generating stocks that offer attractive valuations with below-market risk profiles. The Fund may invest in securities of any market capitalization.

In selecting investments for the Fund, Brookmont Capital Management, LLC (“Brookmont”), sub-adviser of the Fund, reviews macroeconomic data to determine the allocation of investments among various economic sectors. Brookmont seeks to avoid making large sector bets or focusing on individual issuers. Instead, investments are made in securities in all ten economic sectors defined by the S&P 500 Index. Once the sector allocations are determined, Brookmont reviews the investment universe and selects investments based on factors such as dividend yield, the issuer’s debt level, projected cash flow, history of dividend increases, and earnings potential.

The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund is not intended to be a complete investment program.
Risk [Heading] rr_RiskHeading Principal Risks
Risk Narrative [Text Block] rr_RiskNarrativeTextBlock When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Dividend-Paying Stock Risk is the risk that companies that have paid regular dividends to shareholders may decrease or eliminate dividend payments in the future. A decrease in dividend payments by an issuer may result in a decrease in the value of the security held by the Fund or the Fund receiving less income. Additionally, a fund pursuing a dividend-oriented investment strategy may at times underperform other funds that invest more broadly or that have different investment styles.

Equity Securities Risk is the risk that stock prices will fall over short or long periods of time. In addition, common stocks represent a share of ownership in a company, and rank after bonds and preferred stock in their claim on the company’s assets in the event of bankruptcy. The value of equity securities paying dividends at high rates may be more sensitive to changes in interest rates than are other equity securities.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Mid-Cap Company Risk is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Small-Cap Company Risk is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in ETFs, closed-end funds or mutual funds (“Underlying Funds”) may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.

Foreign Investment Risk is the risk that investing in foreign (non-U.S.) securities either directly or indirectly may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that fluctuations in exchange rates will adversely affect the value of the Funds foreign currency holdings and investments denominated in foreign currencies.

Derivatives Risk is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Exchange-Traded Notes Risk is the risk that ETNs in which the Fund may invest are subject to credit risk and the value of an ETN may vary and may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying commodities or other related markets, changes in the applicable interest rates, changes in the issuer’s credit rating, and economic, legal, political, or geographic events. ETNs are debt securities whose returns are linked to a particular index. The Fund will bear its proportionate share of any fees and expenses borne by the ETN.

Counterparty Risk is the risk that a counterparty (the other party to a transaction or an agreement or the party with whom the Fund executes transactions) to a transaction with the Fund may be unable or unwilling to make timely principal, interest or settlement payments, or otherwise honor its obligations.

Hedging Risk is the risk that, although intended to limit or reduce investment risk, hedging strategies may also limit or reduce the potential for profit. There is no assurance that hedging strategies will be successful.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

High Yield Securities Risk is the risk that high yield securities or unrated securities of similar credit quality (commonly known as “junk bonds”) are more likely to default than high rated securities. High Yield securities are regarded as speculative with respect to the issuer’s capacity to pay interest and repay principal. The market value of these securities is more sensitive to corporate developments and economic conditions and can be volatile. Market conditions can diminish liquidity and make accurate valuations difficult to obtain.

Management Risk is the risk that the Adviser or Brookmont may be incorrect in its assessment of the intrinsic value of the securities the Fund holds which may result in a decline in the value of Fund shares and failure to achieve its investment objective. The Fund’s portfolio manager uses qualitative analyses and/or models. Any imperfections or limitations in such analyses and models could affect the ability of the portfolio managers to implement strategies.

Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund’s investment in fewer issuers may result in the Fund’s shares being more sensitive to the economic results of those issuers.

Portfolio Turnover Risk is the risk that the Fund’s high portfolio turnover will increase its transaction costs and may result in increased realization of net short-term capital gains (which are taxable to shareholders as ordinary income when distributed to them), higher taxable distributions and lower after-tax performance.

An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal.
Risk Lose Money [Text] rr_RiskLoseMoney When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund.
Risk Nondiversified Status [Text] rr_RiskNondiversifiedStatus Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund’s investment in fewer issuers may result in the Fund’s shares being more sensitive to the economic results of those issuers.
Risk Not Insured Depository Institution [Text] rr_RiskNotInsuredDepositoryInstitution An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Bar Chart and Performance Table [Heading] rr_BarChartAndPerformanceTableHeading Performance
Performance Narrative [Text Block] rr_PerformanceNarrativeTextBlock The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877- 665-1287.
Performance Information Illustrates Variability of Returns [Text] rr_PerformanceInformationIllustratesVariabilityOfReturns The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index.
Performance Availability Phone [Text] rr_PerformanceAvailabilityPhone 1-877- 665-1287
Performance Availability Website Address [Text] rr_PerformanceAvailabilityWebSiteAddress www.highlandfunds.com/Funds—Performance
Performance Past Does Not Indicate Future [Text] rr_PerformancePastDoesNotIndicateFuture As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future.
Bar Chart [Heading] rr_BarChartHeading Annual Total Returns
Bar Chart Narrative [Text Block] rr_BarChartNarrativeTextBlock The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart Does Not Reflect Sales Loads [Text] rr_BarChartDoesNotReflectSalesLoads The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below.
Bar Chart Closing [Text Block] rr_BarChartClosingTextBlock The highest calendar quarter total return for Class A Shares of the Fund was 6.74% for the quarter ended March 31, 2012 and the lowest calendar quarter total return was -0.90% for the quarter ended June 30, 2012. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 12.27%.
Performance Table Heading rr_PerformanceTableHeading Average Annual Total Returns
(For the periods ended December 31, 2012)
Performance Table Uses Highest Federal Rate rr_PerformanceTableUsesHighestFederalRate After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.
Performance Table Not Relevant to Tax Deferred rr_PerformanceTableNotRelevantToTaxDeferred Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Performance Table One Class of after Tax Shown [Text] rr_PerformanceTableOneClassOfAfterTaxShown After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary.
Performance Table Explanation after Tax Higher rr_PerformanceTableExplanationAfterTaxHigher In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods.
Performance Table Narrative rr_PerformanceTableNarrativeTextBlock After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
Highland Dividend Equity Fund | Class A
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice 5.75%
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 1.20%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.35%
Other Expenses rr_OtherExpensesOverAssets 1.05% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.02%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.62%
Expense Reimbursement rr_FeeWaiverOrReimbursementOverAssets (1.25%) [3]
Total Annual Fund Operating Expenses rr_NetExpensesOverAssets 1.37% [4]
1 Year rr_ExpenseExampleYear01 792
3 Years rr_ExpenseExampleYear03 1,244
5 Years rr_ExpenseExampleYear05 1,720
10 Years rr_ExpenseExampleYear10 3,030
2012 rr_AnnualReturn2012 12.27%
Year to Date Return, Label rr_YearToDateReturnLabel year-to-date total return
Bar Chart, Year to Date Return, Date rr_BarChartYearToDateReturnDate Dec. 31, 2012
Bar Chart, Year to Date Return rr_BarChartYearToDateReturn 12.27%
Highest Quarterly Return, Label rr_HighestQuarterlyReturnLabel highest calendar quarter total return
Highest Quarterly Return, Date rr_BarChartHighestQuarterlyReturnDate Mar. 31, 2012
Highest Quarterly Return rr_BarChartHighestQuarterlyReturn 6.74%
Lowest Quarterly Return, Label rr_LowestQuarterlyReturnLabel lowest calendar quarter total return
Lowest Quarterly Return, Date rr_BarChartLowestQuarterlyReturnDate Jun. 30, 2012
Lowest Quarterly Return rr_BarChartLowestQuarterlyReturn (0.90%)
1 Year rr_AverageAnnualReturnYear01 5.82%
Since Inception rr_AverageAnnualReturnSinceInception 13.22%
Inception Date rr_AverageAnnualReturnInceptionDate Nov. 23, 2011
Highland Dividend Equity Fund | Class C
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 1.00% [5]
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 1.20%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 1.05% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.02%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 3.27%
Expense Reimbursement rr_FeeWaiverOrReimbursementOverAssets (1.25%) [3]
Total Annual Fund Operating Expenses rr_NetExpensesOverAssets 2.02% [4]
1 Year rr_ExpenseExampleYear01 395
3 Years rr_ExpenseExampleYear03 904
5 Years rr_ExpenseExampleYear05 1,538
10 Years rr_ExpenseExampleYear10 3,242
1 Year rr_ExpenseExampleNoRedemptionYear01 295
3 Years rr_ExpenseExampleNoRedemptionYear03 904
5 Years rr_ExpenseExampleNoRedemptionYear05 1,538
10 Years rr_ExpenseExampleNoRedemptionYear10 3,242
1 Year rr_AverageAnnualReturnYear01 10.53%
Since Inception rr_AverageAnnualReturnSinceInception 13.20%
Inception Date rr_AverageAnnualReturnInceptionDate Nov. 15, 2011
Highland Dividend Equity Fund | Class R
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 1.20%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.50%
Other Expenses rr_OtherExpensesOverAssets 1.05% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.02%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.77%
Expense Reimbursement rr_FeeWaiverOrReimbursementOverAssets (1.25%) [3]
Total Annual Fund Operating Expenses rr_NetExpensesOverAssets 1.52% [4]
1 Year rr_ExpenseExampleYear01 245
3 Years rr_ExpenseExampleYear03 755
5 Years rr_ExpenseExampleYear05 1,291
10 Years rr_ExpenseExampleYear10 2,756
Highland Dividend Equity Fund | Class Y
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 1.20%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets none
Other Expenses rr_OtherExpensesOverAssets 1.05% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.02%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.27%
Expense Reimbursement rr_FeeWaiverOrReimbursementOverAssets (1.25%) [3]
Total Annual Fund Operating Expenses rr_NetExpensesOverAssets 1.02% [4]
1 Year rr_ExpenseExampleYear01 195
3 Years rr_ExpenseExampleYear03 603
5 Years rr_ExpenseExampleYear05 1,037
10 Years rr_ExpenseExampleYear10 2,243
1 Year rr_AverageAnnualReturnYear01 12.68%
Since Inception rr_AverageAnnualReturnSinceInception 14.39%
Inception Date rr_AverageAnnualReturnInceptionDate Nov. 14, 2011
Highland Dividend Equity Fund | Return After Taxes on Distributions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 5.48%
Since Inception rr_AverageAnnualReturnSinceInception 12.88%
Inception Date rr_AverageAnnualReturnInceptionDate Nov. 23, 2011
Highland Dividend Equity Fund | Return After Taxes on Distributions and Redemptions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 4.21%
Since Inception rr_AverageAnnualReturnSinceInception 11.23%
Inception Date rr_AverageAnnualReturnInceptionDate Nov. 23, 2011
Highland Dividend Equity Fund | Russell 1000 Value Index (reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 17.51%
Since Inception rr_AverageAnnualReturnSinceInception 18.22%
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 01, 2011
[1] (as % of amount redeemed within two months or less after date of purchase)
[2] "Other Expenses" are based on estimated amounts for the current fiscal year.
[3] Highland Capital Management Fund Advisors, L.P. (the "Adviser") has contractually agreed to limit the total annual operating expenses (exclusive of fees paid by the Fund pursuant to its distribution plan under Rule 12b-1 under the Investment Company Act of 1940, as amended, taxes, brokerage commissions and other transaction costs, acquired fund fees and expenses and extraordinary expenses) of the Fund to 1.00% of average daily net assets attributable to any class of the Fund. The Expense Cap will continue through at least January 31, 2014, and may not be terminated prior to this date without the action or consent of the Fund's Board of Trustees. The Trust, on behalf of the Fund, has contractually agreed to pay the Adviser all amounts previously paid, waived or reimbursed by the Adviser with respect to the Fund pursuant to the Expense Cap, provided that the amount of such additional payment in any year, together with all other expenses of the Fund, in the aggregate, would not cause the Fund's total annual operating expenses in any such year to exceed the amount of the Expense Cap, and provided further that no additional payments by the Trust will be made with respect to amounts paid, waived or reimbursed by the Adviser more than 36 months after the date the Fund accrues a liability with respect to such amounts paid, waived or reimbursed by the Adviser.
[4] After Expense Reimbursement
[5] The contingent deferred sales charge ("CDSC") on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
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Highland Small-Cap Equity Fund
Highland Small-Cap Equity Fund

(formerly “Pyxis Small-Cap Equity Fund”)
Investment Objective
Long-term growth of capital.
Fees and Expenses of the Fund
The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees (fees paid directly from your investment)
Shareholder Fees Highland Small-Cap Equity Fund
Class A
Class B
Class C
Class R
Class Y
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) 5.75% none none none none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) none none none none none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) none 4.00% 1.00% [1] none none
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) none none none none none
Redemption Fee [2] none none none none none
[1] Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
[2] (as % of amount redeemed within two months or less after date of purchase)
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Annual Fund Operating Expenses Highland Small-Cap Equity Fund
Class A
Class B
Class C
Class R
Class Y
Management Fees 0.95% 0.95% 0.95% 0.95% 0.95%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00% 0.50% none
Other Expenses [1] 0.80% 0.80% 0.80% 0.80% 0.80%
Total Annual Fund Operating Expenses 2.00% 2.75% 2.75% 2.25% 1.75%
[1] "Other Expenses" include indirect fees and expenses of Acquired Funds less than 0.01%. "Acquired Fund" means any investment company in which the Fund invests or has invested during the period.
Expense Example
This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Expense Example Highland Small-Cap Equity Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class A
766 1,166 1,591 2,768
Class B
678 1,053 1,454 2,736
Class C
378 853 1,454 3,080
Class R
228 703 1,205 2,585
Class Y
178 551 949 2,062
Expense Example, No Redemption Highland Small-Cap Equity Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class B
278 853 1,454 2,736
Class C
278 853 1,454 3,080
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 24% of the average value of its portfolio.
Principal Investment Strategies
The Fund seeks to achieve its investment objective by investing at least 80% of its net assets under normal circumstances in equity securities, such as common and preferred stocks, of small-cap companies, plus borrowing for investment purposes.

The Fund uses an investment strategy that combines growth, value and core investment management styles. The Fund defines a small-cap company as one with a market capitalization that falls between (a) the bottom range of the Russell 2000® Index (“Russell 2000 Index”) and (b) the greater of either the top range of the Russell 2000 Index or $3.0 billion. As of May 31, 2012 the market capitalization of companies in the Russell 2000 Index ranged from $101 million to $2.61 billion.* The portfolio manager will not sell a stock merely because the market capitalization of a company in the portfolio moves outside its capitalization range or because the index capitalization range changes. Stock selection is key to the performance of the Fund.

The portfolio manager seeks to identify securities of companies with characteristics such as:
  • high quality management focused on generating shareholder value
  • attractive products or services
  • appropriate capital structure
  • strong competitive positions in their industries
*  The Russell 2000 Index is constructed to provide an unbiased small-cap barometer and is reconstituted annually. The capitalization range, however, may change significantly intra-year due to changes in the market capitalization of securities in the Index.

The portfolio manager may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.

The Fund also may invest to a lesser extent in securities with capitalizations outside the Fund’s small-cap range, debt securities and foreign (non-U.S.) securities. The portfolio manager may also invest in exchange-traded funds (“ETFs”) and it may invest in index futures, options on index futures and index options to gain exposure to certain types of securities as a substitute to investing directly in such securities. The Fund is not intended to be a complete investment program.
Principal Risks

When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Small-Cap Company Risk is the risk that investing in the securities of small-cap companies may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.

Growth Investing Risk is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company’s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.

Value Investing Risk is the risk of investing in undervalued stocks that may not realize their perceived value for extended periods of time or may never realize their perceived value. Value stocks may respond differently to market and other developments than other types of stocks. Value-oriented funds will typically underperform when growth investing is in favor.

Allocation Risk is the risk that HCMFA may not allocate assets of the Fund among strategies or asset classes in an optimal manner, if, among other reasons, it does not correctly assess the attractiveness of a strategy or asset class.

Foreign Investment Risk is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.

Credit Risk is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Performance
The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877-665-1287.
Calendar Year Total Returns
The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart
The highest calendar quarter total return for Class A Shares of the Fund was 21.25% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -27.95% for the quarter ended December 31, 2008. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 13.56%.
Average Annual Total Returns
(For the periods ended December 31, 2012)
Average Annual Total Returns Highland Small-Cap Equity Fund
1 Year
5 Years
10 Years
Since Inception
Inception Date
Class A
7.00% 2.52% 7.36% 8.70% Sep. 30, 1998
Class A Return After Taxes on Distributions
5.79% 1.92% 6.05% 6.90% Sep. 30, 1998
Class A Return After Taxes on Distributions and Redemptions
6.08% 1.99% 6.05% 6.83% Sep. 30, 1998
Class B
8.60% 2.97% 7.53% 8.81% Sep. 30, 1998
Class C
11.68% 2.97% 7.18% 7.41% Sep. 30, 1999
Class R
13.59%       5.14% Jan. 29, 2008
Class Y
13.81% 4.05% 8.29% 9.44% Sep. 30, 1998
Russell 2000 Index (reflects no deduction for fees, expenses or taxes)
16.35% 3.56% 9.72% 7.54% Sep. 30, 1998
After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
XML 11 R55.htm IDEA: XBRL DOCUMENT v2.4.0.6
Label Element Value
Risk/Return: rr_RiskReturnAbstract  
Registrant Name dei_EntityRegistrantName HIGHLAND FUNDS II
Prospectus Date rr_ProspectusDate Feb. 01, 2013
Highland Small-Cap Equity Fund
 
Risk/Return: rr_RiskReturnAbstract  
Risk/Return [Heading] rr_RiskReturnHeading Highland Small-Cap Equity Fund

(formerly “Pyxis Small-Cap Equity Fund”)
Objective [Heading] rr_ObjectiveHeading Investment Objective
Objective, Primary [Text Block] rr_ObjectivePrimaryTextBlock Long-term growth of capital.
Expense [Heading] rr_ExpenseHeading Fees and Expenses of the Fund
Expense Narrative [Text Block] rr_ExpenseNarrativeTextBlock The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees Caption [Text] rr_ShareholderFeesCaption Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Text] rr_OperatingExpensesCaption Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Portfolio Turnover [Heading] rr_PortfolioTurnoverHeading Portfolio Turnover
Portfolio Turnover [Text Block] rr_PortfolioTurnoverTextBlock The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 24% of the average value of its portfolio.
Portfolio Turnover, Rate rr_PortfolioTurnoverRate 24.00%
Expenses Deferred Charges [Text Block] rr_ExpensesDeferredChargesTextBlock Class C shares are subject to a 1% contingent deferred sales charge (“CDSC”) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
Expense Breakpoint Discounts [Text] rr_ExpenseBreakpointDiscounts You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Expense Breakpoint, Minimum Investment Required [Amount] rr_ExpenseBreakpointMinimumInvestmentRequiredAmount 50,000
Expense Example [Heading] rr_ExpenseExampleHeading Expense Example
Expense Example Narrative [Text Block] rr_ExpenseExampleNarrativeTextBlock This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Strategy [Heading] rr_StrategyHeading Principal Investment Strategies
Strategy Narrative [Text Block] rr_StrategyNarrativeTextBlock The Fund seeks to achieve its investment objective by investing at least 80% of its net assets under normal circumstances in equity securities, such as common and preferred stocks, of small-cap companies, plus borrowing for investment purposes.

The Fund uses an investment strategy that combines growth, value and core investment management styles. The Fund defines a small-cap company as one with a market capitalization that falls between (a) the bottom range of the Russell 2000® Index (“Russell 2000 Index”) and (b) the greater of either the top range of the Russell 2000 Index or $3.0 billion. As of May 31, 2012 the market capitalization of companies in the Russell 2000 Index ranged from $101 million to $2.61 billion.* The portfolio manager will not sell a stock merely because the market capitalization of a company in the portfolio moves outside its capitalization range or because the index capitalization range changes. Stock selection is key to the performance of the Fund.

The portfolio manager seeks to identify securities of companies with characteristics such as:
  • high quality management focused on generating shareholder value
  • attractive products or services
  • appropriate capital structure
  • strong competitive positions in their industries
*  The Russell 2000 Index is constructed to provide an unbiased small-cap barometer and is reconstituted annually. The capitalization range, however, may change significantly intra-year due to changes in the market capitalization of securities in the Index.

The portfolio manager may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.

The Fund also may invest to a lesser extent in securities with capitalizations outside the Fund’s small-cap range, debt securities and foreign (non-U.S.) securities. The portfolio manager may also invest in exchange-traded funds (“ETFs”) and it may invest in index futures, options on index futures and index options to gain exposure to certain types of securities as a substitute to investing directly in such securities. The Fund is not intended to be a complete investment program.
Risk [Heading] rr_RiskHeading Principal Risks

Risk Narrative [Text Block] rr_RiskNarrativeTextBlock When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Small-Cap Company Risk is the risk that investing in the securities of small-cap companies may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.

Growth Investing Risk is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company’s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.

Value Investing Risk is the risk of investing in undervalued stocks that may not realize their perceived value for extended periods of time or may never realize their perceived value. Value stocks may respond differently to market and other developments than other types of stocks. Value-oriented funds will typically underperform when growth investing is in favor.

Allocation Risk is the risk that HCMFA may not allocate assets of the Fund among strategies or asset classes in an optimal manner, if, among other reasons, it does not correctly assess the attractiveness of a strategy or asset class.

Foreign Investment Risk is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.

Credit Risk is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Risk Lose Money [Text] rr_RiskLoseMoney When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund.
Risk Not Insured Depository Institution [Text] rr_RiskNotInsuredDepositoryInstitution An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Bar Chart and Performance Table [Heading] rr_BarChartAndPerformanceTableHeading Performance
Performance Narrative [Text Block] rr_PerformanceNarrativeTextBlock The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877-665-1287.
Performance Information Illustrates Variability of Returns [Text] rr_PerformanceInformationIllustratesVariabilityOfReturns The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index.
Performance Availability Phone [Text] rr_PerformanceAvailabilityPhone 1-877-665-1287
Performance Availability Website Address [Text] rr_PerformanceAvailabilityWebSiteAddress www.highlandfunds.com/Funds—Performance
Performance Past Does Not Indicate Future [Text] rr_PerformancePastDoesNotIndicateFuture As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future.
Bar Chart [Heading] rr_BarChartHeading Calendar Year Total Returns
Bar Chart Narrative [Text Block] rr_BarChartNarrativeTextBlock The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart Does Not Reflect Sales Loads [Text] rr_BarChartDoesNotReflectSalesLoads The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below.
Bar Chart Closing [Text Block] rr_BarChartClosingTextBlock The highest calendar quarter total return for Class A Shares of the Fund was 21.25% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -27.95% for the quarter ended December 31, 2008. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 13.56%.
Performance Table Heading rr_PerformanceTableHeading Average Annual Total Returns
(For the periods ended December 31, 2012)
Performance Table Uses Highest Federal Rate rr_PerformanceTableUsesHighestFederalRate After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.
Performance Table Not Relevant to Tax Deferred rr_PerformanceTableNotRelevantToTaxDeferred Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Performance Table One Class of after Tax Shown [Text] rr_PerformanceTableOneClassOfAfterTaxShown After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary.
Performance Table Explanation after Tax Higher rr_PerformanceTableExplanationAfterTaxHigher In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods.
Performance Table Narrative rr_PerformanceTableNarrativeTextBlock After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
Highland Small-Cap Equity Fund | Class A
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice 5.75%
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Management Fees rr_ManagementFeesOverAssets 0.95%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.25%
Other Expenses rr_OtherExpensesOverAssets 0.80% [2]
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.00%
1 Year rr_ExpenseExampleYear01 766
3 Years rr_ExpenseExampleYear03 1,166
5 Years rr_ExpenseExampleYear05 1,591
10 Years rr_ExpenseExampleYear10 2,768
2003 rr_AnnualReturn2003 23.97%
2004 rr_AnnualReturn2004 15.11%
2005 rr_AnnualReturn2005 9.26%
2006 rr_AnnualReturn2006 12.98%
2007 rr_AnnualReturn2007 1.92%
2008 rr_AnnualReturn2008 (37.75%)
2009 rr_AnnualReturn2009 30.25%
2010 rr_AnnualReturn2010 26.83%
2011 rr_AnnualReturn2011 2.93%
2012 rr_AnnualReturn2012 13.56%
Year to Date Return, Label rr_YearToDateReturnLabel year-to-date total return
Bar Chart, Year to Date Return, Date rr_BarChartYearToDateReturnDate Dec. 31, 2012
Bar Chart, Year to Date Return rr_BarChartYearToDateReturn 13.56%
Highest Quarterly Return, Label rr_HighestQuarterlyReturnLabel highest calendar quarter total return
Highest Quarterly Return, Date rr_BarChartHighestQuarterlyReturnDate Jun. 30, 2009
Highest Quarterly Return rr_BarChartHighestQuarterlyReturn 21.25%
Lowest Quarterly Return, Label rr_LowestQuarterlyReturnLabel lowest calendar quarter total return
Lowest Quarterly Return, Date rr_BarChartLowestQuarterlyReturnDate Dec. 31, 2008
Lowest Quarterly Return rr_BarChartLowestQuarterlyReturn (27.95%)
1 Year rr_AverageAnnualReturnYear01 7.00%
5 Years rr_AverageAnnualReturnYear05 2.52%
10 Years rr_AverageAnnualReturnYear10 7.36%
Since Inception rr_AverageAnnualReturnSinceInception 8.70%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 30, 1998
Highland Small-Cap Equity Fund | Class B
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 4.00%
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Management Fees rr_ManagementFeesOverAssets 0.95%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 0.80% [2]
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.75%
1 Year rr_ExpenseExampleYear01 678
3 Years rr_ExpenseExampleYear03 1,053
5 Years rr_ExpenseExampleYear05 1,454
10 Years rr_ExpenseExampleYear10 2,736
1 Year rr_ExpenseExampleNoRedemptionYear01 278
3 Years rr_ExpenseExampleNoRedemptionYear03 853
5 Years rr_ExpenseExampleNoRedemptionYear05 1,454
10 Years rr_ExpenseExampleNoRedemptionYear10 2,736
1 Year rr_AverageAnnualReturnYear01 8.60%
5 Years rr_AverageAnnualReturnYear05 2.97%
10 Years rr_AverageAnnualReturnYear10 7.53%
Since Inception rr_AverageAnnualReturnSinceInception 8.81%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 30, 1998
Highland Small-Cap Equity Fund | Class C
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 1.00% [3]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Management Fees rr_ManagementFeesOverAssets 0.95%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 0.80% [2]
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.75%
1 Year rr_ExpenseExampleYear01 378
3 Years rr_ExpenseExampleYear03 853
5 Years rr_ExpenseExampleYear05 1,454
10 Years rr_ExpenseExampleYear10 3,080
1 Year rr_ExpenseExampleNoRedemptionYear01 278
3 Years rr_ExpenseExampleNoRedemptionYear03 853
5 Years rr_ExpenseExampleNoRedemptionYear05 1,454
10 Years rr_ExpenseExampleNoRedemptionYear10 3,080
1 Year rr_AverageAnnualReturnYear01 11.68%
5 Years rr_AverageAnnualReturnYear05 2.97%
10 Years rr_AverageAnnualReturnYear10 7.18%
Since Inception rr_AverageAnnualReturnSinceInception 7.41%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 30, 1999
Highland Small-Cap Equity Fund | Class R
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Management Fees rr_ManagementFeesOverAssets 0.95%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.50%
Other Expenses rr_OtherExpensesOverAssets 0.80% [2]
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.25%
1 Year rr_ExpenseExampleYear01 228
3 Years rr_ExpenseExampleYear03 703
5 Years rr_ExpenseExampleYear05 1,205
10 Years rr_ExpenseExampleYear10 2,585
1 Year rr_AverageAnnualReturnYear01 13.59%
5 Years rr_AverageAnnualReturnYear05   
10 Years rr_AverageAnnualReturnYear10   
Since Inception rr_AverageAnnualReturnSinceInception 5.14%
Inception Date rr_AverageAnnualReturnInceptionDate Jan. 29, 2008
Highland Small-Cap Equity Fund | Class Y
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Management Fees rr_ManagementFeesOverAssets 0.95%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets none
Other Expenses rr_OtherExpensesOverAssets 0.80% [2]
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.75%
1 Year rr_ExpenseExampleYear01 178
3 Years rr_ExpenseExampleYear03 551
5 Years rr_ExpenseExampleYear05 949
10 Years rr_ExpenseExampleYear10 2,062
1 Year rr_AverageAnnualReturnYear01 13.81%
5 Years rr_AverageAnnualReturnYear05 4.05%
10 Years rr_AverageAnnualReturnYear10 8.29%
Since Inception rr_AverageAnnualReturnSinceInception 9.44%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 30, 1998
Highland Small-Cap Equity Fund | Return After Taxes on Distributions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 5.79%
5 Years rr_AverageAnnualReturnYear05 1.92%
10 Years rr_AverageAnnualReturnYear10 6.05%
Since Inception rr_AverageAnnualReturnSinceInception 6.90%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 30, 1998
Highland Small-Cap Equity Fund | Return After Taxes on Distributions and Redemptions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 6.08%
5 Years rr_AverageAnnualReturnYear05 1.99%
10 Years rr_AverageAnnualReturnYear10 6.05%
Since Inception rr_AverageAnnualReturnSinceInception 6.83%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 30, 1998
Highland Small-Cap Equity Fund | Russell 2000 Index (reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 16.35%
5 Years rr_AverageAnnualReturnYear05 3.56%
10 Years rr_AverageAnnualReturnYear10 9.72%
Since Inception rr_AverageAnnualReturnSinceInception 7.54%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 30, 1998
[1] (as % of amount redeemed within two months or less after date of purchase)
[2] "Other Expenses" include indirect fees and expenses of Acquired Funds less than 0.01%. "Acquired Fund" means any investment company in which the Fund invests or has invested during the period.
[3] Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
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Label Element Value
Risk/Return: rr_RiskReturnAbstract  
Registrant Name dei_EntityRegistrantName HIGHLAND FUNDS II
Prospectus Date rr_ProspectusDate Feb. 01, 2013
Document Creation Date dei_DocumentCreationDate Feb. 11, 2013
XML 14 R79.htm IDEA: XBRL DOCUMENT v2.4.0.6
Label Element Value
Risk/Return: rr_RiskReturnAbstract  
Registrant Name dei_EntityRegistrantName HIGHLAND FUNDS II
Prospectus Date rr_ProspectusDate Feb. 01, 2013
Highland Fixed Income Fund
 
Risk/Return: rr_RiskReturnAbstract  
Risk/Return [Heading] rr_RiskReturnHeading Highland Fixed Income Fund

(formerly “Pyxis Fixed Income Fund”)
Objective [Heading] rr_ObjectiveHeading Investment Objective
Objective, Primary [Text Block] rr_ObjectivePrimaryTextBlock Maximum income consistent with prudent investment management and the preservation of capital.
Expense [Heading] rr_ExpenseHeading Fees and Expenses of the Fund
Expense Narrative [Text Block] rr_ExpenseNarrativeTextBlock The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees Caption [Text] rr_ShareholderFeesCaption Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Text] rr_OperatingExpensesCaption Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Portfolio Turnover [Heading] rr_PortfolioTurnoverHeading Portfolio Turnover
Portfolio Turnover [Text Block] rr_PortfolioTurnoverTextBlock The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 350% of the average value of its portfolio.
Portfolio Turnover, Rate rr_PortfolioTurnoverRate 350.00%
Expenses Deferred Charges [Text Block] rr_ExpensesDeferredChargesTextBlock Class C shares are subject to a 1% contingent deferred sales charge (“CDSC”) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
Expense Breakpoint Discounts [Text] rr_ExpenseBreakpointDiscounts You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Expense Breakpoint, Minimum Investment Required [Amount] rr_ExpenseBreakpointMinimumInvestmentRequiredAmount 50,000
Expense Example [Heading] rr_ExpenseExampleHeading Expense Example
Expense Example Narrative [Text Block] rr_ExpenseExampleNarrativeTextBlock This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Strategy [Heading] rr_StrategyHeading Principal Investment Strategies
Strategy Narrative [Text Block] rr_StrategyNarrativeTextBlock The Fund seeks to achieve its investment objective by investing at least 80% of its net assets under normal circumstances in debt securities.

Highland Capital Management Fund Advisors, L.P. (“HCMFA”), the Fund’s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (“GEAM”), the Fund’s sub-adviser. The Fund invests primarily in a variety of investment-grade debt securities, such as mortgage-backed securities, corporate bonds, U.S. Government securities and money market instruments. The Fund normally has a weighted average maturity of approximately five to ten years, but is subject to no limitation with respect to the maturities of the instruments in which it may invest.

U.S. Government securities are securities that are issued or guaranteed as to principal and interest by the U.S. Government or one of its agencies or instrumentalities. Some U.S. Government securities are backed by the full faith and credit of the U.S. Government, such as U.S. Treasury bills and notes and obligations of the Government National Mortgage Association (Ginnie Mae). Other U.S. Government securities are backed by the issuer’s right to borrow from the U.S. Treasury, such as Federal National Mortgage Association (Fannie Mae) securities, while some are backed only by the credit of the issuing organization, such as obligations of the Federal Home Loan Mortgage Corporation (Freddie Mac).

The portfolio managers seek to identify debt securities with characteristics such as:
  • attractive yields and prices
  • the potential for capital appreciation
  • reasonable credit quality
The portfolio managers may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.

The Fund also may invest to a lesser extent in asset-backed securities, high yield securities (also known as “junk bonds”), foreign (non-U.S.) debt securities and equity securities, such as exchange-traded funds (“ETFs”).

The portfolio managers may also invest in various types of derivatives to manage interest rate risk (also known as duration) and to manage exposure to credit quality.
Risk [Heading] rr_RiskHeading Principal Risks
Risk Narrative [Text Block] rr_RiskNarrativeTextBlock When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Credit Risk is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Prepayment Risk is the risk that during periods of falling interest rates, issuers of debt securities may repay higher rate securities before their maturity dates. This may cause the Fund to lose potential price appreciation and to be forced to reinvest the unanticipated proceeds at lower interest rates.

Mortgaged-Backed Securities Risk is the risk of investing in mortgaged-backed securities, and includes interest rate risk, prepayment risk and the risk that the Fund could lose money if there are defaults on the mortgage loans underlying these securities.

Foreign Investment Risk is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.

High Yield Securities Risk is the risk that high yield securities or unrated securities of similar credit quality (commonly known as “junk bonds”) are more likely to default than higher rated securities. The market value of these securities is more sensitive to corporate developments and economic conditions and can be volatile. Market conditions can diminish liquidity and make accurate valuations difficult to obtain.

Asset-Backed Securities Risk is the risk of investing in asset-backed securities, and includes interest rate risk, prepayment risk and the risk that the Fund could lose money if there are defaults on the loans underlying these securities.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Risk Lose Money [Text] rr_RiskLoseMoney When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund.
Risk Not Insured Depository Institution [Text] rr_RiskNotInsuredDepositoryInstitution An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Bar Chart and Performance Table [Heading] rr_BarChartAndPerformanceTableHeading Performance
Performance Narrative [Text Block] rr_PerformanceNarrativeTextBlock The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877-665-1287.
Performance Information Illustrates Variability of Returns [Text] rr_PerformanceInformationIllustratesVariabilityOfReturns The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index.
Performance Availability Phone [Text] rr_PerformanceAvailabilityPhone 1-877-665-1287
Performance Availability Website Address [Text] rr_PerformanceAvailabilityWebSiteAddress www.highlandfunds.com/Funds—Performance
Performance Past Does Not Indicate Future [Text] rr_PerformancePastDoesNotIndicateFuture As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future.
Bar Chart [Heading] rr_BarChartHeading Calendar Year Total Returns
Bar Chart Narrative [Text Block] rr_BarChartNarrativeTextBlock The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart Does Not Reflect Sales Loads [Text] rr_BarChartDoesNotReflectSalesLoads The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below.
Bar Chart Closing [Text Block] rr_BarChartClosingTextBlock The highest calendar quarter total return for Class A Shares of the Fund was 4.37% for the quarter ended September 30, 2009 and the lowest calendar quarter total return was -2.56% for the quarter ended June 30, 2004. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 4.58%.
Performance Table Heading rr_PerformanceTableHeading Average Annual Total Returns
(For the periods ended December 31, 2012)
Performance Table Uses Highest Federal Rate rr_PerformanceTableUsesHighestFederalRate After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.
Performance Table Not Relevant to Tax Deferred rr_PerformanceTableNotRelevantToTaxDeferred Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Performance Table One Class of after Tax Shown [Text] rr_PerformanceTableOneClassOfAfterTaxShown After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary.
Performance Table Explanation after Tax Higher rr_PerformanceTableExplanationAfterTaxHigher In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods.
Performance Table Narrative rr_PerformanceTableNarrativeTextBlock After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.

Highland Fixed Income Fund | Class A
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice 4.25%
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.30%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.25%
Other Expenses rr_OtherExpensesOverAssets 0.54%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.03%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.12%
1 Year rr_ExpenseExampleYear01 534
3 Years rr_ExpenseExampleYear03 766
5 Years rr_ExpenseExampleYear05 1,016
10 Years rr_ExpenseExampleYear10 1,730
2003 rr_AnnualReturn2003 3.36%
2004 rr_AnnualReturn2004 3.50%
2005 rr_AnnualReturn2005 2.02%
2006 rr_AnnualReturn2006 4.09%
2007 rr_AnnualReturn2007 5.66%
2008 rr_AnnualReturn2008 (1.28%)
2009 rr_AnnualReturn2009 7.35%
2010 rr_AnnualReturn2010 7.26%
2011 rr_AnnualReturn2011 7.59%
2012 rr_AnnualReturn2012 4.58%
Year to Date Return, Label rr_YearToDateReturnLabel year-to-date total return
Bar Chart, Year to Date Return, Date rr_BarChartYearToDateReturnDate Dec. 31, 2012
Bar Chart, Year to Date Return rr_BarChartYearToDateReturn 4.58%
Highest Quarterly Return, Label rr_HighestQuarterlyReturnLabel highest calendar quarter total return
Highest Quarterly Return, Date rr_BarChartHighestQuarterlyReturnDate Sep. 30, 2009
Highest Quarterly Return rr_BarChartHighestQuarterlyReturn 4.37%
Lowest Quarterly Return, Label rr_LowestQuarterlyReturnLabel lowest calendar quarter total return
Lowest Quarterly Return, Date rr_BarChartLowestQuarterlyReturnDate Jun. 30, 2004
Lowest Quarterly Return rr_BarChartLowestQuarterlyReturn (2.56%)
1 Year rr_AverageAnnualReturnYear01 0.16%
5 Years rr_AverageAnnualReturnYear05 4.14%
10 Years rr_AverageAnnualReturnYear10 3.93%
Since Inception rr_AverageAnnualReturnSinceInception 5.16%
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 22, 1993
Highland Fixed Income Fund | Class B
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 3.00%
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.30%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 0.54%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.03%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.87%
1 Year rr_ExpenseExampleYear01 490
3 Years rr_ExpenseExampleYear03 788
5 Years rr_ExpenseExampleYear05 1,011
10 Years rr_ExpenseExampleYear10 1,815
1 Year rr_ExpenseExampleNoRedemptionYear01 190
3 Years rr_ExpenseExampleNoRedemptionYear03 588
5 Years rr_ExpenseExampleNoRedemptionYear05 1,011
10 Years rr_ExpenseExampleNoRedemptionYear10 1,815
1 Year rr_AverageAnnualReturnYear01 0.83%
5 Years rr_AverageAnnualReturnYear05 4.27%
10 Years rr_AverageAnnualReturnYear10 3.91%
Since Inception rr_AverageAnnualReturnSinceInception 5.13%
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 22, 1993
Highland Fixed Income Fund | Class C
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 1.00% [2]
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.30%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 0.54%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.03%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.87%
1 Year rr_ExpenseExampleYear01 290
3 Years rr_ExpenseExampleYear03 588
5 Years rr_ExpenseExampleYear05 1,011
10 Years rr_ExpenseExampleYear10 2,190
1 Year rr_ExpenseExampleNoRedemptionYear01 190
3 Years rr_ExpenseExampleNoRedemptionYear03 588
5 Years rr_ExpenseExampleNoRedemptionYear05 1,011
10 Years rr_ExpenseExampleNoRedemptionYear10 2,190
1 Year rr_AverageAnnualReturnYear01 2.82%
5 Years rr_AverageAnnualReturnYear05 4.26%
10 Years rr_AverageAnnualReturnYear10 3.62%
Since Inception rr_AverageAnnualReturnSinceInception 4.54%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 30, 1999
Highland Fixed Income Fund | Class R
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.30%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.50%
Other Expenses rr_OtherExpensesOverAssets 0.54%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.03%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.37%
1 Year rr_ExpenseExampleYear01 139
3 Years rr_ExpenseExampleYear03 434
5 Years rr_ExpenseExampleYear05 750
10 Years rr_ExpenseExampleYear10 1,646
1 Year rr_AverageAnnualReturnYear01 4.29%
5 Years rr_AverageAnnualReturnYear05   
10 Years rr_AverageAnnualReturnYear10   
Since Inception rr_AverageAnnualReturnSinceInception 4.49%
Inception Date rr_AverageAnnualReturnInceptionDate Jan. 29, 2008
Highland Fixed Income Fund | Class Y
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.30%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets none
Other Expenses rr_OtherExpensesOverAssets 0.54%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.03%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 0.87%
1 Year rr_ExpenseExampleYear01 89
3 Years rr_ExpenseExampleYear03 278
5 Years rr_ExpenseExampleYear05 482
10 Years rr_ExpenseExampleYear10 1,073
1 Year rr_AverageAnnualReturnYear01 4.85%
5 Years rr_AverageAnnualReturnYear05 5.27%
10 Years rr_AverageAnnualReturnYear10 4.63%
Since Inception rr_AverageAnnualReturnSinceInception 5.61%
Inception Date rr_AverageAnnualReturnInceptionDate Nov. 29, 1993
Highland Fixed Income Fund | Return After Taxes on Distributions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 (0.44%)
5 Years rr_AverageAnnualReturnYear05 2.96%
10 Years rr_AverageAnnualReturnYear10 2.51%
Since Inception rr_AverageAnnualReturnSinceInception 3.28%
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 22, 1993
Highland Fixed Income Fund | Return After Taxes on Distributions and Redemptions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 0.10%
5 Years rr_AverageAnnualReturnYear05 2.83%
10 Years rr_AverageAnnualReturnYear10 2.51%
Since Inception rr_AverageAnnualReturnSinceInception 3.24%
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 22, 1993
Highland Fixed Income Fund | Barclays Capital U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 4.22%
5 Years rr_AverageAnnualReturnYear05 5.95%
10 Years rr_AverageAnnualReturnYear10 5.18%
Since Inception rr_AverageAnnualReturnSinceInception 6.20%
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 28, 1993
[1] (as % of amount redeemed within two months or less after date of purchase)
[2] Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
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Label Element Value
Risk/Return: rr_RiskReturnAbstract  
Registrant Name dei_EntityRegistrantName HIGHLAND FUNDS II
Prospectus Date rr_ProspectusDate Feb. 01, 2013
Highland Tax-Exempt Fund
 
Risk/Return: rr_RiskReturnAbstract  
Risk/Return [Heading] rr_RiskReturnHeading Highland Tax-Exempt Fund

(formerly “Pyxis Tax-Exempt Fund”)
Objective [Heading] rr_ObjectiveHeading Investment Objective
Objective, Primary [Text Block] rr_ObjectivePrimaryTextBlock As high a level of income exempt from federal income taxation as is consistent with preservation of capital.
Expense [Heading] rr_ExpenseHeading Fees and Expenses of the Fund
Expense Narrative [Text Block] rr_ExpenseNarrativeTextBlock The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees Caption [Text] rr_ShareholderFeesCaption Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Text] rr_OperatingExpensesCaption Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Portfolio Turnover [Heading] rr_PortfolioTurnoverHeading Portfolio Turnover
Portfolio Turnover [Text Block] rr_PortfolioTurnoverTextBlock The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 26% of the average value of its portfolio.
Portfolio Turnover, Rate rr_PortfolioTurnoverRate 26.00%
Expenses Deferred Charges [Text Block] rr_ExpensesDeferredChargesTextBlock Class C shares are subject to a 1% contingent deferred sales charge (“CDSC”) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
Expense Breakpoint Discounts [Text] rr_ExpenseBreakpointDiscounts You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Expense Breakpoint, Minimum Investment Required [Amount] rr_ExpenseBreakpointMinimumInvestmentRequiredAmount 50,000
Expense Example [Heading] rr_ExpenseExampleHeading Expense Example
Expense Example Narrative [Text Block] rr_ExpenseExampleNarrativeTextBlock This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Strategy [Heading] rr_StrategyHeading Principal Investment Strategies
Strategy Narrative [Text Block] rr_StrategyNarrativeTextBlock The Fund seeks to achieve its investment objective by investing primarily in investment-grade municipal obligations. Under normal circumstances, the portfolio manager manages the Fund so that at least 80% of the Fund’s income is exempt from both regular federal income taxes and the federal alternative minimum tax.

Highland Capital Management Fund Advisors, L.P. (“HCMFA”), the Fund’s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (“GEAM”), the Fund’s sub-adviser. The Fund generally will have an effective duration of 75% to 125% of the duration of the Barclays Capital 10-Year Municipal Bond Index. As of December 31, 2012, the effective duration of the Barclays Capital 10-Year Municipal Bond Index was 5.88 years. Portfolio duration is one measure of risk, as noted under “Interest Rate Risk” below.

The portfolio manager seeks to identify municipal obligations with characteristics such as:
  •    attractive yields and prices
  •    the potential for income generation
  •     the potential for capital appreciation
  •    reasonable credit quality
The portfolio manager may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.

The Fund also may invest to a lesser extent in tax-free or taxable money market instruments and may hold cash. The portfolio manager may also invest in various types of derivatives to manage interest rate exposure (also known as duration) and to manage exposure to credit quality. The Fund may also invest in exchange-traded funds (“ETFs”).

The Fund’s policy that at least 80% of its income be exempt from both regular federal income taxes and the federal alternative minimum tax may only be changed with shareholder approval.
Risk [Heading] rr_RiskHeading Principal Risks
Risk Narrative [Text Block] rr_RiskNarrativeTextBlock When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Municipal Obligations Risk is the risk of investing in municipal securities, and includes interest rate risk and the credit risk of the issuers of municipal securities. The municipal securities market is volatile and may be significantly affected by adverse tax, legislative or political changes. To the extent that the Fund remains relatively small, it may have fewer favorable investment opportunities.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Credit Risk is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Risk Lose Money [Text] rr_RiskLoseMoney When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund.
Risk Not Insured Depository Institution [Text] rr_RiskNotInsuredDepositoryInstitution An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Bar Chart and Performance Table [Heading] rr_BarChartAndPerformanceTableHeading Performance
Performance Narrative [Text Block] rr_PerformanceNarrativeTextBlock The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class C and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877-665-1287.
Performance Information Illustrates Variability of Returns [Text] rr_PerformanceInformationIllustratesVariabilityOfReturns The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index.
Performance Availability Phone [Text] rr_PerformanceAvailabilityPhone 1-877-665-1287
Performance Availability Website Address [Text] rr_PerformanceAvailabilityWebSiteAddress www.highlandfunds.com/Funds—Performance
Performance Past Does Not Indicate Future [Text] rr_PerformancePastDoesNotIndicateFuture As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future.
Bar Chart [Heading] rr_BarChartHeading Calendar Year Total Returns
Bar Chart Narrative [Text Block] rr_BarChartNarrativeTextBlock The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart Does Not Reflect Sales Loads [Text] rr_BarChartDoesNotReflectSalesLoads The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below.
Bar Chart Closing [Text Block] rr_BarChartClosingTextBlock The highest calendar quarter total return for Class A Shares of the Fund was 5.16% for the quarter ended September 30, 2009 and the lowest calendar quarter total return was -4.17% for the quarter ended December 31, 2010. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 4.85%.
Performance Table Heading rr_PerformanceTableHeading Average Annual Total Returns
(For the periods ended December 31, 2012)
Performance Table Uses Highest Federal Rate rr_PerformanceTableUsesHighestFederalRate After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.
Performance Table Not Relevant to Tax Deferred rr_PerformanceTableNotRelevantToTaxDeferred Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Performance Table One Class of after Tax Shown [Text] rr_PerformanceTableOneClassOfAfterTaxShown After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary.
Performance Table Narrative rr_PerformanceTableNarrativeTextBlock After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Highland Tax-Exempt Fund | Class A
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice 4.25%
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.35%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.25%
Other Expenses rr_OtherExpensesOverAssets 0.58%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.18%
1 Year rr_ExpenseExampleYear01 540
3 Years rr_ExpenseExampleYear03 784
5 Years rr_ExpenseExampleYear05 1,046
10 Years rr_ExpenseExampleYear10 1,796
2003 rr_AnnualReturn2003 4.14%
2004 rr_AnnualReturn2004 2.40%
2005 rr_AnnualReturn2005 1.14%
2006 rr_AnnualReturn2006 3.01%
2007 rr_AnnualReturn2007 2.67%
2008 rr_AnnualReturn2008 0.06%
2009 rr_AnnualReturn2009 9.42%
2010 rr_AnnualReturn2010 1.14%
2011 rr_AnnualReturn2011 8.97%
2012 rr_AnnualReturn2012 4.85%
Year to Date Return, Label rr_YearToDateReturnLabel year-to-date total return
Bar Chart, Year to Date Return, Date rr_BarChartYearToDateReturnDate Dec. 31, 2012
Bar Chart, Year to Date Return rr_BarChartYearToDateReturn 4.85%
Highest Quarterly Return, Label rr_HighestQuarterlyReturnLabel highest calendar quarter total return
Highest Quarterly Return, Date rr_BarChartHighestQuarterlyReturnDate Sep. 30, 2009
Highest Quarterly Return rr_BarChartHighestQuarterlyReturn 5.16%
Lowest Quarterly Return, Label rr_LowestQuarterlyReturnLabel lowest calendar quarter total return
Lowest Quarterly Return, Date rr_BarChartLowestQuarterlyReturnDate Dec. 31, 2010
Lowest Quarterly Return rr_BarChartLowestQuarterlyReturn (4.17%)
1 Year rr_AverageAnnualReturnYear01 0.43%
5 Years rr_AverageAnnualReturnYear05 3.90%
10 Years rr_AverageAnnualReturnYear10 3.28%
Since Inception rr_AverageAnnualReturnSinceInception 4.28%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 08, 1993
Highland Tax-Exempt Fund | Class C
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 1.00% [2]
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.35%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 0.58%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.93%
1 Year rr_ExpenseExampleYear01 296
3 Years rr_ExpenseExampleYear03 606
5 Years rr_ExpenseExampleYear05 1,042
10 Years rr_ExpenseExampleYear10 2,254
1 Year rr_ExpenseExampleNoRedemptionYear01 196
3 Years rr_ExpenseExampleNoRedemptionYear03 606
5 Years rr_ExpenseExampleNoRedemptionYear05 1,042
Expense Example, No Redemption, 10 Years rr_ExpenseExampleNoRedemptionYear10 2,254
1 Year rr_AverageAnnualReturnYear01 3.00%
5 Years rr_AverageAnnualReturnYear05 4.03%
10 Years rr_AverageAnnualReturnYear10 2.96%
Since Inception rr_AverageAnnualReturnSinceInception 3.81%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 30, 1999
Highland Tax-Exempt Fund | Class Y
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.35%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets none
Other Expenses rr_OtherExpensesOverAssets 0.58%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 0.93%
1 Year rr_ExpenseExampleYear01 95
3 Years rr_ExpenseExampleYear03 296
5 Years rr_ExpenseExampleYear05 515
10 Years rr_ExpenseExampleYear10 1,143
1 Year rr_AverageAnnualReturnYear01 5.09%
5 Years rr_AverageAnnualReturnYear05 5.06%
10 Years rr_AverageAnnualReturnYear10 8.29%
Since Inception rr_AverageAnnualReturnSinceInception 9.44%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 26, 1997
Highland Tax-Exempt Fund | Return After Taxes on Distributions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 0.43%
5 Years rr_AverageAnnualReturnYear05 3.90%
10 Years rr_AverageAnnualReturnYear10 3.28%
Since Inception rr_AverageAnnualReturnSinceInception 4.28%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 08, 1993
Highland Tax-Exempt Fund | Return After Taxes on Distributions and Redemptions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 1.15%
5 Years rr_AverageAnnualReturnYear05 3.79%
10 Years rr_AverageAnnualReturnYear10 3.29%
Since Inception rr_AverageAnnualReturnSinceInception 4.25%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 08, 1993
Highland Tax-Exempt Fund | Barclays Capital 10-Year Municipal Bond Index (reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 5.70%
5 Years rr_AverageAnnualReturnYear05 6.62%
10 Years rr_AverageAnnualReturnYear10 5.46%
Since Inception rr_AverageAnnualReturnSinceInception 5.84%
Inception Date rr_AverageAnnualReturnInceptionDate Aug. 31, 1993
[1] (as % of amount redeemed within two months or less after date of purchase)
[2] Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
XML 18 R71.htm IDEA: XBRL DOCUMENT v2.4.0.6
Label Element Value
Risk/Return: rr_RiskReturnAbstract  
Registrant Name dei_EntityRegistrantName HIGHLAND FUNDS II
Prospectus Date rr_ProspectusDate Feb. 01, 2013
Highland International Equity Fund
 
Risk/Return: rr_RiskReturnAbstract  
Risk/Return [Heading] rr_RiskReturnHeading Highland International Equity Fund

(formerly “Pyxis International Equity Fund”)
Objective [Heading] rr_ObjectiveHeading Investment Objective
Objective, Primary [Text Block] rr_ObjectivePrimaryTextBlock Long-term growth of capital.
Expense [Heading] rr_ExpenseHeading Fees and Expenses of the Fund
Expense Narrative [Text Block] rr_ExpenseNarrativeTextBlock The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees Caption [Text] rr_ShareholderFeesCaption Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Text] rr_OperatingExpensesCaption Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Portfolio Turnover [Heading] rr_PortfolioTurnoverHeading Portfolio Turnover
Portfolio Turnover [Text Block] rr_PortfolioTurnoverTextBlock The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 48% of the average value of its portfolio.

Portfolio Turnover, Rate rr_PortfolioTurnoverRate 48.00%
Expenses Deferred Charges [Text Block] rr_ExpensesDeferredChargesTextBlock Class C shares are subject to a 1% contingent deferred sales charge (“CDSC”) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
Expense Breakpoint Discounts [Text] rr_ExpenseBreakpointDiscounts You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Expense Breakpoint, Minimum Investment Required [Amount] rr_ExpenseBreakpointMinimumInvestmentRequiredAmount 50,000
Expense Example [Heading] rr_ExpenseExampleHeading Expense Example
Expense Example Narrative [Text Block] rr_ExpenseExampleNarrativeTextBlock This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Strategy [Heading] rr_StrategyHeading Principal Investment Strategies
Strategy Narrative [Text Block] rr_StrategyNarrativeTextBlock The Fund seeks to achieve its investment objective by investing at least 80% of its net assets under normal circumstances in equity securities, such as common and preferred stocks, plus borrowings for investment purposes.

Highland Capital Management Fund Advisors, L.P. (“HCMFA”), the Fund’s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (“GEAM”), the Fund’s sub-adviser. The Fund invests primarily (meaning at least 65%) in companies in both developed and emerging market countries outside the U.S. An issuer is considered to be located outside the U.S. if at least 50% of its revenues or profits are from business activities located outside the U.S., at least 50% of its assets are located outside the U.S., or the principal trading market for its securities is located outside the U.S. The portfolio managers focus on companies whose security prices they believe do not fully reflect their potential for growth. Under normal circumstances, the Fund’s assets are invested in securities of foreign (non-U.S.) companies representing at least three different countries. Stock selection is key to the performance of the Fund.

The portfolio managers seek to identify securities of companies with characteristics such as:
  •    low valuation relative to their long term cash earnings potential
  •    potential for significant improvement in the company’s business
  •    financial strength (favorable debt ratios and other financial characteristics)
  •    sufficient liquidity
  •    large or medium capitalization (meaning a market capitalization of $2 billion or more)
The portfolio managers may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.

The Fund also may invest to a lesser extent in debt securities and may invest in securities of companies located in the U.S. The Fund may also invest in exchange-traded funds (“ETFs”), and it may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.
Risk [Heading] rr_RiskHeading Principal Risks

Risk Narrative [Text Block] rr_RiskNarrativeTextBlock When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Foreign Investment Risk is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S., and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.

Growth Investing Risk is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company’s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.

Mid-Cap Company Risk is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Emerging Markets Risk is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets.

Credit Risk is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Risk Lose Money [Text] rr_RiskLoseMoney When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund.
Risk Not Insured Depository Institution [Text] rr_RiskNotInsuredDepositoryInstitution An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Bar Chart and Performance Table [Heading] rr_BarChartAndPerformanceTableHeading Performance
Performance Narrative [Text Block] rr_PerformanceNarrativeTextBlock The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandsfunds.com/Funds—Performance or by calling 1-877-665-1287.
Performance Information Illustrates Variability of Returns [Text] rr_PerformanceInformationIllustratesVariabilityOfReturns The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index.
Performance Availability Phone [Text] rr_PerformanceAvailabilityPhone 1-877-665-1287
Performance Availability Website Address [Text] rr_PerformanceAvailabilityWebSiteAddress www.highlandsfunds.com/Funds—Performance
Performance Past Does Not Indicate Future [Text] rr_PerformancePastDoesNotIndicateFuture As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future.
Bar Chart [Heading] rr_BarChartHeading Calendar Year Total Returns
Bar Chart Narrative [Text Block] rr_BarChartNarrativeTextBlock The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart Does Not Reflect Sales Loads [Text] rr_BarChartDoesNotReflectSalesLoads The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below.
Bar Chart Closing [Text Block] rr_BarChartClosingTextBlock The highest calendar quarter total return for Class A Shares of the Fund was 25.15% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -23.59% for the quarter ended September 30, 2011. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 18.64%.
Performance Table Heading rr_PerformanceTableHeading Average Annual Total Returns
(For the periods ended December 31, 2012)
Performance Table Uses Highest Federal Rate rr_PerformanceTableUsesHighestFederalRate After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.
Performance Table Not Relevant to Tax Deferred rr_PerformanceTableNotRelevantToTaxDeferred Actual after-tax returns depend on an investor's tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Performance Table One Class of after Tax Shown [Text] rr_PerformanceTableOneClassOfAfterTaxShown After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary.
Performance Table Explanation after Tax Higher rr_PerformanceTableExplanationAfterTaxHigher In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods.
Performance Table Narrative rr_PerformanceTableNarrativeTextBlock After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
Highland International Equity Fund | Class A
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice 5.75%
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as a % of proceeds on exchanges within 90 days; currently suspended) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 0.80%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.25%
Other Expenses rr_OtherExpensesOverAssets 0.63% [2]
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.68%
1 Year rr_ExpenseExampleYear01 736
3 Years rr_ExpenseExampleYear03 1,074
5 Years rr_ExpenseExampleYear05 1,435
10 Years rr_ExpenseExampleYear10 2,448
2003 rr_AnnualReturn2003 30.03%
2004 rr_AnnualReturn2004 15.34%
2005 rr_AnnualReturn2005 18.27%
2006 rr_AnnualReturn2006 24.11%
2007 rr_AnnualReturn2007 22.82%
2008 rr_AnnualReturn2008 (49.92%)
2009 rr_AnnualReturn2009 29.52%
2010 rr_AnnualReturn2010 4.23%
2011 rr_AnnualReturn2011 (17.46%)
2012 rr_AnnualReturn2012 18.64%
Year to Date Return, Label rr_YearToDateReturnLabel year-to-date total return
Bar Chart, Year to Date Return, Date rr_BarChartYearToDateReturnDate Dec. 31, 2012
Bar Chart, Year to Date Return rr_BarChartYearToDateReturn 18.64%
Highest Quarterly Return, Label rr_HighestQuarterlyReturnLabel highest calendar quarter total return
Highest Quarterly Return, Date rr_BarChartHighestQuarterlyReturnDate Jun. 30, 2009
Highest Quarterly Return rr_BarChartHighestQuarterlyReturn 25.15%
Lowest Quarterly Return, Label rr_LowestQuarterlyReturnLabel lowest calendar quarter total return
Lowest Quarterly Return, Date rr_BarChartLowestQuarterlyReturnDate Sep. 30, 2011
Lowest Quarterly Return rr_BarChartLowestQuarterlyReturn (23.59%)
1 Year rr_AverageAnnualReturnYear01 11.86%
5 Years rr_AverageAnnualReturnYear05 (7.26%)
10 Years rr_AverageAnnualReturnYear10 6.37%
Since Inception rr_AverageAnnualReturnSinceInception 3.38%
Inception Date rr_AverageAnnualReturnInceptionDate Mar. 02, 1994
Highland International Equity Fund | Class B
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 4.00%
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as a % of proceeds on exchanges within 90 days; currently suspended) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 0.80%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 0.63% [2]
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.43%
1 Year rr_ExpenseExampleYear01 646
3 Years rr_ExpenseExampleYear03 958
5 Years rr_ExpenseExampleYear05 1,296
10 Years rr_ExpenseExampleYear10 2,411
1 Year rr_ExpenseExampleNoRedemptionYear01 246
3 Years rr_ExpenseExampleNoRedemptionYear03 758
5 Years rr_ExpenseExampleNoRedemptionYear05 1,296
10 Years rr_ExpenseExampleNoRedemptionYear10 2,411
1 Year rr_AverageAnnualReturnYear01 13.75%
5 Years rr_AverageAnnualReturnYear05 (6.87%)
10 Years rr_AverageAnnualReturnYear10 6.49%
Since Inception rr_AverageAnnualReturnSinceInception 3.47%
Inception Date rr_AverageAnnualReturnInceptionDate Mar. 02, 1994
Highland International Equity Fund | Class C
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 1.00% [3]
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as a % of proceeds on exchanges within 90 days; currently suspended) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 0.80%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 0.63% [2]
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.43%
1 Year rr_ExpenseExampleYear01 346
3 Years rr_ExpenseExampleYear03 758
5 Years rr_ExpenseExampleYear05 1,296
10 Years rr_ExpenseExampleYear10 2,766
1 Year rr_ExpenseExampleNoRedemptionYear01 246
3 Years rr_ExpenseExampleNoRedemptionYear03 758
5 Years rr_ExpenseExampleNoRedemptionYear05 1,296
10 Years rr_ExpenseExampleNoRedemptionYear10 2,766
1 Year rr_AverageAnnualReturnYear01 16.84%
5 Years rr_AverageAnnualReturnYear05 (6.81%)
10 Years rr_AverageAnnualReturnYear10 6.27%
Since Inception rr_AverageAnnualReturnSinceInception 0.85%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 30, 1999
Highland International Equity Fund | Class R
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as a % of proceeds on exchanges within 90 days; currently suspended) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 0.80%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.50%
Other Expenses rr_OtherExpensesOverAssets 0.63% [2]
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.93%
1 Year rr_ExpenseExampleYear01 196
3 Years rr_ExpenseExampleYear03 606
5 Years rr_ExpenseExampleYear05 1,042
10 Years rr_ExpenseExampleYear10 2,254
1 Year rr_AverageAnnualReturnYear01 18.52%
5 Years rr_AverageAnnualReturnYear05   
10 Years rr_AverageAnnualReturnYear10   
Since Inception rr_AverageAnnualReturnSinceInception (4.67%)
Inception Date rr_AverageAnnualReturnInceptionDate Jan. 29, 2008
Highland International Equity Fund | Class Y
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as a % of proceeds on exchanges within 90 days; currently suspended) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 0.80%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets none
Other Expenses rr_OtherExpensesOverAssets 0.63% [2]
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.43%
1 Year rr_ExpenseExampleYear01 146
3 Years rr_ExpenseExampleYear03 452
5 Years rr_ExpenseExampleYear05 782
10 Years rr_ExpenseExampleYear10 1,713
1 Year rr_AverageAnnualReturnYear01 18.97%
5 Years rr_AverageAnnualReturnYear05 (5.91%)
10 Years rr_AverageAnnualReturnYear10 7.26%
Since Inception rr_AverageAnnualReturnSinceInception 3.99%
Inception Date rr_AverageAnnualReturnInceptionDate Mar. 02, 1994
Highland International Equity Fund | Return After Taxes on Distributions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 11.97%
5 Years rr_AverageAnnualReturnYear05 (7.71%)
10 Years rr_AverageAnnualReturnYear10 5.97%
Since Inception rr_AverageAnnualReturnSinceInception 2.61%
Inception Date rr_AverageAnnualReturnInceptionDate Mar. 02, 1994
Highland International Equity Fund | Return After Taxes on Distributions and Redemptions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 7.82%
5 Years rr_AverageAnnualReturnYear05 (5.94%)
10 Years rr_AverageAnnualReturnYear10 5.78%
Since Inception rr_AverageAnnualReturnSinceInception 2.78%
Inception Date rr_AverageAnnualReturnInceptionDate Mar. 02, 1994
Highland International Equity Fund | MSCI EAFE Index® ( reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 17.32%
5 Years rr_AverageAnnualReturnYear05 (3.69%)
10 Years rr_AverageAnnualReturnYear10 8.21%
Since Inception rr_AverageAnnualReturnSinceInception 4.45%
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 28, 1994
[1] (as a % of redemption proceeds on redemptions within 90 days; currently suspended)
[2] "Other Expenses" include indirect fees and expenses of Acquired Funds less than 0.01%. "Acquired Fund" means any investment company in which the Fund invests or has invested during the period.
[3] Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
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Label Element Value
Risk/Return: rr_RiskReturnAbstract  
Registrant Name dei_EntityRegistrantName HIGHLAND FUNDS II
Prospectus Date rr_ProspectusDate Feb. 01, 2013
Highland Premier Growth Equity Fund
 
Risk/Return: rr_RiskReturnAbstract  
Risk/Return [Heading] rr_RiskReturnHeading Highland Premier Growth Equity Fund

(formerly “Pyxis Premier Growth Equity Fund”)
Objective [Heading] rr_ObjectiveHeading Investment Objective
Objective, Primary [Text Block] rr_ObjectivePrimaryTextBlock Long-term growth of capital and future income rather than current income.
Expense [Heading] rr_ExpenseHeading Fees and Expenses of the Fund
Expense Narrative [Text Block] rr_ExpenseNarrativeTextBlock The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 the Fund’s Statement of Additional Information.
Shareholder Fees Caption [Text] rr_ShareholderFeesCaption Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Text] rr_OperatingExpensesCaption Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Portfolio Turnover [Heading] rr_PortfolioTurnoverHeading Portfolio Turnover
Portfolio Turnover [Text Block] rr_PortfolioTurnoverTextBlock The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 16% of the average value of its portfolio.
Portfolio Turnover, Rate rr_PortfolioTurnoverRate 16.00%
Expenses Deferred Charges [Text Block] rr_ExpensesDeferredChargesTextBlock Class C shares are subject to a 1% contingent deferred sales charge (“CDSC”) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
Expense Breakpoint Discounts [Text] rr_ExpenseBreakpointDiscounts You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 the Fund’s Statement of Additional Information.
Expense Breakpoint, Minimum Investment Required [Amount] rr_ExpenseBreakpointMinimumInvestmentRequiredAmount 50,000
Expense Example [Heading] rr_ExpenseExampleHeading Expense Example
Expense Example Narrative [Text Block] rr_ExpenseExampleNarrativeTextBlock This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Strategy [Heading] rr_StrategyHeading Principal Investment Strategies
Strategy Narrative [Text Block] rr_StrategyNarrativeTextBlock The Fund seeks to achieve its investment objectives by investing at least 80% of its net assets under normal circumstances in equity securities, such as common and preferred stocks, plus borrowing for investment purposes.

Highland Capital Management Fund Advisors, L.P. (“HCMFA”), the Fund’s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (“GEAM”), the Fund’s sub-adviser. The Fund invests primarily in a limited number of large- and medium-sized companies (meaning companies with a market capitalization of $2 billion or more) that the portfolio manager believes have above-average growth histories and/or growth potential. The portfolio manager selects equity securities from a number of industries based on the merits of individual companies. In seeking to satisfy the Fund’s investment objective with respect to future income, the portfolio manager will also consider companies that have the potential to pay dividends in the future. Stock selection is key to the performance of the Fund.

The portfolio manager seeks to identify securities of companies with characteristics such as:
  • above-average annual growth rates
  • financial strength (favorable debt ratios and other financial characteristics)
  • leadership in their respective industries
  • high quality management focused on generating shareholder value
The portfolio manager may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.

The Fund also may invest to a lesser extent in securities of foreign (non-U.S.) issuers and debt securities. The Fund may also invest in exchange-traded funds (“ETFs”), and it may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.
Risk [Heading] rr_RiskHeading Principal Risks
Risk Narrative [Text Block] rr_RiskNarrativeTextBlock When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Growth Investing Risk is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company’s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.

Mid-Cap Company Risk is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Foreign Investment Risk is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.

Credit Risk is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Risk Lose Money [Text] rr_RiskLoseMoney When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund.
Risk Not Insured Depository Institution [Text] rr_RiskNotInsuredDepositoryInstitution An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Bar Chart and Performance Table [Heading] rr_BarChartAndPerformanceTableHeading Performance
Performance Narrative [Text Block] rr_PerformanceNarrativeTextBlock The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of two broad-based securities market indices. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877-665-1287.
Performance Information Illustrates Variability of Returns [Text] rr_PerformanceInformationIllustratesVariabilityOfReturns The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of two broad-based securities market indices.
Performance Availability Phone [Text] rr_PerformanceAvailabilityPhone 1-877-665-1287
Performance Availability Website Address [Text] rr_PerformanceAvailabilityWebSiteAddress www.highlandfunds.com/Funds—Performance
Performance Past Does Not Indicate Future [Text] rr_PerformancePastDoesNotIndicateFuture As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future.
Bar Chart [Heading] rr_BarChartHeading Calendar Year Total Returns
Bar Chart Narrative [Text Block] rr_BarChartNarrativeTextBlock The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart Does Not Reflect Sales Loads [Text] rr_BarChartDoesNotReflectSalesLoads The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below.
Bar Chart Closing [Text Block] rr_BarChartClosingTextBlock The highest calendar quarter total return for Class A Shares of the Fund was 20.15% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -27.30% for the quarter ended December 31, 2008. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 20.22%.
Performance Table Heading rr_PerformanceTableHeading Average Annual Total Returns
(For the periods ended December 31, 2012)
Performance Table Uses Highest Federal Rate rr_PerformanceTableUsesHighestFederalRate After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.
Performance Table Not Relevant to Tax Deferred rr_PerformanceTableNotRelevantToTaxDeferred Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Performance Table One Class of after Tax Shown [Text] rr_PerformanceTableOneClassOfAfterTaxShown After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary.
Performance Table Explanation after Tax Higher rr_PerformanceTableExplanationAfterTaxHigher In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods.
Performance Table Narrative rr_PerformanceTableNarrativeTextBlock After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
Highland Premier Growth Equity Fund | Class A
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice 5.75%
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.60%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.25%
Other Expenses rr_OtherExpensesOverAssets 0.25% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.11%
1 Year rr_ExpenseExampleYear01 682
3 Years rr_ExpenseExampleYear03 908
5 Years rr_ExpenseExampleYear05 1,151
10 Years rr_ExpenseExampleYear10 1,849
2003 rr_AnnualReturn2003 28.32%
2004 rr_AnnualReturn2004 6.79%
2005 rr_AnnualReturn2005 1.10%
2006 rr_AnnualReturn2006 8.66%
2007 rr_AnnualReturn2007 4.98%
2008 rr_AnnualReturn2008 (36.40%)
2009 rr_AnnualReturn2009 38.53%
2010 rr_AnnualReturn2010 11.29%
2011 rr_AnnualReturn2011 0.05%
2012 rr_AnnualReturn2012 20.22%
Year to Date Return, Label rr_YearToDateReturnLabel year-to-date total return
Bar Chart, Year to Date Return, Date rr_BarChartYearToDateReturnDate Dec. 31, 2012
Bar Chart, Year to Date Return rr_BarChartYearToDateReturn 20.22%
Highest Quarterly Return, Label rr_HighestQuarterlyReturnLabel highest calendar quarter total return
Highest Quarterly Return, Date rr_BarChartHighestQuarterlyReturnDate Jun. 30, 2009
Highest Quarterly Return rr_BarChartHighestQuarterlyReturn 20.15%
Lowest Quarterly Return, Label rr_LowestQuarterlyReturnLabel lowest calendar quarter total return
Lowest Quarterly Return, Date rr_BarChartLowestQuarterlyReturnDate Dec. 31, 2008
Lowest Quarterly Return rr_BarChartLowestQuarterlyReturn (27.30%)
1 Year rr_AverageAnnualReturnYear01 13.29%
5 Years rr_AverageAnnualReturnYear05 2.14%
10 Years rr_AverageAnnualReturnYear10 5.80%
Since Inception rr_AverageAnnualReturnSinceInception 6.52%
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 31, 1996
Highland Premier Growth Equity Fund | Class B
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 4.00%
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.60%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 0.25% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.86%
1 Year rr_ExpenseExampleYear01 589
3 Years rr_ExpenseExampleYear03 785
5 Years rr_ExpenseExampleYear05 1,006
10 Years rr_ExpenseExampleYear10 1,804
1 Year rr_ExpenseExampleNoRedemptionYear01 189
3 Years rr_ExpenseExampleNoRedemptionYear03 585
5 Years rr_ExpenseExampleNoRedemptionYear05 1,006
10 Years rr_ExpenseExampleNoRedemptionYear10 1,804
1 Year rr_AverageAnnualReturnYear01 15.35%
5 Years rr_AverageAnnualReturnYear05 2.58%
10 Years rr_AverageAnnualReturnYear10 5.95%
Since Inception rr_AverageAnnualReturnSinceInception 6.62%
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 31, 1996
Highland Premier Growth Equity Fund | Class C
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 1.00% [3]
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.60%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 0.25% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.86%
1 Year rr_ExpenseExampleYear01 289
3 Years rr_ExpenseExampleYear03 585
5 Years rr_ExpenseExampleYear05 1,006
10 Years rr_ExpenseExampleYear10 2,180
1 Year rr_ExpenseExampleNoRedemptionYear01 189
3 Years rr_ExpenseExampleNoRedemptionYear03 585
5 Years rr_ExpenseExampleNoRedemptionYear05 1,006
10 Years rr_ExpenseExampleNoRedemptionYear10 2,180
1 Year rr_AverageAnnualReturnYear01 18.32%
5 Years rr_AverageAnnualReturnYear05 2.58%
10 Years rr_AverageAnnualReturnYear10 5.63%
Since Inception rr_AverageAnnualReturnSinceInception 2.43%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 30, 1999
Highland Premier Growth Equity Fund | Class R
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.60%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.50%
Other Expenses rr_OtherExpensesOverAssets 0.25% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.36%
1 Year rr_ExpenseExampleYear01 138
3 Years rr_ExpenseExampleYear03 431
5 Years rr_ExpenseExampleYear05 745
10 Years rr_ExpenseExampleYear10 1,635
1 Year rr_AverageAnnualReturnYear01 19.95%
5 Years rr_AverageAnnualReturnYear05   
10 Years rr_AverageAnnualReturnYear10   
Since Inception rr_AverageAnnualReturnSinceInception 4.65%
Inception Date rr_AverageAnnualReturnInceptionDate Jan. 29, 2008
Highland Premier Growth Equity Fund | Class Y
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.60%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets none
Other Expenses rr_OtherExpensesOverAssets 0.25% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 0.86%
1 Year rr_ExpenseExampleYear01 88
3 Years rr_ExpenseExampleYear03 274
5 Years rr_ExpenseExampleYear05 477
10 Years rr_ExpenseExampleYear10 1,061
1 Year rr_AverageAnnualReturnYear01 20.56%
5 Years rr_AverageAnnualReturnYear05 3.61%
10 Years rr_AverageAnnualReturnYear10 6.69%
Since Inception rr_AverageAnnualReturnSinceInception 7.19%
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 31, 1996
Highland Premier Growth Equity Fund | Return After Taxes on Distributions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 13.20%
5 Years rr_AverageAnnualReturnYear05 1.86%
10 Years rr_AverageAnnualReturnYear10 5.24%
Since Inception rr_AverageAnnualReturnSinceInception 5.92%
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 31, 1996
Highland Premier Growth Equity Fund | Return After Taxes on Distributions and Redemptions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 8.76%
5 Years rr_AverageAnnualReturnYear05 1.72%
10 Years rr_AverageAnnualReturnYear10 4.97%
Since Inception rr_AverageAnnualReturnSinceInception 5.64%
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 31, 1996
Highland Premier Growth Equity Fund | S&P 500® Index (reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 15.99%
5 Years rr_AverageAnnualReturnYear05 1.66%
10 Years rr_AverageAnnualReturnYear10 7.10%
Since Inception rr_AverageAnnualReturnSinceInception 6.08%
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 31, 1996
Highland Premier Growth Equity Fund | Russell 1000 Growth Index (reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 15.26%
5 Years rr_AverageAnnualReturnYear05 3.12%
10 Years rr_AverageAnnualReturnYear10 7.52%
Since Inception rr_AverageAnnualReturnSinceInception 5.10%
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 31, 1996
[1] (as % of amount redeemed within two months or less after date of purchase)
[2] "Other Expenses" include indirect fees and expenses of Acquired Funds less than 0.01%. "Acquired Fund" means any investment company in which the Fund invests or has invested during the period.
[3] Class C shares are subject to a 1% contingent deferred sales charge (“CDSC”) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
XML 21 R9.htm IDEA: XBRL DOCUMENT v2.4.0.6
Label Element Value
Risk/Return: rr_RiskReturnAbstract  
Registrant Name dei_EntityRegistrantName HIGHLAND FUNDS II
Prospectus Date rr_ProspectusDate Feb. 01, 2013
Highland Alpha Trend Strategies Fund
 
Risk/Return: rr_RiskReturnAbstract  
Risk/Return [Heading] rr_RiskReturnHeading Highland Alpha Trend Strategies Fund

(formerly “Pyxis Alpha Trend Strategies Fund”)
Objective [Heading] rr_ObjectiveHeading Investment Objective
Objective, Primary [Text Block] rr_ObjectivePrimaryTextBlock To provide shareholders with above average total returns over a complete market cycle primarily through capital appreciation, while also attempting to preserve capital and mitigate risk through hedging activities.
Expense [Heading] rr_ExpenseHeading Fees and Expenses of the Fund
Expense Narrative [Text Block] rr_ExpenseNarrativeTextBlock The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and the “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees Caption [Text] rr_ShareholderFeesCaption Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Text] rr_OperatingExpensesCaption Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Portfolio Turnover [Heading] rr_PortfolioTurnoverHeading Portfolio Turnover
Portfolio Turnover [Text Block] rr_PortfolioTurnoverTextBlock The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the period of October 31, 2011 (the date the Fund commenced operations) through September 30, 2012, the Fund had a portfolio turnover rate of 2,624% (not annualized) of the average value of its portfolio.
Portfolio Turnover, Rate rr_PortfolioTurnoverRate 2624.00%
Expenses Deferred Charges [Text Block] rr_ExpensesDeferredChargesTextBlock The contingent deferred sales charge (“CDSC”) on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
Expense Breakpoint Discounts [Text] rr_ExpenseBreakpointDiscounts You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and the “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Expense Breakpoint, Minimum Investment Required [Amount] rr_ExpenseBreakpointMinimumInvestmentRequiredAmount 50,000
Expense Example [Heading] rr_ExpenseExampleHeading Expense Example
Expense Example Narrative [Text Block] rr_ExpenseExampleNarrativeTextBlock This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Strategy [Heading] rr_StrategyHeading Principal Investment Strategies
Strategy Narrative [Text Block] rr_StrategyNarrativeTextBlock The Fund seeks to achieve its investment objective by allocating assets among proprietary technically-based trend following strategies. The Fund takes long and short positions in broad index based securities (primarily domestically-listed foreign equity exchange-traded funds (“ETFs”)) based on long and intermediate term trends. The Fund also employs short term counter trend strategies that seek to hedge the trend following strategy and mitigate risk, while seeking to profit from short term market volatility. The strategies are intended to have low correlation with market benchmarks and with each other.

Anchor Capital Management Group, Inc. (“Anchor”), sub-adviser of the Fund, will allocate Fund assets among strategies that it believes offer the potential for attractive investment returns individually and that are expected to blend within the Fund’s portfolio so that it will have lower correlation and lower volatility relative to the market. In seeking to take advantage of increases or declines in the price of equity securities or indexes, the Fund may use stock baskets (groups of stocks that may be purchased through a single transaction) and exchange-traded notes (“ETNs”). In executing its counter trend strategy, the Fund may rotate investment positions among securities typically correlated to specific countries or regions. Security selection is determined through Anchor’s mathematical and statistical models; however, Anchor may alter such selection based on its assessment of current market conditions and other factors.

As part of its investment strategies, Anchor actively employs the use of cash and cash equivalents in an attempt to sidestep market declines and lower overall portfolio volatility. In particular, the Fund may invest all or substantially all of its assets in cash or cash equivalents when Anchor determines that market conditions so warrant. To the extent the Fund is invested heavily in cash, it may not achieve its investment objective and may experience negative returns.

The Fund may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.

The Fund may invest, directly and indirectly (through derivatives and other pooled investment vehicles (including ETFs)), in securities of issuers of any market capitalization. The Fund may invest without limitation in investments tied economically to any country in the world, including emerging countries. The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund is not intended to be a complete investment program.
Risk [Heading] rr_RiskHeading Principal Risks
Risk Narrative [Text Block] rr_RiskNarrativeTextBlock When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Equity Securities Risk is the risk that stock prices will fall over short or long periods of time. In addition, common stocks represent a share of ownership in a company, and rank after bonds and preferred stock in their claim on the company’s assets in the event of bankruptcy.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Short Sales Risk is the risk of loss associated with any appreciation on the price of a security borrowed in connection with a short sale. The Fund may engage in short sales that are not made “against-the-box,” which means that the Fund may sell short securities even when they are not actually owned or otherwise covered at all times during the period the short position is open. Short sales that are not made “against-the-box” theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase.

Derivatives Risk is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations.

Counterparty Risk is the risk that a counterparty (the other party to a transaction or an agreement or the party with whom the Fund executes transactions) to a transaction with the Fund may be unable or unwilling to make timely principal, interest or settlement payments, or otherwise honor its obligations.

Currency Risk is the risk that fluctuations in exchange rates will adversely affect the value of the Fund’s foreign currency holdings and investments denominated in foreign currencies.

Foreign Investment Risk is the risk that investing in foreign (non-U.S.) securities either directly or indirectly may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Emerging Markets Risk is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Hedging Risk is the risk that, although intended to limit or reduce investment risk, hedging strategies may also limit or reduce the potential for profit. There is no assurance that hedging strategies will be successful.

Illiquid and Restricted Securities Risk is the risk that the Adviser may not be able to sell illiquid or restricted securities at the price it would like or may have to sell them at a loss. Securities of non-U.S. issuers, and emerging markets securities in particular, are subject to illiquidity risk.

Management Risk is the risk that the Adviser or Anchor may be incorrect in its assessment of the intrinsic value of the securities the Fund holds which may result in a decline in the value of Fund shares and failure to achieve its investment objective. The Fund’s portfolio managers use quantitative analyses and/or models. Any imperfections or limitations in such analyses and models could affect the ability of the portfolio managers to implement strategies.

Mid-Cap Company Risk is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Small-Cap Company Risk is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in ETFs, closed-end funds or mutual funds (“Underlying Funds”) may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.

Exchange-Traded Notes Risk is the risk that ETNs in which the Fund may invest are subject to credit risk and the value of an ETN may vary and may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying commodities or other related markets, changes in the applicable interest rates, changes in the issuer’s credit rating, and economic, legal, political, or geographic events. ETNs are debt securities whose returns are linked to a particular index. The Fund will bear its proportionate share of any fees and expenses borne by the ETN.

Model Risk is the risk that the models used by the Fund to determine or guide investment decisions may not achieve the objectives of the Fund. Additionally, the portfolio manager of the Fund is able to adjust the models or, under certain adverse conditions, to deviate from the models employed by the Fund. Such adjustments or deviations may not achieve the objectives of the Fund and may produce lower returns and/or higher volatility compared to what the returns and volatility of the Fund would have been if the portfolio manager had not adjusted or deviated from the models.

Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund’s investment in fewer issuers may result in the Fund’s shares being more sensitive to the economic results of those issuers.

Portfolio Turnover Risk is the risk that the Fund’s high portfolio turnover will increase its transaction costs and may result in increased realization of net short-term capital gains (which are taxable to shareholders as ordinary income when distributed to them), higher taxable distributions and lower after-tax performance.

An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal.
Risk Lose Money [Text] rr_RiskLoseMoney When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund.
Risk Nondiversified Status [Text] rr_RiskNondiversifiedStatus Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund’s investment in fewer issuers may result in the Fund’s shares being more sensitive to the economic results of those issuers.
Risk Not Insured Depository Institution [Text] rr_RiskNotInsuredDepositoryInstitution An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Bar Chart and Performance Table [Heading] rr_BarChartAndPerformanceTableHeading Performance
Performance Narrative [Text Block] rr_PerformanceNarrativeTextBlock The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877- 665-1287.
Performance Information Illustrates Variability of Returns [Text] rr_PerformanceInformationIllustratesVariabilityOfReturns The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index.
Performance Availability Phone [Text] rr_PerformanceAvailabilityPhone 1-877- 665-1287
Performance Availability Website Address [Text] rr_PerformanceAvailabilityWebSiteAddress www.highlandfunds.com/Funds—Performance
Performance Past Does Not Indicate Future [Text] rr_PerformancePastDoesNotIndicateFuture As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future.
Bar Chart [Heading] rr_BarChartHeading Annual Total Returns
Bar Chart Narrative [Text Block] rr_BarChartNarrativeTextBlock The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart Does Not Reflect Sales Loads [Text] rr_BarChartDoesNotReflectSalesLoads The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below.
Bar Chart Closing [Text Block] rr_BarChartClosingTextBlock The highest calendar quarter total return for Class A Shares of the Fund was 7.04% for the quarter ended March 31, 2012 and the lowest calendar quarter total return was -3.29% for the quarter ended June 30, 2012. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 0.67%.
Performance Table Heading rr_PerformanceTableHeading Average Annual Total Returns
(For the periods ended December 31, 2012)
Performance Table Uses Highest Federal Rate rr_PerformanceTableUsesHighestFederalRate After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.
Performance Table Not Relevant to Tax Deferred rr_PerformanceTableNotRelevantToTaxDeferred Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Performance Table Explanation after Tax Higher rr_PerformanceTableExplanationAfterTaxHigher In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods.
Performance Table Narrative rr_PerformanceTableNarrativeTextBlock After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
Highland Alpha Trend Strategies Fund | Class A
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice 5.75%
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 2.00%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.35%
Other Expenses rr_OtherExpensesOverAssets 2.00%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.23%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 4.58%
1 Year rr_ExpenseExampleYear01 1,008
3 Years rr_ExpenseExampleYear03 1,878
5 Years rr_ExpenseExampleYear05 2,756
10 Years rr_ExpenseExampleYear10 4,983
2012 rr_AnnualReturn2012 0.67%
Year to Date Return, Label rr_YearToDateReturnLabel year-to-date total return
Bar Chart, Year to Date Return, Date rr_BarChartYearToDateReturnDate Dec. 31, 2012
Bar Chart, Year to Date Return rr_BarChartYearToDateReturn 0.67%
Highest Quarterly Return, Label rr_HighestQuarterlyReturnLabel highest calendar quarter total return
Highest Quarterly Return, Date rr_BarChartHighestQuarterlyReturnDate Mar. 31, 2012
Highest Quarterly Return rr_BarChartHighestQuarterlyReturn 7.04%
Lowest Quarterly Return, Label rr_LowestQuarterlyReturnLabel lowest calendar quarter total return
Lowest Quarterly Return, Date rr_BarChartLowestQuarterlyReturnDate Jun. 30, 2012
Lowest Quarterly Return rr_BarChartLowestQuarterlyReturn (3.29%)
1 Year rr_AverageAnnualReturnYear01 (5.07%)
Since Inception rr_AverageAnnualReturnSinceInception (11.95%)
Inception Date rr_AverageAnnualReturnInceptionDate Nov. 02, 2011
Highland Alpha Trend Strategies Fund | Class C
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 1.00% [2]
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 2.00%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 2.00%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.23%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 5.23%
1 Year rr_ExpenseExampleYear01 622
3 Years rr_ExpenseExampleYear03 1,564
5 Years rr_ExpenseExampleYear05 2,600
10 Years rr_ExpenseExampleYear10 5,170
1 Year rr_ExpenseExampleNoRedemptionYear01 522
3 Years rr_ExpenseExampleNoRedemptionYear03 1,564
5 Years rr_ExpenseExampleNoRedemptionYear05 2,600
10 Years rr_ExpenseExampleNoRedemptionYear10 5,170
Highland Alpha Trend Strategies Fund | Class R
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 2.00%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.50%
Other Expenses rr_OtherExpensesOverAssets 2.00%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.23%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 4.73%
1 Year rr_ExpenseExampleYear01 474
3 Years rr_ExpenseExampleYear03 1,425
5 Years rr_ExpenseExampleYear05 2,381
10 Years rr_ExpenseExampleYear10 4,794
1 Year rr_AverageAnnualReturnYear01 0.56%
Since Inception rr_AverageAnnualReturnSinceInception (7.29%)
Inception Date rr_AverageAnnualReturnInceptionDate Nov. 09, 2011
Highland Alpha Trend Strategies Fund | Class Y
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 2.00%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets none
Other Expenses rr_OtherExpensesOverAssets 2.00%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.23%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 4.23%
1 Year rr_ExpenseExampleYear01 425
3 Years rr_ExpenseExampleYear03 1,284
5 Years rr_ExpenseExampleYear05 2,156
10 Years rr_ExpenseExampleYear10 4,396
1 Year rr_AverageAnnualReturnYear01 1.00%
Since Inception rr_AverageAnnualReturnSinceInception (6.99%)
Inception Date rr_AverageAnnualReturnInceptionDate Nov. 01, 2011
Highland Alpha Trend Strategies Fund | Return After Taxes on Distributions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 (5.37%)
Since Inception rr_AverageAnnualReturnSinceInception (12.19%)
Inception Date rr_AverageAnnualReturnInceptionDate Nov. 02, 2011
Highland Alpha Trend Strategies Fund | Return After Taxes on Distributions and Redemptions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 (3.29%)
Since Inception rr_AverageAnnualReturnSinceInception (10.28%)
Inception Date rr_AverageAnnualReturnInceptionDate Nov. 02, 2011
Highland Alpha Trend Strategies Fund | MSCI EAFE Index (reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 17.32%
Since Inception rr_AverageAnnualReturnSinceInception 8.99%
Inception Date rr_AverageAnnualReturnInceptionDate Oct. 31, 2011
[1] (as % of amount redeemed within two months or less after date of purchase)
[2] The contingent deferred sales charge ("CDSC") on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
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Highland Global Select Equity
Highland Global Select Equity Fund

(formerly “Pyxis Global Equity Fund”)
Investment Objective
Long-term growth of capital.
Fees and Expenses of the Fund
The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees (fees paid directly from your investment)
Shareholder Fees Highland Global Select Equity
Class A
Class B
Class C
Class R
Class Y
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) 5.75% none none none none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) none none none none none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) none 4.00% 1.00% [1] none none
Redemption Fee [2] 2.00% 2.00% 2.00% 2.00% 2.00%
Exchange Fee (as a % of proceeds on exchanges within 90 days; currently suspended) 2.00% 2.00% 2.00% 2.00% 2.00%
[1] Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
[2] (as a % of redemption proceeds on redemptions within 90 days; currently suspended)
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Annual Fund Operating Expenses Highland Global Select Equity
Class A
Class B
Class C
Class R
Class Y
Management Fees 0.75% 0.75% 0.75% 0.75% 0.75%
Distribution and/or Service (12b-1) Fees 0.25% 1.00% 1.00% 0.50% none
Other Expenses [1] 1.24% 1.24% 1.24% 1.24% 1.24%
Acquired Fund Fees and Expenses 0.01% 0.01% 0.01% 0.01% 0.01%
Total Annual Fund Operating Expenses 2.25% 3.00% 3.00% 2.50% 2.00%
[1] "Other Expenses" include indirect fees and expenses of Acquired Funds less than 0.01%. "Acquired Fund" means any investment company in which the Fund invests or has invested during the period.
Expense Example
This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Expense Example Highland Global Select Equity (USD $)
1 Year
3 Years
5 Years
10 Years
Class A
790 1,238 1,711 3,011
Class B
703 1,127 1,577 2,982
Class C
403 927 1,577 3,318
Class R
253 779 1,331 2,836
Class Y
203 627 1,078 2,327
Expense Example, No Redemption Highland Global Select Equity (USD $)
1 Year
3 Years
5 Years
10 Years
Class B
303 927 1,577 2,982
Class C
303 927 1,577 3,318
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 94% of the average value of its portfolio.
Principal Investment Strategies
The Fund seeks to achieve its investment objective by investing at least 80% of its net assets under normal circumstances in equity securities, such as common and preferred stocks, plus borrowings for investment purposes.

Highland Capital Management Fund Advisors, L.P. (“HCMFA”), the Fund’s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (“GEAM”), the Fund’s sub-adviser. The Fund invests in companies in both developed and emerging market countries, including the United States, but will invest at least 25% of its total assets in non-U.S. issuers. The portfolio manager focuses on companies that are expected to grow faster than their relevant peers/markets and whose security prices do not fully reflect their potential for growth. When valuations are low, the portfolio managers may also invest in companies that are not expected to grow faster than their relevant peers/markets. Under normal circumstances, the Fund’s assets are invested primarily in countries included in the Morgan Stanley Capital InternationalSM (MSCI®) All Country World Index (“MSCI® World Index”) and in no fewer than three different countries (not including the United States). As of December 31, 2012, U.S. companies represented 45% of the MSCI® All Country World Index, but the portion of the Fund’s portfolio represented by U.S. companies may vary materially from that level. Stock selection is key to the performance of the Fund.

The portfolio managers seek to identify securities of growth companies with the following characteristics:
  •    low prices relative to their long-term cash earnings potential
  •    potential for significant improvement in the company’s business
  •    financial strength (favorable debt ratios and other financial characteristics)
  •    sufficient liquidity
  •     emerging markets exposure
The portfolio manager may consider selling a security when one or more of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified. The Fund may invest in securities of issuers of any market capitalization and in any industry or sector.

The Fund also may invest in pooled investment vehicles, including ETFs, and it may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.

The Fund may invest to a lesser extent in debt securities of any kind, including debt securities of varying maturities, debt securities paying a fixed or fluctuating rate of interest, inflation-indexed bonds, structured notes, loan assignments, loan participations, debt securities, convertible into equity securities and securities issued or guaranteed by the U.S. Government.

Although the Fund is classified as a “diversified” fund under the Investment Company Act of 1940, as amended (the “1940 Act”), the Fund will typically invest in approximately 30-50 different issuers, resulting in a more concentrated portfolio than a more widely diversified Fund. The Fund is not intended to be a complete investment program.
Principal Risks
When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Foreign Investment Risk is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S., and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.

Growth Investing Risk is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company’s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.

Focused Investment Risk is the risk of investing in securities of a limited number of issuers in an effort to achieve a potentially greater investment return than a fund that invests in a larger number of issuers. While the Fund is classified as a “diversified” fund under the 1940 Act, the limited number of issuers in which the Fund will invest means that price movements of a single issuer’s securities will possibly have a greater impact on the Fund’s net asset value. As a result, the Fund’s value may fluctuate more than that of a more widely diversified fund.

Mid-Cap Company Risk is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Emerging Markets Risk is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets.

Credit Risk is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Performance
The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandsfunds.com/Funds—Performance or by calling 1-877-665-1287.
Calendar Year Total Returns
The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart
The highest calendar quarter total return for Class A Shares of the Fund was 19.72% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -24.38% for the quarter ended December 31, 2008. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 16.28%.
Average Annual Total Returns
(For the periods ended December 31, 2012)
Average Annual Total Returns Highland Global Select Equity
1 Year
5 Years
10 Years
Since Inception
Inception Date
Class A
9.60% (5.50%) 5.68% 5.42% Feb. 22, 1993
Class A Return After Taxes on Distributions
9.60% (5.73%) 5.35% 4.59% Feb. 22, 1993
Class A Return After Taxes on Distributions and Redemptions
6.24% (4.65%) 4.99% 4.50% Feb. 22, 1993
Class B
11.38% (5.09%) 5.84% 4.61% Dec. 22, 1993
Class C
14.38% (5.08%) 5.61% 1.50% Sep. 30, 1999
Class R
16.14%       (2.79%) Jan. 29, 2008
Class Y
15.87% (4.13%) 6.59% 5.41% Nov. 29, 1993
MCSI® All Country World Index (Fund Benchmark) (reflects no deduction for fees, expenses or taxes)
16.13% (1.16%) 8.11%    Feb. 28, 1993
MCSI® World Index (Prior Fund Benchmark) (reflects no deduction for fees, expenses or taxes)
[1] 15.83% (1.18%) 7.51% 6.80% Feb. 28, 1993
[1] Effective February 1, 2012, the Fund changed its benchmark from MSCI World Index to the MSCI All Country World Index because the Adviser believes that the MSCI All Country World Index is a more appropriate comparative, broad-based market index for the Fund.
After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.

XML 25 R31.htm IDEA: XBRL DOCUMENT v2.4.0.6
Label Element Value
Risk/Return: rr_RiskReturnAbstract  
Registrant Name dei_EntityRegistrantName HIGHLAND FUNDS II
Prospectus Date rr_ProspectusDate Feb. 01, 2013
Highland Core America Equity Fund
 
Risk/Return: rr_RiskReturnAbstract  
Risk/Return [Heading] rr_RiskReturnHeading Highland Core America Equity Fund

(formerly “Pyxis Core America Equity Fund”)
Objective [Heading] rr_ObjectiveHeading Investment Objective
Objective, Primary [Text Block] rr_ObjectivePrimaryTextBlock Long-term growth of capital and future income. (Future income means the ability to pay dividends in the future.)
Expense [Heading] rr_ExpenseHeading Fees and Expenses of the Fund
Expense Narrative [Text Block] rr_ExpenseNarrativeTextBlock The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in the Fund or in other Highland Funds II alternative funds, equity funds and/or asset allocation funds or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees Caption [Text] rr_ShareholderFeesCaption Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Text] rr_OperatingExpensesCaption Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Portfolio Turnover [Heading] rr_PortfolioTurnoverHeading Portfolio Turnover
Portfolio Turnover [Text Block] rr_PortfolioTurnoverTextBlock The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 47% of the average value of its portfolio.
Portfolio Turnover, Rate rr_PortfolioTurnoverRate 47.00%
Expenses Deferred Charges [Text Block] rr_ExpensesDeferredChargesTextBlock Class C shares are subject to a 1% contingent deferred sales charge (“CDSC”) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
Expense Breakpoint Discounts [Text] rr_ExpenseBreakpointDiscounts You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in the Fund or in other Highland Funds II alternative funds, equity funds and/or asset allocation funds or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Expense Breakpoint, Minimum Investment Required [Amount] rr_ExpenseBreakpointMinimumInvestmentRequiredAmount 50,000
Expense Example [Heading] rr_ExpenseExampleHeading Expense Example
Expense Example Narrative [Text Block] rr_ExpenseExampleNarrativeTextBlock This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Strategy [Heading] rr_StrategyHeading Principal Investment Strategies
Strategy Narrative [Text Block] rr_StrategyNarrativeTextBlock The Fund seeks to achieve its investment objectives by investing at least 80% of its net assets under normal circumstances in domestic equity securities, such as common and preferred stocks, plus borrowing for investment purposes.

Highland Capital Management Fund Advisors, L.P. (“HCMFA”), the Fund’s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (“GEAM”), the Fund’s sub-adviser. The Fund invests primarily in U.S. companies that the portfolio managers believe are undervalued by the market but have solid growth prospects. The portfolio managers employ a relative value approach to identify companies across all economic sectors which are undervalued relative to the market, their peers, their historical valuation or their growth rate. This approach results in a portfolio more broadly diversified across economic sectors and contrasts with other investing approaches that focus on low absolute valuations and often result in a portfolio concentrated in fewer sectors. A company may be undervalued for reasons such as market overreaction to recent company, industry or economic events. In seeking to satisfy the Fund’s investment objective with respect to future income, the portfolio managers will also consider companies that have the potential to pay dividends in the future. Stock selection is key to the performance of the Fund.

The portfolio managers seek to identify securities of companies with characteristics such as:
  • low valuations in relation to their peers and the overall market
  • the potential for long-term earnings growth
  • above-average free cash flow yields
  • high quality management focused on generating shareholder value
  • financial strength (favorable debt ratios and other financial characteristics)
  • attractive upside potential and limited downside risk
  • a catalyst such as changing industry fundamentals, introduction of a new product, a company restructuring, or a change in management
The portfolio managers may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.

The Fund also may invest to a lesser extent in securities of foreign (non-U.S.) issuers and debt securities. The Fund may also invest in exchange-traded funds (“ETFs”), and it may use derivatives primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.
Risk [Heading] rr_RiskHeading Principal Risks
Risk Narrative [Text Block] rr_RiskNarrativeTextBlock When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Value Investing Risk is the risk of investing in undervalued stocks that may not realize their perceived value for extended periods of time or may never realize their perceived value. Value stocks may respond differently to market and other developments than other types of stocks. Value-oriented funds will typically underperform when growth investing is in favor.

Foreign Investment Risk is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.

Credit Risk is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Risk Lose Money [Text] rr_RiskLoseMoney When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund.
Risk Not Insured Depository Institution [Text] rr_RiskNotInsuredDepositoryInstitution An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Bar Chart and Performance Table [Heading] rr_BarChartAndPerformanceTableHeading Performance
Performance Narrative [Text Block] rr_PerformanceNarrativeTextBlock The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877-665-1287.
Performance Information Illustrates Variability of Returns [Text] rr_PerformanceInformationIllustratesVariabilityOfReturns The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index.
Performance Availability Phone [Text] rr_PerformanceAvailabilityPhone 1-877-665-1287
Performance Availability Website Address [Text] rr_PerformanceAvailabilityWebSiteAddress www.highlandfunds.com/Funds—Performance
Performance Past Does Not Indicate Future [Text] rr_PerformancePastDoesNotIndicateFuture As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future.
Bar Chart [Heading] rr_BarChartHeading Calendar Year Total Returns
Bar Chart Narrative [Text Block] rr_BarChartNarrativeTextBlock The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart Does Not Reflect Sales Loads [Text] rr_BarChartDoesNotReflectSalesLoads The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below.
Bar Chart Closing [Text Block] rr_BarChartClosingTextBlock The highest calendar quarter total return for Class A Shares of the Fund was 16.72% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -21.47% for the quarter ended December 31, 2008. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 13.21%.
Performance Table Heading rr_PerformanceTableHeading Average Annual Total Returns
(For the periods ended December 31, 2012)
Performance Table Uses Highest Federal Rate rr_PerformanceTableUsesHighestFederalRate After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.
Performance Table Not Relevant to Tax Deferred rr_PerformanceTableNotRelevantToTaxDeferred Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For Example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Performance Table One Class of after Tax Shown [Text] rr_PerformanceTableOneClassOfAfterTaxShown After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary.
Performance Table Explanation after Tax Higher rr_PerformanceTableExplanationAfterTaxHigher In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods.
Performance Table Narrative rr_PerformanceTableNarrativeTextBlock After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For Example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
Highland Core America Equity Fund | Class A
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice 5.75%
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.40%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.25%
Other Expenses rr_OtherExpensesOverAssets 0.61% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.27%
1 Year rr_ExpenseExampleYear01 697
3 Years rr_ExpenseExampleYear03 955
5 Years rr_ExpenseExampleYear05 1,232
10 Years rr_ExpenseExampleYear10 2,021
2003 rr_AnnualReturn2003 23.65%
2004 rr_AnnualReturn2004 9.07%
2005 rr_AnnualReturn2005 3.69%
2006 rr_AnnualReturn2006 17.31%
2007 rr_AnnualReturn2007 9.65%
2008 rr_AnnualReturn2008 (33.22%)
2009 rr_AnnualReturn2009 25.48%
2010 rr_AnnualReturn2010 11.17%
2011 rr_AnnualReturn2011 (1.45%)
2012 rr_AnnualReturn2012 13.21%
Year to Date Return, Label rr_YearToDateReturnLabel year-to-date total return
Bar Chart, Year to Date Return, Date rr_BarChartYearToDateReturnDate Dec. 31, 2012
Bar Chart, Year to Date Return rr_BarChartYearToDateReturn 13.21%
Highest Quarterly Return, Label rr_HighestQuarterlyReturnLabel highest calendar quarter total return
Highest Quarterly Return, Date rr_BarChartHighestQuarterlyReturnDate Jun. 30, 2009
Highest Quarterly Return rr_BarChartHighestQuarterlyReturn 16.72%
Lowest Quarterly Return, Label rr_LowestQuarterlyReturnLabel lowest calendar quarter total return
Lowest Quarterly Return, Date rr_BarChartLowestQuarterlyReturnDate Dec. 31, 2008
Lowest Quarterly Return rr_BarChartLowestQuarterlyReturn (21.47%)
1 Year rr_AverageAnnualReturnYear01 6.72%
5 Years rr_AverageAnnualReturnYear05 (0.42%)
10 Years rr_AverageAnnualReturnYear10 5.83%
Since Inception rr_AverageAnnualReturnSinceInception 7.56%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 08, 1993
Highland Core America Equity Fund | Class B
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 4.00%
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.40%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 0.61% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.02%
1 Year rr_ExpenseExampleYear01 605
3 Years rr_ExpenseExampleYear03 834
5 Years rr_ExpenseExampleYear05 1,088
10 Years rr_ExpenseExampleYear10 1,978
1 Year rr_ExpenseExampleNoRedemptionYear01 205
3 Years rr_ExpenseExampleNoRedemptionYear03 634
5 Years rr_ExpenseExampleNoRedemptionYear05 1,088
10 Years rr_ExpenseExampleNoRedemptionYear10 1,978
1 Year rr_AverageAnnualReturnYear01 8.32%
5 Years rr_AverageAnnualReturnYear05 0.02%
10 Years rr_AverageAnnualReturnYear10 5.81%
Since Inception rr_AverageAnnualReturnSinceInception 7.59%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 08, 1993
Highland Core America Equity Fund | Class C
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 1.00% [3]
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.40%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 0.61% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.02%
1 Year rr_ExpenseExampleYear01 305
3 Years rr_ExpenseExampleYear03 634
5 Years rr_ExpenseExampleYear05 1,088
10 Years rr_ExpenseExampleYear10 2,348
1 Year rr_ExpenseExampleNoRedemptionYear01 205
3 Years rr_ExpenseExampleNoRedemptionYear03 634
5 Years rr_ExpenseExampleNoRedemptionYear05 1,088
10 Years rr_ExpenseExampleNoRedemptionYear10 2,348
1 Year rr_AverageAnnualReturnYear01 11.28%
5 Years rr_AverageAnnualReturnYear05 0.02%
10 Years rr_AverageAnnualReturnYear10 5.66%
Since Inception rr_AverageAnnualReturnSinceInception 2.26%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 30, 1999
Highland Core America Equity Fund | Class R
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.40%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.50%
Other Expenses rr_OtherExpensesOverAssets 0.61% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.52%
1 Year rr_ExpenseExampleYear01 155
3 Years rr_ExpenseExampleYear03 480
5 Years rr_ExpenseExampleYear05 829
10 Years rr_ExpenseExampleYear10 1,813
1 Year rr_AverageAnnualReturnYear01 13.17%
5 Years rr_AverageAnnualReturnYear05   
10 Years rr_AverageAnnualReturnYear10   
Since Inception rr_AverageAnnualReturnSinceInception 2.21%
Inception Date rr_AverageAnnualReturnInceptionDate Jan. 29, 2008
Highland Core America Equity Fund | Class Y
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.40%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets none
Other Expenses rr_OtherExpensesOverAssets 0.61% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.02%
1 Year rr_ExpenseExampleYear01 104
3 Years rr_ExpenseExampleYear03 325
5 Years rr_ExpenseExampleYear05 563
10 Years rr_ExpenseExampleYear10 1,248
1 Year rr_AverageAnnualReturnYear01 13.51%
5 Years rr_AverageAnnualReturnYear05 1.02%
10 Years rr_AverageAnnualReturnYear10 6.81%
Since Inception rr_AverageAnnualReturnSinceInception 5.25%
Inception Date rr_AverageAnnualReturnInceptionDate Jan. 05, 1998
Highland Core America Equity Fund | Return After Taxes on Distributions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 6.23%
5 Years rr_AverageAnnualReturnYear05 (0.68%)
10 Years rr_AverageAnnualReturnYear10 5.05%
Since Inception rr_AverageAnnualReturnSinceInception 6.16%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 08, 1993
Highland Core America Equity Fund | Return After Taxes on Distributions and Redemptions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 5.01%
5 Years rr_AverageAnnualReturnYear05 (0.40%)
10 Years rr_AverageAnnualReturnYear10 5.02%
Since Inception rr_AverageAnnualReturnSinceInception 6.11%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 08, 1993
Highland Core America Equity Fund | S&P 500® Index (reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 15.99%
5 Years rr_AverageAnnualReturnYear05 1.66%
10 Years rr_AverageAnnualReturnYear10 7.10%
Since Inception rr_AverageAnnualReturnSinceInception 8.06%
Inception Date rr_AverageAnnualReturnInceptionDate Aug. 31, 1993
[1] (as % of amount redeemed within two months or less after date of purchase)
[2] "Other Expenses" include indirect fees and expenses of Acquired Funds less than 0.01%. "Acquired Fund" means any investment company in which the Fund invests or has invested during the period.
[3] Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
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Highland Dividend Equity Fund
Highland Dividend Equity Fund

(formerly “Pyxis Dividend Equity Fund”)
Investment Objective
To provide above average dividend yields with the potential for long-term capital appreciation.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and the “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees (fees paid directly from your investment)
Shareholder Fees Highland Dividend Equity Fund
Class A
Class C
Class R
Class Y
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) 5.75% none none none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) none none none none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) none 1.00% [1] none none
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) 2.00% 2.00% 2.00% 2.00%
Redemption Fee [2] 2.00% 2.00% 2.00% 2.00%
[1] The contingent deferred sales charge ("CDSC") on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
[2] (as % of amount redeemed within two months or less after date of purchase)
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Annual Fund Operating Expenses Highland Dividend Equity Fund
Class A
Class C
Class R
Class Y
Management Fees 1.20% 1.20% 1.20% 1.20%
Distribution and Service (12b-1) Fees 0.35% 1.00% 0.50% none
Other Expenses [1] 1.05% 1.05% 1.05% 1.05%
Acquired Fund Fees and Expenses 0.02% 0.02% 0.02% 0.02%
Total Annual Fund Operating Expenses 2.62% 3.27% 2.77% 2.27%
Expense Reimbursement [2] (1.25%) (1.25%) (1.25%) (1.25%)
Total Annual Fund Operating Expenses [3] 1.37% 2.02% 1.52% 1.02%
[1] "Other Expenses" are based on estimated amounts for the current fiscal year.
[2] Highland Capital Management Fund Advisors, L.P. (the "Adviser") has contractually agreed to limit the total annual operating expenses (exclusive of fees paid by the Fund pursuant to its distribution plan under Rule 12b-1 under the Investment Company Act of 1940, as amended, taxes, brokerage commissions and other transaction costs, acquired fund fees and expenses and extraordinary expenses) of the Fund to 1.00% of average daily net assets attributable to any class of the Fund. The Expense Cap will continue through at least January 31, 2014, and may not be terminated prior to this date without the action or consent of the Fund's Board of Trustees. The Trust, on behalf of the Fund, has contractually agreed to pay the Adviser all amounts previously paid, waived or reimbursed by the Adviser with respect to the Fund pursuant to the Expense Cap, provided that the amount of such additional payment in any year, together with all other expenses of the Fund, in the aggregate, would not cause the Fund's total annual operating expenses in any such year to exceed the amount of the Expense Cap, and provided further that no additional payments by the Trust will be made with respect to amounts paid, waived or reimbursed by the Adviser more than 36 months after the date the Fund accrues a liability with respect to such amounts paid, waived or reimbursed by the Adviser.
[3] After Expense Reimbursement
Expense Example
This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Expense Example Highland Dividend Equity Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class A
792 1,244 1,720 3,030
Class C
395 904 1,538 3,242
Class R
245 755 1,291 2,756
Class Y
195 603 1,037 2,243
Expense Example, No Redemption (USD $)
1 Year
3 Years
5 Years
10 Years
Highland Dividend Equity Fund Class C
295 904 1,538 3,242
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the period November 14, 2011 (the date the Fund commenced operations) through September 30, 2012, the Fund had a portfolio turnover rate of 6% (not annualized) of the average value of its portfolio.
Principal Investment Strategies
The Fund seeks to achieve its investment objective under normal market conditions by investing, directly and indirectly (e.g., through investments in derivatives or other pooled investment vehicles), at least 80% of its net assets, plus any borrowings for investment purposes, in equity investments that pay or expect to pay dividends. The term “equity investments” refers to direct and indirect investments in common stocks, preferred stocks and convertible securities. The Fund may invest without limitation in equity investments tied economically to any country in the world, including emerging countries.

In addition to dividend-paying equity investments, the Fund may invest up to 20% of its assets, plus any borrowings for investment purposes, in a variety of other instruments including fixed income securities (including “junk bonds”), exchange-traded funds (“ETFs”), exchange-traded notes (“ETNs”), and warrants. The Fund may use derivatives, primarily swaps, options and futures, to an unlimited extent to hedge various investments for risk management and for speculative purposes. The Fund’s investments in derivatives and other types of pooled investment vehicles that invest in equity investments that pay or expect to pay dividends are intended to provide substantially similar economic exposure to direct investments in such dividend-paying equity investments.

The Fund seeks to invest in high-quality, income generating stocks that offer attractive valuations with below-market risk profiles. The Fund may invest in securities of any market capitalization.

In selecting investments for the Fund, Brookmont Capital Management, LLC (“Brookmont”), sub-adviser of the Fund, reviews macroeconomic data to determine the allocation of investments among various economic sectors. Brookmont seeks to avoid making large sector bets or focusing on individual issuers. Instead, investments are made in securities in all ten economic sectors defined by the S&P 500 Index. Once the sector allocations are determined, Brookmont reviews the investment universe and selects investments based on factors such as dividend yield, the issuer’s debt level, projected cash flow, history of dividend increases, and earnings potential.

The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund is not intended to be a complete investment program.
Principal Risks
When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Dividend-Paying Stock Risk is the risk that companies that have paid regular dividends to shareholders may decrease or eliminate dividend payments in the future. A decrease in dividend payments by an issuer may result in a decrease in the value of the security held by the Fund or the Fund receiving less income. Additionally, a fund pursuing a dividend-oriented investment strategy may at times underperform other funds that invest more broadly or that have different investment styles.

Equity Securities Risk is the risk that stock prices will fall over short or long periods of time. In addition, common stocks represent a share of ownership in a company, and rank after bonds and preferred stock in their claim on the company’s assets in the event of bankruptcy. The value of equity securities paying dividends at high rates may be more sensitive to changes in interest rates than are other equity securities.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Mid-Cap Company Risk is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Small-Cap Company Risk is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in ETFs, closed-end funds or mutual funds (“Underlying Funds”) may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.

Foreign Investment Risk is the risk that investing in foreign (non-U.S.) securities either directly or indirectly may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that fluctuations in exchange rates will adversely affect the value of the Funds foreign currency holdings and investments denominated in foreign currencies.

Derivatives Risk is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Exchange-Traded Notes Risk is the risk that ETNs in which the Fund may invest are subject to credit risk and the value of an ETN may vary and may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying commodities or other related markets, changes in the applicable interest rates, changes in the issuer’s credit rating, and economic, legal, political, or geographic events. ETNs are debt securities whose returns are linked to a particular index. The Fund will bear its proportionate share of any fees and expenses borne by the ETN.

Counterparty Risk is the risk that a counterparty (the other party to a transaction or an agreement or the party with whom the Fund executes transactions) to a transaction with the Fund may be unable or unwilling to make timely principal, interest or settlement payments, or otherwise honor its obligations.

Hedging Risk is the risk that, although intended to limit or reduce investment risk, hedging strategies may also limit or reduce the potential for profit. There is no assurance that hedging strategies will be successful.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

High Yield Securities Risk is the risk that high yield securities or unrated securities of similar credit quality (commonly known as “junk bonds”) are more likely to default than high rated securities. High Yield securities are regarded as speculative with respect to the issuer’s capacity to pay interest and repay principal. The market value of these securities is more sensitive to corporate developments and economic conditions and can be volatile. Market conditions can diminish liquidity and make accurate valuations difficult to obtain.

Management Risk is the risk that the Adviser or Brookmont may be incorrect in its assessment of the intrinsic value of the securities the Fund holds which may result in a decline in the value of Fund shares and failure to achieve its investment objective. The Fund’s portfolio manager uses qualitative analyses and/or models. Any imperfections or limitations in such analyses and models could affect the ability of the portfolio managers to implement strategies.

Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund’s investment in fewer issuers may result in the Fund’s shares being more sensitive to the economic results of those issuers.

Portfolio Turnover Risk is the risk that the Fund’s high portfolio turnover will increase its transaction costs and may result in increased realization of net short-term capital gains (which are taxable to shareholders as ordinary income when distributed to them), higher taxable distributions and lower after-tax performance.

An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal.
Performance
The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877- 665-1287.
Annual Total Returns
The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart
The highest calendar quarter total return for Class A Shares of the Fund was 6.74% for the quarter ended March 31, 2012 and the lowest calendar quarter total return was -0.90% for the quarter ended June 30, 2012. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 12.27%.
Average Annual Total Returns
(For the periods ended December 31, 2012)
Average Annual Total Returns Highland Dividend Equity Fund
1 Year
Since Inception
Inception Date
Class A
5.82% 13.22% Nov. 23, 2011
Class A Return After Taxes on Distributions
5.48% 12.88% Nov. 23, 2011
Class A Return After Taxes on Distributions and Redemptions
4.21% 11.23% Nov. 23, 2011
Class C
10.53% 13.20% Nov. 15, 2011
Class Y
12.68% 14.39% Nov. 14, 2011
Russell 1000 Value Index (reflects no deduction for fees, expenses or taxes)
17.51% 18.22% Dec. 01, 2011
After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
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Highland Premier Growth Equity Fund
Highland Premier Growth Equity Fund

(formerly “Pyxis Premier Growth Equity Fund”)
Investment Objective
Long-term growth of capital and future income rather than current income.
Fees and Expenses of the Fund
The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 the Fund’s Statement of Additional Information.
Shareholder Fees (fees paid directly from your investment)
Shareholder Fees Highland Premier Growth Equity Fund
Class A
Class B
Class C
Class R
Class Y
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) 5.75% none none none none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) none none none none none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) none 4.00% 1.00% [1] none none
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) none none none none none
Redemption Fee [2] none none none none none
[1] Class C shares are subject to a 1% contingent deferred sales charge (“CDSC”) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
[2] (as % of amount redeemed within two months or less after date of purchase)
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Annual Fund Operating Expenses Highland Premier Growth Equity Fund
Class A
Class B
Class C
Class R
Class Y
Management Fees 0.60% 0.60% 0.60% 0.60% 0.60%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00% 0.50% none
Other Expenses [1] 0.25% 0.25% 0.25% 0.25% 0.25%
Acquired Fund Fees and Expenses 0.01% 0.01% 0.01% 0.01% 0.01%
Total Annual Fund Operating Expenses 1.11% 1.86% 1.86% 1.36% 0.86%
[1] "Other Expenses" include indirect fees and expenses of Acquired Funds less than 0.01%. "Acquired Fund" means any investment company in which the Fund invests or has invested during the period.
Expense Example
This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Expense Example Highland Premier Growth Equity Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class A
682 908 1,151 1,849
Class B
589 785 1,006 1,804
Class C
289 585 1,006 2,180
Class R
138 431 745 1,635
Class Y
88 274 477 1,061
Expense Example, No Redemption Highland Premier Growth Equity Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class B
189 585 1,006 1,804
Class C
189 585 1,006 2,180
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 16% of the average value of its portfolio.
Principal Investment Strategies
The Fund seeks to achieve its investment objectives by investing at least 80% of its net assets under normal circumstances in equity securities, such as common and preferred stocks, plus borrowing for investment purposes.

Highland Capital Management Fund Advisors, L.P. (“HCMFA”), the Fund’s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (“GEAM”), the Fund’s sub-adviser. The Fund invests primarily in a limited number of large- and medium-sized companies (meaning companies with a market capitalization of $2 billion or more) that the portfolio manager believes have above-average growth histories and/or growth potential. The portfolio manager selects equity securities from a number of industries based on the merits of individual companies. In seeking to satisfy the Fund’s investment objective with respect to future income, the portfolio manager will also consider companies that have the potential to pay dividends in the future. Stock selection is key to the performance of the Fund.

The portfolio manager seeks to identify securities of companies with characteristics such as:
  • above-average annual growth rates
  • financial strength (favorable debt ratios and other financial characteristics)
  • leadership in their respective industries
  • high quality management focused on generating shareholder value
The portfolio manager may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.

The Fund also may invest to a lesser extent in securities of foreign (non-U.S.) issuers and debt securities. The Fund may also invest in exchange-traded funds (“ETFs”), and it may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.
Principal Risks
When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Growth Investing Risk is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company’s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.

Mid-Cap Company Risk is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Foreign Investment Risk is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.

Credit Risk is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Performance
The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of two broad-based securities market indices. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877-665-1287.
Calendar Year Total Returns
The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart
The highest calendar quarter total return for Class A Shares of the Fund was 20.15% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -27.30% for the quarter ended December 31, 2008. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 20.22%.
Average Annual Total Returns
(For the periods ended December 31, 2012)
Average Annual Total Returns Highland Premier Growth Equity Fund
1 Year
5 Years
10 Years
Since Inception
Inception Date
Class A
13.29% 2.14% 5.80% 6.52% Dec. 31, 1996
Class A Return After Taxes on Distributions
13.20% 1.86% 5.24% 5.92% Dec. 31, 1996
Class A Return After Taxes on Distributions and Redemptions
8.76% 1.72% 4.97% 5.64% Dec. 31, 1996
Class B
15.35% 2.58% 5.95% 6.62% Dec. 31, 1996
Class C
18.32% 2.58% 5.63% 2.43% Sep. 30, 1999
Class R
19.95%       4.65% Jan. 29, 2008
Class Y
20.56% 3.61% 6.69% 7.19% Dec. 31, 1996
S&P 500® Index (reflects no deduction for fees, expenses or taxes)
15.99% 1.66% 7.10% 6.08% Dec. 31, 1996
Russell 1000 Growth Index (reflects no deduction for fees, expenses or taxes)
15.26% 3.12% 7.52% 5.10% Dec. 31, 1996
After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
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Highland Fixed Income Fund
Highland Fixed Income Fund

(formerly “Pyxis Fixed Income Fund”)
Investment Objective
Maximum income consistent with prudent investment management and the preservation of capital.
Fees and Expenses of the Fund
The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees (fees paid directly from your investment)
Shareholder Fees Highland Fixed Income Fund
Class A
Class B
Class C
Class R
Class Y
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) 4.25% none none none none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) none none none none none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) none 3.00% 1.00% [1] none none
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) none none none none none
Redemption Fee [2] none none none none none
[1] Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
[2] (as % of amount redeemed within two months or less after date of purchase)
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Annual Fund Operating Expenses Highland Fixed Income Fund
Class A
Class B
Class C
Class R
Class Y
Management Fees 0.30% 0.30% 0.30% 0.30% 0.30%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00% 0.50% none
Other Expenses 0.54% 0.54% 0.54% 0.54% 0.54%
Acquired Fund Fees and Expenses 0.03% 0.03% 0.03% 0.03% 0.03%
Total Annual Fund Operating Expenses 1.12% 1.87% 1.87% 1.37% 0.87%
Expense Example
This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Expense Example Highland Fixed Income Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class A
534 766 1,016 1,730
Class B
490 788 1,011 1,815
Class C
290 588 1,011 2,190
Class R
139 434 750 1,646
Class Y
89 278 482 1,073
Expense Example, No Redemption Highland Fixed Income Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class B
190 588 1,011 1,815
Class C
190 588 1,011 2,190
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 350% of the average value of its portfolio.
Principal Investment Strategies
The Fund seeks to achieve its investment objective by investing at least 80% of its net assets under normal circumstances in debt securities.

Highland Capital Management Fund Advisors, L.P. (“HCMFA”), the Fund’s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (“GEAM”), the Fund’s sub-adviser. The Fund invests primarily in a variety of investment-grade debt securities, such as mortgage-backed securities, corporate bonds, U.S. Government securities and money market instruments. The Fund normally has a weighted average maturity of approximately five to ten years, but is subject to no limitation with respect to the maturities of the instruments in which it may invest.

U.S. Government securities are securities that are issued or guaranteed as to principal and interest by the U.S. Government or one of its agencies or instrumentalities. Some U.S. Government securities are backed by the full faith and credit of the U.S. Government, such as U.S. Treasury bills and notes and obligations of the Government National Mortgage Association (Ginnie Mae). Other U.S. Government securities are backed by the issuer’s right to borrow from the U.S. Treasury, such as Federal National Mortgage Association (Fannie Mae) securities, while some are backed only by the credit of the issuing organization, such as obligations of the Federal Home Loan Mortgage Corporation (Freddie Mac).

The portfolio managers seek to identify debt securities with characteristics such as:
  • attractive yields and prices
  • the potential for capital appreciation
  • reasonable credit quality
The portfolio managers may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.

The Fund also may invest to a lesser extent in asset-backed securities, high yield securities (also known as “junk bonds”), foreign (non-U.S.) debt securities and equity securities, such as exchange-traded funds (“ETFs”).

The portfolio managers may also invest in various types of derivatives to manage interest rate risk (also known as duration) and to manage exposure to credit quality.
Principal Risks
When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Credit Risk is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Prepayment Risk is the risk that during periods of falling interest rates, issuers of debt securities may repay higher rate securities before their maturity dates. This may cause the Fund to lose potential price appreciation and to be forced to reinvest the unanticipated proceeds at lower interest rates.

Mortgaged-Backed Securities Risk is the risk of investing in mortgaged-backed securities, and includes interest rate risk, prepayment risk and the risk that the Fund could lose money if there are defaults on the mortgage loans underlying these securities.

Foreign Investment Risk is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.

High Yield Securities Risk is the risk that high yield securities or unrated securities of similar credit quality (commonly known as “junk bonds”) are more likely to default than higher rated securities. The market value of these securities is more sensitive to corporate developments and economic conditions and can be volatile. Market conditions can diminish liquidity and make accurate valuations difficult to obtain.

Asset-Backed Securities Risk is the risk of investing in asset-backed securities, and includes interest rate risk, prepayment risk and the risk that the Fund could lose money if there are defaults on the loans underlying these securities.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Performance
The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877-665-1287.
Calendar Year Total Returns
The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart
The highest calendar quarter total return for Class A Shares of the Fund was 4.37% for the quarter ended September 30, 2009 and the lowest calendar quarter total return was -2.56% for the quarter ended June 30, 2004. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 4.58%.
Average Annual Total Returns
(For the periods ended December 31, 2012)
Average Annual Total Returns Highland Fixed Income Fund
1 Year
5 Years
10 Years
Since Inception
Inception Date
Class A
0.16% 4.14% 3.93% 5.16% Feb. 22, 1993
Class A Return After Taxes on Distributions
(0.44%) 2.96% 2.51% 3.28% Feb. 22, 1993
Class A Return After Taxes on Distributions and Redemptions
0.10% 2.83% 2.51% 3.24% Feb. 22, 1993
Class B
0.83% 4.27% 3.91% 5.13% Dec. 22, 1993
Class C
2.82% 4.26% 3.62% 4.54% Sep. 30, 1999
Class R
4.29%       4.49% Jan. 29, 2008
Class Y
4.85% 5.27% 4.63% 5.61% Nov. 29, 1993
Barclays Capital U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)
4.22% 5.95% 5.18% 6.20% Feb. 28, 1993
After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.

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Highland Alpha Trend Strategies Fund
Highland Alpha Trend Strategies Fund

(formerly “Pyxis Alpha Trend Strategies Fund”)
Investment Objective
To provide shareholders with above average total returns over a complete market cycle primarily through capital appreciation, while also attempting to preserve capital and mitigate risk through hedging activities.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and the “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees (fees paid directly from your investment)
Shareholder Fees Highland Alpha Trend Strategies Fund
Class A
Class C
Class R
Class Y
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) 5.75% none none none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) none none none none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) none 1.00% [1] none none
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) 2.00% 2.00% 2.00% 2.00%
Redemption Fee [2] 2.00% 2.00% 2.00% 2.00%
[1] The contingent deferred sales charge ("CDSC") on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
[2] (as % of amount redeemed within two months or less after date of purchase)
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Annual Fund Operating Expenses Highland Alpha Trend Strategies Fund
Class A
Class C
Class R
Class Y
Management Fees 2.00% 2.00% 2.00% 2.00%
Distribution and Service (12b-1) Fees 0.35% 1.00% 0.50% none
Other Expenses 2.00% 2.00% 2.00% 2.00%
Acquired Fund Fees and Expenses 0.23% 0.23% 0.23% 0.23%
Total Annual Fund Operating Expenses 4.58% 5.23% 4.73% 4.23%
Expense Example
This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Expense Example Highland Alpha Trend Strategies Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class A
1,008 1,878 2,756 4,983
Class C
622 1,564 2,600 5,170
Class R
474 1,425 2,381 4,794
Class Y
425 1,284 2,156 4,396
Expense Example, No Redemption (USD $)
1 Year
3 Years
5 Years
10 Years
Highland Alpha Trend Strategies Fund Class C
522 1,564 2,600 5,170
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the period of October 31, 2011 (the date the Fund commenced operations) through September 30, 2012, the Fund had a portfolio turnover rate of 2,624% (not annualized) of the average value of its portfolio.
Principal Investment Strategies
The Fund seeks to achieve its investment objective by allocating assets among proprietary technically-based trend following strategies. The Fund takes long and short positions in broad index based securities (primarily domestically-listed foreign equity exchange-traded funds (“ETFs”)) based on long and intermediate term trends. The Fund also employs short term counter trend strategies that seek to hedge the trend following strategy and mitigate risk, while seeking to profit from short term market volatility. The strategies are intended to have low correlation with market benchmarks and with each other.

Anchor Capital Management Group, Inc. (“Anchor”), sub-adviser of the Fund, will allocate Fund assets among strategies that it believes offer the potential for attractive investment returns individually and that are expected to blend within the Fund’s portfolio so that it will have lower correlation and lower volatility relative to the market. In seeking to take advantage of increases or declines in the price of equity securities or indexes, the Fund may use stock baskets (groups of stocks that may be purchased through a single transaction) and exchange-traded notes (“ETNs”). In executing its counter trend strategy, the Fund may rotate investment positions among securities typically correlated to specific countries or regions. Security selection is determined through Anchor’s mathematical and statistical models; however, Anchor may alter such selection based on its assessment of current market conditions and other factors.

As part of its investment strategies, Anchor actively employs the use of cash and cash equivalents in an attempt to sidestep market declines and lower overall portfolio volatility. In particular, the Fund may invest all or substantially all of its assets in cash or cash equivalents when Anchor determines that market conditions so warrant. To the extent the Fund is invested heavily in cash, it may not achieve its investment objective and may experience negative returns.

The Fund may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.

The Fund may invest, directly and indirectly (through derivatives and other pooled investment vehicles (including ETFs)), in securities of issuers of any market capitalization. The Fund may invest without limitation in investments tied economically to any country in the world, including emerging countries. The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund is not intended to be a complete investment program.
Principal Risks
When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Equity Securities Risk is the risk that stock prices will fall over short or long periods of time. In addition, common stocks represent a share of ownership in a company, and rank after bonds and preferred stock in their claim on the company’s assets in the event of bankruptcy.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Short Sales Risk is the risk of loss associated with any appreciation on the price of a security borrowed in connection with a short sale. The Fund may engage in short sales that are not made “against-the-box,” which means that the Fund may sell short securities even when they are not actually owned or otherwise covered at all times during the period the short position is open. Short sales that are not made “against-the-box” theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase.

Derivatives Risk is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations.

Counterparty Risk is the risk that a counterparty (the other party to a transaction or an agreement or the party with whom the Fund executes transactions) to a transaction with the Fund may be unable or unwilling to make timely principal, interest or settlement payments, or otherwise honor its obligations.

Currency Risk is the risk that fluctuations in exchange rates will adversely affect the value of the Fund’s foreign currency holdings and investments denominated in foreign currencies.

Foreign Investment Risk is the risk that investing in foreign (non-U.S.) securities either directly or indirectly may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Emerging Markets Risk is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Hedging Risk is the risk that, although intended to limit or reduce investment risk, hedging strategies may also limit or reduce the potential for profit. There is no assurance that hedging strategies will be successful.

Illiquid and Restricted Securities Risk is the risk that the Adviser may not be able to sell illiquid or restricted securities at the price it would like or may have to sell them at a loss. Securities of non-U.S. issuers, and emerging markets securities in particular, are subject to illiquidity risk.

Management Risk is the risk that the Adviser or Anchor may be incorrect in its assessment of the intrinsic value of the securities the Fund holds which may result in a decline in the value of Fund shares and failure to achieve its investment objective. The Fund’s portfolio managers use quantitative analyses and/or models. Any imperfections or limitations in such analyses and models could affect the ability of the portfolio managers to implement strategies.

Mid-Cap Company Risk is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Small-Cap Company Risk is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in ETFs, closed-end funds or mutual funds (“Underlying Funds”) may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.

Exchange-Traded Notes Risk is the risk that ETNs in which the Fund may invest are subject to credit risk and the value of an ETN may vary and may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying commodities or other related markets, changes in the applicable interest rates, changes in the issuer’s credit rating, and economic, legal, political, or geographic events. ETNs are debt securities whose returns are linked to a particular index. The Fund will bear its proportionate share of any fees and expenses borne by the ETN.

Model Risk is the risk that the models used by the Fund to determine or guide investment decisions may not achieve the objectives of the Fund. Additionally, the portfolio manager of the Fund is able to adjust the models or, under certain adverse conditions, to deviate from the models employed by the Fund. Such adjustments or deviations may not achieve the objectives of the Fund and may produce lower returns and/or higher volatility compared to what the returns and volatility of the Fund would have been if the portfolio manager had not adjusted or deviated from the models.

Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund’s investment in fewer issuers may result in the Fund’s shares being more sensitive to the economic results of those issuers.

Portfolio Turnover Risk is the risk that the Fund’s high portfolio turnover will increase its transaction costs and may result in increased realization of net short-term capital gains (which are taxable to shareholders as ordinary income when distributed to them), higher taxable distributions and lower after-tax performance.

An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal.
Performance
The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877- 665-1287.
Annual Total Returns
The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart
The highest calendar quarter total return for Class A Shares of the Fund was 7.04% for the quarter ended March 31, 2012 and the lowest calendar quarter total return was -3.29% for the quarter ended June 30, 2012. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 0.67%.
Average Annual Total Returns
(For the periods ended December 31, 2012)
Average Annual Total Returns Highland Alpha Trend Strategies Fund
1 Year
Since Inception
Inception Date
Class A
(5.07%) (11.95%) Nov. 02, 2011
Class A Return After Taxes on Distributions
(5.37%) (12.19%) Nov. 02, 2011
Class A Return After Taxes on Distributions and Redemptions
(3.29%) (10.28%) Nov. 02, 2011
Class R
0.56% (7.29%) Nov. 09, 2011
Class Y
1.00% (6.99%) Nov. 01, 2011
MSCI EAFE Index (reflects no deduction for fees, expenses or taxes)
17.32% 8.99% Oct. 31, 2011
After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
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Highland Energy MLP Fund
Highland Energy MLP Fund

(Formerly Pyxis Energy MLP Fund)
Investment Objective
The investment objective of Highland Energy MLP Fund (the “Fund”) is to provide investors with current income and capital appreciation.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the “Reduced Sales Charges for Class A Shares” section on page 31 of the Fund’s Prospectus and the “Programs for Reducing or Eliminating Sales Charges” section on page 34 of the Fund’s Statement of Additional Information.
Shareholder Fees (fees paid directly from your investment)
Shareholder Fees Highland Energy MLP Fund
Class A
Class C
Class R
Class Y
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) 5.75% none none none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) none none none none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) none 1.00% [1] none none
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) 2.00% 2.00% 2.00% 2.00%
Redemption Fee [2] 2.00% 2.00% 2.00% 2.00%
[1] The contingent deferred sales charge ("CDSC") on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
[2] (as % of amount redeemed within two months or less after date of purchase)
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Annual Fund Operating Expenses Highland Energy MLP Fund
Class A
Class C
Class R
Class Y
Management Fees 1.20% 1.20% 1.20% 1.20%
Distribution and Service (12b-1) Fees 0.35% 1.00% 0.50% none
Other Expenses [1] 2.45% 2.45% 2.45% 2.45%
Acquired Fund Fees and Expenses 0.10% 0.10% 0.10% 0.10%
Total Annual Fund Operating Expenses 4.10% 4.75% 4.25% 3.75%
Expense Reimbursement [2] 2.55% 2.55% 2.55% 2.55%
Total Annual Fund Operating Expenses 1.55% 2.20% 1.70% 1.20%
[1] "Other Expenses" are based on estimated amounts for the current fiscal year. Other Expenses" does not reflect deferred and current income tax liability, if any, incurred by the Fund. The Fund accrues deferred income tax liability for its future tax liability associated with the capital appreciation of its investments and the distributions received by the Fund on equity securities of MLPs considered to be return of capital and for any net operating gains. The Fund's accrued deferred tax liability is reflected each day in the Fund's net asset value per share. The Fund's current and deferred tax liability, if any, depends upon the Fund's net investment gains and losses and realized and unrealized gains and losses on investments and therefore may vary greatly from year to year depending on the nature of the Fund's investments, the performance of those investments and general market conditions. Actual income tax expense, if any, will be incurred over many years, depending on if and when investment gains and losses are realized, the then-current basis of the Fund's assets and other factors. See "Net Asset Value" in the Fund's prospectus.
[2] Highland Capital Management Fund Advisors, L.P. (the "Adviser") has contractually agreed to limit the total annual operating expenses (exclusive of fees paid by the Fund pursuant to its distribution plan under Rule 12b-1 under the Investment Company Act of 1940, as amended, taxes, such as deferred tax expenses, brokerage commissions and other transaction costs, acquired fund fees and expenses, and extraordinary expenses) of the Fund to 1.10% of average daily net assets of the Fund (the "Expense Cap"). The Expense Cap will continue through at least January 31, 2014, and may not be terminated prior to this date without the action or consent of the Fund's Board of Trustees. The Trust, on behalf of the Fund, has contractually agreed to pay the Adviser all amounts previously paid, waived or reimbursed by the Adviser with respect to the Fund pursuant to the Expense Cap, provided that the amount of such additional payment in any year, together with all other expenses of the Fund, in the aggregate, would not cause the Fund's total annual operating expenses in any such year to exceed the amount of the Expense Cap, and provided further that no additional payments by the Trust will be made with respect to amounts paid, waived or reimbursed by the Adviser more than 36 months after the date the Fund accrues a liability with respect to such amounts paid, waived or reimbursed by the Adviser.
Expense Example
This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Expense Example Highland Energy MLP Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class A
963 [1] 1,750 2,551 4,618
Class C
576 [1] 1,430 2,390 4,810
Class R
427 [1] 1,289 2,165 4,413
Class Y
377 [1] 1,146 1,934 3,993
[1] After reimbursement.
Expense Example, No Redemption (USD $)
1 Year
3 Years
5 Years
10 Years
Highland Energy MLP Fund Class C
476 [1] 1,430 2,390 4,810
[1] After reimbursement.
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may increase the tax liability of the Fund. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the period December 1, 2011 (the date the Fund commenced operations) through September 30, 2012, the Fund had a portfolio turnover rate of 254% (not annualized) of the average value of its portfolio.
Principal Investment Strategies
Effective February 1, 2013, the Fund revised its investment strategy to focus on master limited partnership ("MLP") investments. Under normal market conditions, the Fund seeks to achieve its objective by investing at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of MLP investments. MLPs typically are characterized as "publicly traded partnerships" that qualify to be treated as partnerships for U.S. federal income tax purposes and are principally engaged in one or more aspects of the exploration, production, processing, transmission, marketing, storage or delivery of energy-related commodities, such as natural gas, natural gas liquids, coal, crude oil or refined petroleum products (collectively, the energy industry). The Fund's MLP investments include investments that offer economic exposure to public MLPs in the form of common or subordinated units issued by MLPs, securities of entities holding primarily general partner or managing member interests in MLPs, debt securities of MLPs, and securities that are derivatives of interests in MLPs, including I-Shares, and derivative instruments in which the Fund may invest that have economic characteristics of MLP securities. Certain of the benefits Fund shareholders are expected to derive from the Fund's MLP investments depend largely on the MLPs' treatment as partnerships for U.S. federal income tax purposes. See "MLP Tax Risk" below for additional details.

After the Fund implements its revised strategy to concentrate in MLP investments, retroactive to the beginning of the Fund's current taxable year, which began on October 1, 2012 and ends on September 30, 2013, and continuing for future taxable years, the Fund will no longer be eligible for treatment as a regulated investment company under the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, the Fund will be treated as a regular corporation, or "C" corporation, for U.S. federal income tax purposes. As a result, the Fund will be subject to U.S. federal income tax on its taxable income at the graduated rates applicable to corporations (currently at a maximum rate of 35%) as well as state and local income taxes. However, based on a review of the historic results of the types of MLPs in which the Fund intends to invest, Highland Capital Management, L.P. ("HCM"), sub-adviser of the Fund, currently expects that, at least in the early years of the Fund's life, the cash distributions it receives with respect to its investments in equity securities of MLPs will typically exceed the net taxable income allocated to the Fund from such MLPs, due to a variety of factors, including significant non-cash deductions such as depreciation and depletion. Any such excess in a taxable year will not be treated as income to the Fund, but rather will be treated as a tax-deferred return of capital to the Fund for U.S. federal income tax purposes, to the extent of the Fund's basis in the MLP securities. Distributions the Fund receives from a MLP that exceed the Fund's basis in the securities of that MLP are treated as taxable income or gains in the Fund's hands. Thus, HCM expects that the Fund would experience relatively more tax deferral (and thus lower corporate income tax expense) during the early years of the Fund's operations than during its later years. See "Taxation" in this Prospectus and "Fund-Related Tax Risks: C Corporation Structure Tax Risks" below for additional details, including information on distributions, redemptions and the tax consequences of C corporation status.

In addition, the Fund may invest up to 20% of the value of its total assets in a wide variety of securities and financial instruments, of all kinds and descriptions, that are not MLP investments, such as equity securities, equity-linked securities, fixed income securities (including "junk bonds"), and money market securities. The Fund may invest without limitation in Exchange Traded Funds ("ETFs") and may invest up to 20% of the value of its total assets in ETFs that do not provide exposure to MLPs. The Fund may invest in securities of issuers of any market capitalization. The Fund may invest in securities of any credit quality.

The Fund may invest in securities of non-U.S. issuers, which may include, without limitation, emerging market issuers. Such securities may be denominated in U.S. dollars, non-U.S. currencies or multinational currency units (such as the Euro). At times, the Fund intends to hedge currency exposure resulting from investments denominated in non U.S. currencies.

Derivatives, which are instruments that have a value based on another instrument, exchange rate or index, may be used as substitutes for securities in which the Fund can invest. The Fund may use derivatives, primarily options and foreign currency transactions (e.g., foreign currency swaps, futures, and forwards), as tools in the management of portfolio assets. The Fund may also use such derivatives to hedge various investments for risk management and for speculative purposes.

The Fund may borrow an amount up to 33 1/3% (or such other percentage permitted by law) of its total assets (including the amount borrowed) less all liabilities other than borrowings. The Fund may borrow for investment purposes, to meet redemption requests and for temporary, extraordinary or emergency purposes. The use of borrowing for investment purposes (i.e., leverage) increases both investment opportunity and investment risk. However, the Fund has no present intention to use borrowing for investment purposes.

The Fund's investment strategy utilizes the analytical models of HCM to evaluate potential investments. In selecting investments for the Fund, HCM typically focuses on MLP issuers that it believes: (i) have stable cash flows and pay regular distributions; (ii) have potential for long-term distribution growth; (iii) may be subject to a value catalyst, such as industry developments, regulatory changes, changes in management, acquisitions, sale or spin-off of a division; (iv) are well-managed; (v) will benefit from favorable demand and supply dynamics for its products and services; (vi) are best in class; and/or (vii) are underappreciated by market analysts. HCM will typically focus on companies that are exhibiting one or more of these indicators. Technical analysis may also be used to help in the decision making process.

HCM may sell short securities of a company that it believes: (i) is overvalued relative to normalized business and industry fundamentals or to the expected growth that HCM believes the company will achieve; (ii) has a weak competitive position relative to peers; (iii) engages in questionable accounting practices; (iv) shows declining cash flow and/or liquidity; (v) has distribution estimates that HCM believes are too high; (vi) has weak competitive barriers to entry; (vii) suffers from deteriorating industry and/or business fundamentals; (viii) has a weak management team; (ix) will see multiple contraction; (x) is not adapting to changes in technological, regulatory or competitive environments; or (xi) provides a hedge against the Fund's long exposure, such as a broad based market ETF. Technical analysis may be used to help in the decision making process. The Fund may engage in short sales that are not made "against-the-box," which means that the Fund may sell short securities even when they are not actually owned or offset at all times during the period the short position is open. Short sales that are not made "against-the-box" could result in unlimited loss.

HCM generates investment ideas from a variety of different sources. These include, but are not limited to, screening software that analyzes both fundamental and technical factors, industry contacts, consultants, company press releases, company conference calls, conversations with company management teams, buy-side contacts, sell-side contacts, brokers, third-party research, independent research of financial and corporate information, third-party research databases, and news services. HCM will make investment decisions based on its analysis of the security's value, and will also take into account its view of macroeconomic conditions and industry trends. HCM will make investments without regard to a company's level of capitalization. HCM is an affiliated of the Adviser.

The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended, (the "1940 Act"). The Fund is not intended to be a complete investment program.
Principal Risks
When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Industry Concentration Risk is the risk that the Fund may be particularly susceptible to economic, political or regulatory events affecting those industries in which the Fund focuses its investments. Because the Fund normally invests at least 80% of the value of its assets in MLP investments, the Fund's performance largely depends on the overall condition of these industries and the Fund is susceptible to economic, political and regulatory risks or other occurrences associated with these industries.

MLP Risk is the risk of investing in MLP units, which involves some risks that differ from an investment in the equity securities of a company. The Fund intends to invest substantially in MLP units. Holders of MLP units have limited control and voting rights on matters affecting the partnership. Holders of units issued by a MLP are exposed to a remote possibility of liability for all of the obligations of that MLP in the event that a court determines that the rights of the holders of MLP units to vote to remove or replace the general partner of that MLP, to approve amendments to that MLP's partnership agreement, or to take other action under the partnership agreement of that MLP would constitute "control" of the business of that MLP, or a court or governmental agency determines that the MLP is conducting business in a state without complying with the partnership statute of that state. Holders of MLP units are also exposed to the risk that they will be required to repay amounts to the MLP that are wrongfully distributed to them. Investments in MLP units also present special tax risks. See "MLP Tax Risk" below.

MLP Tax Risk is the risk that the MLPs in which the Fund invests will fail to be treated as partnerships for U.S. federal income tax purposes. The Fund's ability to meet its investment objective will depend, in large measure, on the level of dividends, distributions or income it receives from the MLPs in which it invests and on the MLPs' continued treatment as partnerships for U.S. federal income tax purposes. If a MLP does not meet current legal requirements to maintain its partnership status, or if it is unable to do so because of tax or other law changes, it would be treated as a corporation for U.S. federal income tax purposes. In that case, the MLP would be obligated to pay U.S. federal income tax (as well as state and local taxes) at the entity level on its taxable income and distributions received by the Fund would be taxable to the Fund as dividend income to the extent of the MLP's current and accumulated earnings and profits for federal tax purposes. The classification of a MLP as a corporation for U.S. federal income tax purposes could have the effect of reducing the amount of cash available for distribution by the MLP and the value of the Fund's investment in any such MLP. As a result, the value of the Fund's shares and the cash available for distribution to Fund shareholders could be materially reduced.

Fund-Related Tax Risks are tax risks related to an investment in the Fund, including, but not limited to:
  • C Corporation Structure Tax Risks. Unlike most mutual funds, the Fund will not be entitled to pass-through tax treatment as a regulated investment company. Instead, the Fund will be treated as a regular corporation, or "C" corporation, for U.S. federal income tax purposes. Accordingly, the Fund generally will be subject to U.S. federal income tax on its investment income and gains at the graduated rates applicable to corporations as well as state and local taxes. However, based on a review of the historic results of the types of MLPs in which the Fund intends to invest, HCM currently expects that, at least in the early years of the Fund's life, the cash distributions it receives with respect to its investments in equity securities of MLPs will typically exceed the taxable income allocated to the Fund from such MLPs, due to a variety of factors, including significant non-cash deductions such as depreciation and depletion. Any such excess in a taxable year will not be treated as income to the Fund, but rather will be treated as a tax-deferred return of capital to the Fund for U.S. federal income tax purposes, to the extent of the Fund's basis in the MLP securities. Distributions the Fund receives from a MLP that exceed the Fund's basis in the securities of that MLP are treated as taxable income or gains in the Fund's hands.

    Thus, HCM expects that the Fund would experience relatively more tax deferral (and thus lower corporate income tax expense) during the early years of the Fund's operations than during its later years.

    The Fund's receipt of return-of-capital distributions from MLPs also will cause the Fund's taxable income or gains to be higher, or losses to be lower, upon the ultimate sale of the MLP security by the Fund, and may cause taxable income or gains to be higher upon receipt of subsequent distributions from the MLP security by the Fund in later periods. The Fund's corporate income tax liability may be materially affected by, and may fluctuate materially from year to year depending on, a number of factors relating to the Fund and/or its MLP or other investments, including the length of time the Fund has owned the MLP equity securities in its portfolio and the extent to which the Fund disposes of MLP equity securities during a particular year, including, if necessary, to meet Fund shareholder redemption requests.

    The Fund's tax liability will not be finally known until the Fund completes its annual tax return. The Fund's tax estimates could vary substantially from the actual liability and therefore the final determination of the Fund's actual tax liability may have a material impact on the Fund's net asset value. See "Calculation of NAV Risk" below. The payment of corporate income taxes imposed on the Fund will decrease the value of the Fund's shares and the amount of cash available for distribution to shareholders.

    Due to the tax treatment of the Fund's allocations and distributions from MLPs, as described above, HCM currently expects that a significant portion of the Fund's distributions to shareholders will typically be treated as a return of capital in the hands of shareholders for U.S. federal income tax purposes (i.e., as distributions in excess of the Fund's current and accumulated earnings and profits) and thus would not be subject U.S. federal income tax to the extent of the shareholder's basis in its Fund shares. However, no assurance can be given in this regard and the extent to which the Fund is able to make return of capital distributions can vary materially from year to year.
  • Calculation of NAV Risk. In calculating the Fund's daily net asset value in accordance with generally accepted accounting principles, the Fund will account for its deferred tax liability and/or asset balances. The Fund will accrue a deferred income tax liability balance, at the currently effective statutory U.S. federal income tax rate (currently at a maximum rate of 35%) plus an estimated state and local income tax rate, for its future tax liability associated with the capital appreciation of its investments and the distributions received by the Fund on equity securities of MLPs considered to be return of capital and for any net operating gains. Any deferred tax liability balance will reduce the Fund's net asset value. Upon the Fund's sale of a portfolio security, the Fund may be liable for previously deferred taxes. If the Fund is required to sell portfolio securities to meet redemption requests, the Fund may recognize income and gains for U.S. federal, state and local income tax purposes, which will result in corporate income taxes imposed on the Fund.
  • The Fund will accrue a deferred tax asset balance, which reflects an estimate of the Fund's future tax benefit associated with net operating losses, capital loss carryforwards and unrealized losses. Any deferred tax asset balance will increase the Fund's net asset value. To the extent the Fund has a deferred tax asset balance, the Fund will assess whether a valuation allowance, which would offset the value of some or all of the Fund's deferred tax asset balance, is required, considering all positive and negative evidence related to the realization of the Fund's deferred tax asset. The Fund intends to assess whether a valuation allowance is required to offset some or all of any deferred tax asset balance in connection with the calculation of the Fund's daily net asset value; however, to the extent the final valuation allowance differs from the estimates of the Fund used in calculating the Fund's daily net asset value, the application of such final valuation allowance could have a material impact on the Fund's net asset value. From time to time, the Fund may modify its estimates or assumptions regarding its deferred tax liability and/or asset balances as new information becomes available. Such modifications, changes in generally accepted accounting principles or related guidance or interpretations thereof, limitations imposed on net operating and capital losses (if any) and changes in applicable tax law could result in increases or decreases in the Fund's net asset value per share, which could be material.
  • Tax Law Changes Risk. Changes in tax laws, regulations or interpretations of those laws or regulations in the future could adversely affect the Fund or its MLPs or other investments, and could adversely affect the Fund and its shareholders. In some cases, such changes could have retroactive effect.
Equity Securities Risk is the risk that stock prices will fall over short or long periods of time. In addition, common stocks represent a share of ownership in a company, and rank after bonds and preferred stock in their claim on the company's assets in the event of bankruptcy.

Short Sales Risk is the risk of loss associated with any appreciation on the price of a security borrowed in connection with a short sale. The Fund may engage in short sales that are not made "against-the-box," which means that the Fund may sell short securities even when they are not actually owned or otherwise covered at all times during the period the short position is open. Short sales that are not made "against-the-box" theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase.

Derivatives Risk is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations. In addition, recent legislation has called for a new regulatory framework for the derivatives market. The impact of the new regulations are still unknown, but has the potential to increase the costs of using derivatives, may limit the availability of some forms of derivatives or the Fund's ability to use derivatives, and may adversely affect the performance of some derivative instruments used by the Fund as well as the Fund's ability to pursue its investment objective through the use of such instruments.

Counterparty Risk is the risk that a counterparty (the other party to a transaction or an agreement or the party with whom the Fund executes transactions) to a transaction with the Fund may be unable or unwilling to make timely principal, interest or settlement payments, or otherwise honor its obligations.

Leverage Risk is the risk associated with the use of leverage for investment purposes to create opportunities for greater total returns. 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.

Debt Securities Risk is the risk that the issuer of a debt security may fail to pay interest or principal when due, and that changes in market interest rates may reduce the value of debt securities or reduce the Fund's returns. The Fund may invest in debt securities, principally below investment grade securities, but also including investment grade securities and other debt obligations. The Fund's investments in high yield debt securities generally subject the Fund to greater risk than investments in securities with higher ratings. Such securities are regarded by the rating organizations as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation.

Senior Loans Risk is the risk that the issuer or a senior may fail to pay interest or principal when due, and changes in market interest rates may reduce the value of the senior loan or reduce the Fund's returns. The risks associated with senior loans are similar to the risks of high yield debt securities. Senior loans and other debt securities are also subject to the risk of price declines and to increases in prevailing interest rates. The Fund's investments in senior loans are typically below investment grade and are considered speculative because of the credit risk of their issuers.

Mid-Cap Company Risk is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Small-Cap Company Risk is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in Underlying Funds may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.

Foreign Investment Risk is the risk that investing in foreign (non-U.S.) securities either directly or indirectly may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that fluctuation in exchange rates will adversely affect the value of the Fund's foreign currency holdings and investments denominated in foreign currencies.

Hedging Risk is the risk that, although intended to limit or reduce investment risk, hedging strategies may also limit or reduce the potential for profit. There is no assurance that hedging strategies will be successful.

Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. The Fund's share price will fluctuate with changes in the market value of its portfolio securities. Many factors can affect this value and you may lose money by investing in the Fund.

Emerging Markets Risk is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. Emerging markets countries may have unstable governments and/or economies that are subject to sudden change, and may also lack the legal, business and social framework to support securities markets, which tends to make investments less liquid and more volatile.

Portfolio Turnover Risk is the risk that the Fund's high portfolio turnover will increase its transaction costs and may result in increased realization by the Fund and thus lower after-tax performance, as well as reduce the amount of cash available for distribution to Fund shareholders.

Fixed Income Securities Risk is the risk that fixed income securities will decline in value because of changes in interest rates. The value of fixed income securities typically changes as interest rates fluctuate. During periods of rising interest rates, fixed income securities generally decline in value. Conversely, during periods of falling interest rates, fixed income securities generally rise in value. This kind of market risk is generally greater for a fund investing in fixed income securities with longer durations.

Credit Risk is the risk that the Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund's expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Illiquid and Restricted Securities Risk is the risk that the Adviser or Sub-Adviser, as applicable, may not be able to sell illiquid or restricted securities at the price it would like or may have to sell them at a loss. Securities of non-U.S. issuers, and emerging markets securities in particular, are subject to illiquidity risk.

Legislation Risk is the risk that to the extent that state, federal or international regulators impose additional requirements or restrictions with respect to MLPs, the availability of MLP investments may be adversely affected.

Management Risk is the risk that the Adviser or Sub-Adviser may be incorrect in its assessment of the intrinsic value of the securities the Fund holds which may result in a decline in the value of Fund shares and failure to achieve its investment objective. The Fund's portfolio managers use quantitative analyses and/or models. Any imperfections or limitations in such analyses and models could affect the ability of the portfolio managers to implement strategies.

Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund's investment in fewer issuers may result in the Fund's shares being more sensitive to the economic results of those issuers.

Market Disruption Risk is the risk of unusual and extreme volatility in the equity and debt markets and in the prices of individual investments resulting from a period of acute stress recently experienced by domestic and international markets starting in the real estate and financial sectors and then moving to other sectors of the world economy. These market conditions could add to the risk of short-term volatility of the Fund.

Non-Payment Risk is the risk of non-payment of scheduled interest and/or principal with respect to debt securities. Non-payment would result in a reduction of income to the Fund, a reduction in the value of the obligation experiencing non-payment and a potential decrease in the NAV of the Fund.

Prepayment Risk is the risk that part or all of the principal of a debt security will be paid prior to the scheduled maturity. Pursuant to the relevant debt agreement, a borrower may be required, and may have the option at any time, to prepay the principal amount of a debt security, in some instances without incurring a prepayment penalty. In the event that like-yielding debt is not available in the marketplace, the prepayment of and subsequent reinvestment by the Fund in high yield debt could have a materially adverse affect on the yield of the Fund's investment portfolio. Prepayments may have a beneficial impact on income due to receipt of prepayment penalties, if any, and any facility fees earned in connection with reinvestment.

Industry Specific Risk is the risk that the MLPs in which the Fund invests will be impacted by risks specific to the industry MLPs serve, including the following:
  • Fluctuations in commodity prices may impact the volume of commodities transported, processed, stored or distributed.
  • Reduced volumes of natural gas or other energy commodities available for transporting, processing, storing or distributing may affect the profitability of an MLP.
  • Slowdowns in new construction and acquisitions can limit growth potential.
  • A sustained reduced demand for crude oil, natural gas and refined petroleum products that could adversely affect MLP revenues and cash flows.
  • Depletion of the natural gas reserves or other commodities if not replaced, which could impact an MLP's ability to make distributions.
  • Changes in the regulatory environment could adversely affect the profitability of MLPs.
  • Extreme weather and environmental hazards could impact the value of MLP securities.
  • Rising interest rates which could result in a higher cost of capital and drive investors into other investment opportunities.
  • Threats of attack by terrorists on energy assets could impact the market for MLPs.
Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal.
Performance
The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—-Performance or by calling 1-877- 665-1287.
Annual Total Returns
The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart
The highest calendar quarter total return for Class A Shares of the Fund was 7.54% for the quarter ended September 30, 2012 and the lowest calendar quarter total return was -0.55% for the quarter ended December 31, 2012. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 8.40%.
Average Annual Total Returns
(For the periods ended December 31, 2012)
Average Annual Total Returns Highland Energy MLP Fund
1 Year
Since Inception
Inception Date
Class A
[1] 2.14% 3.13% Dec. 01, 2011
Class A Return After Taxes on Distributions
[1] (1.75%) (0.50%) Dec. 01, 2011
Class A Return After Taxes on Distributions and Redemptions
[1] 1.39% 0.59% Dec. 01, 2011
Class C
[1] 6.79% 8.23% Dec. 01, 2011
Class R
[1] 8.34% 8.77% Dec. 01, 2011
Class Y
[1] 9.02% 9.51% Dec. 01, 2011
Alerian MLP Index (reflects no deduction for fees, expenses or taxes)
[1] 4.80% 9.96% Dec. 01, 2011
[1] Effective February 1, 2013, the Fund revised its investment strategy to focus on MLP investments. Returns through September 30, 2012 reflect the Fund's treatment as a regulated investment company under the Code. Returns after September 30, 2012 reflect the Fund's treatment as a regular corporation, or "C" corporation, for U.S. federal income tax purposes. As a result, returns after September 30, 2012 generally will be reduced by the amount of entity-level income taxes paid by the Fund as a regular corporation and thus will not necessarily be comparable to returns reported while the Fund still qualified as a regulated investment company.
After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
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Highland Core America Equity Fund
Highland Core America Equity Fund

(formerly “Pyxis Core America Equity Fund”)
Investment Objective
Long-term growth of capital and future income. (Future income means the ability to pay dividends in the future.)
Fees and Expenses of the Fund
The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in the Fund or in other Highland Funds II alternative funds, equity funds and/or asset allocation funds or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees (fees paid directly from your investment)
Shareholder Fees Highland Core America Equity Fund
Class A
Class B
Class C
Class R
Class Y
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) 5.75% none none none none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) none none none none none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) none 4.00% 1.00% [1] none none
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) none none none none none
Redemption Fee [2] none none none none none
[1] Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
[2] (as % of amount redeemed within two months or less after date of purchase)
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Annual Fund Operating Expenses Highland Core America Equity Fund
Class A
Class B
Class C
Class R
Class Y
Management Fees 0.40% 0.40% 0.40% 0.40% 0.40%
Distribution and/or Service (12b-1) Fees 0.25% 1.00% 1.00% 0.50% none
Other Expenses [1] 0.61% 0.61% 0.61% 0.61% 0.61%
Acquired Fund Fees and Expenses 0.01% 0.01% 0.01% 0.01% 0.01%
Total Annual Fund Operating Expenses 1.27% 2.02% 2.02% 1.52% 1.02%
[1] "Other Expenses" include indirect fees and expenses of Acquired Funds less than 0.01%. "Acquired Fund" means any investment company in which the Fund invests or has invested during the period.
Expense Example
This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Expense Example Highland Core America Equity Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class A
697 955 1,232 2,021
Class B
605 834 1,088 1,978
Class C
305 634 1,088 2,348
Class R
155 480 829 1,813
Class Y
104 325 563 1,248
Expense Example, No Redemption Highland Core America Equity Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class B
205 634 1,088 1,978
Class C
205 634 1,088 2,348
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 47% of the average value of its portfolio.
Principal Investment Strategies
The Fund seeks to achieve its investment objectives by investing at least 80% of its net assets under normal circumstances in domestic equity securities, such as common and preferred stocks, plus borrowing for investment purposes.

Highland Capital Management Fund Advisors, L.P. (“HCMFA”), the Fund’s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (“GEAM”), the Fund’s sub-adviser. The Fund invests primarily in U.S. companies that the portfolio managers believe are undervalued by the market but have solid growth prospects. The portfolio managers employ a relative value approach to identify companies across all economic sectors which are undervalued relative to the market, their peers, their historical valuation or their growth rate. This approach results in a portfolio more broadly diversified across economic sectors and contrasts with other investing approaches that focus on low absolute valuations and often result in a portfolio concentrated in fewer sectors. A company may be undervalued for reasons such as market overreaction to recent company, industry or economic events. In seeking to satisfy the Fund’s investment objective with respect to future income, the portfolio managers will also consider companies that have the potential to pay dividends in the future. Stock selection is key to the performance of the Fund.

The portfolio managers seek to identify securities of companies with characteristics such as:
  • low valuations in relation to their peers and the overall market
  • the potential for long-term earnings growth
  • above-average free cash flow yields
  • high quality management focused on generating shareholder value
  • financial strength (favorable debt ratios and other financial characteristics)
  • attractive upside potential and limited downside risk
  • a catalyst such as changing industry fundamentals, introduction of a new product, a company restructuring, or a change in management
The portfolio managers may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.

The Fund also may invest to a lesser extent in securities of foreign (non-U.S.) issuers and debt securities. The Fund may also invest in exchange-traded funds (“ETFs”), and it may use derivatives primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.
Principal Risks
When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Value Investing Risk is the risk of investing in undervalued stocks that may not realize their perceived value for extended periods of time or may never realize their perceived value. Value stocks may respond differently to market and other developments than other types of stocks. Value-oriented funds will typically underperform when growth investing is in favor.

Foreign Investment Risk is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.

Credit Risk is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Performance
The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877-665-1287.
Calendar Year Total Returns
The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart
The highest calendar quarter total return for Class A Shares of the Fund was 16.72% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -21.47% for the quarter ended December 31, 2008. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 13.21%.
Average Annual Total Returns
(For the periods ended December 31, 2012)
Average Annual Total Returns Highland Core America Equity Fund
1 Year
5 Years
10 Years
Since Inception
Inception Date
Class A
6.72% (0.42%) 5.83% 7.56% Sep. 08, 1993
Class A Return After Taxes on Distributions
6.23% (0.68%) 5.05% 6.16% Sep. 08, 1993
Class A Return After Taxes on Distributions and Redemptions
5.01% (0.40%) 5.02% 6.11% Sep. 08, 1993
Class B
8.32% 0.02% 5.81% 7.59% Sep. 08, 1993
Class C
11.28% 0.02% 5.66% 2.26% Sep. 30, 1999
Class R
13.17%       2.21% Jan. 29, 2008
Class Y
13.51% 1.02% 6.81% 5.25% Jan. 05, 1998
S&P 500® Index (reflects no deduction for fees, expenses or taxes)
15.99% 1.66% 7.10% 8.06% Aug. 31, 1993
After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For Example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
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XML 34 R103.htm IDEA: XBRL DOCUMENT v2.4.0.6
Label Element Value
Risk/Return: rr_RiskReturnAbstract  
Registrant Name dei_EntityRegistrantName HIGHLAND FUNDS II
Prospectus Date rr_ProspectusDate Feb. 01, 2013
Highland Energy MLP Fund
 
Risk/Return: rr_RiskReturnAbstract  
Risk/Return [Heading] rr_RiskReturnHeading Highland Energy MLP Fund

(Formerly Pyxis Energy MLP Fund)
Objective [Heading] rr_ObjectiveHeading Investment Objective
Objective, Primary [Text Block] rr_ObjectivePrimaryTextBlock The investment objective of Highland Energy MLP Fund (the “Fund”) is to provide investors with current income and capital appreciation.
Expense [Heading] rr_ExpenseHeading Fees and Expenses of the Fund
Expense Narrative [Text Block] rr_ExpenseNarrativeTextBlock The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the “Reduced Sales Charges for Class A Shares” section on page 31 of the Fund’s Prospectus and the “Programs for Reducing or Eliminating Sales Charges” section on page 34 of the Fund’s Statement of Additional Information.
Shareholder Fees Caption [Text] rr_ShareholderFeesCaption Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Text] rr_OperatingExpensesCaption Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Fee Waiver or Reimbursement over Assets, Date of Termination rr_FeeWaiverOrReimbursementOverAssetsDateOfTermination January 31, 2014
Portfolio Turnover [Heading] rr_PortfolioTurnoverHeading Portfolio Turnover
Portfolio Turnover [Text Block] rr_PortfolioTurnoverTextBlock The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may increase the tax liability of the Fund. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the period December 1, 2011 (the date the Fund commenced operations) through September 30, 2012, the Fund had a portfolio turnover rate of 254% (not annualized) of the average value of its portfolio.
Portfolio Turnover, Rate rr_PortfolioTurnoverRate 254.00%
Expenses Deferred Charges [Text Block] rr_ExpensesDeferredChargesTextBlock The contingent deferred sales charge (“CDSC”) on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
Expense Breakpoint Discounts [Text] rr_ExpenseBreakpointDiscounts You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the “Reduced Sales Charges for Class A Shares” section on page 31 of the Fund’s Prospectus and the “Programs for Reducing or Eliminating Sales Charges” section on page 34 of the Fund’s Statement of Additional Information.
Expense Breakpoint, Minimum Investment Required [Amount] rr_ExpenseBreakpointMinimumInvestmentRequiredAmount 50,000
Other Expenses, New Fund, Based on Estimates [Text] rr_OtherExpensesNewFundBasedOnEstimates “Other Expenses” are based on estimated amounts for the current fiscal year.
Expense Example [Heading] rr_ExpenseExampleHeading Expense Example
Expense Example Narrative [Text Block] rr_ExpenseExampleNarrativeTextBlock This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Strategy [Heading] rr_StrategyHeading Principal Investment Strategies
Strategy Narrative [Text Block] rr_StrategyNarrativeTextBlock Effective February 1, 2013, the Fund revised its investment strategy to focus on master limited partnership ("MLP") investments. Under normal market conditions, the Fund seeks to achieve its objective by investing at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of MLP investments. MLPs typically are characterized as "publicly traded partnerships" that qualify to be treated as partnerships for U.S. federal income tax purposes and are principally engaged in one or more aspects of the exploration, production, processing, transmission, marketing, storage or delivery of energy-related commodities, such as natural gas, natural gas liquids, coal, crude oil or refined petroleum products (collectively, the energy industry). The Fund's MLP investments include investments that offer economic exposure to public MLPs in the form of common or subordinated units issued by MLPs, securities of entities holding primarily general partner or managing member interests in MLPs, debt securities of MLPs, and securities that are derivatives of interests in MLPs, including I-Shares, and derivative instruments in which the Fund may invest that have economic characteristics of MLP securities. Certain of the benefits Fund shareholders are expected to derive from the Fund's MLP investments depend largely on the MLPs' treatment as partnerships for U.S. federal income tax purposes. See "MLP Tax Risk" below for additional details.

After the Fund implements its revised strategy to concentrate in MLP investments, retroactive to the beginning of the Fund's current taxable year, which began on October 1, 2012 and ends on September 30, 2013, and continuing for future taxable years, the Fund will no longer be eligible for treatment as a regulated investment company under the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, the Fund will be treated as a regular corporation, or "C" corporation, for U.S. federal income tax purposes. As a result, the Fund will be subject to U.S. federal income tax on its taxable income at the graduated rates applicable to corporations (currently at a maximum rate of 35%) as well as state and local income taxes. However, based on a review of the historic results of the types of MLPs in which the Fund intends to invest, Highland Capital Management, L.P. ("HCM"), sub-adviser of the Fund, currently expects that, at least in the early years of the Fund's life, the cash distributions it receives with respect to its investments in equity securities of MLPs will typically exceed the net taxable income allocated to the Fund from such MLPs, due to a variety of factors, including significant non-cash deductions such as depreciation and depletion. Any such excess in a taxable year will not be treated as income to the Fund, but rather will be treated as a tax-deferred return of capital to the Fund for U.S. federal income tax purposes, to the extent of the Fund's basis in the MLP securities. Distributions the Fund receives from a MLP that exceed the Fund's basis in the securities of that MLP are treated as taxable income or gains in the Fund's hands. Thus, HCM expects that the Fund would experience relatively more tax deferral (and thus lower corporate income tax expense) during the early years of the Fund's operations than during its later years. See "Taxation" in this Prospectus and "Fund-Related Tax Risks: C Corporation Structure Tax Risks" below for additional details, including information on distributions, redemptions and the tax consequences of C corporation status.

In addition, the Fund may invest up to 20% of the value of its total assets in a wide variety of securities and financial instruments, of all kinds and descriptions, that are not MLP investments, such as equity securities, equity-linked securities, fixed income securities (including "junk bonds"), and money market securities. The Fund may invest without limitation in Exchange Traded Funds ("ETFs") and may invest up to 20% of the value of its total assets in ETFs that do not provide exposure to MLPs. The Fund may invest in securities of issuers of any market capitalization. The Fund may invest in securities of any credit quality.

The Fund may invest in securities of non-U.S. issuers, which may include, without limitation, emerging market issuers. Such securities may be denominated in U.S. dollars, non-U.S. currencies or multinational currency units (such as the Euro). At times, the Fund intends to hedge currency exposure resulting from investments denominated in non U.S. currencies.

Derivatives, which are instruments that have a value based on another instrument, exchange rate or index, may be used as substitutes for securities in which the Fund can invest. The Fund may use derivatives, primarily options and foreign currency transactions (e.g., foreign currency swaps, futures, and forwards), as tools in the management of portfolio assets. The Fund may also use such derivatives to hedge various investments for risk management and for speculative purposes.

The Fund may borrow an amount up to 33 1/3% (or such other percentage permitted by law) of its total assets (including the amount borrowed) less all liabilities other than borrowings. The Fund may borrow for investment purposes, to meet redemption requests and for temporary, extraordinary or emergency purposes. The use of borrowing for investment purposes (i.e., leverage) increases both investment opportunity and investment risk. However, the Fund has no present intention to use borrowing for investment purposes.

The Fund's investment strategy utilizes the analytical models of HCM to evaluate potential investments. In selecting investments for the Fund, HCM typically focuses on MLP issuers that it believes: (i) have stable cash flows and pay regular distributions; (ii) have potential for long-term distribution growth; (iii) may be subject to a value catalyst, such as industry developments, regulatory changes, changes in management, acquisitions, sale or spin-off of a division; (iv) are well-managed; (v) will benefit from favorable demand and supply dynamics for its products and services; (vi) are best in class; and/or (vii) are underappreciated by market analysts. HCM will typically focus on companies that are exhibiting one or more of these indicators. Technical analysis may also be used to help in the decision making process.

HCM may sell short securities of a company that it believes: (i) is overvalued relative to normalized business and industry fundamentals or to the expected growth that HCM believes the company will achieve; (ii) has a weak competitive position relative to peers; (iii) engages in questionable accounting practices; (iv) shows declining cash flow and/or liquidity; (v) has distribution estimates that HCM believes are too high; (vi) has weak competitive barriers to entry; (vii) suffers from deteriorating industry and/or business fundamentals; (viii) has a weak management team; (ix) will see multiple contraction; (x) is not adapting to changes in technological, regulatory or competitive environments; or (xi) provides a hedge against the Fund's long exposure, such as a broad based market ETF. Technical analysis may be used to help in the decision making process. The Fund may engage in short sales that are not made "against-the-box," which means that the Fund may sell short securities even when they are not actually owned or offset at all times during the period the short position is open. Short sales that are not made "against-the-box" could result in unlimited loss.

HCM generates investment ideas from a variety of different sources. These include, but are not limited to, screening software that analyzes both fundamental and technical factors, industry contacts, consultants, company press releases, company conference calls, conversations with company management teams, buy-side contacts, sell-side contacts, brokers, third-party research, independent research of financial and corporate information, third-party research databases, and news services. HCM will make investment decisions based on its analysis of the security's value, and will also take into account its view of macroeconomic conditions and industry trends. HCM will make investments without regard to a company's level of capitalization. HCM is an affiliated of the Adviser.

The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended, (the "1940 Act"). The Fund is not intended to be a complete investment program.
Strategy Portfolio Concentration [Text] rr_StrategyPortfolioConcentration Under normal market conditions, the Fund seeks to achieve its objective by investing at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of MLP investments. MLPs typically are characterized as "publicly traded partnerships" that qualify to be treated as partnerships for U.S. federal income tax purposes and are principally engaged in one or more aspects of the exploration, production, processing, transmission, marketing, storage or delivery of energy-related commodities, such as natural gas, natural gas liquids, coal, crude oil or refined petroleum products (collectively, the energy industry).
Risk [Heading] rr_RiskHeading Principal Risks
Risk Narrative [Text Block] rr_RiskNarrativeTextBlock When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Industry Concentration Risk is the risk that the Fund may be particularly susceptible to economic, political or regulatory events affecting those industries in which the Fund focuses its investments. Because the Fund normally invests at least 80% of the value of its assets in MLP investments, the Fund's performance largely depends on the overall condition of these industries and the Fund is susceptible to economic, political and regulatory risks or other occurrences associated with these industries.

MLP Risk is the risk of investing in MLP units, which involves some risks that differ from an investment in the equity securities of a company. The Fund intends to invest substantially in MLP units. Holders of MLP units have limited control and voting rights on matters affecting the partnership. Holders of units issued by a MLP are exposed to a remote possibility of liability for all of the obligations of that MLP in the event that a court determines that the rights of the holders of MLP units to vote to remove or replace the general partner of that MLP, to approve amendments to that MLP's partnership agreement, or to take other action under the partnership agreement of that MLP would constitute "control" of the business of that MLP, or a court or governmental agency determines that the MLP is conducting business in a state without complying with the partnership statute of that state. Holders of MLP units are also exposed to the risk that they will be required to repay amounts to the MLP that are wrongfully distributed to them. Investments in MLP units also present special tax risks. See "MLP Tax Risk" below.

MLP Tax Risk is the risk that the MLPs in which the Fund invests will fail to be treated as partnerships for U.S. federal income tax purposes. The Fund's ability to meet its investment objective will depend, in large measure, on the level of dividends, distributions or income it receives from the MLPs in which it invests and on the MLPs' continued treatment as partnerships for U.S. federal income tax purposes. If a MLP does not meet current legal requirements to maintain its partnership status, or if it is unable to do so because of tax or other law changes, it would be treated as a corporation for U.S. federal income tax purposes. In that case, the MLP would be obligated to pay U.S. federal income tax (as well as state and local taxes) at the entity level on its taxable income and distributions received by the Fund would be taxable to the Fund as dividend income to the extent of the MLP's current and accumulated earnings and profits for federal tax purposes. The classification of a MLP as a corporation for U.S. federal income tax purposes could have the effect of reducing the amount of cash available for distribution by the MLP and the value of the Fund's investment in any such MLP. As a result, the value of the Fund's shares and the cash available for distribution to Fund shareholders could be materially reduced.

Fund-Related Tax Risks are tax risks related to an investment in the Fund, including, but not limited to:
  • C Corporation Structure Tax Risks. Unlike most mutual funds, the Fund will not be entitled to pass-through tax treatment as a regulated investment company. Instead, the Fund will be treated as a regular corporation, or "C" corporation, for U.S. federal income tax purposes. Accordingly, the Fund generally will be subject to U.S. federal income tax on its investment income and gains at the graduated rates applicable to corporations as well as state and local taxes. However, based on a review of the historic results of the types of MLPs in which the Fund intends to invest, HCM currently expects that, at least in the early years of the Fund's life, the cash distributions it receives with respect to its investments in equity securities of MLPs will typically exceed the taxable income allocated to the Fund from such MLPs, due to a variety of factors, including significant non-cash deductions such as depreciation and depletion. Any such excess in a taxable year will not be treated as income to the Fund, but rather will be treated as a tax-deferred return of capital to the Fund for U.S. federal income tax purposes, to the extent of the Fund's basis in the MLP securities. Distributions the Fund receives from a MLP that exceed the Fund's basis in the securities of that MLP are treated as taxable income or gains in the Fund's hands.

    Thus, HCM expects that the Fund would experience relatively more tax deferral (and thus lower corporate income tax expense) during the early years of the Fund's operations than during its later years.

    The Fund's receipt of return-of-capital distributions from MLPs also will cause the Fund's taxable income or gains to be higher, or losses to be lower, upon the ultimate sale of the MLP security by the Fund, and may cause taxable income or gains to be higher upon receipt of subsequent distributions from the MLP security by the Fund in later periods. The Fund's corporate income tax liability may be materially affected by, and may fluctuate materially from year to year depending on, a number of factors relating to the Fund and/or its MLP or other investments, including the length of time the Fund has owned the MLP equity securities in its portfolio and the extent to which the Fund disposes of MLP equity securities during a particular year, including, if necessary, to meet Fund shareholder redemption requests.

    The Fund's tax liability will not be finally known until the Fund completes its annual tax return. The Fund's tax estimates could vary substantially from the actual liability and therefore the final determination of the Fund's actual tax liability may have a material impact on the Fund's net asset value. See "Calculation of NAV Risk" below. The payment of corporate income taxes imposed on the Fund will decrease the value of the Fund's shares and the amount of cash available for distribution to shareholders.

    Due to the tax treatment of the Fund's allocations and distributions from MLPs, as described above, HCM currently expects that a significant portion of the Fund's distributions to shareholders will typically be treated as a return of capital in the hands of shareholders for U.S. federal income tax purposes (i.e., as distributions in excess of the Fund's current and accumulated earnings and profits) and thus would not be subject U.S. federal income tax to the extent of the shareholder's basis in its Fund shares. However, no assurance can be given in this regard and the extent to which the Fund is able to make return of capital distributions can vary materially from year to year.
  • Calculation of NAV Risk. In calculating the Fund's daily net asset value in accordance with generally accepted accounting principles, the Fund will account for its deferred tax liability and/or asset balances. The Fund will accrue a deferred income tax liability balance, at the currently effective statutory U.S. federal income tax rate (currently at a maximum rate of 35%) plus an estimated state and local income tax rate, for its future tax liability associated with the capital appreciation of its investments and the distributions received by the Fund on equity securities of MLPs considered to be return of capital and for any net operating gains. Any deferred tax liability balance will reduce the Fund's net asset value. Upon the Fund's sale of a portfolio security, the Fund may be liable for previously deferred taxes. If the Fund is required to sell portfolio securities to meet redemption requests, the Fund may recognize income and gains for U.S. federal, state and local income tax purposes, which will result in corporate income taxes imposed on the Fund.
  • The Fund will accrue a deferred tax asset balance, which reflects an estimate of the Fund's future tax benefit associated with net operating losses, capital loss carryforwards and unrealized losses. Any deferred tax asset balance will increase the Fund's net asset value. To the extent the Fund has a deferred tax asset balance, the Fund will assess whether a valuation allowance, which would offset the value of some or all of the Fund's deferred tax asset balance, is required, considering all positive and negative evidence related to the realization of the Fund's deferred tax asset. The Fund intends to assess whether a valuation allowance is required to offset some or all of any deferred tax asset balance in connection with the calculation of the Fund's daily net asset value; however, to the extent the final valuation allowance differs from the estimates of the Fund used in calculating the Fund's daily net asset value, the application of such final valuation allowance could have a material impact on the Fund's net asset value. From time to time, the Fund may modify its estimates or assumptions regarding its deferred tax liability and/or asset balances as new information becomes available. Such modifications, changes in generally accepted accounting principles or related guidance or interpretations thereof, limitations imposed on net operating and capital losses (if any) and changes in applicable tax law could result in increases or decreases in the Fund's net asset value per share, which could be material.
  • Tax Law Changes Risk. Changes in tax laws, regulations or interpretations of those laws or regulations in the future could adversely affect the Fund or its MLPs or other investments, and could adversely affect the Fund and its shareholders. In some cases, such changes could have retroactive effect.
Equity Securities Risk is the risk that stock prices will fall over short or long periods of time. In addition, common stocks represent a share of ownership in a company, and rank after bonds and preferred stock in their claim on the company's assets in the event of bankruptcy.

Short Sales Risk is the risk of loss associated with any appreciation on the price of a security borrowed in connection with a short sale. The Fund may engage in short sales that are not made "against-the-box," which means that the Fund may sell short securities even when they are not actually owned or otherwise covered at all times during the period the short position is open. Short sales that are not made "against-the-box" theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase.

Derivatives Risk is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations. In addition, recent legislation has called for a new regulatory framework for the derivatives market. The impact of the new regulations are still unknown, but has the potential to increase the costs of using derivatives, may limit the availability of some forms of derivatives or the Fund's ability to use derivatives, and may adversely affect the performance of some derivative instruments used by the Fund as well as the Fund's ability to pursue its investment objective through the use of such instruments.

Counterparty Risk is the risk that a counterparty (the other party to a transaction or an agreement or the party with whom the Fund executes transactions) to a transaction with the Fund may be unable or unwilling to make timely principal, interest or settlement payments, or otherwise honor its obligations.

Leverage Risk is the risk associated with the use of leverage for investment purposes to create opportunities for greater total returns. 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.

Debt Securities Risk is the risk that the issuer of a debt security may fail to pay interest or principal when due, and that changes in market interest rates may reduce the value of debt securities or reduce the Fund's returns. The Fund may invest in debt securities, principally below investment grade securities, but also including investment grade securities and other debt obligations. The Fund's investments in high yield debt securities generally subject the Fund to greater risk than investments in securities with higher ratings. Such securities are regarded by the rating organizations as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation.

Senior Loans Risk is the risk that the issuer or a senior may fail to pay interest or principal when due, and changes in market interest rates may reduce the value of the senior loan or reduce the Fund's returns. The risks associated with senior loans are similar to the risks of high yield debt securities. Senior loans and other debt securities are also subject to the risk of price declines and to increases in prevailing interest rates. The Fund's investments in senior loans are typically below investment grade and are considered speculative because of the credit risk of their issuers.

Mid-Cap Company Risk is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Small-Cap Company Risk is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in Underlying Funds may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.

Foreign Investment Risk is the risk that investing in foreign (non-U.S.) securities either directly or indirectly may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that fluctuation in exchange rates will adversely affect the value of the Fund's foreign currency holdings and investments denominated in foreign currencies.

Hedging Risk is the risk that, although intended to limit or reduce investment risk, hedging strategies may also limit or reduce the potential for profit. There is no assurance that hedging strategies will be successful.

Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. The Fund's share price will fluctuate with changes in the market value of its portfolio securities. Many factors can affect this value and you may lose money by investing in the Fund.

Emerging Markets Risk is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. Emerging markets countries may have unstable governments and/or economies that are subject to sudden change, and may also lack the legal, business and social framework to support securities markets, which tends to make investments less liquid and more volatile.

Portfolio Turnover Risk is the risk that the Fund's high portfolio turnover will increase its transaction costs and may result in increased realization by the Fund and thus lower after-tax performance, as well as reduce the amount of cash available for distribution to Fund shareholders.

Fixed Income Securities Risk is the risk that fixed income securities will decline in value because of changes in interest rates. The value of fixed income securities typically changes as interest rates fluctuate. During periods of rising interest rates, fixed income securities generally decline in value. Conversely, during periods of falling interest rates, fixed income securities generally rise in value. This kind of market risk is generally greater for a fund investing in fixed income securities with longer durations.

Credit Risk is the risk that the Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund's expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Illiquid and Restricted Securities Risk is the risk that the Adviser or Sub-Adviser, as applicable, may not be able to sell illiquid or restricted securities at the price it would like or may have to sell them at a loss. Securities of non-U.S. issuers, and emerging markets securities in particular, are subject to illiquidity risk.

Legislation Risk is the risk that to the extent that state, federal or international regulators impose additional requirements or restrictions with respect to MLPs, the availability of MLP investments may be adversely affected.

Management Risk is the risk that the Adviser or Sub-Adviser may be incorrect in its assessment of the intrinsic value of the securities the Fund holds which may result in a decline in the value of Fund shares and failure to achieve its investment objective. The Fund's portfolio managers use quantitative analyses and/or models. Any imperfections or limitations in such analyses and models could affect the ability of the portfolio managers to implement strategies.

Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund's investment in fewer issuers may result in the Fund's shares being more sensitive to the economic results of those issuers.

Market Disruption Risk is the risk of unusual and extreme volatility in the equity and debt markets and in the prices of individual investments resulting from a period of acute stress recently experienced by domestic and international markets starting in the real estate and financial sectors and then moving to other sectors of the world economy. These market conditions could add to the risk of short-term volatility of the Fund.

Non-Payment Risk is the risk of non-payment of scheduled interest and/or principal with respect to debt securities. Non-payment would result in a reduction of income to the Fund, a reduction in the value of the obligation experiencing non-payment and a potential decrease in the NAV of the Fund.

Prepayment Risk is the risk that part or all of the principal of a debt security will be paid prior to the scheduled maturity. Pursuant to the relevant debt agreement, a borrower may be required, and may have the option at any time, to prepay the principal amount of a debt security, in some instances without incurring a prepayment penalty. In the event that like-yielding debt is not available in the marketplace, the prepayment of and subsequent reinvestment by the Fund in high yield debt could have a materially adverse affect on the yield of the Fund's investment portfolio. Prepayments may have a beneficial impact on income due to receipt of prepayment penalties, if any, and any facility fees earned in connection with reinvestment.

Industry Specific Risk is the risk that the MLPs in which the Fund invests will be impacted by risks specific to the industry MLPs serve, including the following:
  • Fluctuations in commodity prices may impact the volume of commodities transported, processed, stored or distributed.
  • Reduced volumes of natural gas or other energy commodities available for transporting, processing, storing or distributing may affect the profitability of an MLP.
  • Slowdowns in new construction and acquisitions can limit growth potential.
  • A sustained reduced demand for crude oil, natural gas and refined petroleum products that could adversely affect MLP revenues and cash flows.
  • Depletion of the natural gas reserves or other commodities if not replaced, which could impact an MLP's ability to make distributions.
  • Changes in the regulatory environment could adversely affect the profitability of MLPs.
  • Extreme weather and environmental hazards could impact the value of MLP securities.
  • Rising interest rates which could result in a higher cost of capital and drive investors into other investment opportunities.
  • Threats of attack by terrorists on energy assets could impact the market for MLPs.
Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal.
Risk Lose Money [Text] rr_RiskLoseMoney When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund.
Risk Nondiversified Status [Text] rr_RiskNondiversifiedStatus Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund's investment in fewer issuers may result in the Fund's shares being more sensitive to the economic results of those issuers.
Risk Not Insured Depository Institution [Text] rr_RiskNotInsuredDepositoryInstitution An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Bar Chart and Performance Table [Heading] rr_BarChartAndPerformanceTableHeading Performance
Performance Narrative [Text Block] rr_PerformanceNarrativeTextBlock The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—-Performance or by calling 1-877- 665-1287.
Performance Information Illustrates Variability of Returns [Text] rr_PerformanceInformationIllustratesVariabilityOfReturns The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index.
Performance Availability Phone [Text] rr_PerformanceAvailabilityPhone 1-877- 665-1287
Performance Availability Website Address [Text] rr_PerformanceAvailabilityWebSiteAddress www.highlandfunds.com/Funds—-Performance
Performance Past Does Not Indicate Future [Text] rr_PerformancePastDoesNotIndicateFuture As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future.
Bar Chart [Heading] rr_BarChartHeading Annual Total Returns
Bar Chart Narrative [Text Block] rr_BarChartNarrativeTextBlock The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart Does Not Reflect Sales Loads [Text] rr_BarChartDoesNotReflectSalesLoads The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below.
Bar Chart Closing [Text Block] rr_BarChartClosingTextBlock The highest calendar quarter total return for Class A Shares of the Fund was 7.54% for the quarter ended September 30, 2012 and the lowest calendar quarter total return was -0.55% for the quarter ended December 31, 2012. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 8.40%.
Performance Table Heading rr_PerformanceTableHeading Average Annual Total Returns
(For the periods ended December 31, 2012)
Performance Table Uses Highest Federal Rate rr_PerformanceTableUsesHighestFederalRate After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.
Performance Table Not Relevant to Tax Deferred rr_PerformanceTableNotRelevantToTaxDeferred Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Performance Table One Class of after Tax Shown [Text] rr_PerformanceTableOneClassOfAfterTaxShown After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary.
Performance Table Explanation after Tax Higher rr_PerformanceTableExplanationAfterTaxHigher In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods.
Performance Table Narrative rr_PerformanceTableNarrativeTextBlock After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
Highland Energy MLP Fund | Class A
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice 5.75%
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 1.20%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.35%
Other Expenses rr_OtherExpensesOverAssets 2.45% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.10%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 4.10%
Expense Reimbursement rr_FeeWaiverOrReimbursementOverAssets 2.55% [3]
Total Annual Fund Operating Expenses rr_NetExpensesOverAssets 1.55%
1 Year rr_ExpenseExampleYear01 963 [4]
3 Years rr_ExpenseExampleYear03 1,750
5 Years rr_ExpenseExampleYear05 2,551
10 Years rr_ExpenseExampleYear10 4,618
2012 rr_AnnualReturn2012 8.40%
Year to Date Return, Label rr_YearToDateReturnLabel year-to-date total return
Bar Chart, Year to Date Return, Date rr_BarChartYearToDateReturnDate Dec. 31, 2012
Bar Chart, Year to Date Return rr_BarChartYearToDateReturn 8.40%
Highest Quarterly Return, Label rr_HighestQuarterlyReturnLabel highest calendar quarter total return
Highest Quarterly Return, Date rr_BarChartHighestQuarterlyReturnDate Sep. 30, 2012
Highest Quarterly Return rr_BarChartHighestQuarterlyReturn 7.54%
Lowest Quarterly Return, Label rr_LowestQuarterlyReturnLabel lowest calendar quarter total return
Lowest Quarterly Return, Date rr_BarChartLowestQuarterlyReturnDate Dec. 31, 2012
Lowest Quarterly Return rr_BarChartLowestQuarterlyReturn (0.55%)
1 Year rr_AverageAnnualReturnYear01 2.14% [5]
Since Inception rr_AverageAnnualReturnSinceInception 3.13% [5]
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 01, 2011 [5]
Highland Energy MLP Fund | Class C
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 1.00% [6]
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 1.20%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 2.45% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.10%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 4.75%
Expense Reimbursement rr_FeeWaiverOrReimbursementOverAssets 2.55% [3]
Total Annual Fund Operating Expenses rr_NetExpensesOverAssets 2.20%
1 Year rr_ExpenseExampleYear01 576 [4]
3 Years rr_ExpenseExampleYear03 1,430
5 Years rr_ExpenseExampleYear05 2,390
10 Years rr_ExpenseExampleYear10 4,810
1 Year rr_ExpenseExampleNoRedemptionYear01 476 [4]
3 Years rr_ExpenseExampleNoRedemptionYear03 1,430
5 Years rr_ExpenseExampleNoRedemptionYear05 2,390
10 Years rr_ExpenseExampleNoRedemptionYear10 4,810
1 Year rr_AverageAnnualReturnYear01 6.79% [5]
Since Inception rr_AverageAnnualReturnSinceInception 8.23% [5]
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 01, 2011 [5]
Highland Energy MLP Fund | Class R
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 1.20%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.50%
Other Expenses rr_OtherExpensesOverAssets 2.45% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.10%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 4.25%
Expense Reimbursement rr_FeeWaiverOrReimbursementOverAssets 2.55% [3]
Total Annual Fund Operating Expenses rr_NetExpensesOverAssets 1.70%
1 Year rr_ExpenseExampleYear01 427 [4]
3 Years rr_ExpenseExampleYear03 1,289
5 Years rr_ExpenseExampleYear05 2,165
10 Years rr_ExpenseExampleYear10 4,413
1 Year rr_AverageAnnualReturnYear01 8.34% [5]
Since Inception rr_AverageAnnualReturnSinceInception 8.77% [5]
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 01, 2011 [5]
Highland Energy MLP Fund | Class Y
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 1.20%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets none
Other Expenses rr_OtherExpensesOverAssets 2.45% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.10%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 3.75%
Expense Reimbursement rr_FeeWaiverOrReimbursementOverAssets 2.55% [3]
Total Annual Fund Operating Expenses rr_NetExpensesOverAssets 1.20%
1 Year rr_ExpenseExampleYear01 377 [4]
3 Years rr_ExpenseExampleYear03 1,146
5 Years rr_ExpenseExampleYear05 1,934
10 Years rr_ExpenseExampleYear10 3,993
1 Year rr_AverageAnnualReturnYear01 9.02% [5]
Since Inception rr_AverageAnnualReturnSinceInception 9.51% [5]
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 01, 2011 [5]
Highland Energy MLP Fund | Return After Taxes on Distributions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 (1.75%) [5]
Since Inception rr_AverageAnnualReturnSinceInception (0.50%) [5]
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 01, 2011 [5]
Highland Energy MLP Fund | Return After Taxes on Distributions and Redemptions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 1.39% [5]
Since Inception rr_AverageAnnualReturnSinceInception 0.59% [5]
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 01, 2011 [5]
Highland Energy MLP Fund | Alerian MLP Index (reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 4.80% [5]
Since Inception rr_AverageAnnualReturnSinceInception 9.96% [5]
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 01, 2011 [5]
[1] (as % of amount redeemed within two months or less after date of purchase)
[2] "Other Expenses" are based on estimated amounts for the current fiscal year. Other Expenses" does not reflect deferred and current income tax liability, if any, incurred by the Fund. The Fund accrues deferred income tax liability for its future tax liability associated with the capital appreciation of its investments and the distributions received by the Fund on equity securities of MLPs considered to be return of capital and for any net operating gains. The Fund's accrued deferred tax liability is reflected each day in the Fund's net asset value per share. The Fund's current and deferred tax liability, if any, depends upon the Fund's net investment gains and losses and realized and unrealized gains and losses on investments and therefore may vary greatly from year to year depending on the nature of the Fund's investments, the performance of those investments and general market conditions. Actual income tax expense, if any, will be incurred over many years, depending on if and when investment gains and losses are realized, the then-current basis of the Fund's assets and other factors. See "Net Asset Value" in the Fund's prospectus.
[3] Highland Capital Management Fund Advisors, L.P. (the "Adviser") has contractually agreed to limit the total annual operating expenses (exclusive of fees paid by the Fund pursuant to its distribution plan under Rule 12b-1 under the Investment Company Act of 1940, as amended, taxes, such as deferred tax expenses, brokerage commissions and other transaction costs, acquired fund fees and expenses, and extraordinary expenses) of the Fund to 1.10% of average daily net assets of the Fund (the "Expense Cap"). The Expense Cap will continue through at least January 31, 2014, and may not be terminated prior to this date without the action or consent of the Fund's Board of Trustees. The Trust, on behalf of the Fund, has contractually agreed to pay the Adviser all amounts previously paid, waived or reimbursed by the Adviser with respect to the Fund pursuant to the Expense Cap, provided that the amount of such additional payment in any year, together with all other expenses of the Fund, in the aggregate, would not cause the Fund's total annual operating expenses in any such year to exceed the amount of the Expense Cap, and provided further that no additional payments by the Trust will be made with respect to amounts paid, waived or reimbursed by the Adviser more than 36 months after the date the Fund accrues a liability with respect to such amounts paid, waived or reimbursed by the Adviser.
[4] After reimbursement.
[5] Effective February 1, 2013, the Fund revised its investment strategy to focus on MLP investments. Returns through September 30, 2012 reflect the Fund's treatment as a regulated investment company under the Code. Returns after September 30, 2012 reflect the Fund's treatment as a regular corporation, or "C" corporation, for U.S. federal income tax purposes. As a result, returns after September 30, 2012 generally will be reduced by the amount of entity-level income taxes paid by the Fund as a regular corporation and thus will not necessarily be comparable to returns reported while the Fund still qualified as a regulated investment company.
[6] The contingent deferred sales charge ("CDSC") on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
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Document and Entity Information
12 Months Ended
Feb. 01, 2013
Risk/Return:  
Document Type Other
Document Period End Date Sep. 30, 2012
Registrant Name HIGHLAND FUNDS II
Central Index Key 0000891079
Amendment Flag false
Document Creation Date Feb. 11, 2013
Document Effective Date Feb. 11, 2013
Prospectus Date Feb. 01, 2013
XML 36 R80.htm IDEA: XBRL DOCUMENT v2.4.0.6
Highland Tax-Exempt Fund
Highland Tax-Exempt Fund

(formerly “Pyxis Tax-Exempt Fund”)
Investment Objective
As high a level of income exempt from federal income taxation as is consistent with preservation of capital.
Fees and Expenses of the Fund
The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees (fees paid directly from your investment)
Shareholder Fees Highland Tax-Exempt Fund
Class A
Class C
Class Y
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) 4.25% none none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) none none none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) none 1.00% [1] none
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) none none none
Redemption Fee [2] none none none
[1] Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
[2] (as % of amount redeemed within two months or less after date of purchase)
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Annual Fund Operating Expenses Highland Tax-Exempt Fund
Class A
Class C
Class Y
Management Fees 0.35% 0.35% 0.35%
Distribution and/or Service (12b-1) Fees 0.25% 1.00% none
Other Expenses 0.58% 0.58% 0.58%
Total Annual Fund Operating Expenses 1.18% 1.93% 0.93%
Expense Example
This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Expense Example Highland Tax-Exempt Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class A
540 784 1,046 1,796
Class C
296 606 1,042 2,254
Class Y
95 296 515 1,143
Expense Example, No Redemption (USD $)
1 Year
3 Years
5 Years
10 Years
Highland Tax-Exempt Fund Class C
196 606 1,042 2,254
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 26% of the average value of its portfolio.
Principal Investment Strategies
The Fund seeks to achieve its investment objective by investing primarily in investment-grade municipal obligations. Under normal circumstances, the portfolio manager manages the Fund so that at least 80% of the Fund’s income is exempt from both regular federal income taxes and the federal alternative minimum tax.

Highland Capital Management Fund Advisors, L.P. (“HCMFA”), the Fund’s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (“GEAM”), the Fund’s sub-adviser. The Fund generally will have an effective duration of 75% to 125% of the duration of the Barclays Capital 10-Year Municipal Bond Index. As of December 31, 2012, the effective duration of the Barclays Capital 10-Year Municipal Bond Index was 5.88 years. Portfolio duration is one measure of risk, as noted under “Interest Rate Risk” below.

The portfolio manager seeks to identify municipal obligations with characteristics such as:
  •    attractive yields and prices
  •    the potential for income generation
  •     the potential for capital appreciation
  •    reasonable credit quality
The portfolio manager may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.

The Fund also may invest to a lesser extent in tax-free or taxable money market instruments and may hold cash. The portfolio manager may also invest in various types of derivatives to manage interest rate exposure (also known as duration) and to manage exposure to credit quality. The Fund may also invest in exchange-traded funds (“ETFs”).

The Fund’s policy that at least 80% of its income be exempt from both regular federal income taxes and the federal alternative minimum tax may only be changed with shareholder approval.
Principal Risks
When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Municipal Obligations Risk is the risk of investing in municipal securities, and includes interest rate risk and the credit risk of the issuers of municipal securities. The municipal securities market is volatile and may be significantly affected by adverse tax, legislative or political changes. To the extent that the Fund remains relatively small, it may have fewer favorable investment opportunities.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Credit Risk is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Performance
The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class C and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877-665-1287.
Calendar Year Total Returns
The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart
The highest calendar quarter total return for Class A Shares of the Fund was 5.16% for the quarter ended September 30, 2009 and the lowest calendar quarter total return was -4.17% for the quarter ended December 31, 2010. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 4.85%.
Average Annual Total Returns
(For the periods ended December 31, 2012)
Average Annual Total Returns Highland Tax-Exempt Fund
1 Year
5 Years
10 Years
Since Inception
Inception Date
Class A
0.43% 3.90% 3.28% 4.28% Sep. 08, 1993
Class A Return After Taxes on Distributions
0.43% 3.90% 3.28% 4.28% Sep. 08, 1993
Class A Return After Taxes on Distributions and Redemptions
1.15% 3.79% 3.29% 4.25% Sep. 08, 1993
Class C
3.00% 4.03% 2.96% 3.81% Sep. 30, 1999
Class Y
5.09% 5.06% 8.29% 9.44% Sep. 26, 1997
Barclays Capital 10-Year Municipal Bond Index (reflects no deduction for fees, expenses or taxes)
5.70% 6.62% 5.46% 5.84% Aug. 31, 1993
After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
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Label Element Value
Risk/Return: rr_RiskReturnAbstract  
Registrant Name dei_EntityRegistrantName HIGHLAND FUNDS II
Prospectus Date rr_ProspectusDate Feb. 01, 2013
Highland Trend Following Fund
 
Risk/Return: rr_RiskReturnAbstract  
Risk/Return [Heading] rr_RiskReturnHeading Highland Trend Following Fund

(formerly “Pyxis Trend Following Fund”)
Objective [Heading] rr_ObjectiveHeading Investment Objective
Objective, Primary [Text Block] rr_ObjectivePrimaryTextBlock To provide long-term capital appreciation consistent with capital preservation.
Expense [Heading] rr_ExpenseHeading Fees and Expenses of the Fund
Expense Narrative [Text Block] rr_ExpenseNarrativeTextBlock The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and the “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees Caption [Text] rr_ShareholderFeesCaption Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Text] rr_OperatingExpensesCaption Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Portfolio Turnover [Heading] rr_PortfolioTurnoverHeading Portfolio Turnover
Portfolio Turnover [Text Block] rr_PortfolioTurnoverTextBlock The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 848% of the average value of its portfolio.
Portfolio Turnover, Rate rr_PortfolioTurnoverRate 848.00%
Expenses Deferred Charges [Text Block] rr_ExpensesDeferredChargesTextBlock The contingent deferred sales charge (“CDSC”) on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
Expense Breakpoint Discounts [Text] rr_ExpenseBreakpointDiscounts You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and the “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Expense Breakpoint, Minimum Investment Required [Amount] rr_ExpenseBreakpointMinimumInvestmentRequiredAmount 50,000
Expense Example [Heading] rr_ExpenseExampleHeading Expense Example
Expense Example Narrative [Text Block] rr_ExpenseExampleNarrativeTextBlock This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Strategy [Heading] rr_StrategyHeading Principal Investment Strategies
Strategy Narrative [Text Block] rr_StrategyNarrativeTextBlock Under normal market conditions, the Fund is managed based on signals generated by a proprietary model maintained by the Fund’s sub-adviser (the “Model”). The Model is “technically weighted,” which means that it assigns a greater or lesser importance to asset classes based on signals derived from their price trends. For example, an individual asset class (such as stocks, bonds or commodities) may be assigned a heavier weighting in the portfolio based on its price being above its moving average or a lesser weighting if its price is below its moving average. The net effect being that the investment model switches in and out of broad asset classes based on their trends, providing investors an active asset allocation fund.

These proprietary, top-down strategies are intended to profit from market trends in both directions, with little regard for the prospects of individual equity or debt securities. Specifically, the portfolio manager will seek to take long positions (i.e., buy securities) during upward trends in certain securities prices and conversely sell and/or take short positions during downward trends in the price of such securities. The portfolio manager seeks to lower overall Fund volatility through diversification of asset classes, as well as the use of cash. Additionally, the portfolio manager’s trend-following methods seek to provide returns which are un-correlated to traditional managers and investment “styles,” such as growth and value.

The Fund primarily invests in exchange-traded funds (“ETFs”) which represent these broad asset classes as opposed to securities representing the debt or equity of individual companies. These ETFs invest primarily in (1) U.S. and foreign equity securities; (2) U.S. Government fixed income securities; (3) commodities; and (4) the U.S. dollar. ETFs are investment companies that seek to track the performance of securities indices or baskets of securities. The Fund’s portfolio may include ETFs that invest in both developed and emerging markets in Europe, the Far East, the Middle East, Africa, Australia, Latin America and North America. The Fund also may invest in exchange traded notes (“ETNs”), in much the same manner in which it invests in ETFs. The Fund may also invest directly in the securities which comprise the ETFs and ETNs discussed above, such as individual equities and government obligations, but excluding physical commodities. The Fund’s investments in U.S. fixed income markets may include other investment companies, such as closed-end funds and other open-end mutual funds (together with ETFs, “Underlying Funds”).

The Fund may employ both leveraged investment techniques as well as short positions, which allows the Fund a market exposure which can range from 150% net long (i.e., the Fund has more long (purchased) positions than short (borrowed) positions) to 50% net short (i.e., the Fund has more short (borrowed) positions than long (purchased) positions). Such extremes however, will be uncommon. The Fund may take a “short position” where the portfolio manager believes that the price of a security or value of an index will decline. The Fund may “short” a particular security by borrowing the security and selling it with the intent of later purchasing the security at a lower price. The Fund may also gain short exposure to an index by buying an ETF that has an inverse exposure to the index. The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund is not intended to be a complete investment program.

The Fund may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.

In general, under normal market conditions, the portfolio manager makes investment decisions based on signals generated by the Model. Following the Model, the portfolio manager will generally buy investments during upward trends in the price of securities and sell investments or take short positions during downward trends in the price of securities. The portfolio manager also actively employs the use of cash and cash equivalents as a strategic asset class in an attempt to both sidestep market declines as well as lower overall portfolio volatility. During adverse market, economic or political conditions, as defined by the portfolio manager, the portfolio manager may deviate from the Model, including investing up to 100% of the portfolio in cash, cash equivalents, short-term debt securities and/or money market instruments, moving from a long exposure to a short exposure or from a short exposure to a long exposure in the various asset classes, when they feel doing so will help the Fund achieve its objectives of long-term capital appreciation or capital preservation. The sub-adviser may also adjust the Model from time-to-time to change the component constituents of the Model or in an attempt to improve the Model’s ability to implement a trend-following strategy. The Fund is not intended to be a complete investment program.
Risk [Heading] rr_RiskHeading Principal Risks
Risk Narrative [Text Block] rr_RiskNarrativeTextBlock When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objectives, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Currency Risk is the risk that fluctuations in exchange rates will adversely affect the value of the Fund’s foreign currency holdings and investments denominated in foreign currencies.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company. A Fund’s investments in certain commodities-linked ETFs may be limited by tax considerations, including the Fund’s intention to qualify annually as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”). See “Taxation” below.

Exchange-Traded Notes Risk is the risk that ETNs in which the Fund may invest are subject to credit risk and the value of an ETN may vary and may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying commodities or other related markets, changes in the applicable interest rates, changes in the issuer’s credit rating, and economic, legal, political, or geographic events. ETNs are debt securities whose returns are linked to a particular index. The Fund will bear its proportionate share of any fees and expenses borne by the ETN. A Fund’s investments in certain commodities-linked ETNs may be limited by tax considerations, including the Fund’s intention to qualify annually as a RIC under the Code. See “Taxation” below.

Tax Status Risk is the risk that the Fund’s ability to invest in certain commodity-related instruments, including in certain commodity-linked ETFs and ETNs, is or may be limited by the Fund’s intention to qualify as a RIC under the Code, and, if the Fund does not appropriately limit such investments or if such investments (or the income earned on such investments) were to be recharacterized for U.S. tax purposes, the Fund could fail to qualify as a RIC under one or more of the qualification tests applicable to RICs under the Code. If the Fund were to fail to qualify as a RIC in any taxable year, and were ineligible to or otherwise did not cure such failure, the Fund would be subject to tax on its taxable income at corporate rates, and all distributions from earnings and profits, including any distributions of net long-term capital gains, would be taxable to shareholders as dividend income. See “Taxation” below.

Foreign Investment Risk is the risk that investing in foreign (non-U.S.) securities either directly or indirectly through investments in Underlying Funds may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Government Securities Risk is the risk associated with U.S. Government obligations. U.S. Government obligations include securities issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities, such as the U.S. Treasury. Payment of principal and interest on U.S. Government obligations may be backed by the full faith and credit of the U.S. or may be backed solely by the issuing or guaranteeing agency or instrumentality itself. There can be no assurance that the U.S. Government would provide financial support to its agencies or instrumentalities (including government-sponsored enterprises) where it is not obligated to do so.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Derivatives Risk is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations.

Leverage Risk is the risk associated with the use of leverage for investment purposes to create opportunities for greater total returns. Any investment income or gains earned with respect to the amounts borrowed that are in excess of the interest that is due on the borrowing will augment the Fund’s income. Conversely, if the investment performance with respect to the amounts borrowed fails to cover the interest on such borrowings, the value of the Fund’s shares may decrease more quickly than would otherwise be the case, and dividends on Fund shares could be reduced or eliminated. Interest payments and fees incurred in connection with such borrowings will reduce the amount of net income available for payment to Fund shareholders.

Mid-Cap Company Risk is the risk of investing either directly or indirectly through investments in Underlying Funds in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Model Risk is the risk that the Model used by the Fund to determine or guide investment decisions may not achieve the objectives of the Fund. Additionally, the portfolio manager of the Fund is able to adjust the Model or, under certain adverse conditions, to deviate from the Model employed by the Fund. Such adjustments or deviations may not achieve the objectives of the Fund and may produce lower returns and/or higher volatility compared to what the returns and volatility of the Fund would have been if the portfolio manager had not adjusted or deviated from the Model.

Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund’s investment in fewer issuers may result in the Fund’s shares being more sensitive to the economic results of those issuers.

Portfolio Turnover Risk is the risk that the Fund’s high portfolio turnover will increase its transaction costs and may result in increased realization of net short-term capital gains (which are taxable to shareholders as ordinary income when distributed to them), higher taxable distributions and lower after-tax performance.

Securities Market Risk is the risk that the value of securities owned by the Fund either directly or indirectly through investments in Underlying Funds may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Short Sales Risk is the risk of loss associated with any appreciation on the price of a security borrowed in connection with a short sale. The Fund may engage in short sales that are not made “against-the-box,” which means that the Fund may sell short securities even when they are not actually owned or otherwise covered at all times during the period the short position is open. Short sales that are not made “against-the-box” theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase.

Small-Cap Company Risk is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in Underlying Funds may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.

Underlying Funds Risk is the risk that ETFs, mutual funds and closed-end funds in which the Fund may invest are subject to investment advisory and other expenses, which will be paid indirectly by the Fund and its shareholders. As a result, the cost of investing in the Fund will be higher than the cost of investing directly in ETFs, mutual funds and closed-end funds and may be higher than other mutual funds that invest directly in stocks and bonds. The closed-end fund shares may differ from their net asset value. Underlying Funds are subject to specific risks, depending on the nature of the fund.

An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal.
Risk Lose Money [Text] rr_RiskLoseMoney When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund.
Risk Nondiversified Status [Text] rr_RiskNondiversifiedStatus Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund’s investment in fewer issuers may result in the Fund’s shares being more sensitive to the economic results of those issuers.
Risk Not Insured Depository Institution [Text] rr_RiskNotInsuredDepositoryInstitution An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Bar Chart and Performance Table [Heading] rr_BarChartAndPerformanceTableHeading Performance
Performance Narrative [Text Block] rr_PerformanceNarrativeTextBlock The Fund was organized to acquire the assets and liabilities of the Incline Capital Trend Following Fund (the “Predecessor Fund”) in exchange for Class A Shares of the Fund. Accordingly, the Fund is the successor to the Predecessor Fund, and the following information was derived from the performance records of the Predecessor Fund through September 23, 2011. The Fund has substantially similar objectives, strategies and policies as the Predecessor Fund, which was advised by the Fund’s sub-adviser.

The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year since the Predecessor Fund’s inception and by showing how the average annual returns for the Fund’s Class A Shares compared to those of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. Class C, Class R and Class Y Shares of the Predecessor Fund were not offered, and Class C, Class R and Class Y Shares were not sold, prior to the date of this Prospectus. The returns of Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highland.com/Funds—Performance or by calling 1-877-665-1287.
Performance Information Illustrates Variability of Returns [Text] rr_PerformanceInformationIllustratesVariabilityOfReturns The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year since the Predecessor Fund’s inception and by showing how the average annual returns for the Fund’s Class A Shares compared to those of a broad-based securities market index.
Performance Availability Phone [Text] rr_PerformanceAvailabilityPhone 1-877-665-1287
Performance Availability Website Address [Text] rr_PerformanceAvailabilityWebSiteAddress www.highland.com/Funds—Performance
Performance Past Does Not Indicate Future [Text] rr_PerformancePastDoesNotIndicateFuture As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future.
Bar Chart [Heading] rr_BarChartHeading Calendar Year Total Return
Bar Chart Narrative [Text Block] rr_BarChartNarrativeTextBlock The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart Does Not Reflect Sales Loads [Text] rr_BarChartDoesNotReflectSalesLoads The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below.
Bar Chart Closing [Text Block] rr_BarChartClosingTextBlock The highest calendar quarter total return for Class A Shares of the Fund was 8.23% for the quarter ended December 21, 2010 and the lowest calendar quarter total return was -8.26% for the quarter ended December 31, 2011. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was -5.14%.
Bar Chart, Returns for Class Not Offered in Prospectus [Text] rr_BarChartReturnsForClassNotOfferedInProspectus Class C, Class R and Class Y Shares of the Predecessor Fund were not offered, and Class C, Class R and Class Y Shares were not sold, prior to the date of this Prospectus. The returns of Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses.
Performance Table Heading rr_PerformanceTableHeading Average Annual Total Returns
(For the periods ended December 31, 2012)
Performance Table Uses Highest Federal Rate rr_PerformanceTableUsesHighestFederalRate After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.
Performance Table Not Relevant to Tax Deferred rr_PerformanceTableNotRelevantToTaxDeferred Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Performance Table One Class of after Tax Shown [Text] rr_PerformanceTableOneClassOfAfterTaxShown After-tax returns in the table above are shown for Class A Shares only and will differ for Class C, Class R and Class Y Shares.
Performance Table Explanation after Tax Higher rr_PerformanceTableExplanationAfterTaxHigher In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods.
Performance Table Narrative rr_PerformanceTableNarrativeTextBlock After-tax returns in the table above are shown for Class A Shares only and will differ for Class C, Class R and Class Y Shares. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
Highland Trend Following Fund | Class A
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice 5.75%
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 2.00%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.35%
Other Expenses rr_OtherExpensesOverAssets 0.33%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.38%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 3.06%
1 Year rr_ExpenseExampleYear01 866
3 Years rr_ExpenseExampleYear03 1,466
5 Years rr_ExpenseExampleYear05 2,089
10 Years rr_ExpenseExampleYear10 3,755
2010 rr_AnnualReturn2010 4.29%
2011 rr_AnnualReturn2011 (13.55%)
2012 rr_AnnualReturn2012 (5.14%)
Year to Date Return, Label rr_YearToDateReturnLabel year-to-date total return
Bar Chart, Year to Date Return, Date rr_BarChartYearToDateReturnDate Dec. 31, 2012
Bar Chart, Year to Date Return rr_BarChartYearToDateReturn (5.14%)
Highest Quarterly Return, Label rr_HighestQuarterlyReturnLabel highest calendar quarter total return
Highest Quarterly Return, Date rr_BarChartHighestQuarterlyReturnDate Dec. 21, 2010
Highest Quarterly Return rr_BarChartHighestQuarterlyReturn 8.23%
Lowest Quarterly Return, Label rr_LowestQuarterlyReturnLabel lowest calendar quarter total return
Lowest Quarterly Return, Date rr_BarChartLowestQuarterlyReturnDate Dec. 31, 2011
Lowest Quarterly Return rr_BarChartLowestQuarterlyReturn (8.26%)
1 Year rr_AverageAnnualReturnYear01 (10.58%)
Since Inception rr_AverageAnnualReturnSinceInception (3.72%)
Inception Date rr_AverageAnnualReturnInceptionDate Mar. 31, 2009
Highland Trend Following Fund | Class C
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 1.00% [2]
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 2.00%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 0.33%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.38%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 3.71%
1 Year rr_ExpenseExampleYear01 473
3 Years rr_ExpenseExampleYear03 1,135
5 Years rr_ExpenseExampleYear05 1,916
10 Years rr_ExpenseExampleYear10 3,958
1 Year rr_ExpenseExampleNoRedemptionYear01 373
3 Years rr_ExpenseExampleNoRedemptionYear03 1,135
5 Years rr_ExpenseExampleNoRedemptionYear05 1,916
10 Years rr_ExpenseExampleNoRedemptionYear10 3,958
Highland Trend Following Fund | Class R
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 2.00%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.50%
Other Expenses rr_OtherExpensesOverAssets 0.33%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.38%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 3.21%
1 Year rr_ExpenseExampleYear01 324
3 Years rr_ExpenseExampleYear03 989
5 Years rr_ExpenseExampleYear05 1,678
10 Years rr_ExpenseExampleYear10 3,512
Highland Trend Following Fund | Class Y
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 2.00%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets none
Other Expenses rr_OtherExpensesOverAssets 0.33%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.38%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.71%
1 Year rr_ExpenseExampleYear01 274
3 Years rr_ExpenseExampleYear03 841
5 Years rr_ExpenseExampleYear05 1,435
10 Years rr_ExpenseExampleYear10 3,041
Highland Trend Following Fund | Return After Taxes on Distributions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 (10.58%)
Since Inception rr_AverageAnnualReturnSinceInception (12.19%)
Inception Date rr_AverageAnnualReturnInceptionDate Mar. 31, 2009
Highland Trend Following Fund | Return After Taxes on Distributions and Redemptions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 (6.88%)
Since Inception rr_AverageAnnualReturnSinceInception (10.28%)
Inception Date rr_AverageAnnualReturnInceptionDate Mar. 31, 2009
Highland Trend Following Fund | BofA Merrill Lynch US Dollar LIBOR 3 Month Constant Maturity Index (reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 0.51% [3]
Since Inception rr_AverageAnnualReturnSinceInception 0.46% [3]
Inception Date rr_AverageAnnualReturnInceptionDate Mar. 31, 2009 [3]
[1] (as % of amount redeemed within two months or less after date of purchase)
[2] The contingent deferred sales charge (“CDSC”) on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
[3] The BofA Merrill Lynch US Dollar LIBOR Month Constant Maturity Index tracks the interest rate offered by a specific group of London banks for U.S. dollar deposits with a three-month maturity.
XML 38 R15.htm IDEA: XBRL DOCUMENT v2.4.0.6
Label Element Value
Risk/Return: rr_RiskReturnAbstract  
Registrant Name dei_EntityRegistrantName HIGHLAND FUNDS II
Prospectus Date rr_ProspectusDate Feb. 01, 2013
Highland Alternative Income Fund
 
Risk/Return: rr_RiskReturnAbstract  
Risk/Return [Heading] rr_RiskReturnHeading Highland Alternative Income Fund

(formerly “Pyxis Alternative Income Fund”)
Objective [Heading] rr_ObjectiveHeading Investment Objective
Objective, Primary [Text Block] rr_ObjectivePrimaryTextBlock To provide shareholders with above-average total returns over a complete market cycle primarily through capital appreciation and income generation.
Expense [Heading] rr_ExpenseHeading Fees and Expenses of the Fund
Expense Narrative [Text Block] rr_ExpenseNarrativeTextBlock The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees Caption [Text] rr_ShareholderFeesCaption Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Text] rr_OperatingExpensesCaption Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Portfolio Turnover [Heading] rr_PortfolioTurnoverHeading Portfolio Turnover
Portfolio Turnover [Text Block] rr_PortfolioTurnoverTextBlock The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the period January 12, 2012 (the date the Fund commenced operations) through September 30, 2012, the Fund had a portfolio turnover rate of 1,081% (not annualized) of the average value of its portfolio.
Portfolio Turnover, Rate rr_PortfolioTurnoverRate 1081.00%
Expenses Deferred Charges [Text Block] rr_ExpensesDeferredChargesTextBlock The contingent deferred sales charge ("CDSC") on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
Expense Breakpoint Discounts [Text] rr_ExpenseBreakpointDiscounts You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Expense Breakpoint, Minimum Investment Required [Amount] rr_ExpenseBreakpointMinimumInvestmentRequiredAmount 50,000
Expense Example [Heading] rr_ExpenseExampleHeading Expense Example
Expense Example Narrative [Text Block] rr_ExpenseExampleNarrativeTextBlock This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Strategy [Heading] rr_StrategyHeading Principal Investment Strategies
Strategy Narrative [Text Block] rr_StrategyNarrativeTextBlock The Fund seeks to achieve its investment objective under normal market conditions by allocating assets among proprietary technically-based trend following strategies. The Fund primarily takes long and short positions with respect to securities that are highly correlated to high yield corporate bonds (also known as “junk bonds”) based on long, intermediate, and short term trends. Such securities primarily will include domestically-listed exchange-traded funds (“ETFs”), exchange-traded notes (“ETNs”) and mutual funds with high yield corporate bond exposure in any industry or sector. Security selection is determined through Anchor Capital Management Group, Inc.’s (“Anchor” or the “Sub-Adviser”) mathematical and statistical models; however, the Sub-Adviser may alter such selection based on its assessment of current market conditions and other factors.

The Sub-Adviser also actively employs the use of cash and cash equivalents as a strategic asset class in an attempt to both sidestep market declines as well as lower overall portfolio volatility, and the Fund may make investments in cash, cash equivalents and short-term debt securities and/or money market instruments in response to adverse market, economic or political conditions. In particular, the Fund may invest all or substantially all of its assets in cash or cash equivalents when the Sub-Adviser determines that market conditions so warrant. To the extent the Fund is invested heavily in cash, it may not achieve its investment objective and may experience negative returns.

The Fund may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.

The Fund may invest, directly and indirectly (through derivatives and other pooled investment vehicles (including ETFs, ETNs, and mutual funds)), in securities of issuers of any credit quality. The Fund may invest without limitation in investments tied economically to any country in the world, including emerging market countries.

The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund is not intended to be a complete investment program.
Risk [Heading] rr_RiskHeading Principal Risks
Risk Narrative [Text Block] rr_RiskNarrativeTextBlock When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Equity Securities Risk is the risk that stock prices will fall over short or long periods of time. In addition, common stocks represent a share of ownership in a company, and rank after bonds and preferred stock in their claim on the company’s assets in the event of bankruptcy.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

High Yield Securities Risk is the risk that high yield securities or unrated securities of similar credit quality (commonly known as “junk bonds”) are more likely to default than higher rated securities. High yield securities are regarded as speculative with respect to the issuer’s capacity to pay interest and to repay principal. The market value of these securities is more sensitive to corporate developments and economic conditions and can be volatile. Market conditions can diminish liquidity and make accurate valuations difficult to obtain.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Credit Risk is the risk that the Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Short Sales Risk is the risk of loss associated with any appreciation on the price of a security borrowed in connection with a short sale. The Fund may engage in short sales that are not made “against-the-box,” which means that the Fund may sell short securities even when they are not actually owned or otherwise covered at all times during the period the short position is open. Short sales that are not made “against-the-box” theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase.

Derivatives Risk is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations.

Debt Securities Risk is the risk that the issuer of a debt security may fail to pay interest or principal when due, and that changes in market interest rates may reduce the value of debt securities or reduce the Fund’s returns. The Fund may invest in debt securities, principally below investment grade securities, but also including investment grade securities and other debt obligations. During periods of economic uncertainty and change, the market price of the Fund’s investments in below investment grade securities may be particularly volatile.

Counterparty Risk is the risk that a counterparty (the other party to a transaction or an agreement or the party with whom the Fund executes transactions) to a transaction with the Fund may be unable or unwilling to make timely principal, interest or settlement payments, or otherwise honor its obligations.

Currency Risk is the risk that fluctuations in exchange rates will adversely affect the value of the Fund’s foreign currency holdings and investments denominated in foreign currencies.

Foreign Investment Risk is the risk that investing in foreign (non-U.S.) securities either directly or indirectly may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Emerging Markets Risk is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Hedging Risk is the risk that, although intended to limit or reduce investment risk, hedging strategies may also limit or reduce the potential for profit. There is no assurance that hedging strategies will be successful.

Illiquid and Restricted Securities Risk is the risk that the Adviser may not be able to sell illiquid or restricted securities at the price it would like or may have to sell them at a loss. Securities of non-U.S. issuers, and emerging markets securities in particular, are subject to illiquidity risk.

Management Risk is the risk that the Adviser or Anchor may be incorrect in its assessment of the intrinsic value of the securities the Fund holds which may result in a decline in the value of Fund shares and failure to achieve its investment objective. The Fund’s portfolio managers use qualitative analyses and/or models. Any imperfections or limitations in such analyses and models could affect the ability of the portfolio managers to implement strategies.

Mid-Cap Company Risk is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Small-Cap Company Risk is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in ETFs, closed-end funds or mutual funds (“Underlying Funds”) may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.

Exchange-Traded Notes Risk is the risk that ETNs in which the Fund may invest are subject to credit risk and the value of an ETN may vary and may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying markets, changes in the applicable interest rates, changes in the issuer’s credit rating, and economic, legal, political, or geographic events. ETNs are debt securities whose returns are linked to a particular index.

Model Risk is the risk that the models used by the Fund to determine or guide investment decisions may not achieve the objectives of the Fund. Additionally, the portfolio manager of the Fund is able to adjust the models or, under certain adverse conditions, to deviate from the models employed by the Fund. Such adjustments or deviations may not achieve the objectives of the Fund and may produce lower returns and/or higher volatility compared to what the returns and volatility of the Fund would have been if the portfolio manager had not adjusted or deviated from the models.

Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund’s investment in fewer issuers may result in the Fund’s shares being more sensitive to the economic results of those issuers.

Portfolio Turnover Risk is the risk that the Fund’s high portfolio turnover will increase its transaction costs and may result in increased realization of net short-term capital gains (which are taxable to shareholders as ordinary income when distributed to them), higher taxable distributions and lower after-tax performance.

An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal.
Risk Lose Money [Text] rr_RiskLoseMoney When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund.
Risk Nondiversified Status [Text] rr_RiskNondiversifiedStatus Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund’s investment in fewer issuers may result in the Fund’s shares being more sensitive to the economic results of those issuers.
Risk Not Insured Depository Institution [Text] rr_RiskNotInsuredDepositoryInstitution An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Bar Chart and Performance Table [Heading] rr_BarChartAndPerformanceTableHeading Performance
Performance Narrative [Text Block] rr_PerformanceNarrativeTextBlock The Fund commenced operations on January 12, 2012. After the Fund has had operations for at least one full calendar year, its Prospectus will include a bar chart and a table that will provide an indication of the risks of investing in the Fund by showing changes in the Fund’s performance from year to year and by showing how the Fund’s average annual returns for the most recent one year, five years and ten years (or the life of the Fund, if shorter), compared to those of a broad measure of market performance. Although past performance of the Fund is no guarantee of how it will perform in the future, historical performance may give you some indication of the risks of investing in the Fund.
Performance Information Illustrates Variability of Returns [Text] rr_PerformanceInformationIllustratesVariabilityOfReturns After the Fund has had operations for at least one full calendar year, its Prospectus will include a bar chart and a table that will provide an indication of the risks of investing in the Fund by showing changes in the Fund’s performance from year to year and by showing how the Fund’s average annual returns for the most recent one year, five years and ten years (or the life of the Fund, if shorter), compared to those of a broad measure of market performance.
Performance One Year or Less [Text] rr_PerformanceOneYearOrLess The Fund commenced operations on January 12, 2012.
Performance Past Does Not Indicate Future [Text] rr_PerformancePastDoesNotIndicateFuture Although past performance of the Fund is no guarantee of how it will perform in the future, historical performance may give you some indication of the risks of investing in the Fund.
Highland Alternative Income Fund | Class A
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice 5.75%
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 2.00%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.35%
Other Expenses rr_OtherExpensesOverAssets 1.42%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.30%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 4.07%
1 Year rr_ExpenseExampleYear01 960
3 Years rr_ExpenseExampleYear03 1,742
5 Years rr_ExpenseExampleYear05 2,538
10 Years rr_ExpenseExampleYear10 4,594
Highland Alternative Income Fund | Class C
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 1.00% [2]
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 2.00%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 1.42%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.30%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 4.72%
1 Year rr_ExpenseExampleYear01 573
3 Years rr_ExpenseExampleYear03 1,422
5 Years rr_ExpenseExampleYear05 2,377
10 Years rr_ExpenseExampleYear10 4,787
1 Year rr_ExpenseExampleNoRedemptionYear01 473
3 Years rr_ExpenseExampleNoRedemptionYear03 1,422
5 Years rr_ExpenseExampleNoRedemptionYear05 2,377
10 Years rr_ExpenseExampleNoRedemptionYear10 4,787
Highland Alternative Income Fund | Class R
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 2.00%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.50%
Other Expenses rr_OtherExpensesOverAssets 1.42%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.30%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 4.22%
1 Year rr_ExpenseExampleYear01 424
3 Years rr_ExpenseExampleYear03 1,281
5 Years rr_ExpenseExampleYear05 2,152
10 Years rr_ExpenseExampleYear10 4,388
Highland Alternative Income Fund | Class Y
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 2.00%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets none
Other Expenses rr_OtherExpensesOverAssets 1.42%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.30%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 3.72%
1 Year rr_ExpenseExampleYear01 374
3 Years rr_ExpenseExampleYear03 1,138
5 Years rr_ExpenseExampleYear05 1,920
10 Years rr_ExpenseExampleYear10 3,967
[1] (as % of amount redeemed within two months or less after date of purchase)
[2] The contingent deferred sales charge ("CDSC") on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
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Highland Trend Following Fund
Highland Trend Following Fund

(formerly “Pyxis Trend Following Fund”)
Investment Objective
To provide long-term capital appreciation consistent with capital preservation.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in the “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and the “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees (fees paid directly from your investment)
Shareholder Fees Highland Trend Following Fund
Class A
Class C
Class R
Class Y
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) 5.75% none none none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) none none none none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) none 1.00% [1] none none
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) 2.00% 2.00% 2.00% 2.00%
Redemption Fee [2] 2.00% 2.00% 2.00% 2.00%
[1] The contingent deferred sales charge (“CDSC”) on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
[2] (as % of amount redeemed within two months or less after date of purchase)
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Annual Fund Operating Expenses Highland Trend Following Fund
Class A
Class C
Class R
Class Y
Management Fees 2.00% 2.00% 2.00% 2.00%
Distribution and Service (12b-1) Fees 0.35% 1.00% 0.50% none
Other Expenses 0.33% 0.33% 0.33% 0.33%
Acquired Fund Fees and Expenses 0.38% 0.38% 0.38% 0.38%
Total Annual Fund Operating Expenses 3.06% 3.71% 3.21% 2.71%
Expense Example
This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Expense Example Highland Trend Following Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class A
866 1,466 2,089 3,755
Class C
473 1,135 1,916 3,958
Class R
324 989 1,678 3,512
Class Y
274 841 1,435 3,041
Expense Example, No Redemption (USD $)
1 Year
3 Years
5 Years
10 Years
Highland Trend Following Fund Class C
373 1,135 1,916 3,958
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 848% of the average value of its portfolio.
Principal Investment Strategies
Under normal market conditions, the Fund is managed based on signals generated by a proprietary model maintained by the Fund’s sub-adviser (the “Model”). The Model is “technically weighted,” which means that it assigns a greater or lesser importance to asset classes based on signals derived from their price trends. For example, an individual asset class (such as stocks, bonds or commodities) may be assigned a heavier weighting in the portfolio based on its price being above its moving average or a lesser weighting if its price is below its moving average. The net effect being that the investment model switches in and out of broad asset classes based on their trends, providing investors an active asset allocation fund.

These proprietary, top-down strategies are intended to profit from market trends in both directions, with little regard for the prospects of individual equity or debt securities. Specifically, the portfolio manager will seek to take long positions (i.e., buy securities) during upward trends in certain securities prices and conversely sell and/or take short positions during downward trends in the price of such securities. The portfolio manager seeks to lower overall Fund volatility through diversification of asset classes, as well as the use of cash. Additionally, the portfolio manager’s trend-following methods seek to provide returns which are un-correlated to traditional managers and investment “styles,” such as growth and value.

The Fund primarily invests in exchange-traded funds (“ETFs”) which represent these broad asset classes as opposed to securities representing the debt or equity of individual companies. These ETFs invest primarily in (1) U.S. and foreign equity securities; (2) U.S. Government fixed income securities; (3) commodities; and (4) the U.S. dollar. ETFs are investment companies that seek to track the performance of securities indices or baskets of securities. The Fund’s portfolio may include ETFs that invest in both developed and emerging markets in Europe, the Far East, the Middle East, Africa, Australia, Latin America and North America. The Fund also may invest in exchange traded notes (“ETNs”), in much the same manner in which it invests in ETFs. The Fund may also invest directly in the securities which comprise the ETFs and ETNs discussed above, such as individual equities and government obligations, but excluding physical commodities. The Fund’s investments in U.S. fixed income markets may include other investment companies, such as closed-end funds and other open-end mutual funds (together with ETFs, “Underlying Funds”).

The Fund may employ both leveraged investment techniques as well as short positions, which allows the Fund a market exposure which can range from 150% net long (i.e., the Fund has more long (purchased) positions than short (borrowed) positions) to 50% net short (i.e., the Fund has more short (borrowed) positions than long (purchased) positions). Such extremes however, will be uncommon. The Fund may take a “short position” where the portfolio manager believes that the price of a security or value of an index will decline. The Fund may “short” a particular security by borrowing the security and selling it with the intent of later purchasing the security at a lower price. The Fund may also gain short exposure to an index by buying an ETF that has an inverse exposure to the index. The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund is not intended to be a complete investment program.

The Fund may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.

In general, under normal market conditions, the portfolio manager makes investment decisions based on signals generated by the Model. Following the Model, the portfolio manager will generally buy investments during upward trends in the price of securities and sell investments or take short positions during downward trends in the price of securities. The portfolio manager also actively employs the use of cash and cash equivalents as a strategic asset class in an attempt to both sidestep market declines as well as lower overall portfolio volatility. During adverse market, economic or political conditions, as defined by the portfolio manager, the portfolio manager may deviate from the Model, including investing up to 100% of the portfolio in cash, cash equivalents, short-term debt securities and/or money market instruments, moving from a long exposure to a short exposure or from a short exposure to a long exposure in the various asset classes, when they feel doing so will help the Fund achieve its objectives of long-term capital appreciation or capital preservation. The sub-adviser may also adjust the Model from time-to-time to change the component constituents of the Model or in an attempt to improve the Model’s ability to implement a trend-following strategy. The Fund is not intended to be a complete investment program.
Principal Risks
When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objectives, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Currency Risk is the risk that fluctuations in exchange rates will adversely affect the value of the Fund’s foreign currency holdings and investments denominated in foreign currencies.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company. A Fund’s investments in certain commodities-linked ETFs may be limited by tax considerations, including the Fund’s intention to qualify annually as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”). See “Taxation” below.

Exchange-Traded Notes Risk is the risk that ETNs in which the Fund may invest are subject to credit risk and the value of an ETN may vary and may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying commodities or other related markets, changes in the applicable interest rates, changes in the issuer’s credit rating, and economic, legal, political, or geographic events. ETNs are debt securities whose returns are linked to a particular index. The Fund will bear its proportionate share of any fees and expenses borne by the ETN. A Fund’s investments in certain commodities-linked ETNs may be limited by tax considerations, including the Fund’s intention to qualify annually as a RIC under the Code. See “Taxation” below.

Tax Status Risk is the risk that the Fund’s ability to invest in certain commodity-related instruments, including in certain commodity-linked ETFs and ETNs, is or may be limited by the Fund’s intention to qualify as a RIC under the Code, and, if the Fund does not appropriately limit such investments or if such investments (or the income earned on such investments) were to be recharacterized for U.S. tax purposes, the Fund could fail to qualify as a RIC under one or more of the qualification tests applicable to RICs under the Code. If the Fund were to fail to qualify as a RIC in any taxable year, and were ineligible to or otherwise did not cure such failure, the Fund would be subject to tax on its taxable income at corporate rates, and all distributions from earnings and profits, including any distributions of net long-term capital gains, would be taxable to shareholders as dividend income. See “Taxation” below.

Foreign Investment Risk is the risk that investing in foreign (non-U.S.) securities either directly or indirectly through investments in Underlying Funds may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Government Securities Risk is the risk associated with U.S. Government obligations. U.S. Government obligations include securities issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities, such as the U.S. Treasury. Payment of principal and interest on U.S. Government obligations may be backed by the full faith and credit of the U.S. or may be backed solely by the issuing or guaranteeing agency or instrumentality itself. There can be no assurance that the U.S. Government would provide financial support to its agencies or instrumentalities (including government-sponsored enterprises) where it is not obligated to do so.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Derivatives Risk is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations.

Leverage Risk is the risk associated with the use of leverage for investment purposes to create opportunities for greater total returns. Any investment income or gains earned with respect to the amounts borrowed that are in excess of the interest that is due on the borrowing will augment the Fund’s income. Conversely, if the investment performance with respect to the amounts borrowed fails to cover the interest on such borrowings, the value of the Fund’s shares may decrease more quickly than would otherwise be the case, and dividends on Fund shares could be reduced or eliminated. Interest payments and fees incurred in connection with such borrowings will reduce the amount of net income available for payment to Fund shareholders.

Mid-Cap Company Risk is the risk of investing either directly or indirectly through investments in Underlying Funds in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Model Risk is the risk that the Model used by the Fund to determine or guide investment decisions may not achieve the objectives of the Fund. Additionally, the portfolio manager of the Fund is able to adjust the Model or, under certain adverse conditions, to deviate from the Model employed by the Fund. Such adjustments or deviations may not achieve the objectives of the Fund and may produce lower returns and/or higher volatility compared to what the returns and volatility of the Fund would have been if the portfolio manager had not adjusted or deviated from the Model.

Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund’s investment in fewer issuers may result in the Fund’s shares being more sensitive to the economic results of those issuers.

Portfolio Turnover Risk is the risk that the Fund’s high portfolio turnover will increase its transaction costs and may result in increased realization of net short-term capital gains (which are taxable to shareholders as ordinary income when distributed to them), higher taxable distributions and lower after-tax performance.

Securities Market Risk is the risk that the value of securities owned by the Fund either directly or indirectly through investments in Underlying Funds may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Short Sales Risk is the risk of loss associated with any appreciation on the price of a security borrowed in connection with a short sale. The Fund may engage in short sales that are not made “against-the-box,” which means that the Fund may sell short securities even when they are not actually owned or otherwise covered at all times during the period the short position is open. Short sales that are not made “against-the-box” theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase.

Small-Cap Company Risk is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in Underlying Funds may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.

Underlying Funds Risk is the risk that ETFs, mutual funds and closed-end funds in which the Fund may invest are subject to investment advisory and other expenses, which will be paid indirectly by the Fund and its shareholders. As a result, the cost of investing in the Fund will be higher than the cost of investing directly in ETFs, mutual funds and closed-end funds and may be higher than other mutual funds that invest directly in stocks and bonds. The closed-end fund shares may differ from their net asset value. Underlying Funds are subject to specific risks, depending on the nature of the fund.

An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal.
Performance
The Fund was organized to acquire the assets and liabilities of the Incline Capital Trend Following Fund (the “Predecessor Fund”) in exchange for Class A Shares of the Fund. Accordingly, the Fund is the successor to the Predecessor Fund, and the following information was derived from the performance records of the Predecessor Fund through September 23, 2011. The Fund has substantially similar objectives, strategies and policies as the Predecessor Fund, which was advised by the Fund’s sub-adviser.

The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year since the Predecessor Fund’s inception and by showing how the average annual returns for the Fund’s Class A Shares compared to those of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. Class C, Class R and Class Y Shares of the Predecessor Fund were not offered, and Class C, Class R and Class Y Shares were not sold, prior to the date of this Prospectus. The returns of Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highland.com/Funds—Performance or by calling 1-877-665-1287.
Calendar Year Total Return
The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart
The highest calendar quarter total return for Class A Shares of the Fund was 8.23% for the quarter ended December 21, 2010 and the lowest calendar quarter total return was -8.26% for the quarter ended December 31, 2011. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was -5.14%.
Average Annual Total Returns
(For the periods ended December 31, 2012)
Average Annual Total Returns Highland Trend Following Fund
1 Year
Since Inception
Inception Date
Class A
(10.58%) (3.72%) Mar. 31, 2009
Class A Return After Taxes on Distributions
(10.58%) (12.19%) Mar. 31, 2009
Class A Return After Taxes on Distributions and Redemptions
(6.88%) (10.28%) Mar. 31, 2009
BofA Merrill Lynch US Dollar LIBOR 3 Month Constant Maturity Index (reflects no deduction for fees, expenses or taxes)
[1] 0.51% 0.46% Mar. 31, 2009
[1] The BofA Merrill Lynch US Dollar LIBOR Month Constant Maturity Index tracks the interest rate offered by a specific group of London banks for U.S. dollar deposits with a three-month maturity.
After-tax returns in the table above are shown for Class A Shares only and will differ for Class C, Class R and Class Y Shares. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
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Highland International Equity Fund
Highland International Equity Fund

(formerly “Pyxis International Equity Fund”)
Investment Objective
Long-term growth of capital.
Fees and Expenses of the Fund
The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees (fees paid directly from your investment)
Shareholder Fees Highland International Equity Fund
Class A
Class B
Class C
Class R
Class Y
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) 5.75% none none none none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) none none none none none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) none 4.00% 1.00% [1] none none
Redemption Fee [2] 2.00% 2.00% 2.00% 2.00% 2.00%
Exchange Fee (as a % of proceeds on exchanges within 90 days; currently suspended) 2.00% 2.00% 2.00% 2.00% 2.00%
[1] Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
[2] (as a % of redemption proceeds on redemptions within 90 days; currently suspended)
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Annual Fund Operating Expenses Highland International Equity Fund
Class A
Class B
Class C
Class R
Class Y
Management Fees 0.80% 0.80% 0.80% 0.80% 0.80%
Distribution and/or Service (12b-1) Fees 0.25% 1.00% 1.00% 0.50% none
Other Expenses [1] 0.63% 0.63% 0.63% 0.63% 0.63%
Total Annual Fund Operating Expenses 1.68% 2.43% 2.43% 1.93% 1.43%
[1] "Other Expenses" include indirect fees and expenses of Acquired Funds less than 0.01%. "Acquired Fund" means any investment company in which the Fund invests or has invested during the period.
Expense Example
This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Expense Example Highland International Equity Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class A
736 1,074 1,435 2,448
Class B
646 958 1,296 2,411
Class C
346 758 1,296 2,766
Class R
196 606 1,042 2,254
Class Y
146 452 782 1,713
Expense Example, No Redemption Highland International Equity Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class B
246 758 1,296 2,411
Class C
246 758 1,296 2,766
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 48% of the average value of its portfolio.

Principal Investment Strategies
The Fund seeks to achieve its investment objective by investing at least 80% of its net assets under normal circumstances in equity securities, such as common and preferred stocks, plus borrowings for investment purposes.

Highland Capital Management Fund Advisors, L.P. (“HCMFA”), the Fund’s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (“GEAM”), the Fund’s sub-adviser. The Fund invests primarily (meaning at least 65%) in companies in both developed and emerging market countries outside the U.S. An issuer is considered to be located outside the U.S. if at least 50% of its revenues or profits are from business activities located outside the U.S., at least 50% of its assets are located outside the U.S., or the principal trading market for its securities is located outside the U.S. The portfolio managers focus on companies whose security prices they believe do not fully reflect their potential for growth. Under normal circumstances, the Fund’s assets are invested in securities of foreign (non-U.S.) companies representing at least three different countries. Stock selection is key to the performance of the Fund.

The portfolio managers seek to identify securities of companies with characteristics such as:
  •    low valuation relative to their long term cash earnings potential
  •    potential for significant improvement in the company’s business
  •    financial strength (favorable debt ratios and other financial characteristics)
  •    sufficient liquidity
  •    large or medium capitalization (meaning a market capitalization of $2 billion or more)
The portfolio managers may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.

The Fund also may invest to a lesser extent in debt securities and may invest in securities of companies located in the U.S. The Fund may also invest in exchange-traded funds (“ETFs”), and it may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.
Principal Risks

When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Foreign Investment Risk is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S., and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.

Growth Investing Risk is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company’s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.

Mid-Cap Company Risk is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Emerging Markets Risk is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets.

Credit Risk is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Performance
The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandsfunds.com/Funds—Performance or by calling 1-877-665-1287.
Calendar Year Total Returns
The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart
The highest calendar quarter total return for Class A Shares of the Fund was 25.15% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -23.59% for the quarter ended September 30, 2011. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 18.64%.
Average Annual Total Returns
(For the periods ended December 31, 2012)
Average Annual Total Returns Highland International Equity Fund
1 Year
5 Years
10 Years
Since Inception
Inception Date
Class A
11.86% (7.26%) 6.37% 3.38% Mar. 02, 1994
Class A Return After Taxes on Distributions
11.97% (7.71%) 5.97% 2.61% Mar. 02, 1994
Class A Return After Taxes on Distributions and Redemptions
7.82% (5.94%) 5.78% 2.78% Mar. 02, 1994
Class B
13.75% (6.87%) 6.49% 3.47% Mar. 02, 1994
Class C
16.84% (6.81%) 6.27% 0.85% Sep. 30, 1999
Class R
18.52%       (4.67%) Jan. 29, 2008
Class Y
18.97% (5.91%) 7.26% 3.99% Mar. 02, 1994
MSCI EAFE Index® ( reflects no deduction for fees, expenses or taxes)
17.32% (3.69%) 8.21% 4.45% Feb. 28, 1994
After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
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Label Element Value
Risk/Return: rr_RiskReturnAbstract  
Registrant Name dei_EntityRegistrantName HIGHLAND FUNDS II
Prospectus Date rr_ProspectusDate Feb. 01, 2013
Highland Global Select Equity
 
Risk/Return: rr_RiskReturnAbstract  
Risk/Return [Heading] rr_RiskReturnHeading Highland Global Select Equity Fund

(formerly “Pyxis Global Equity Fund”)
Objective [Heading] rr_ObjectiveHeading Investment Objective
Objective, Primary [Text Block] rr_ObjectivePrimaryTextBlock Long-term growth of capital.
Expense [Heading] rr_ExpenseHeading Fees and Expenses of the Fund
Expense Narrative [Text Block] rr_ExpenseNarrativeTextBlock The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees Caption [Text] rr_ShareholderFeesCaption Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Text] rr_OperatingExpensesCaption Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Portfolio Turnover [Heading] rr_PortfolioTurnoverHeading Portfolio Turnover
Portfolio Turnover [Text Block] rr_PortfolioTurnoverTextBlock The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 94% of the average value of its portfolio.
Portfolio Turnover, Rate rr_PortfolioTurnoverRate 94.00%
Expense Breakpoint Discounts [Text] rr_ExpenseBreakpointDiscounts You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Expense Breakpoint, Minimum Investment Required [Amount] rr_ExpenseBreakpointMinimumInvestmentRequiredAmount 50,000
Expense Example [Heading] rr_ExpenseExampleHeading Expense Example
Expense Example Narrative [Text Block] rr_ExpenseExampleNarrativeTextBlock This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Strategy [Heading] rr_StrategyHeading Principal Investment Strategies
Strategy Narrative [Text Block] rr_StrategyNarrativeTextBlock The Fund seeks to achieve its investment objective by investing at least 80% of its net assets under normal circumstances in equity securities, such as common and preferred stocks, plus borrowings for investment purposes.

Highland Capital Management Fund Advisors, L.P. (“HCMFA”), the Fund’s investment adviser, has allocated all the assets of the Fund to be managed/advised by GE Asset Management Incorporated (“GEAM”), the Fund’s sub-adviser. The Fund invests in companies in both developed and emerging market countries, including the United States, but will invest at least 25% of its total assets in non-U.S. issuers. The portfolio manager focuses on companies that are expected to grow faster than their relevant peers/markets and whose security prices do not fully reflect their potential for growth. When valuations are low, the portfolio managers may also invest in companies that are not expected to grow faster than their relevant peers/markets. Under normal circumstances, the Fund’s assets are invested primarily in countries included in the Morgan Stanley Capital InternationalSM (MSCI®) All Country World Index (“MSCI® World Index”) and in no fewer than three different countries (not including the United States). As of December 31, 2012, U.S. companies represented 45% of the MSCI® All Country World Index, but the portion of the Fund’s portfolio represented by U.S. companies may vary materially from that level. Stock selection is key to the performance of the Fund.

The portfolio managers seek to identify securities of growth companies with the following characteristics:
  •    low prices relative to their long-term cash earnings potential
  •    potential for significant improvement in the company’s business
  •    financial strength (favorable debt ratios and other financial characteristics)
  •    sufficient liquidity
  •     emerging markets exposure
The portfolio manager may consider selling a security when one or more of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified. The Fund may invest in securities of issuers of any market capitalization and in any industry or sector.

The Fund also may invest in pooled investment vehicles, including ETFs, and it may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.

The Fund may invest to a lesser extent in debt securities of any kind, including debt securities of varying maturities, debt securities paying a fixed or fluctuating rate of interest, inflation-indexed bonds, structured notes, loan assignments, loan participations, debt securities, convertible into equity securities and securities issued or guaranteed by the U.S. Government.

Although the Fund is classified as a “diversified” fund under the Investment Company Act of 1940, as amended (the “1940 Act”), the Fund will typically invest in approximately 30-50 different issuers, resulting in a more concentrated portfolio than a more widely diversified Fund. The Fund is not intended to be a complete investment program.
Risk [Heading] rr_RiskHeading Principal Risks
Risk Narrative [Text Block] rr_RiskNarrativeTextBlock When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Foreign Investment Risk is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S., and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.

Growth Investing Risk is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company’s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.

Focused Investment Risk is the risk of investing in securities of a limited number of issuers in an effort to achieve a potentially greater investment return than a fund that invests in a larger number of issuers. While the Fund is classified as a “diversified” fund under the 1940 Act, the limited number of issuers in which the Fund will invest means that price movements of a single issuer’s securities will possibly have a greater impact on the Fund’s net asset value. As a result, the Fund’s value may fluctuate more than that of a more widely diversified fund.

Mid-Cap Company Risk is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Emerging Markets Risk is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets.

Credit Risk is the risk that the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Risk Lose Money [Text] rr_RiskLoseMoney When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund.
Risk Not Insured Depository Institution [Text] rr_RiskNotInsuredDepositoryInstitution An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Bar Chart and Performance Table [Heading] rr_BarChartAndPerformanceTableHeading Performance
Performance Narrative [Text Block] rr_PerformanceNarrativeTextBlock The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandsfunds.com/Funds—Performance or by calling 1-877-665-1287.
Performance Information Illustrates Variability of Returns [Text] rr_PerformanceInformationIllustratesVariabilityOfReturns The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of a broad-based securities market index.
Performance Availability Phone [Text] rr_PerformanceAvailabilityPhone 1-877-665-1287
Performance Availability Website Address [Text] rr_PerformanceAvailabilityWebSiteAddress www.highlandsfunds.com/Funds—Performance
Performance Past Does Not Indicate Future [Text] rr_PerformancePastDoesNotIndicateFuture As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future.
Bar Chart [Heading] rr_BarChartHeading Calendar Year Total Returns
Bar Chart Narrative [Text Block] rr_BarChartNarrativeTextBlock The bar chart shows the performance of the Fund’s Class A shares as of December 31.
Bar Chart Does Not Reflect Sales Loads [Text] rr_BarChartDoesNotReflectSalesLoads The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below.
Bar Chart Closing [Text Block] rr_BarChartClosingTextBlock The highest calendar quarter total return for Class A Shares of the Fund was 19.72% for the quarter ended June 30, 2009 and the lowest calendar quarter total return was -24.38% for the quarter ended December 31, 2008. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 16.28%.
Performance Table Heading rr_PerformanceTableHeading Average Annual Total Returns
(For the periods ended December 31, 2012)
Performance Table Uses Highest Federal Rate rr_PerformanceTableUsesHighestFederalRate After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.
Performance Table Not Relevant to Tax Deferred rr_PerformanceTableNotRelevantToTaxDeferred Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Performance Table One Class of after Tax Shown [Text] rr_PerformanceTableOneClassOfAfterTaxShown After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary.
Performance Table Explanation after Tax Higher rr_PerformanceTableExplanationAfterTaxHigher In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods.
Performance Table Narrative rr_PerformanceTableNarrativeTextBlock After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. For example, after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
Highland Global Select Equity | Class A
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice 5.75%
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge on Reinvested Dividends and Distributions (as a percentage) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as a % of proceeds on exchanges within 90 days; currently suspended) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 0.75%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.25%
Other Expenses rr_OtherExpensesOverAssets 1.24% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.25%
1 Year rr_ExpenseExampleYear01 790
3 Years rr_ExpenseExampleYear03 1,238
5 Years rr_ExpenseExampleYear05 1,711
10 Years rr_ExpenseExampleYear10 3,011
2003 rr_AnnualReturn2003 28.09%
2004 rr_AnnualReturn2004 10.46%
2005 rr_AnnualReturn2005 13.01%
2006 rr_AnnualReturn2006 20.64%
2007 rr_AnnualReturn2007 19.60%
2008 rr_AnnualReturn2008 (43.53%)
2009 rr_AnnualReturn2009 26.63%
2010 rr_AnnualReturn2010 11.33%
2011 rr_AnnualReturn2011 (13.63%)
2012 rr_AnnualReturn2012 16.28%
Year to Date Return, Label rr_YearToDateReturnLabel year-to-date total return
Bar Chart, Year to Date Return, Date rr_BarChartYearToDateReturnDate Dec. 31, 2012
Bar Chart, Year to Date Return rr_BarChartYearToDateReturn 16.28%
Highest Quarterly Return, Label rr_HighestQuarterlyReturnLabel highest calendar quarter total return
Highest Quarterly Return, Date rr_BarChartHighestQuarterlyReturnDate Jun. 30, 2009
Highest Quarterly Return rr_BarChartHighestQuarterlyReturn 19.72%
Lowest Quarterly Return, Label rr_LowestQuarterlyReturnLabel lowest calendar quarter total return
Lowest Quarterly Return, Date rr_BarChartLowestQuarterlyReturnDate Dec. 31, 2008
Lowest Quarterly Return rr_BarChartLowestQuarterlyReturn (24.38%)
1 Year rr_AverageAnnualReturnYear01 9.60%
5 Years rr_AverageAnnualReturnYear05 (5.50%)
10 Years rr_AverageAnnualReturnYear10 5.68%
Since Inception rr_AverageAnnualReturnSinceInception 5.42%
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 22, 1993
Highland Global Select Equity | Class B
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 4.00%
Maximum Sales Charge on Reinvested Dividends and Distributions (as a percentage) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as a % of proceeds on exchanges within 90 days; currently suspended) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 0.75%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 1.24% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 3.00%
1 Year rr_ExpenseExampleYear01 703
3 Years rr_ExpenseExampleYear03 1,127
5 Years rr_ExpenseExampleYear05 1,577
10 Years rr_ExpenseExampleYear10 2,982
1 Year rr_ExpenseExampleNoRedemptionYear01 303
3 Years rr_ExpenseExampleNoRedemptionYear03 927
5 Years rr_ExpenseExampleNoRedemptionYear05 1,577
10 Years rr_ExpenseExampleNoRedemptionYear10 2,982
1 Year rr_AverageAnnualReturnYear01 11.38%
5 Years rr_AverageAnnualReturnYear05 (5.09%)
10 Years rr_AverageAnnualReturnYear10 5.84%
Since Inception rr_AverageAnnualReturnSinceInception 4.61%
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 22, 1993
Highland Global Select Equity | Class C
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 1.00% [3]
Maximum Sales Charge on Reinvested Dividends and Distributions (as a percentage) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as a % of proceeds on exchanges within 90 days; currently suspended) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 0.75%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 1.24% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 3.00%
1 Year rr_ExpenseExampleYear01 403
3 Years rr_ExpenseExampleYear03 927
5 Years rr_ExpenseExampleYear05 1,577
10 Years rr_ExpenseExampleYear10 3,318
1 Year rr_ExpenseExampleNoRedemptionYear01 303
3 Years rr_ExpenseExampleNoRedemptionYear03 927
5 Years rr_ExpenseExampleNoRedemptionYear05 1,577
10 Years rr_ExpenseExampleNoRedemptionYear10 3,318
1 Year rr_AverageAnnualReturnYear01 14.38%
5 Years rr_AverageAnnualReturnYear05 (5.08%)
10 Years rr_AverageAnnualReturnYear10 5.61%
Since Inception rr_AverageAnnualReturnSinceInception 1.50%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 30, 1999
Highland Global Select Equity | Class R
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge on Reinvested Dividends and Distributions (as a percentage) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as a % of proceeds on exchanges within 90 days; currently suspended) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 0.75%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.50%
Other Expenses rr_OtherExpensesOverAssets 1.24% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.50%
1 Year rr_ExpenseExampleYear01 253
3 Years rr_ExpenseExampleYear03 779
5 Years rr_ExpenseExampleYear05 1,331
10 Years rr_ExpenseExampleYear10 2,836
1 Year rr_AverageAnnualReturnYear01 16.14%
5 Years rr_AverageAnnualReturnYear05   
10 Years rr_AverageAnnualReturnYear10   
Since Inception rr_AverageAnnualReturnSinceInception (2.79%)
Inception Date rr_AverageAnnualReturnInceptionDate Jan. 29, 2008
Highland Global Select Equity | Class Y
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge on Reinvested Dividends and Distributions (as a percentage) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption 2.00% [1]
Exchange Fee (as a % of proceeds on exchanges within 90 days; currently suspended) rr_ExchangeFeeOverRedemption 2.00%
Management Fees rr_ManagementFeesOverAssets 0.75%
Distribution and/or Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets none
Other Expenses rr_OtherExpensesOverAssets 1.24% [2]
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.01%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.00%
1 Year rr_ExpenseExampleYear01 203
3 Years rr_ExpenseExampleYear03 627
5 Years rr_ExpenseExampleYear05 1,078
10 Years rr_ExpenseExampleYear10 2,327
1 Year rr_AverageAnnualReturnYear01 15.87%
5 Years rr_AverageAnnualReturnYear05 (4.13%)
10 Years rr_AverageAnnualReturnYear10 6.59%
Since Inception rr_AverageAnnualReturnSinceInception 5.41%
Inception Date rr_AverageAnnualReturnInceptionDate Nov. 29, 1993
Highland Global Select Equity | Return After Taxes on Distributions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 9.60%
5 Years rr_AverageAnnualReturnYear05 (5.73%)
10 Years rr_AverageAnnualReturnYear10 5.35%
Since Inception rr_AverageAnnualReturnSinceInception 4.59%
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 22, 1993
Highland Global Select Equity | Return After Taxes on Distributions and Redemptions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 6.24%
5 Years rr_AverageAnnualReturnYear05 (4.65%)
10 Years rr_AverageAnnualReturnYear10 4.99%
Since Inception rr_AverageAnnualReturnSinceInception 4.50%
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 22, 1993
Highland Global Select Equity | MCSI® All Country World Index (Fund Benchmark) (reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 16.13%
5 Years rr_AverageAnnualReturnYear05 (1.16%)
10 Years rr_AverageAnnualReturnYear10 8.11%
Since Inception rr_AverageAnnualReturnSinceInception   
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 28, 1993
Highland Global Select Equity | MCSI® World Index (Prior Fund Benchmark) (reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 15.83% [4]
5 Years rr_AverageAnnualReturnYear05 (1.18%) [4]
10 Years rr_AverageAnnualReturnYear10 7.51% [4]
Since Inception rr_AverageAnnualReturnSinceInception 6.80% [4]
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 28, 1993 [4]
[1] (as a % of redemption proceeds on redemptions within 90 days; currently suspended)
[2] "Other Expenses" include indirect fees and expenses of Acquired Funds less than 0.01%. "Acquired Fund" means any investment company in which the Fund invests or has invested during the period.
[3] Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
[4] Effective February 1, 2012, the Fund changed its benchmark from MSCI World Index to the MSCI All Country World Index because the Adviser believes that the MSCI All Country World Index is a more appropriate comparative, broad-based market index for the Fund.
XML 43 R95.htm IDEA: XBRL DOCUMENT v2.4.0.6
Label Element Value
Risk/Return: rr_RiskReturnAbstract  
Registrant Name dei_EntityRegistrantName HIGHLAND FUNDS II
Prospectus Date rr_ProspectusDate Feb. 01, 2013
Highland Total Return Fund
 
Risk/Return: rr_RiskReturnAbstract  
Risk/Return [Heading] rr_RiskReturnHeading Highland Total Return Fund

(formerly “Pyxis Total Return Fund”)
Objective [Heading] rr_ObjectiveHeading Investment Objective
Objective, Primary [Text Block] rr_ObjectivePrimaryTextBlock Maximum total return (total return includes both income and capital appreciation).
Expense [Heading] rr_ExpenseHeading Fees and Expenses of the Fund
Expense Narrative [Text Block] rr_ExpenseNarrativeTextBlock The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees Caption [Text] rr_ShareholderFeesCaption Shareholder Fees (fees paid directly from your investment)
Operating Expenses Caption [Text] rr_OperatingExpensesCaption Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Portfolio Turnover [Heading] rr_PortfolioTurnoverHeading Portfolio Turnover
Portfolio Turnover [Text Block] rr_PortfolioTurnoverTextBlock The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 169% of the average value of its portfolio.
Portfolio Turnover, Rate rr_PortfolioTurnoverRate 169.00%
Expenses Deferred Charges [Text Block] rr_ExpensesDeferredChargesTextBlock Class C shares are subject to a 1% contingent deferred sales charge (“CDSC”) for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
Expense Breakpoint Discounts [Text] rr_ExpenseBreakpointDiscounts You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Expense Breakpoint, Minimum Investment Required [Amount] rr_ExpenseBreakpointMinimumInvestmentRequiredAmount 50,000
Expense Example [Heading] rr_ExpenseExampleHeading Expense Example
Expense Example Narrative [Text Block] rr_ExpenseExampleNarrativeTextBlock This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Strategy [Heading] rr_StrategyHeading Principal Investment Strategies
Strategy Narrative [Text Block] rr_StrategyNarrativeTextBlock The Fund seeks to achieve its investment objective by investing primarily in a combination of U.S. and foreign equity and debt securities and cash. The Fund’s asset allocation process utilizes information from the Fund’s sub-adviser, GE Asset Management Incorporated (“GEAM”), to diversify holdings across these asset classes. The Fund adjusts its weightings based on market and economic conditions to meet its objectives. The Fund may also invest in various types of derivatives to gain exposure to certain types of securities as an alternative to investing directly in such securities, to manage currency exposure and interest rate exposure (also known as duration), and to manage exposure to credit quality.

Highland Capital Management Fund Advisors, L.P. (“HCMFA”), the Fund’s investment adviser, has allocated all the assets of the Fund to be managed/advised by GEAM, the Fund’s sub-adviser. The Fund invests in equity securities, such as common and preferred stocks, principally for their capital appreciation potential and investment-grade debt securities principally for their income potential. The Fund invests in cash principally for the preservation of capital, income potential or maintenance of liquidity. Within each asset class, the portfolio managers primarily use active security selection to choose securities based on the perceived merits of individual issuers, although portfolio managers of different asset classes or strategies may place different emphasis on the various characteristics of a company (as identified below) during the selection process.

The portfolio managers seek to identify equity securities of companies with characteristics such as:
  •    strong earnings growth
  •     favorable valuation
  •     a presence in successful industries
  •    high quality management focused on generating shareholder value
  •     large or medium capitalization (meaning a market capitalization of $2 billion or more)
The portfolio managers seek to identify debt securities with characteristics such as:
  •    attractive yields and prices
  •    the potential for capital appreciation
  •    reasonable credit quality (typically investment grade debt securities, such as mortgage-backed securities, corporate bonds, U.S. Government securities and money market instruments)
The portfolio managers may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.

The portion of the Fund invested in debt securities normally has a weighted average maturity of approximately five to ten years, but is subject to no limitation with respect to the maturities of the instruments in which it may invest.

The Fund may also invest to a lesser extent in high yield securities (also known as “junk bonds”), equity and debt securities of companies that are located in emerging market countries, and exchange -traded funds (“ETFs”) to gain exposure to securities including those of U.S. issuers that are principally engaged in or related to the real estate industry.
Risk [Heading] rr_RiskHeading Principal Risks
Risk Narrative [Text Block] rr_RiskNarrativeTextBlock When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Mid-Cap Company Risk is the risk that investing in the securities of mid-cap companies could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Small-Cap Company Risk is the risk that investing in the securities of small-cap companies may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.

Growth Investing Risk is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company’s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.

Value Investing Risk is the risk of investing in undervalued stocks that may not realize their perceived value for extended periods of time or may never realize their perceived value. Value stocks may respond differently to market and other developments than other types of stocks. Value-oriented funds will typically underperform when growth investing is in favor.

Foreign Investment Risk is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S., and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Credit Risk is the risk that the Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Prepayment Risk is the risk that during periods of falling interest rates, issuers of debt securities may repay higher rate securities before their maturity dates. This may cause the Fund to lose potential price appreciation and to be forced to reinvest the unanticipated proceeds at lower interest rates.

Allocation Risk is the risk that HCMFA may not allocate assets of the Fund among strategies or asset classes in an optimal manner, if, among other reasons, it does not correctly assess the attractiveness of a strategy or asset class.

Valuation Risk is the risk that the portfolio securities that have been valued using techniques other than market quotations, may have valuations that are different from those produced using other methodology, and that the security may be sold at a discount to the value established by the Fund.

Illiquid and Restricted Securities Risk is the risk that the Adviser may not be able to sell illiquid or restricted securities at the price it would like or may have to sell them at a loss. Securities of non-U.S. issuers, and emerging markets securities in particular, are subject to illiquidity risk.

High Yield Securities Risk is the risk that high yield securities or unrated securities of similar credit quality (commonly known as “junk bonds”) are more likely to default than higher rated securities. The market value of these securities is more sensitive to corporate developments and economic conditions and can be volatile. Market conditions can diminish liquidity and make accurate valuations difficult to obtain.

Emerging Markets Risk is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets.

REIT-Specific Risk includes the risk that an investment in the stocks of real estate investment trusts (“REITs”) will decline because of adverse developments affecting the real estate industry and real property values. An investment in a REIT also may be adversely affected or lost if the REIT fails to qualify as a REIT for tax purposes.

Real Estate Securities Risk is the risk that an investment in real estate securities will be closely linked to the performance of the real estate markets. Property values or income may fall due to increasing vacancies or declining rents resulting from economic, legal, cultural or technological developments.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Risk Lose Money [Text] rr_RiskLoseMoney When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund.
Risk Not Insured Depository Institution [Text] rr_RiskNotInsuredDepositoryInstitution An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Bar Chart and Performance Table [Heading] rr_BarChartAndPerformanceTableHeading Performance
Performance Narrative [Text Block] rr_PerformanceNarrativeTextBlock The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of two broad-based securities market indices. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877-665-1287.
Performance Information Illustrates Variability of Returns [Text] rr_PerformanceInformationIllustratesVariabilityOfReturns The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of two broad-based securities market indices.
Performance Availability Phone [Text] rr_PerformanceAvailabilityPhone 1-877-665-1287
Performance Availability Website Address [Text] rr_PerformanceAvailabilityWebSiteAddress www.highlandfunds.com/Funds—Performance
Performance Past Does Not Indicate Future [Text] rr_PerformancePastDoesNotIndicateFuture As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future.
Bar Chart [Heading] rr_BarChartHeading Calendar Year Total Returns
Bar Chart Narrative [Text Block] rr_BarChartNarrativeTextBlock The bar chart shows the performance of the Fund's Class A shares as of December 31.
Bar Chart Does Not Reflect Sales Loads [Text] rr_BarChartDoesNotReflectSalesLoads The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below.
Bar Chart Closing [Text Block] rr_BarChartClosingTextBlock The highest calendar quarter total return for Class A Shares of the Fund was 12.15% for the quarter ended June 30, 2003 and the lowest calendar quarter total return was -16.91% for the quarter ended December 31, 2008. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 11.04%.
Performance Table Heading rr_PerformanceTableHeading Average Annual Total Returns
(For the periods ended December 31, 2012)
Performance Table Uses Highest Federal Rate rr_PerformanceTableUsesHighestFederalRate After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.
Performance Table Not Relevant to Tax Deferred rr_PerformanceTableNotRelevantToTaxDeferred Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Performance Table One Class of after Tax Shown [Text] rr_PerformanceTableOneClassOfAfterTaxShown After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary.
Performance Table Explanation after Tax Higher rr_PerformanceTableExplanationAfterTaxHigher In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.
Performance Table Narrative rr_PerformanceTableNarrativeTextBlock After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.

Highland Total Return Fund | Class A
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice 5.75%
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.50%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.25%
Other Expenses rr_OtherExpensesOverAssets 1.07%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.02%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.84%
1 Year rr_ExpenseExampleYear01 751
3 Years rr_ExpenseExampleYear03 1,120
5 Years rr_ExpenseExampleYear05 1,513
10 Years rr_ExpenseExampleYear10 2,609
2003 rr_AnnualReturn2003 20.62%
2004 rr_AnnualReturn2004 7.98%
2005 rr_AnnualReturn2005 3.56%
2006 rr_AnnualReturn2006 13.89%
2007 rr_AnnualReturn2007 11.56%
2008 rr_AnnualReturn2008 (30.64%)
2009 rr_AnnualReturn2009 21.14%
2010 rr_AnnualReturn2010 9.60%
2011 rr_AnnualReturn2011 (3.45%)
2012 rr_AnnualReturn2012 11.04%
Year to Date Return, Label rr_YearToDateReturnLabel year-to-date total return
Bar Chart, Year to Date Return, Date rr_BarChartYearToDateReturnDate Dec. 31, 2012
Bar Chart, Year to Date Return rr_BarChartYearToDateReturn 11.04%
Highest Quarterly Return, Label rr_HighestQuarterlyReturnLabel highest calendar quarter total return
Highest Quarterly Return, Date rr_BarChartHighestQuarterlyReturnDate Jun. 30, 2003
Highest Quarterly Return rr_BarChartHighestQuarterlyReturn 12.15%
Lowest Quarterly Return, Label rr_LowestQuarterlyReturnLabel lowest calendar quarter total return
Lowest Quarterly Return, Date rr_BarChartLowestQuarterlyReturnDate Dec. 31, 2008
Lowest Quarterly Return rr_BarChartLowestQuarterlyReturn (16.91%)
1 Year rr_AverageAnnualReturnYear01 4.64%
5 Years rr_AverageAnnualReturnYear05 (1.43%)
10 Years rr_AverageAnnualReturnYear10 4.78%
Since Inception rr_AverageAnnualReturnSinceInception 6.54%
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 22, 1993
Highland Total Return Fund | Class B
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 4.00%
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.50%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 1.07%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.02%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.59%
1 Year rr_ExpenseExampleYear01 662
3 Years rr_ExpenseExampleYear03 1,005
5 Years rr_ExpenseExampleYear05 1,375
10 Years rr_ExpenseExampleYear10 2,575
1 Year rr_ExpenseExampleNoRedemptionYear01 262
3 Years rr_ExpenseExampleNoRedemptionYear03 805
5 Years rr_ExpenseExampleNoRedemptionYear05 1,375
10 Years rr_ExpenseExampleNoRedemptionYear10 2,575
1 Year rr_AverageAnnualReturnYear01 6.23%
5 Years rr_AverageAnnualReturnYear05 (1.00%)
10 Years rr_AverageAnnualReturnYear10   
Since Inception rr_AverageAnnualReturnSinceInception 6.45%
Inception Date rr_AverageAnnualReturnInceptionDate Dec. 22, 1993
Highland Total Return Fund | Class C
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther 1.00% [2]
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.50%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 1.00%
Other Expenses rr_OtherExpensesOverAssets 1.07%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.02%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.59%
1 Year rr_ExpenseExampleYear01 362
3 Years rr_ExpenseExampleYear03 805
5 Years rr_ExpenseExampleYear05 1,375
10 Years rr_ExpenseExampleYear10 2,925
1 Year rr_ExpenseExampleNoRedemptionYear01 262
3 Years rr_ExpenseExampleNoRedemptionYear03 805
5 Years rr_ExpenseExampleNoRedemptionYear05 1,375
10 Years rr_ExpenseExampleNoRedemptionYear10 2,925
1 Year rr_AverageAnnualReturnYear01 9.19%
5 Years rr_AverageAnnualReturnYear05 (1.00%)
10 Years rr_AverageAnnualReturnYear10 4.63%
Since Inception rr_AverageAnnualReturnSinceInception 3.28%
Inception Date rr_AverageAnnualReturnInceptionDate Sep. 30, 1999
Highland Total Return Fund | Class R
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.50%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets 0.50%
Other Expenses rr_OtherExpensesOverAssets 1.07%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.02%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 2.09%
1 Year rr_ExpenseExampleYear01 212
3 Years rr_ExpenseExampleYear03 655
5 Years rr_ExpenseExampleYear05 1,124
10 Years rr_ExpenseExampleYear10 2,421
1 Year rr_AverageAnnualReturnYear01 10.77%
5 Years rr_AverageAnnualReturnYear05   
10 Years rr_AverageAnnualReturnYear10   
Since Inception rr_AverageAnnualReturnSinceInception 0.74%
Inception Date rr_AverageAnnualReturnInceptionDate Jan. 29, 2008
Highland Total Return Fund | Class Y
 
Risk/Return: rr_RiskReturnAbstract  
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) rr_MaximumSalesChargeImposedOnPurchasesOverOfferingPrice none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) rr_MaximumDeferredSalesChargeOverOther none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) rr_MaximumSalesChargeOnReinvestedDividendsAndDistributionsOverOther none
Redemption Fee rr_RedemptionFeeOverRedemption none [1]
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) rr_ExchangeFeeOverRedemption none
Management Fees rr_ManagementFeesOverAssets 0.50%
Distribution and Service (12b-1) Fees rr_DistributionAndService12b1FeesOverAssets none
Other Expenses rr_OtherExpensesOverAssets 1.07%
Acquired Fund Fees and Expenses rr_AcquiredFundFeesAndExpensesOverAssets 0.02%
Total Annual Fund Operating Expenses rr_ExpensesOverAssets 1.59%
1 Year rr_ExpenseExampleYear01 162
3 Years rr_ExpenseExampleYear03 502
5 Years rr_ExpenseExampleYear05 866
10 Years rr_ExpenseExampleYear10 1,889
1 Year rr_AverageAnnualReturnYear01 11.34%
5 Years rr_AverageAnnualReturnYear05 (0.02%)
10 Years rr_AverageAnnualReturnYear10 5.73%
Since Inception rr_AverageAnnualReturnSinceInception 7.03%
Inception Date rr_AverageAnnualReturnInceptionDate Nov. 29, 1993
Highland Total Return Fund | Return After Taxes on Distributions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 4.48%
5 Years rr_AverageAnnualReturnYear05 (1.86%)
10 Years rr_AverageAnnualReturnYear10 3.95%
Since Inception rr_AverageAnnualReturnSinceInception 5.33%
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 22, 1993
Highland Total Return Fund | Return After Taxes on Distributions and Redemptions | Class A
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 3.23%
5 Years rr_AverageAnnualReturnYear05 (1.33%)
10 Years rr_AverageAnnualReturnYear10 3.98%
Since Inception rr_AverageAnnualReturnSinceInception 5.26%
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 22, 1993
Highland Total Return Fund | S&P 500® Index (reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 15.99%
5 Years rr_AverageAnnualReturnYear05 1.66%
10 Years rr_AverageAnnualReturnYear10 7.10%
Since Inception rr_AverageAnnualReturnSinceInception 8.16%
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 28, 1993
Highland Total Return Fund | Barclays Capital U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)
 
Risk/Return: rr_RiskReturnAbstract  
1 Year rr_AverageAnnualReturnYear01 4.22%
5 Years rr_AverageAnnualReturnYear05 5.95%
10 Years rr_AverageAnnualReturnYear10 5.18%
Since Inception rr_AverageAnnualReturnSinceInception 6.20%
Inception Date rr_AverageAnnualReturnInceptionDate Feb. 28, 1993
[1] (as % of amount redeemed within two months or less after date of purchase)
[2] Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
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Highland Total Return Fund
Highland Total Return Fund

(formerly “Pyxis Total Return Fund”)
Investment Objective
Maximum total return (total return includes both income and capital appreciation).
Fees and Expenses of the Fund
The following table describes the fees that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in the Fund or in other Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees (fees paid directly from your investment)
Shareholder Fees Highland Total Return Fund
Class A
Class B
Class C
Class R
Class Y
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) 5.75% none none none none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) none none none none none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) none 4.00% 1.00% [1] none none
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) none none none none none
Redemption Fee [2] none none none none none
[1] Class C shares are subject to a 1% contingent deferred sales charge ("CDSC") for redemption of shares within one year of purchase. This CDSC does not apply to redemptions under a systematic withdrawal plan.
[2] (as % of amount redeemed within two months or less after date of purchase)
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Annual Fund Operating Expenses Highland Total Return Fund
Class A
Class B
Class C
Class R
Class Y
Management Fees 0.50% 0.50% 0.50% 0.50% 0.50%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00% 0.50% none
Other Expenses 1.07% 1.07% 1.07% 1.07% 1.07%
Acquired Fund Fees and Expenses 0.02% 0.02% 0.02% 0.02% 0.02%
Total Annual Fund Operating Expenses 1.84% 2.59% 2.59% 2.09% 1.59%
Expense Example
This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Expense Example Highland Total Return Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class A
751 1,120 1,513 2,609
Class B
662 1,005 1,375 2,575
Class C
362 805 1,375 2,925
Class R
212 655 1,124 2,421
Class Y
162 502 866 1,889
Expense Example, No Redemption Highland Total Return Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class B
262 805 1,375 2,575
Class C
262 805 1,375 2,925
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 169% of the average value of its portfolio.
Principal Investment Strategies
The Fund seeks to achieve its investment objective by investing primarily in a combination of U.S. and foreign equity and debt securities and cash. The Fund’s asset allocation process utilizes information from the Fund’s sub-adviser, GE Asset Management Incorporated (“GEAM”), to diversify holdings across these asset classes. The Fund adjusts its weightings based on market and economic conditions to meet its objectives. The Fund may also invest in various types of derivatives to gain exposure to certain types of securities as an alternative to investing directly in such securities, to manage currency exposure and interest rate exposure (also known as duration), and to manage exposure to credit quality.

Highland Capital Management Fund Advisors, L.P. (“HCMFA”), the Fund’s investment adviser, has allocated all the assets of the Fund to be managed/advised by GEAM, the Fund’s sub-adviser. The Fund invests in equity securities, such as common and preferred stocks, principally for their capital appreciation potential and investment-grade debt securities principally for their income potential. The Fund invests in cash principally for the preservation of capital, income potential or maintenance of liquidity. Within each asset class, the portfolio managers primarily use active security selection to choose securities based on the perceived merits of individual issuers, although portfolio managers of different asset classes or strategies may place different emphasis on the various characteristics of a company (as identified below) during the selection process.

The portfolio managers seek to identify equity securities of companies with characteristics such as:
  •    strong earnings growth
  •     favorable valuation
  •     a presence in successful industries
  •    high quality management focused on generating shareholder value
  •     large or medium capitalization (meaning a market capitalization of $2 billion or more)
The portfolio managers seek to identify debt securities with characteristics such as:
  •    attractive yields and prices
  •    the potential for capital appreciation
  •    reasonable credit quality (typically investment grade debt securities, such as mortgage-backed securities, corporate bonds, U.S. Government securities and money market instruments)
The portfolio managers may consider selling a security when one of these characteristics no longer applies, or when valuation becomes excessive and more attractive alternatives are identified.

The portion of the Fund invested in debt securities normally has a weighted average maturity of approximately five to ten years, but is subject to no limitation with respect to the maturities of the instruments in which it may invest.

The Fund may also invest to a lesser extent in high yield securities (also known as “junk bonds”), equity and debt securities of companies that are located in emerging market countries, and exchange -traded funds (“ETFs”) to gain exposure to securities including those of U.S. issuers that are principally engaged in or related to the real estate industry.
Principal Risks
When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Mid-Cap Company Risk is the risk that investing in the securities of mid-cap companies could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Small-Cap Company Risk is the risk that investing in the securities of small-cap companies may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.

Growth Investing Risk is the risk of investing in growth stocks that may be more volatile than other stocks because they are more sensitive to investor perceptions of the issuing company’s growth potential. Growth-oriented funds will typically underperform when value investing is in favor.

Value Investing Risk is the risk of investing in undervalued stocks that may not realize their perceived value for extended periods of time or may never realize their perceived value. Value stocks may respond differently to market and other developments than other types of stocks. Value-oriented funds will typically underperform when growth investing is in favor.

Foreign Investment Risk is the risk that investing in securities of foreign (non-U.S.) issuers may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S., and investments may be less liquid. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Currency Risk is the risk that the dollar value of foreign investments will change in response to changes in currency exchange rates. If a foreign currency weakens against the U.S. dollar, the U.S. dollar value of an investment denominated in that currency would also decline.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Credit Risk is the risk that the Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Prepayment Risk is the risk that during periods of falling interest rates, issuers of debt securities may repay higher rate securities before their maturity dates. This may cause the Fund to lose potential price appreciation and to be forced to reinvest the unanticipated proceeds at lower interest rates.

Allocation Risk is the risk that HCMFA may not allocate assets of the Fund among strategies or asset classes in an optimal manner, if, among other reasons, it does not correctly assess the attractiveness of a strategy or asset class.

Valuation Risk is the risk that the portfolio securities that have been valued using techniques other than market quotations, may have valuations that are different from those produced using other methodology, and that the security may be sold at a discount to the value established by the Fund.

Illiquid and Restricted Securities Risk is the risk that the Adviser may not be able to sell illiquid or restricted securities at the price it would like or may have to sell them at a loss. Securities of non-U.S. issuers, and emerging markets securities in particular, are subject to illiquidity risk.

High Yield Securities Risk is the risk that high yield securities or unrated securities of similar credit quality (commonly known as “junk bonds”) are more likely to default than higher rated securities. The market value of these securities is more sensitive to corporate developments and economic conditions and can be volatile. Market conditions can diminish liquidity and make accurate valuations difficult to obtain.

Emerging Markets Risk is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets.

REIT-Specific Risk includes the risk that an investment in the stocks of real estate investment trusts (“REITs”) will decline because of adverse developments affecting the real estate industry and real property values. An investment in a REIT also may be adversely affected or lost if the REIT fails to qualify as a REIT for tax purposes.

Real Estate Securities Risk is the risk that an investment in real estate securities will be closely linked to the performance of the real estate markets. Property values or income may fall due to increasing vacancies or declining rents resulting from economic, legal, cultural or technological developments.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

Derivatives Risk is a combination of several risks, including the risks that: (1) an investment in a derivative instrument will not correlate well with the performance of the securities or asset class to which the Fund seeks exposure, (2) a derivative instrument entailing leverage may result in a loss greater than the principal amount invested, and (3) derivatives not traded on an exchange may be subject to credit risk, as well as liquidity risk and the related risk that the instrument is difficult or impossible to value accurately. For example, the methodology the Fund uses to establish the fair value of a derivative may result in a value materially different from the value obtained using an alternative methodology.

It is possible to lose money on an investment in the Fund, and this risk of loss may be heightened if you hold shares of the Fund for a shorter period. An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Performance
The bar chart and the Average Annual Total Returns table below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund’s Class A Shares for each full calendar year and by showing how the Fund’s average annual returns compare with the returns of two broad-based securities market indices. As with all mutual funds, the Fund’s past performance (before and after taxes) does not predict how the Fund will perform in the future. The Fund’s performance reflects applicable fee waivers and/or expense limitations in effect during the periods presented. Both the chart and the table assume the reinvestment of dividends and distributions. The bar chart does not reflect the deduction of applicable sales charges for Class A Shares. If sales charges had been reflected, the returns for Class A Shares would be less than those shown below. The returns of Class B, Class C, Class R and Class Y Shares would have substantially similar returns as Class A because the classes are invested in the same portfolio of securities and the annual returns would differ only to the extent that the classes have different expenses. Updated performance information is available by visiting www.highlandfunds.com/Funds—Performance or by calling 1-877-665-1287.
Calendar Year Total Returns
The bar chart shows the performance of the Fund's Class A shares as of December 31.
Bar Chart
The highest calendar quarter total return for Class A Shares of the Fund was 12.15% for the quarter ended June 30, 2003 and the lowest calendar quarter total return was -16.91% for the quarter ended December 31, 2008. The Fund’s year-to-date total return for Class A Shares through December 31, 2012 was 11.04%.
Average Annual Total Returns
(For the periods ended December 31, 2012)
Average Annual Total Returns Highland Total Return Fund
1 Year
5 Years
10 Years
Since Inception
Inception Date
Class A
4.64% (1.43%) 4.78% 6.54% Feb. 22, 1993
Class A Return After Taxes on Distributions
4.48% (1.86%) 3.95% 5.33% Feb. 22, 1993
Class A Return After Taxes on Distributions and Redemptions
3.23% (1.33%) 3.98% 5.26% Feb. 22, 1993
Class B
6.23% (1.00%)    6.45% Dec. 22, 1993
Class C
9.19% (1.00%) 4.63% 3.28% Sep. 30, 1999
Class R
10.77%       0.74% Jan. 29, 2008
Class Y
11.34% (0.02%) 5.73% 7.03% Nov. 29, 1993
S&P 500® Index (reflects no deduction for fees, expenses or taxes)
15.99% 1.66% 7.10% 8.16% Feb. 28, 1993
Barclays Capital U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes)
4.22% 5.95% 5.18% 6.20% Feb. 28, 1993
After-tax returns in the table above are shown for Class A Shares only and after-tax returns for other share classes will vary. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

In some cases, average annual return after taxes on distributions and redemptions is higher than the average annual return before taxes and the average annual return after taxes on distributions because of realized losses that would have been sustained upon the sale of fund shares immediately after the relevant periods. The calculations assume that an investor holds the shares in a taxable account, is in the actual historical highest individual federal marginal income tax bracket for each year and would have been able to immediately utilize the full realized loss to reduce his or her federal tax liability. However, actual individual tax results may vary and investors should consult their tax advisers regarding their personal tax situations.

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Highland Alternative Income Fund
Highland Alternative Income Fund

(formerly “Pyxis Alternative Income Fund”)
Investment Objective
To provide shareholders with above-average total returns over a complete market cycle primarily through capital appreciation and income generation.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A Shares if you and your family invest, or agree to invest in the future, at least $50,000 in Highland Funds II alternative funds, equity funds and/or asset allocation funds, or at least $100,000 in Highland Funds II fixed income funds. More information about these and other discounts is available from your financial professional and in “Reduced Sales Charges for Class A Shares” section on page 87 of the Fund’s Prospectus and “Programs for Reducing or Eliminating Sales Charges” section on page 62 of the Fund’s Statement of Additional Information.
Shareholder Fees (fees paid directly from your investment)
Shareholder Fees Highland Alternative Income Fund
Class A
Class C
Class R
Class Y
Maximum Sales Charge (Load) Imposed On Purchases (as a % of purchase price) 5.75% none none none
Maximum Sales Charge (Load) Imposed on Reinvested Dividends and other Distributions (as % of offering price) none none none none
Maximum Deferred Sales Charge (Load) (as a % of the net asset value at the time of purchase or redemption, whichever is lower) none 1.00% [1] none none
Exchange Fee (as % of amount exchanged within two months or less after date of purchase) 2.00% 2.00% 2.00% 2.00%
Redemption Fee [2] 2.00% 2.00% 2.00% 2.00%
[1] The contingent deferred sales charge ("CDSC") on Class C Shares is 1.00% for redemption of shares within the first year of purchase. There is no CDSC on Class C Shares thereafter.
[2] (as % of amount redeemed within two months or less after date of purchase)
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Annual Fund Operating Expenses Highland Alternative Income Fund
Class A
Class C
Class R
Class Y
Management Fees 2.00% 2.00% 2.00% 2.00%
Distribution and Service (12b-1) Fees 0.35% 1.00% 0.50% none
Other Expenses 1.42% 1.42% 1.42% 1.42%
Acquired Fund Fees and Expenses 0.30% 0.30% 0.30% 0.30%
Total Annual Fund Operating Expenses 4.07% 4.72% 4.22% 3.72%
Expense Example
This Example helps you compare the cost of investing in the Fund to the cost of investing in other mutual funds. The Example assumes that (i) you invest $10,000 in the Fund for the time periods indicated and then sell or redeem all your shares at the end of those periods, (ii) your investment has a 5% return each year, and (iii) operating expenses remain the same. Your actual costs may be higher or lower.
Expense Example Highland Alternative Income Fund (USD $)
1 Year
3 Years
5 Years
10 Years
Class A
960 1,742 2,538 4,594
Class C
573 1,422 2,377 4,787
Class R
424 1,281 2,152 4,388
Class Y
374 1,138 1,920 3,967
Expense Example, No Redemption (USD $)
1 Year
3 Years
5 Years
10 Years
Highland Alternative Income Fund Class C
473 1,422 2,377 4,787
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Annual Fund Operating Expenses or in the Expense Example, affect the Fund’s performance. During the period January 12, 2012 (the date the Fund commenced operations) through September 30, 2012, the Fund had a portfolio turnover rate of 1,081% (not annualized) of the average value of its portfolio.
Principal Investment Strategies
The Fund seeks to achieve its investment objective under normal market conditions by allocating assets among proprietary technically-based trend following strategies. The Fund primarily takes long and short positions with respect to securities that are highly correlated to high yield corporate bonds (also known as “junk bonds”) based on long, intermediate, and short term trends. Such securities primarily will include domestically-listed exchange-traded funds (“ETFs”), exchange-traded notes (“ETNs”) and mutual funds with high yield corporate bond exposure in any industry or sector. Security selection is determined through Anchor Capital Management Group, Inc.’s (“Anchor” or the “Sub-Adviser”) mathematical and statistical models; however, the Sub-Adviser may alter such selection based on its assessment of current market conditions and other factors.

The Sub-Adviser also actively employs the use of cash and cash equivalents as a strategic asset class in an attempt to both sidestep market declines as well as lower overall portfolio volatility, and the Fund may make investments in cash, cash equivalents and short-term debt securities and/or money market instruments in response to adverse market, economic or political conditions. In particular, the Fund may invest all or substantially all of its assets in cash or cash equivalents when the Sub-Adviser determines that market conditions so warrant. To the extent the Fund is invested heavily in cash, it may not achieve its investment objective and may experience negative returns.

The Fund may use derivatives, primarily swaps, options and futures contracts, as substitutes for securities in which the Fund can invest. The Fund may also use derivatives to an unlimited extent to hedge various investments for risk management and speculative purposes.

The Fund may invest, directly and indirectly (through derivatives and other pooled investment vehicles (including ETFs, ETNs, and mutual funds)), in securities of issuers of any credit quality. The Fund may invest without limitation in investments tied economically to any country in the world, including emerging market countries.

The Fund is non-diversified as defined in the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund is not intended to be a complete investment program.
Principal Risks
When you sell Fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in the Fund. No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period. An investment in the Fund is not appropriate for all investors.

Equity Securities Risk is the risk that stock prices will fall over short or long periods of time. In addition, common stocks represent a share of ownership in a company, and rank after bonds and preferred stock in their claim on the company’s assets in the event of bankruptcy.

Exchange-Traded Funds Risk is the risk that the ETFs in which the Fund invests will not be able to replicate exactly the performance of the indices they track and may result in a loss. In addition, shareholders bear both their proportionate share of the Fund’s expenses and similar expenses of the underlying investment company when the Fund invests in shares of another investment company.

High Yield Securities Risk is the risk that high yield securities or unrated securities of similar credit quality (commonly known as “junk bonds”) are more likely to default than higher rated securities. High yield securities are regarded as speculative with respect to the issuer’s capacity to pay interest and to repay principal. The market value of these securities is more sensitive to corporate developments and economic conditions and can be volatile. Market conditions can diminish liquidity and make accurate valuations difficult to obtain.

Interest Rate Risk is the risk that fixed income securities will decline in value because of changes in interest rates. A fund with a longer average portfolio duration will be more sensitive to changes in interest rates than a fund with a shorter average portfolio duration.

Credit Risk is the risk that the Fund could lose money if the issuer or guarantor of a fixed income security, or the counterparty of a derivatives contract or repurchase agreement, is unable or unwilling (or is perceived to be unable or unwilling) to make timely payment of principal and/or interest, or to otherwise honor its obligations.

Short Sales Risk is the risk of loss associated with any appreciation on the price of a security borrowed in connection with a short sale. The Fund may engage in short sales that are not made “against-the-box,” which means that the Fund may sell short securities even when they are not actually owned or otherwise covered at all times during the period the short position is open. Short sales that are not made “against-the-box” theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase.

Derivatives Risk is the risk that an investment in derivatives, such as swaps, options and futures, may not correlate completely to the performance of the underlying securities or index and may be volatile, and may result in a loss greater than the principal amount invested. Equity derivatives may also be subject to liquidity risk, as well as the risk that the derivative is mispriced and that the value established for a derivative may be different than what would be produced through the use of another methodology or if it had been priced using market quotations.

Debt Securities Risk is the risk that the issuer of a debt security may fail to pay interest or principal when due, and that changes in market interest rates may reduce the value of debt securities or reduce the Fund’s returns. The Fund may invest in debt securities, principally below investment grade securities, but also including investment grade securities and other debt obligations. During periods of economic uncertainty and change, the market price of the Fund’s investments in below investment grade securities may be particularly volatile.

Counterparty Risk is the risk that a counterparty (the other party to a transaction or an agreement or the party with whom the Fund executes transactions) to a transaction with the Fund may be unable or unwilling to make timely principal, interest or settlement payments, or otherwise honor its obligations.

Currency Risk is the risk that fluctuations in exchange rates will adversely affect the value of the Fund’s foreign currency holdings and investments denominated in foreign currencies.

Foreign Investment Risk is the risk that investing in foreign (non-U.S.) securities either directly or indirectly may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to smaller markets, differing reporting, accounting and auditing standards, nationalization, expropriation or confiscatory taxation, currency blockages and political changes or diplomatic developments. The costs of investing in many foreign markets are higher than the U.S. and investments may be less liquid. These risks may be heightened for emerging markets securities. Recently, additional risks have arisen related to the high levels of debt of various European countries such as Greece, Italy and Spain. One or more member states might exit the European Union, placing its currency and banking system in jeopardy. These problems, and related political and monetary efforts to address these problems, may increase the potential for market declines in one or more member states that can spread to global markets. These increased risks may persist and may result in greater volatility in the securities markets and the potential for impaired liquidity and valuation.

Emerging Markets Risk is the risk of investing in securities of companies located in emerging market countries, which primarily includes increased foreign investment risk. In addition, there are greater risks involved in investing in emerging markets, the economies of which tend to be more volatile than the economies of developed markets.

Securities Market Risk is the risk that the value of securities owned by the Fund may go up or down, sometimes rapidly or unpredictably, due to factors affecting particular companies or the securities markets generally. A general downturn in the securities market may cause multiple asset classes to decline in value simultaneously.

Hedging Risk is the risk that, although intended to limit or reduce investment risk, hedging strategies may also limit or reduce the potential for profit. There is no assurance that hedging strategies will be successful.

Illiquid and Restricted Securities Risk is the risk that the Adviser may not be able to sell illiquid or restricted securities at the price it would like or may have to sell them at a loss. Securities of non-U.S. issuers, and emerging markets securities in particular, are subject to illiquidity risk.

Management Risk is the risk that the Adviser or Anchor may be incorrect in its assessment of the intrinsic value of the securities the Fund holds which may result in a decline in the value of Fund shares and failure to achieve its investment objective. The Fund’s portfolio managers use qualitative analyses and/or models. Any imperfections or limitations in such analyses and models could affect the ability of the portfolio managers to implement strategies.

Mid-Cap Company Risk is the risk of investing in securities of mid-cap companies that could entail greater risks than investments in larger, more established companies. Mid-cap companies tend to have more narrow product lines, more limited financial resources and a more limited trading market for their stocks, as compared with larger companies. As a result, their stock prices may decline significantly as market conditions change.

Small-Cap Company Risk is the risk that investing in the securities of small-cap companies either directly or indirectly through investments in ETFs, closed-end funds or mutual funds (“Underlying Funds”) may pose greater market and liquidity risks than larger, more established companies, because of limited product lines and/or operating history, limited financial resources, limited trading markets, and the potential lack of management depth. In addition, the securities of such companies are typically more volatile than securities of larger capitalization companies.

Exchange-Traded Notes Risk is the risk that ETNs in which the Fund may invest are subject to credit risk and the value of an ETN may vary and may be influenced by time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying markets, changes in the applicable interest rates, changes in the issuer’s credit rating, and economic, legal, political, or geographic events. ETNs are debt securities whose returns are linked to a particular index.

Model Risk is the risk that the models used by the Fund to determine or guide investment decisions may not achieve the objectives of the Fund. Additionally, the portfolio manager of the Fund is able to adjust the models or, under certain adverse conditions, to deviate from the models employed by the Fund. Such adjustments or deviations may not achieve the objectives of the Fund and may produce lower returns and/or higher volatility compared to what the returns and volatility of the Fund would have been if the portfolio manager had not adjusted or deviated from the models.

Non-Diversification Risk is the risk that an investment in the Fund could fluctuate in value more than an investment in a diversified fund. As a non-diversified fund for purposes of the 1940 Act, the Fund may invest a larger portion of its assets in the securities of a few issuers than a diversified fund. A non-diversified fund’s investment in fewer issuers may result in the Fund’s shares being more sensitive to the economic results of those issuers.

Portfolio Turnover Risk is the risk that the Fund’s high portfolio turnover will increase its transaction costs and may result in increased realization of net short-term capital gains (which are taxable to shareholders as ordinary income when distributed to them), higher taxable distributions and lower after-tax performance.

An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. As with any mutual fund, there is no guarantee that the Fund will achieve its goal.
Performance
The Fund commenced operations on January 12, 2012. After the Fund has had operations for at least one full calendar year, its Prospectus will include a bar chart and a table that will provide an indication of the risks of investing in the Fund by showing changes in the Fund’s performance from year to year and by showing how the Fund’s average annual returns for the most recent one year, five years and ten years (or the life of the Fund, if shorter), compared to those of a broad measure of market performance. Although past performance of the Fund is no guarantee of how it will perform in the future, historical performance may give you some indication of the risks of investing in the Fund.
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