Objective And StrategyObjective
StrategyThe adviser utilizes a trend-following methodology that seeks to take advantage of trends and momentum in the U.S. stock market, as represented by the S&P 500 and the DJIA. Using a quantitative and qualitative approach that evaluates cyclical and seasonal trends in the market and employs a tactical overlay based on political and macro level economic events. When trends indicate that conditions are favorable for U.S. equities, the Portfolio will seek to gain exposure to the U.S. equities through investment in Index ETFs. During periods in which the adviser anticipates the highest probability for gains, the Portfolio will seek to invest in Leveraged ETFs in order to maximize potential returns. When trends indicate that market conditions are unfavorable for U.S. equities, the Portfolio will invest in Cash Instruments. The Portfolio will typically hold only a single category of investments at any given time. The adviser generally expects the Portfolio to be invested in ETFs approximately 70% of the time during a typical calendar year. The adviser’s strategy is based on long-term historical analyses and does not primarily attempt to anticipate market movements based on current conditions; rather, it attempts to isolate the periods of time where the U.S. equities has the greatest likelihood of capital appreciation in the longer term. When trends are most favorable, the adviser seeks to maximize the Portfolio’s exposure to the U. S. equities through Leveraged ETFs. The investment program will emphasize active management, with an emphasis on capturing profits on short-term movements. This policy will result in the Portfolio taking frequent trading positions. The Portfolio’s portfolio turnover and brokerage commission expenses may exceed those of most investment entities of comparable size.
* ETF Risks. Underlying ETS are subject to the following risks: 1) the market price of an Underlying ETF’s shares may trade above or below its net asset value; 2) an active trading market for an Underlying ETF’s shares may not develop or be maintained; 3) the Underlying ETF may employ an investment strategy that utilizes high leverage ratios; 4) trading of an Underlying ETF’s shares may be halted if the listing exchange’s officials deem such action appropriate, the shares are delisted from the exchange or the activation of market wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally; or 5) the Underlying ETF may fail to achieve close correlation with the index that it tracks due to a variety of factors, such as rounding of prices and changes to the index and/or regulatory policies, resulting in the deviating of the Underlying ETF’s returns from that of its corresponding index. Some Underlying ETFs may be thinly traded, and the costs associated with respect to purchasing and selling the Underlying ETFs will be borne by the Portfolio.
* Certain portfolios are subject to active trading risk. (Some may derive a significant portion of their assets from investors who take part in certain strategic and tactical asset allocation programs). The frequent exchange of shares of the portfolio may cause the portfolio to experience high turnover. High portfolio turnover may result in the portfolio having to pay higher transaction costs and may negatively impact the portfolio manager's ability to achieve the investment objective of the portfolio.
* The Portfolio is a new mutual fund and has a limited history of operation. The adviser has not previously managed a mutual fund.
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