Filed with the Securities and Exchange Commission
on June 8, 2020
1933 Act Registration File No. 033-20827
1940 Act Registration File No. 811-05518
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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Pre-Effective Amendment No.
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Post-Effective Amendment No.
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
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Amendment No.
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(Check Appropriate Box or Boxes)
THE RBB FUND, INC.
(Exact Name of Registrant as Specified
in Charter)
615 East Michigan Street
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Milwaukee, Wisconsin 53202
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(Address of Principal Executive Offices, including
Zip Code)
Registrant’s Telephone Number, including
Area Code: (609) 731-6256
Copies to:
SALVATORE FAIA
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MICHAEL P. MALLOY, ESQ.
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The RBB Fund, Inc.
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Faegre Drinker Biddle & Reath LLP
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615 East Michigan Street
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One Logan Square, Suite 2000
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Milwaukee, Wisconsin 53202
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Philadelphia, Pennsylvania 19103-6996
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Approximate Date of Proposed Public Offering:
As soon as practicable after the Registration Statement becomes effective.
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immediately upon filing pursuant to paragraph (b)
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on (date) pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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on (date) pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on (date) pursuant to paragraph (a)(2) of Rule 485.
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If appropriate, check the following box:
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This post-effective amendment designates a new effective date for a previously filed post-effective amendment.
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Summit
Global Investments
Prospectus
SGI
Peak Growth Fund
Class I Shares (Ticker: SGPKX)
SGI
Prudent Growth Fund
Class I Shares (Ticker: SGPGX)
SGI
Conservative Fund
Class I Shares (Ticker: SGCIX)
June
8, 2020
of
The RBB Fund, Inc.
Beginning
on January 1, 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission (the "SEC"),
paper copies of the Funds' annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically
request paper copies of the reports. Instead, the reports will be made available on a website and you will be notified by mail
each time a report is posted and provided with a website link to access the report.
If
you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take
any action. You may elect to receive shareholder reports and other communications from the Funds electronically anytime by contacting
your financial intermediary (such as a broker-dealer or a bank) or, if you are a direct investor, by calling 1-855-744-8500.
You
may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact
your financial intermediary to request that you continue to receive paper copies of your shareholder reports. If you invest directly
with the Funds, you can call 1-855-744-8500 to inform the Funds that you wish to continue receiving paper copies of your shareholder
reports. Your election to receive reports in paper will apply to all funds held in your account if you invest through your financial
intermediary or all funds held with the fund complex if you invest directly with the Funds.
This
prospectus gives vital information about the SGI Peak Growth Fund, the SGI Prudent Growth Fund and the SGI Conservative Fund (each
a "Fund" and together the “Funds”), each an investment portfolio of The RBB Fund, Inc. (the "Company"),
including information on investment policies, risks and fees. For your own benefit and protection, please read it before you invest
and keep it on hand for future reference.
THE
SECURITIES DESCRIBED IN THIS PROSPECTUS HAVE BEEN REGISTERED WITH THE SEC. THE SEC, HOWEVER, HAS NOT JUDGED THESE SECURITIES FOR
THEIR INVESTMENT MERIT AND HAS NOT DETERMINED THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING
A CRIMINAL OFFENSE.
TABLE
OF CONTENTS
A
look at the goals, strategies, and risks of the Funds.
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SUMMARY
SECTIONS
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1
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SGI
Peak Growth Fund
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1
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SGI
Prudent Growth Fund
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9
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SGI
Conservative Fund
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17
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ADDITIONAL
INFORMATION ABOUT EACH FUND’S INVESTMENTS AND RISKS
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25
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Details
about the Funds’ service providers.
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MANAGEMENT
OF THE FUNDS
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31
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Investment
Adviser
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31
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Portfolio
Managers
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31
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SHAREHOLDER
INFORMATION
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33
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Policies
and instructions for opening, maintaining and closing an account in a Fund.
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Pricing
of Fund Shares
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33
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Market
Timing
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33
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Purchase
of Fund Shares
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34
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Redemption
of Fund Shares
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39
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Dividends
and Distributions
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41
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Taxes
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41
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ADDITIONAL
INFORMATION
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45
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FINANCIAL
HIGHLIGHTS
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46
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FOR
MORE INFORMATION
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Back
Cover
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SGI
Peak Growth Fund
Investment
Objective
The
SGI Peak Growth Fund (for this section only, the "Fund") seeks capital appreciation. There can be no guarantee that
the Fund will achieve its investment objective.
Expenses
and Fees
This
table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. Additionally, you may be
required to pay commissions and/or other forms of compensation to an intermediary for transactions in the Fund, which are not
reflected in the table or the example below.
Shareholder
Fees (fees paid directly from your investment)
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Class
I
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Maximum
Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)
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None
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Maximum
Deferred Sales Charge (Load)
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None
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Maximum
Sales Charge (Load) Imposed on Reinvested Dividends
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None
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Redemption
Fee (as a percentage of amount redeemed, if applicable)
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None
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Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
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Management
Fees
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0.75%
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Distribution
and/or Service (12b-1) Fees
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None
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Other
Expenses
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0.40%
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Fund
Services Administrative Fee
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0.25%
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Remaining
Other Expenses (1)
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0.15%
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Acquired
Fund Fees and Expenses (2)
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0.85%
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Total
Annual Fund Operating Expenses (3)
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2.00%
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(1)
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Other
Expenses are estimated for the current fiscal year.
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(2)
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Acquired
Fund Fees and Expenses (“AFFE”) are indirect fees and expenses that the Fund
incurs from investing in the shares of other mutual funds, including money market funds
and exchange-traded funds, and are estimated for the current fiscal year.
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(3)
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Summit
Global Investments, LLC (the "Adviser"), the Fund's investment adviser, has
contractually agreed to waive management fees and reimburse expenses through December
31, 2021 to the extent that Total Annual Fund Operating Expenses (excluding certain items
discussed below) exceed 1.70% of the average daily net assets attributable to the Fund’s
Class I Shares. In determining the Adviser's obligation to waive advisory fees and/or
reimburse expenses, the following expenses are not taken into account: acquired fund
fees and expenses, fund services administrative fee, short sale dividend expenses, brokerage
commissions, extraordinary items, interest or taxes. This contractual limitation may
not be terminated before December 31, 2021 without the approval of the Board of Directors
of The RBB Fund, Inc. (the “Company”). If at any time the Fund's Total Annual
Fund Operating Expenses (not including acquired fund fees and expenses, fund services
administrative fee, short sale dividend expenses, brokerage commissions, extraordinary
items, interest or taxes) for a year are less than 1.70% of the average daily net assets
attributable to the Fund’s Class I Shares, the Adviser is entitled to reimbursement
by the Fund of the advisory fees forgone and other payments remitted by the Adviser to
the Fund within three years from the date on which such waiver or reimbursement was made,
provided such reimbursement does not cause the Fund to exceed expense limitations that
were in effect at the time of the waiver or reimbursement.
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Example:
This
Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The
Example assumes that you invest $10,000 in Class I Shares of the Fund for the time periods indicated and then redeem all of your
shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's
operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would
be:
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 Total Annual Fund Operating Expenses or in the Example, affect the
Fund's performance. No portfolio turnover rate is provided for the Fund because the Fund had not commenced operations prior to
the date of this Prospectus.
Principal
Investment Strategies
The
Fund invests in securities of affiliated and unaffiliated open-end mutual funds and exchange-traded funds (“ETFs”)
(collectively, “Underlying Funds”). The Fund may allocate assets across six categories of Underlying Funds: domestic
equities, foreign equities (including emerging markets securities), domestic investment-grade bonds, domestic high yield bonds
(also known as “junk bonds”), foreign investment-grade and high yield bonds, and money market funds.
Under
normal circumstances, the Fund will invest primarily in Underlying Funds focusing on domestic equities and large capitalization
foreign equities, a lesser amount in Underlying Funds focused on small and mid-capitalization foreign equities and emerging markets,
and a small amount in Underlying Funds focused on domestic investment-grade bonds, domestic high yield bonds, foreign investment-grade
and high yield bonds, and money market funds.
Summit
Global Investments, LLC (the "Adviser") attempts to lower the Fund’s market risk by investing in Underlying Funds
that seek to lower the overall volatility of the Fund’s portfolio as compared to the S&P 500® Index.
Volatility is a statistical measurement of the magnitude of up and down fluctuations in the value of a financial instrument or
index. In addition, the Adviser reviews the idiosyncratic risks associated with each Underlying Fund if these risks are deemed
elevated with increased downside risks due to environmental, social and/or governance (“ESG”) issues. The Adviser
selects Underlying Funds for the Fund that it anticipates will produce a portfolio with less volatility with more capital protection
and consistent returns. While the Adviser attempts to manage the Fund’s volatility, there is no guarantee that the strategy
will be successful or that the Fund’s portfolio will not experience periods of volatility.
The
Adviser employs a process of assessing Underlying Funds that include ESG issues as part of their investment strategy. The Adviser
considers ESG issues to be comprised of one or more of the following actions by companies: demonstrate strong environmental factors,
apply extensive sustainability criteria throughout their supply chains, minimize risks and demonstrate best practices regarding
air, water and public health; act as socially responsible companies in the communities in which they operate and their record
of values and ethics; have strong corporate governance and exhibit excellent labor practices, and show environmental innovation
such as energy efficiency and clean energy companies.
The
Adviser evaluates how an Underlying Fund uses proxy votes and access to corporate management to improve ESG concerns. This process
may include interviews with an Underlying Fund’s management and an examination of an Underlying Fund’s proxy voting
records, prospectus and other reports. The methods that Underlying Funds use to assess ESG issues will vary.
The
Fund may focus its investments in a particular industry or sector for the purpose of capitalizing on performance momentum in that
industry or sector due to significant changes in market conditions or geopolitical conditions.
The
Fund may sell an Underlying Fund if the Adviser identifies fundamental, ESG, or legal risks and/or if the risk/return ranking
declines due to increasing risk and/or decreasing return potential. The Fund may also decrease weight in an investment for risk
control purposes.
Principal
Risks
Loss
of money is a risk of investing in the Fund. The value of your investment in the Fund, as well as the amount of return you receive
on your investment, may fluctuate significantly from day to day and over time. You may lose part or all of your investment in
the Fund or your investment may not perform as well as other similar investments. The Fund's principal risks are presented in
alphabetical order to facilitate finding particular risks and comparing them with other funds. Each risk summarized below is considered
a “principal risk” of investing in the Fund, regardless of the order in which it appears. Different risks may be more
significant at different times depending on market conditions or other factors.
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Affiliated
Fund Risk. Affiliated fund risk is the risk that the Adviser may select investments
for the Fund based on its own financial interests rather than the Fund’s interests.
The Adviser may be subject to potential conflicts of interest in selecting the Underlying
Funds because the fees paid to the Adviser by some affiliated Underlying Funds may be
higher than other Underlying Funds or the Underlying Funds may be in need of assets to
enhance their appeal to other investors, liquidity and trading and/or to enable them
to carry out their investment strategies. However, the Adviser is a fiduciary to the
Fund and is legally obligated to act in the Fund’s best interest when selecting
Underlying Funds.
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Currency
Risk. Underlying Funds that invest in foreign securities are subject to currency
risk associated with securities that trade or are denominated in currencies other than
the U.S. dollar and that may be affected by fluctuations in currency exchange rates.
An increase in the strength of the U.S. dollar relative to a foreign currency may cause
the U.S. dollar value of an investment in that country to decline. Foreign currencies
also are subject to risks caused by inflation, interest rates, budget deficits and low
savings rates, political factors and government controls.
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Cyber
Security Risk. Cyber security risk is the risk of an unauthorized breach and access
to Fund assets, Fund or customer data (including private shareholder information), or
proprietary information, or the risk of an incident occurring that causes the Fund, the
Underlying Funds, the investment adviser, custodian, transfer agent, distributor and
other service providers and financial intermediaries to suffer data breaches, data corruption
or lose operational functionality or prevent Fund investors from purchasing, redeeming
or exchanging shares or receiving distributions. The Fund and its investment adviser
have limited ability to prevent or mitigate cyber security incidents affecting third-party
service providers, the Underlying Funds, and the Underlying Funds’ third-party
service providers. Successful cyber-attacks or other cyber-failures or events affecting
the Fund, the Underlying Funds, or third-party service providers may adversely impact
and cause financial losses to the Fund or its shareholders.
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Dividend-Paying
Securities Risk. Underlying Funds that invest in dividend-paying securities may be
subject to the risk that the company issuing such securities may fail and have to decrease
or eliminate its dividend. In such an event, an Underlying Fund, and in turn the Fund,
may not only lose the dividend payout but the stock price of the company may fall.
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Environmental,
Social and Governance Investing Risk. ESG investing risk is the risk stemming from
the ESG factors that the Underlying Funds may apply in selecting securities. The Underlying
Funds may invest in companies with measurably high ESG ratings relative to their sector
peers, and screen out particular companies that do not meet their ESG criteria. This
may affect the Underlying Funds’ and the Fund’s exposure to certain companies
or industries and cause the Underlying Funds to forego certain investment opportunities.
The Underlying Funds’ results may be lower than other funds that do not seek to
invest in companies based on ESG ratings and/or screen out certain companies or industries.
The Underlying Funds may seek to identify companies that they believe may have a societal
impact outcome, but investors may differ in their views of what constitutes positive
or negative societal impact outcomes. As a result, the Underlying Funds may invest in
companies that do not reflect the beliefs and values of any particular investor.
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Equity
Risk. The Underlying Funds’ investments in common stock are subject to market,
economic and business risks that will cause their price to fluctuate over time. Therefore,
an investment in the Fund may be more suitable for long-term investors who can bear the
risk of these fluctuations. In the event an issuer is liquidated or declares bankruptcy,
the claims of owners of bonds and preferred stock take precedence over the claims of
those who own common stock.
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Exchange-Traded
Fund Risk. In addition to risks generally associated with investments in investment
company securities, ETFs are subject to the following risks that do not apply to traditional
mutual funds: (i) an ETF’s shares may trade at a market price that is above or
below their net asset value (“NAV”); (ii) an active trading market for an
ETF’s shares may not develop or be maintained; (iii) the ETF may employ an investment
strategy that utilizes high leverage ratios; or (iv) trading of an ETF’s shares
may be halted if the listing exchange’s officials deem such action appropriate,
the shares are de-listed from the exchange, or the activation of market-wide “circuit
breakers” (which are tied to large decreases in stock prices) halts stock trading
generally. Certain ETFs may be thinly traded and experience large spreads between the
“ask” price quoted by a seller and the “bid” price offered by
a buyer.
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Fixed
Income Securities Risk. To the extent the Fund invests in Underlying Funds that invest
in fixed income securities, the Fund will be subject to fixed income securities risks.
While fixed income securities normally fluctuate less in price than stocks, there have
been extended periods of increases in interest rates that have caused significant declines
in fixed income securities prices. The values of fixed income securities may be affected
by changes in the credit rating or financial condition of their issuers. Generally, the
lower the credit rating of a security, the higher the degree of risk as to the payment
of interest and return of principal.
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Credit
Risk. The issuer of a fixed income security may not be able to make interest and principal payments when due. Generally, the
lower the credit rating of a security, the greater the risk that the issuer will default on its obligation.
Duration
Risk. Prices of fixed income securities with longer effective maturities are more sensitive to interest rate changes than
those with shorter effective maturities.
Income
Risk. The Fund’s income could decline due to falling market interest rates. In a falling interest rate environment,
the Fund may be required to invest in Underlying Funds that invest their assets in lower-yielding securities. Because interest
rates vary, it is impossible to predict the income or yield of the Fund for any particular period.
Interest
Rate Risk. The value of the Fund or an Underlying Fund may fluctuate based upon changes in interest rates and market conditions.
As interest rates increase, the value of an Underlying Fund’s income-producing investments may go down. For example, bonds
tend to decrease in value when interest rates rise. Debt obligations with longer maturities typically offer higher yields, but
are subject to greater price movements as a result of interest rate changes than debt obligations with shorter maturities.
Prepayment
Risk. The Fund may invest in Underlying Funds that invest in securities that are subject to fluctuations in yield, due to
prepayment rates that may be faster or slower than expected.
Rating
Risk. If a rating agency gives a debt security a lower rating, the value of the debt security will decline because investors
will demand a higher rate of return.
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Foreign
Custody Risk. An Underlying Fund may hold foreign securities and cash with foreign
banks, agents, and securities depositories appointed by the Underlying Fund’s custodian
(each a “Foreign Custodian”). Some Foreign Custodians may be recently organized
or new to the foreign custody business. In some countries, Foreign Custodians may be
subject to little or no regulatory oversight over or independent evaluation of their
operations. Further, the laws of certain countries may place limitations on the Underlying
Fund’s ability to recover its assets if a Foreign Custodian enters bankruptcy.
Investments in emerging markets may be subject to even greater custody risks than investments
in more developed markets. Custody services in emerging market countries are very often
undeveloped and may be considerably less well-regulated than in more developed countries,
and thus may not afford the same level of investor protection as would apply in developed
countries.
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Foreign
Securities Risk. Underlying Funds that invest in foreign securities are subject to
special risks, including, but not limited to, currency exchange rate volatility, political,
social or economic instability, and differences in taxation, auditing and other financial
practices. Investments in emerging market securities by Underlying Funds are subject
to higher risks than those in developed countries because there is greater uncertainty
in less established markets and economies.
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Growth
Risk. If an Underlying Fund adviser’s perceptions of a company’s growth
potential are wrong, the securities purchased by that Underlying Fund may not perform
as expected, thereby reducing the Underlying Fund’s and the Fund’s return.
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High-Yield
Securities (“Junk Bond”) Risk. To the extent that a Fund invests in Underlying
Funds that invest in high-yield securities and unrated securities of similar credit quality
(commonly known as “junk bonds”), the Fund may be subject to greater levels
of interest rate and credit risk than funds that do not invest in such securities. Junk
bonds are considered predominately speculative with respect to the issuer’s continuing
ability to make principal and interest payments. An economic downturn or period of rising
interest rates could adversely affect the market for these securities and reduce an Underlying
Fund’s ability to sell these securities (liquidity risk). If the issuer of a security
is in default with respect to interest or principal payments, the Underlying Fund may
lose its entire investment, which will affect the Underlying Fund’s and the Fund’s
return.
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Index
Management Risk. To the extent the Fund invests in an Underlying Fund that is intended
to track a target index, it is subject to the risk that the Underlying Fund may track
its target index less closely. For example, an adviser to the Underlying Fund may select
securities that are not fully representative of the index, and the Underlying Fund’s
transaction expenses, and the size and timing of its cash flows, may result in the Underlying
Fund’s performance being different than that of its index. Additionally, the Underlying
Fund will generally reflect the performance of its target index even when the index does
not perform well.
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Industry
or Sector Focus Risk. To the extent the Fund invests in Underlying Funds that focus
their investments in a particular industry or sector, the Fund’s shares may be
more volatile and fluctuate more than shares of a fund investing in a broader range of
securities.
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Large-Capitalization
Companies Risk. The stocks of large capitalization companies as a group could fall
out of favor with the market, causing an Underlying Fund and the Fund to underperform
investments that focus solely on small- or medium- capitalization stocks.
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Low
Volatility Risk. Underlying Funds with investments in low volatility companies are
seen as having a lower risk profile than the overall markets. However, a portfolio comprised
of low volatility Underlying Funds may not produce investment exposure that has lower
variability to changes in market levels. Investing in low volatility Underlying Funds
may limit the Fund's gains in rising markets.
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Management
Risk. The Fund is subject to the risk of poor selection in Underlying Funds. The
Underlying Funds may not perform as well as expected, and/or the Fund's portfolio management
practices may not work to achieve their desired result.
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Market
Risk. The NAV of the Fund will change with changes in the market value of its portfolio
positions. Investors may lose money. Although the Fund will invest in Underlying Funds
that the Adviser believes will produce less volatility, there is no guarantee that the
Underlying Funds will perform as expected. The prices of securities held by the Underlying
Funds may decline in response to conditions affecting the general economy, overall market
changes, local, regional or global political, social or economic instability, and currency,
interest rate and commodity price fluctuations.
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Mid-Capitalization
Companies Risk. The stocks of mid-capitalization companies that the Underlying Funds
may invest in may be subject to more abrupt or erratic market movements than stocks of
larger, more established companies.
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New
Fund Risk. The Fund is new with no operating history and there can be no assurance
that the Fund will grow to or maintain an economically viable size, in which case the
Board may determine to liquidate the Fund.
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Opportunity
Risk. As with all mutual funds, the Fund is subject to the risk of missing out on
an opportunity because the assets necessary to take advantage of it are tied up in less
advantageous investments.
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Small-Capitalization
Companies Risk. Small-cap companies that the Underlying Funds may invest in may be
more volatile than, and not as readily marketable as, those of larger companies. Small
companies may also have limited product lines, markets or financial resources and may
be dependent on relatively small or inexperienced management groups. Additionally, the
trading volume of small-cap company securities may make them more difficult to sell than
those of larger companies. Moreover, the lack of an efficient market for the securities
may make them difficult to value.
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Underlying
Funds Risk. Investing in Underlying Funds may result in duplication of expenses,
including advisory fees, in addition to the Fund’s own expenses. The Fund’s
investment performance and its ability to achieve its investment objective are directly
related to the performance of the Underlying Funds in which it invests. The risk of owning
an Underlying Fund generally reflects the risks of owning the underlying investments
the Underlying Fund holds. The Fund may incur brokerage fees in connection with its purchase
of ETF shares.
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Performance
Information
Performance
information for the Fund is not included because the Fund had not commenced operations prior to the date of this prospectus. Performance
information will be available once the Fund has at least one calendar year of performance. Updated performance information may
be obtained at www.sgiam.com or by calling 1-855-744-8500.
Management
of the Fund
Investment
Adviser
Summit
Global Investments, LLC
Portfolio
Managers
Name
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Title
with Adviser
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Tenure
with the Fund
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David
Harden
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President
and Portfolio Manager
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Since
Inception in 2020
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Matthew
Hanna
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Portfolio
Manager
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Since
Inception in 2020
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Aash
Shah
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Portfolio
Manager
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Since
Inception in 2020
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Purchase
and Sale of Fund Shares
You
can purchase and redeem shares of the Fund only on days the New York Stock Exchange ("NYSE") is open. The minimum initial
purchase or exchange into the Fund is $1,000. Subsequent investments must be in amounts of $100 or more. The Fund may waive minimums
for purchases or exchanges through employer-sponsored retirement plans and individual retirement accounts. Shares of the Fund
may be available through certain brokerage firms, financial institutions and other industry professionals (collectively, “Service
Organizations”). Shares of the Fund may also be purchased and redeemed directly through the Company by the means described
below.
Purchase
and Redemption By Mail:
SGI
Peak Growth Fund
c/o
U.S. Bank Global Fund Services
P.O.
Box 701
Milwaukee,
WI 53201-0701
Overnight
Mail:
SGI
Peak Growth Fund
c/o
U.S. Bank Global Fund Services
615
East Michigan Street
Milwaukee,
WI 53202
Purchase
and Redemption By Wire:
Before
sending any wire, call U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (the "Transfer Agent")
at 855-744-8500 to confirm the current wire instructions for the Fund.
Redemption
By Telephone:
If
you select the option to redeem by telephone on your account application, you may call the Transfer Agent at 855-744-8500.
Tax
Information
The
Fund intends to make distributions that generally may be taxed at ordinary income or capital gains rates.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies
may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary's website for more information.
SGI
Prudent Growth Fund
Investment
Objective
The
SGI Prudent Growth Fund (for this section only, the "Fund") seeks long-term capital appreciation. There can be no guarantee
that the Fund will achieve its investment objective.
Expenses
and Fees
This
table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. Additionally, you may be
required to pay commissions and/or other forms of compensation to an intermediary for transactions in the Fund, which are not
reflected in the table or the example below.
Shareholder
Fees (fees paid directly from your investment)
|
Class
I
|
Maximum
Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)
|
None
|
Maximum
Deferred Sales Charge (Load)
|
None
|
Maximum
Sales Charge (Load) Imposed on Reinvested Dividends
|
None
|
Redemption
Fee (as a percentage of amount redeemed, if applicable)
|
None
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
Management
Fees
|
|
0.75%
|
Distribution
and/or Service (12b-1) Fees
|
|
None
|
Other
Expenses
|
|
0.40%
|
Fund
Services Administrative Fee
|
0.25%
|
|
Remaining
Other Expenses (1)
|
0.15%
|
|
Acquired
Fund Fees and Expenses (2)
|
|
0.60%
|
Total
Annual Fund Operating Expenses (3)
|
|
1.75%
|
|
(1)
|
Other
Expenses are estimated for the current fiscal year.
|
|
(2)
|
Acquired
Fund Fees and Expenses (“AFFE”) are indirect fees and expenses that the Fund
incurs from investing in the shares of other mutual funds, including money market funds
and exchange-traded funds, and are estimated for the current fiscal year.
|
|
(3)
|
Summit
Global Investments, LLC (the "Adviser"), the Fund's investment adviser, has
contractually agreed to waive management fees and reimburse expenses through December
31, 2021 to the extent that Total Annual Fund Operating Expenses (excluding certain items
discussed below) exceed 1.70% of the average daily net assets attributable to the Fund’s
Class I Shares. In determining the Adviser's obligation to waive advisory fees and/or
reimburse expenses, the following expenses are not taken into account: acquired fund
fees and expenses, fund services administrative fee, short sale dividend expenses, brokerage
commissions, extraordinary items, interest or taxes. This contractual limitation may
not be terminated before December 31, 2021 without the approval of the Board of Directors
of The RBB Fund, Inc. (the “Company”). If at any time the Fund's Total Annual
Fund Operating Expenses (not including acquired fund fees and expenses, fund services
administrative fee, short sale dividend expenses, brokerage commissions, extraordinary
items, interest or taxes) for a year are less than 1.70% of the average daily net assets
attributable to the Fund’s Class I Shares, the Adviser is entitled to reimbursement
by the Fund of the advisory fees forgone and other payments remitted by the Adviser to
the Fund within three years from the date on which such waiver or reimbursement was made,
provided such reimbursement does not cause the Fund to exceed expense limitations that
were in effect at the time of the waiver or reimbursement.
|
Example:
This
Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The
Example assumes that you invest $10,000 in Class I Shares of the Fund for the time periods indicated and then redeem all of your
shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's
operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would
be:
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 Total Annual Fund Operating Expenses or in the Example, affect the
Fund's performance. No portfolio turnover rate is provided for the Fund because the Fund had not commenced operations prior to
the date of this Prospectus.
Principal
Investment Strategies
The
Fund invests in securities of affiliated and unaffiliated open-end mutual funds and exchange-traded funds (“ETFs”)
(collectively, “Underlying Funds”). The Fund may allocate assets across six categories of Underlying Funds: domestic
equities, foreign equities (including emerging markets securities), domestic investment-grade bonds, domestic high yield bonds
(also known as “junk bonds”), foreign investment-grade and high yield bonds, and money market funds.
Under
normal circumstances, the Fund will invest primarily in Underlying Funds focused on domestic equities, a lesser amount in Underlying
Funds focused on large capitalization foreign equities, mid-capitalization foreign equities, emerging markets and domestic investment-grade
bonds, and a small amount in Underlying Funds focused on small-capitalization foreign equities, domestic high yield bonds, foreign
investment-grade and high yield bonds, and money market funds.
Summit
Global Investments, LLC (the "Adviser") attempts to lower the Fund’s market risk by investing in Underlying Funds
that seek to lower the overall volatility of the Fund’s portfolio. The Fund seeks volatility between 60%-80% as compared
to the S&P 500® Index. Volatility is a statistical measurement of the magnitude of up and down fluctuations
in the value of a financial instrument or index. In addition, the Adviser reviews the idiosyncratic risks associated with each
Underlying Fund if these risks are deemed elevated with increased downside risks due to environmental, social and/or governance
(“ESG”) issues. The Adviser selects Underlying Funds for the Fund that it anticipates will produce a portfolio with
less volatility with more capital protection and consistent returns. While the Adviser attempts to manage the Fund’s volatility,
there is no guarantee that the strategy will be successful or that the Fund’s portfolio will not experience periods of higher
volatility.
The
Adviser employs a process of assessing Underlying Funds that include ESG issues as part of their investment strategy. The Adviser
considers ESG issues to be comprised of one or more of the following actions by companies: demonstrate strong environmental factors,
apply extensive sustainability criteria throughout their supply chains, minimize risks and demonstrate best practices regarding
air, water and public health; act as socially responsible companies in the communities in which they operate and their record
of values and ethics; have strong corporate governance and exhibit excellent labor practices, and show environmental innovation
such as energy efficiency and clean energy companies.
The
Adviser evaluates how an Underlying Fund uses proxy votes and access to corporate management to improve ESG concerns. This process
may include interviews with an Underlying Fund’s management and an examination of an Underlying Fund’s proxy voting
records, prospectus and other reports. The methods that Underlying Funds use to assess ESG issues will vary.
The
Fund may focus its investments in a particular industry or sector for the purpose of capitalizing on performance momentum in that
industry or sector due to significant changes in market conditions or geopolitical conditions.
The
Fund may sell an Underlying Fund if the Adviser identifies fundamental, ESG, or legal risks and/or if the risk/return ranking
declines due to increasing risk and/or decreasing return potential. The Fund may also decrease weight in an investment for risk
control purposes.
Principal
Risks
Loss
of money is a risk of investing in the Fund. The value of your investment in the Fund, as well as the amount of return you receive
on your investment, may fluctuate significantly from day to day and over time. You may lose part or all of your investment in
the Fund or your investment may not perform as well as other similar investments. The Fund's principal risks are presented in
alphabetical order to facilitate finding particular risks and comparing them with other funds. Each risk summarized below is considered
a “principal risk” of investing in the Fund, regardless of the order in which it appears. Different risks may be more
significant at different times depending on market conditions or other factors.
|
•
|
Affiliated
Fund Risk. Affiliated fund risk is the risk that the Adviser may select investments
for the Fund based on its own financial interests rather than the Fund’s interests.
The Adviser may be subject to potential conflicts of interest in selecting the Underlying
Funds because the fees paid to the Adviser by some affiliated Underlying Funds may be
higher than other Underlying Funds or the Underlying Funds may be in need of assets to
enhance their appeal to other investors, liquidity and trading and/or to enable them
to carry out their investment strategies. However, the Adviser is a fiduciary to the
Fund and is legally obligated to act in the Fund’s best interest when selecting
Underlying Funds.
|
|
•
|
Currency
Risk. Underlying Funds that invest in foreign securities are subject to currency
risk associated with securities that trade or are denominated in currencies other than
the U.S. dollar and that may be affected by fluctuations in currency exchange rates.
An increase in the strength of the U.S. dollar relative to a foreign currency may cause
the U.S. dollar value of an investment in that country to decline. Foreign currencies
also are subject to risks caused by inflation, interest rates, budget deficits and low
savings rates, political factors and government controls.
|
|
•
|
Cyber
Security Risk. Cyber security risk is the risk of an unauthorized breach and access
to Fund assets, Fund or customer data (including private shareholder information), or
proprietary information, or the risk of an incident occurring that causes the Fund, the
Underlying Funds, the investment adviser, custodian, transfer agent, distributor and
other service providers and financial intermediaries to suffer data breaches, data corruption
or lose operational functionality or prevent Fund investors from purchasing, redeeming
or exchanging shares or receiving distributions. The Fund and its investment adviser
have limited ability to prevent or mitigate cyber security incidents affecting third-party
service providers, the Underlying Funds, and the Underlying Funds’ third-party
service providers. Successful cyber-attacks or other cyber-failures or events affecting
the Fund, the Underlying Funds, or third-party service providers may adversely impact
and cause financial losses to the Fund or its shareholders.
|
|
•
|
Dividend-Paying
Securities Risk. Underlying Funds that invest in dividend-paying securities may be
subject to the risk that the company issuing such securities may fail and have to decrease
or eliminate its dividend. In such an event, an Underlying Fund, and in turn the Fund,
may not only lose the dividend payout but the stock price of the company may fall.
|
|
•
|
Environmental,
Social and Governance Investing Risk. ESG investing risk is the risk stemming from
the ESG factors that the Underlying Funds may apply in selecting securities. The Underlying
Funds may invest in companies with measurably high ESG ratings relative to their sector
peers, and screen out particular companies that do not meet their ESG criteria. This
may affect the Underlying Funds’ and the Fund’s exposure to certain companies
or industries and cause the Underlying Funds to forego certain investment opportunities.
The Underlying Funds’ results may be lower than other funds that do not seek to
invest in companies based on ESG ratings and/or screen out certain companies or industries.
The Underlying Funds may seek to identify companies that they believe may have a societal
impact outcome, but investors may differ in their views of what constitutes positive
or negative societal impact outcomes. As a result, the Underlying Funds may invest in
companies that do not reflect the beliefs and values of any particular investor.
|
|
•
|
Equity
Risk. The Underlying Funds’ investments in common stock are subject to market,
economic and business risks that will cause their price to fluctuate over time. Therefore,
an investment in the Fund may be more suitable for long-term investors who can bear the
risk of these fluctuations. In the event an issuer is liquidated or declares bankruptcy,
the claims of owners of bonds and preferred stock take precedence over the claims of
those who own common stock.
|
|
•
|
Exchange-Traded
Fund Risk. In addition to risks generally associated with investments in investment
company securities, ETFs are subject to the following risks that do not apply to traditional
mutual funds: (i) an ETF’s shares may trade at a market price that is above or
below their net asset value (“NAV”); (ii) an active trading market for an
ETF’s shares may not develop or be maintained; (iii) the ETF may employ an investment
strategy that utilizes high leverage ratios; or (iv) trading of an ETF’s shares
may be halted if the listing exchange’s officials deem such action appropriate,
the shares are de-listed from the exchange, or the activation of market-wide “circuit
breakers” (which are tied to large decreases in stock prices) halts stock trading
generally. Certain ETFs may be thinly traded and experience large spreads between the
“ask” price quoted by a seller and the “bid” price offered by
a buyer.
|
|
•
|
Fixed
Income Securities Risk. To the extent the Fund invests in Underlying Funds that invest
in fixed income securities, the Fund will be subject to fixed income securities risks.
While fixed income securities normally fluctuate less in price than stocks, there have
been extended periods of increases in interest rates that have caused significant declines
in fixed income securities prices. The values of fixed income securities may be affected
by changes in the credit rating or financial condition of their issuers. Generally, the
lower the credit rating of a security, the higher the degree of risk as to the payment
of interest and return of principal.
|
Credit
Risk. The issuer of a fixed income security may not be able to make interest and principal payments when due. Generally, the
lower the credit rating of a security, the greater the risk that the issuer will default on its obligation.
Duration
Risk. Prices of fixed income securities with longer effective maturities are more sensitive to interest rate changes than
those with shorter effective maturities.
Income
Risk. The Fund’s income could decline due to falling market interest rates. In a falling interest rate environment,
the Fund may be required to invest in Underlying Funds that invest their assets in lower-yielding securities. Because interest
rates vary, it is impossible to predict the income or yield of the Fund for any particular period.
Interest
Rate Risk. The value of the Fund or an Underlying Fund may fluctuate based upon changes in interest rates and market conditions.
As interest rates increase, the value of an Underlying Fund’s income-producing investments may go down. For example, bonds
tend to decrease in value when interest rates rise. Debt obligations with longer maturities typically offer higher yields, but
are subject to greater price movements as a result of interest rate changes than debt obligations with shorter maturities.
Prepayment
Risk. The Fund may invest in Underlying Funds that invest in securities that are subject to fluctuations in yield, due to
prepayment rates that may be faster or slower than expected.
Rating
Risk. If a rating agency gives a debt security a lower rating, the value of the debt security will decline because investors
will demand a higher rate of return.
|
•
|
Foreign
Custody Risk. An Underlying Fund may hold foreign securities and cash with foreign
banks, agents, and securities depositories appointed by the Underlying Fund’s custodian
(each a “Foreign Custodian”). Some Foreign Custodians may be recently organized
or new to the foreign custody business. In some countries, Foreign Custodians may be
subject to little or no regulatory oversight over or independent evaluation of their
operations. Further, the laws of certain countries may place limitations on the Underlying
Fund’s ability to recover its assets if a Foreign Custodian enters bankruptcy.
Investments in emerging markets may be subject to even greater custody risks than investments
in more developed markets. Custody services in emerging market countries are very often
undeveloped and may be considerably less well-regulated than in more developed countries,
and thus may not afford the same level of investor protection as would apply in developed
countries.
|
|
•
|
Foreign
Securities Risk. Underlying Funds that invest in foreign securities are subject to
special risks, including, but not limited to, currency exchange rate volatility, political,
social or economic instability, and differences in taxation, auditing and other financial
practices. Investments in emerging market securities by Underlying Funds are subject
to higher risks than those in developed countries because there is greater uncertainty
in less established markets and economies.
|
|
•
|
Growth
Risk. If an Underlying Fund adviser’s perceptions of a company’s growth
potential are wrong, the securities purchased by that Underlying Fund may not perform
as expected, thereby reducing the Underlying Fund’s and the Fund’s return.
|
|
•
|
High-Yield
Securities (“Junk Bond”) Risk. To the extent that a Fund invests in Underlying
Funds that invest in high-yield securities and unrated securities of similar credit quality
(commonly known as “junk bonds”), the Fund may be subject to greater levels
of interest rate and credit risk than funds that do not invest in such securities. Junk
bonds are considered predominately speculative with respect to the issuer’s continuing
ability to make principal and interest payments. An economic downturn or period of rising
interest rates could adversely affect the market for these securities and reduce an Underlying
Fund’s ability to sell these securities (liquidity risk). If the issuer of a security
is in default with respect to interest or principal payments, the Underlying Fund may
lose its entire investment, which will affect the Underlying Fund’s and the Fund’s
return.
|
|
•
|
Index
Management Risk. To the extent the Fund invests in an Underlying Fund that is intended
to track a target index, it is subject to the risk that the Underlying Fund may track
its target index less closely. For example, an adviser to the Underlying Fund may select
securities that are not fully representative of the index, and the Underlying Fund’s
transaction expenses, and the size and timing of its cash flows, may result in the Underlying
Fund’s performance being different than that of its index. Additionally, the Underlying
Fund will generally reflect the performance of its target index even when the index does
not perform well.
|
|
•
|
Industry
or Sector Focus Risk. To the extent the Fund invests in Underlying Funds that focus
their investments in a particular industry or sector, the Fund’s shares may be
more volatile and fluctuate more than shares of a fund investing in a broader range of
securities.
|
|
•
|
Large-Capitalization
Companies Risk. The stocks of large capitalization companies as a group could fall
out of favor with the market, causing an Underlying Fund and the Fund to underperform
investments that focus solely on small- or medium- capitalization stocks.
|
|
•
|
Low
Volatility Risk. Underlying Funds with investments in low volatility companies are
seen as having a lower risk profile than the overall markets. However, a portfolio comprised
of low volatility Underlying Funds may not produce investment exposure that has lower
variability to changes in market levels. Investing in low volatility Underlying Funds
may limit the Fund's gains in rising markets.
|
|
•
|
Management
Risk. The Fund is subject to the risk of poor selection in Underlying Funds. The
Underlying Funds may not perform as well as expected, and/or the Fund's portfolio management
practices may not work to achieve their desired result.
|
|
•
|
Market
Risk. The NAV of the Fund will change with changes in the market value of its portfolio
positions. Investors may lose money. Although the Fund will invest in Underlying Funds
that the Adviser believes will produce less volatility, there is no guarantee that the
Underlying Funds will perform as expected. The prices of securities held by the Underlying
Funds may decline in response to conditions affecting the general economy, overall market
changes, local, regional or global political, social or economic instability, and currency,
interest rate and commodity price fluctuations.
|
|
•
|
Mid-Capitalization
Companies Risk. The stocks of mid-capitalization companies that the Underlying Funds
may invest in may be subject to more abrupt or erratic market movements than stocks of
larger, more established companies.
|
|
•
|
New
Fund Risk. The Fund is new with no operating history and there can be no assurance
that the Fund will grow to or maintain an economically viable size, in which case the
Board may determine to liquidate the Fund.
|
|
•
|
Opportunity
Risk. As with all mutual funds, the Fund is subject to the risk of missing out on
an opportunity because the assets necessary to take advantage of it are tied up in less
advantageous investments.
|
|
•
|
Small-Capitalization
Companies Risk. Small-cap companies that the Underlying Funds may invest in may be
more volatile than, and not as readily marketable as, those of larger companies. Small
companies may also have limited product lines, markets or financial resources and may
be dependent on relatively small or inexperienced management groups. Additionally, the
trading volume of small-cap company securities may make them more difficult to sell than
those of larger companies. Moreover, the lack of an efficient market for the securities
may make them difficult to value.
|
|
•
|
Underlying
Funds Risk. Investing in Underlying Funds may result in duplication of expenses,
including advisory fees, in addition to the Fund’s own expenses. The Fund’s
investment performance and its ability to achieve its investment objective are directly
related to the performance of the Underlying Funds in which it invests. The risk of owning
an Underlying Fund generally reflects the risks of owning the underlying investments
the Underlying Fund holds. The Fund may incur brokerage fees in connection with its purchase
of ETF shares.
|
Performance
Information
Performance
information for the Fund is not included because the Fund had not commenced operations prior to the date of this prospectus. Performance
information will be available once the Fund has at least one calendar year of performance. Updated performance information may
be obtained at www.sgiam.com or by calling 1-855-744-8500.
Management
of the Fund
Investment
Adviser
Summit
Global Investments, LLC
Portfolio
Managers
Name
|
Title
with Adviser
|
Tenure
with the Fund
|
David
Harden
|
President
and Portfolio Manager
|
Since
Inception in 2020
|
Matthew
Hanna
|
Portfolio
Manager
|
Since
Inception in 2020
|
Aash
Shah
|
Portfolio
Manager
|
Since
Inception in 2020
|
Purchase
and Sale of Fund Shares
You
can purchase and redeem shares of the Fund only on days the New York Stock Exchange ("NYSE") is open. The minimum initial
purchase or exchange into the Fund is $1,000. Subsequent investments must be in amounts of $100 or more. The Fund may waive minimums
for purchases or exchanges through employer-sponsored retirement plans and individual retirement accounts. Shares of the Fund
may be available through certain brokerage firms, financial institutions and other industry professionals (collectively, “Service
Organizations”). Shares of the Fund may also be purchased and redeemed directly through the Company by the means described
below.
Purchase
and Redemption By Mail:
SGI
Prudent Growth Fund
c/o
U.S. Bank Global Fund Services
P.O.
Box 701
Milwaukee,
WI 53201-0701
Overnight
Mail:
SGI
Prudent Growth Fund
c/o
U.S. Bank Global Fund Services
615
East Michigan Street
Milwaukee,
WI 53202
Purchase
and Redemption By Wire:
Before
sending any wire, call U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (the "Transfer Agent")
at 855-744-8500 to confirm the current wire instructions for the Fund.
Redemption
By Telephone:
If
you select the option to redeem by telephone on your account application, you may call the Transfer Agent at 855-744-8500.
Tax
Information
The
Fund intends to make distributions that generally may be taxed at ordinary income or capital gains rates.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies
may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary's website for more information.
SUMMARY
SECTION
SGI
Conservative Fund
Investment
Objective
The
SGI Conservative Fund (for this section only, the “Fund) seeks conservative capital appreciation. There can be no
guarantee that the Fund will achieve its investment objective.
Expenses
and Fees
This
table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. Additionally, you may be
required to pay commissions and/or other forms of compensation to an intermediary for transactions in the Fund, which are
not reflected in the table or the example below.
Shareholder
Fees (fees paid directly from your investment)
|
Class
I
|
Maximum
Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)
|
None
|
Maximum
Deferred Sales Charge (Load)
|
None
|
Maximum
Sales Charge (Load) Imposed on Reinvested Dividends
|
None
|
Redemption
Fee (as a percentage of amount redeemed, if applicable)
|
None
|
Annual
Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
|
|
|
Management
Fees
|
|
0.75%
|
Distribution
and/or Service (12b-1) Fees
|
|
None
|
Other
Expenses
|
|
0.40%
|
Fund
Services Administrative Fee
|
0.25%
|
|
Remaining
Other Expenses (1)
|
0.15%
|
|
Acquired
Fund Fees and Expenses (2)
|
|
0.35%
|
Total
Annual Fund Operating Expenses (3)
|
|
1.50%
|
(1)
|
Other
Expenses are estimated for the current fiscal year.
|
(2)
|
Acquired
Fund Fees and Expenses (“AFFE) are indirect fees and expenses that the Fund incurs from investing in the shares
of other mutual funds, including money market funds and exchange-traded funds, and are estimated for the current fiscal year.
|
(3)
|
Summit
Global Investments, LLC (the “Adviser), the Fund’s investment adviser,
has contractually agreed to waive management fees and reimburse expenses through December
31, 2021 to the extent that Total Annual Fund Operating Expenses (excluding certain items
discussed below) exceed 1.70% of the average daily net assets attributable to the Fund’s
Class I Shares. In determining the Adviser’s obligation to waive advisory fees
and/or reimburse expenses, the following expenses are not taken into account: acquired
fund fees and expenses, fund services administrative fee, short sale dividend expenses,
brokerage commissions, extraordinary items, interest or taxes. This contractual limitation
may not be terminated before December 31, 2021 without the approval of the Board of Directors
of The RBB Fund, Inc. (the “Company). If at any time the Fund’s
Total Annual Fund Operating Expenses (not including acquired fund fees and expenses,
fund services administrative fee, short sale dividend expenses, brokerage commissions,
extraordinary items, interest or taxes) for a year are less than 1.70% of the average
daily net assets attributable to the Fund’s Class I Shares, the Adviser is entitled
to reimbursement by the Fund of the advisory fees forgone and other payments remitted
by the Adviser to the Fund within three years from the date on which such waiver or reimbursement
was made, provided such reimbursement does not cause the Fund to exceed expense limitations
that were in effect at the time of the waiver or reimbursement.
|
Example:
This
Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The
Example assumes that you invest $10,000 in Class I Shares of the Fund for the time periods indicated and then redeem all of your
shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would
be:
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 Total Annual Fund Operating Expenses or in the Example, affect the
Fund’s performance. No portfolio turnover rate is provided for the Fund because the Fund had not commenced operations prior
to the date of this Prospectus.
Principal
Investment Strategies
The
Fund invests in securities of affiliated and unaffiliated open-end mutual funds and exchange-traded funds (“ETFs)
(collectively, “Underlying Funds). The Fund may allocate assets across six categories of Underlying Funds:
domestic equities, foreign equities (including emerging markets securities), domestic investment-grade bonds, domestic high yield
bonds (also known as “junk bonds), foreign investment-grade and high yield bonds, and money market funds.
Under
normal circumstances, the Fund will invest primarily in Underlying Funds focused on domestic investment-grade bonds, a lesser
amount in Underlying Funds focused on large capitalization domestic equities, domestic high yield bonds, and money market funds,
and a small amount in Underlying Funds focused on domestic small-capitalization equities, foreign equities and emerging markets,
and in foreign investment-grade and high yield bonds.
Summit
Global Investments, LLC (the “Adviser) attempts to lower the Fund’s market risk by investing in Underlying
Funds that seek to lower the overall volatility of the Fund’s portfolio. The Fund seeks volatility between 20%-40% as compared
to the S&P 500® Index. Volatility is a statistical measurement of the magnitude of up and down fluctuations
in the value of a financial instrument or index. In addition, the Adviser reviews the idiosyncratic risks associated with each
Underlying Fund if these risks are deemed elevated with increased downside risks due to environmental, social and/or governance
(“ESG) issues. The Adviser selects Underlying Funds for the Fund that it anticipates will produce a portfolio with
less volatility with more capital protection and consistent returns. While the Adviser attempts to manage the Fund’s volatility,
there is no guarantee that the strategy will be successful or that the Fund’s portfolio will not experience periods of
higher volatility.
The
Adviser employs a process of assessing Underlying Funds that include ESG issues as part of their investment strategy. The Adviser
considers ESG issues to be comprised of one or more of the following actions by companies: demonstrate strong environmental factors,
apply extensive sustainability criteria throughout their supply chains, minimize risks and demonstrate best practices regarding
air, water and public health; act as socially responsible companies in the communities in which they operate and their record
of values and ethics; have strong corporate governance and exhibit excellent labor practices, and show environmental innovation
such as energy efficiency and clean energy companies.
The
Adviser evaluates how an Underlying Fund uses proxy votes and access to corporate management to improve ESG concerns. This process
may include interviews with an Underlying Fund’s management and an examination of an Underlying Fund’s proxy voting
records, prospectus and other reports. The methods that Underlying Funds use to assess ESG issues will vary.
The
Fund may focus its investments in a particular industry or sector for the purpose of capitalizing on performance momentum in that
industry or sector due to significant changes in market conditions or geopolitical conditions.
The
Fund may sell an Underlying Fund if the Adviser identifies fundamental, ESG, or legal risks and/or if the risk/return ranking
declines due to increasing risk and/or decreasing return potential. The Fund may also decrease weight in an investment for risk
control purposes.
Principal
Risks
Loss
of money is a risk of investing in the Fund. The value of your investment in the Fund, as well as the amount of return you receive
on your investment, may fluctuate significantly from day to day and over time. You may lose part or all of your investment in
the Fund or your investment may not perform as well as other similar investments. The Fund’s principal risks are presented
in alphabetical order to facilitate finding particular risks and comparing them with other funds. Each risk summarized below is
considered a “principal risk of investing in the Fund, regardless of the order in which it appears. Different
risks may be more significant at different times depending on market conditions or other factors.
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Affiliated
Fund Risk. Affiliated fund risk is the risk that the Adviser may select investments for the Fund based on its own financial
interests rather than the Fund’s interests. The Adviser may be subject to potential conflicts of interest in selecting
the Underlying Funds because the fees paid to the Adviser by some affiliated Underlying Funds may be higher than other Underlying
Funds or the Underlying Funds may be in need of assets to enhance their appeal to other investors, liquidity and trading and/or
to enable them to carry out their investment strategies. However, the Adviser is a fiduciary to the Fund and is legally
obligated to act in the Fund’s best interest when selecting Underlying Funds.
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Currency
Risk. Underlying Funds that invest in foreign securities are subject to currency risk associated with securities that trade
or are denominated in currencies other than the U.S. dollar and that may be affected by fluctuations in currency exchange rates.
An increase in the strength of the U.S. dollar relative to a foreign currency may cause the U.S. dollar value of an investment
in that country to decline. Foreign currencies also are subject to risks caused by inflation, interest rates, budget deficits
and low savings rates, political factors and government controls.
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Cyber
Security Risk. Cyber security risk is the risk of an unauthorized breach and access to Fund assets, Fund or customer data
(including private shareholder information), or proprietary information, or the risk of an incident occurring that causes the
Fund, the Underlying Funds, the investment adviser, custodian, transfer agent, distributor and other service providers and financial
intermediaries to suffer data breaches, data corruption or lose operational functionality or prevent Fund investors from purchasing,
redeeming or exchanging shares or receiving distributions. The Fund and its investment adviser have limited ability to prevent
or mitigate cyber security incidents affecting third-party service providers, the Underlying Funds, and the Underlying Funds’
third-party service providers. Successful cyber-attacks or other cyber-failures or events affecting the Fund, the Underlying Funds,
or third-party service providers may adversely impact and cause financial losses to the Fund or its shareholders.
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Dividend-Paying
Securities Risk. Underlying Funds that invest in dividend-paying securities may be subject to the risk that the
company issuing such securities may fail and have to decrease or eliminate its dividend. In such an event, an Underlying Fund,
and in turn the Fund, may not only lose the dividend payout but the stock price of the company may fall.
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Environmental,
Social and Governance Investing Risk. ESG investing risk is the risk stemming from
the ESG factors that the Underlying Funds may apply in selecting securities. The Underlying
Funds may invest in companies with measurably high ESG ratings relative to their sector
peers, and screen out particular companies that do not meet their ESG criteria. This
may affect the Underlying Funds’ and the Fund’s exposure to certain companies
or industries and cause the Underlying Funds to forego certain investment opportunities.
The Underlying Funds’ results may be lower than other funds that do not seek to
invest in companies based on ESG ratings and/or screen out certain companies or industries.
The Underlying Funds may seek to identify companies that they believe may have a societal
impact outcome, but investors may differ in their views of what constitutes positive
or negative societal impact outcomes. As a result, the Underlying Funds may invest in
companies that do not reflect the beliefs and values of any particular investor.
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Equity
Risk. The Underlying Funds’ investments in common stock are subject to market,
economic and business risks that will cause their price to fluctuate over time. Therefore,
an investment in the Fund may be more suitable for long-term investors who can bear the
risk of these fluctuations. In the event an issuer is liquidated or declares bankruptcy,
the claims of owners of bonds and preferred stock take precedence over the claims of
those who own common stock.
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Exchange-Traded
Fund Risk. In addition to risks generally associated with investments in investment
company securities, ETFs are subject to the following risks that do not apply to traditional
mutual funds: (i) an ETF’s shares may trade at a market price that is above or
below their net asset value (“NAV); (ii) an active trading market for an
ETF’s shares may not develop or be maintained; (iii) the ETF may employ an investment
strategy that utilizes high leverage ratios; or (iv) trading of an ETF’s shares
may be halted if the listing exchange’s officials deem such action appropriate,
the shares are de-listed from the exchange, or the activation of market-wide “circuit
breakers (which are tied to large decreases in stock prices) halts stock trading
generally. Certain ETFs may be thinly traded and experience large spreads between the
“ask price quoted by a seller and the “bid price offered
by a buyer.
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Fixed
Income Securities Risk. To the extent the Fund invests in Underlying Funds that invest
in fixed income securities, the Fund will be subject to fixed income securities risks.
While fixed income securities normally fluctuate less in price than stocks, there have
been extended periods of increases in interest rates that have caused significant declines
in fixed income securities prices. The values of fixed income securities may be affected
by changes in the credit rating or financial condition of their issuers. Generally, the
lower the credit rating of a security, the higher the degree of risk as to the payment
of interest and return of principal.
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Credit
Risk. The issuer of a fixed income security may not be able to make interest and principal payments when due. Generally, the
lower the credit rating of a security, the greater the risk that the issuer will default on its obligation.
Duration
Risk. Prices of fixed income securities with longer effective maturities are more sensitive to interest rate changes than
those with shorter effective maturities.
Income
Risk. The Fund’s income could decline due to falling market interest rates. In a falling interest rate environment,
the Fund may be required to invest in Underlying Funds that invest their assets in lower-yielding securities. Because interest
rates vary, it is impossible to predict the income or yield of the Fund for any particular period.
Interest
Rate Risk. The value of the Fund or an Underlying Fund may fluctuate based upon changes in interest rates and market conditions.
As interest rates increase, the value of an Underlying Fund’s income-producing investments may go down. For example, bonds
tend to decrease in value when interest rates rise. Debt obligations with longer maturities typically offer higher yields, but
are subject to greater price movements as a result of interest rate changes than debt obligations with shorter maturities.
Prepayment
Risk. The Fund may invest in Underlying Funds that invest in securities that are subject to fluctuations in yield, due to
prepayment rates that may be faster or slower than expected.
Rating
Risk. If a rating agency gives a debt security a lower rating, the value of the debt security will decline because investors
will demand a higher rate of return.
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Foreign
Custody Risk. An Underlying Fund may hold foreign securities and cash with foreign
banks, agents, and securities depositories appointed by the Underlying Fund’s
custodian (each a “Foreign Custodian). Some Foreign Custodians may be recently
organized or new to the foreign custody business. In some countries, Foreign Custodians
may be subject to little or no regulatory oversight over or independent evaluation of
their operations. Further, the laws of certain countries may place limitations on the
Underlying Fund’s ability to recover its assets if a Foreign Custodian enters
bankruptcy. Investments in emerging markets may be subject to even greater custody risks
than investments in more developed markets. Custody services in emerging market countries
are very often undeveloped and may be considerably less well-regulated than in more developed
countries, and thus may not afford the same level of investor protection as would apply
in developed countries.
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Foreign
Securities Risk. Underlying Funds that invest in foreign securities are subject to
special risks, including, but not limited to, currency exchange rate volatility, political,
social or economic instability, and differences in taxation, auditing and other financial
practices. Investments in emerging market securities by Underlying Funds are subject
to higher risks than those in developed countries because there is greater uncertainty
in less established markets and economies.
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Growth
Risk. If an Underlying Fund adviser’s perceptions of a company’s growth
potential are wrong, the securities purchased by that Underlying Fund may not perform
as expected, thereby reducing the Underlying Fund’s and the Fund’s return.
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High-Yield
Securities (“Junk Bond) Risk. To the extent that a Fund invests in
Underlying Funds that invest in high-yield securities and unrated securities of similar
credit quality (commonly known as “junk bonds), the Fund may be subject
to greater levels of interest rate and credit risk than funds that do not invest in such
securities. Junk bonds are considered predominately speculative with respect to the issuer’s
continuing ability to make principal and interest payments. An economic downturn or period
of rising interest rates could adversely affect the market for these securities and reduce
an Underlying Fund’s ability to sell these securities (liquidity risk). If the
issuer of a security is in default with respect to interest or principal payments, the
Underlying Fund may lose its entire investment, which will affect the Underlying Fund’s
and the Fund’s return.
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Index
Management Risk. To the extent the Fund invests in an Underlying Fund that is intended
to track a target index, it is subject to the risk that the Underlying Fund may track
its target index less closely. For example, an adviser to the Underlying Fund may select
securities that are not fully representative of the index, and the Underlying Fund’s
transaction expenses, and the size and timing of its cash flows, may result in the Underlying
Fund’s performance being different than that of its index. Additionally, the Underlying
Fund will generally reflect the performance of its target index even when the index does
not perform well.
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Industry
or Sector Focus Risk. To the extent the Fund invests in Underlying Funds that focus
their investments in a particular industry or sector, the Fund’s shares may be
more volatile and fluctuate more than shares of a fund investing in a broader range of
securities.
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Large-Capitalization
Companies Risk. The stocks of large capitalization companies as a group could fall
out of favor with the market, causing an Underlying Fund and the Fund to underperform
investments that focus solely on small- or medium- capitalization stocks.
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Low
Volatility Risk. Underlying Funds with investments in low volatility companies are
seen as having a lower risk profile than the overall markets. However, a portfolio comprised
of low volatility Underlying Funds may not produce investment exposure that has lower
variability to changes in market levels. Investing in low volatility Underlying Funds
may limit the Fund’s gains in rising markets.
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Management
Risk. The Fund is subject to the risk of poor selection in Underlying Funds. The
Underlying Funds may not perform as well as expected, and/or the Fund’s portfolio
management practices may not work to achieve their desired result.
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Market
Risk. The NAV of the Fund will change with changes in the market value of its portfolio
positions. Investors may lose money. Although the Fund will invest in Underlying Funds
that the Adviser believes will produce less volatility, there is no guarantee that the
Underlying Funds will perform as expected. The prices of securities held by the Underlying
Funds may decline in response to conditions affecting the general economy, overall market
changes, local, regional or global political, social or economic instability, and currency,
interest rate and commodity price fluctuations.
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Mid-Capitalization
Companies Risk. The stocks of mid-capitalization companies that the Underlying Funds
may invest in may be subject to more abrupt or erratic market movements than stocks of
larger, more established companies.
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New
Fund Risk. The Fund is new with no operating history and there can be no assurance that the Fund will grow to or maintain
an economically viable size, in which case the Board may determine to liquidate the Fund.
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Opportunity
Risk. As with all mutual funds, the Fund is subject to the risk of missing out on an opportunity because the assets necessary
to take advantage of it are tied up in less advantageous investments.
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Small-Capitalization
Companies Risk. Small-cap companies that the Underlying Funds may invest in may be more volatile than, and not as readily
marketable as, those of larger companies. Small companies may also have limited product lines, markets or financial resources
and may be dependent on relatively small or inexperienced management groups. Additionally, the trading volume of small-cap company
securities may make them more difficult to sell than those of larger companies. Moreover, the lack of an efficient market for
the securities may make them difficult to value.
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Underlying
Funds Risk. Investing in Underlying Funds may result in duplication of expenses, including advisory fees, in addition to the
Fund’s own expenses. The Fund’s investment performance and its ability to achieve its investment objective are directly
related to the performance of the Underlying Funds in which it invests. The risk of owning an Underlying Fund generally reflects
the risks of owning the underlying investments the Underlying Fund holds. The Fund may incur brokerage fees in connection with
its purchase of ETF shares.
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Performance
Information
Performance
information for the Fund is not included because the Fund had not commenced operations prior to the date of this prospectus. Performance
information will be available once the Fund has at least one calendar year of performance. Updated performance information may
be obtained at www.sgiam.com or by calling 1-855-744-8500.
Management
of the Fund
Investment
Adviser
Summit
Global Investments, LLC
Portfolio
Managers
Name
|
Title
with Adviser
|
Tenure
with the Fund
|
David
Harden
|
President
and Portfolio Manager
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Since
Inception in 2020
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Matthew
Hanna
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Portfolio
Manager
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Since
Inception in 2020
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Aash
Shah
|
Portfolio
Manager
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Since
Inception in 2020
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Purchase
and Sale of Fund Shares
You
can purchase and redeem shares of the Fund only on days the New York Stock Exchange (“NYSE) is open. The minimum
initial purchase or exchange into the Fund is $1,000. Subsequent investments must be in amounts of $100 or more. The Fund may
waive minimums for purchases or exchanges through employer-sponsored retirement plans and individual retirement accounts. Shares
of the Fund may be available through certain brokerage firms, financial institutions and other industry professionals (collectively,
“Service Organizations). Shares of the Fund may also be purchased and redeemed directly through the Company by the
means described below.
Purchase
and Redemption By Mail:
SGI
Conservative Fund
c/o
U.S. Bank Global Fund Services
P.O.
Box 701
Milwaukee,
WI 53201-0701
Overnight
Mail:
SGI
Conservative Fund
c/o
U.S. Bank Global Fund Services
615
East Michigan Street
Milwaukee,
WI 53202
Purchase
and Redemption By Wire:
Before
sending any wire, call U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (the “Transfer
Agent) at 855-744-8500 to confirm the current wire instructions for the Fund.
Redemption
By Telephone:
If
you select the option to redeem by telephone on your account application, you may call the Transfer Agent at 855-744-8500.
Tax
Information
The
Fund intends to make distributions that generally may be taxed at ordinary income or capital gains rates.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies
may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more information.
ADDITIONAL
INFORMATION ABOUT EACH FUND’S INVESTMENTS AND RISKS
This
section provides some additional information about the Funds’ investments and certain portfolio management techniques that
the Funds may use. More information about the Funds’ investments and portfolio management techniques, and related risks,
is included in the SAI.
Investment
Objectives
Each
Fund’s investment objective may be changed by the Board of Directors (the “Board) of the Company without
shareholder approval. Shareholders will, however, receive 60 days’ prior notice of any changes. Any such changes may result
in a Fund having an investment objective different from the objective that the shareholder considered appropriate at the time
of investment in the Fund.
Additional
Information About Each Fund’s Principal Investments and Risks
Affiliated Fund Risk. The Funds’ investment in Underlying Funds may have the effect of creating economies of scale,
possibly resulting in lower expense ratios for the Underlying Funds, because the Funds may own substantial portions of the shares
of the Underlying Funds. However, redemption of the Underlying Fund shares by one or more Funds could cause the expense ratio
of an Underlying Fund to increase, as its fixed costs would be spread over a smaller asset base. Because of large positions of
certain Funds, the Underlying Funds may experience relatively large inflows and outflows of cash due to Funds’ purchases
and sales of Underlying Fund shares. Although the Adviser may seek to minimize the impact of these transactions where possible,
for example, by structuring them over a reasonable period of time or through other measures, Underlying Funds may experience increased
expenses as they buy and sell portfolio securities to manage the cash flow effect related to these transactions. Further, when
the Adviser structures transactions over a reasonable period of time in order to manage the potential impact of the buy and sell
decisions for the Funds, those Funds, including funds-of-funds, may pay more or less (for purchase activity) or receive more or
less (for redemption activity), for shares of the Underlying Funds than if the transactions were executed in one transaction.
In addition, substantial redemptions by the Funds within a short period of time could require the Underlying Fund to liquidate
positions more rapidly than would otherwise be desirable, which may have the effect of reducing or eliminating potential gain
or causing it to realize a loss. Substantial redemptions may also adversely affect the ability of the Underlying Fund to implement
its investment strategy. The Adviser may have a conflict of interest with respect to Fund investments in Underlying Funds, particularly
when an Underlying Fund has low assets. The Adviser also has an economic conflict of interest in determining the allocation of
the Funds’ assets among the Underlying Funds, as it earns different fees from the various Underlying Funds.
Currency
Risk. An Underlying Fund’s investment in foreign securities involves currency risk associated with securities that
trade or are denominated in currencies other than the U.S. dollar and that may be affected by fluctuations in currency exchange
rates. An increase in the strength of the U.S. dollar relative to a foreign currency may cause the U.S. dollar value of
an investment in that country to decline. Foreign currencies also are subject to risks caused by inflation, interest rates,
budget deficits and low savings rates, political factors and government controls.
Cyber
Security Risk. With the increased use of technologies such as the internet to conduct business, the Funds and the
Underlying Funds are susceptible to operational, information security and related risks. In general, cyber incidents can result
from deliberate attacks or unintentional events. Cyber-attacks include, but are not limited to, gaining unauthorized access to
digital systems (e.g., through “hacking or malicious software coding) for purposes of misappropriating assets or
sensitive information, corrupting data, or causing operational disruption. Cyber-attacks may also be carried out in a manner that
does not require gaining unauthorized access, such as causing denial-of-service attacks on websites (i.e., efforts to make network
services unavailable to intended users). Cyber security failures or breaches by the Fund’s or an Underlying Fund’s
adviser and other service providers (including, but not limited to, the Fund’s or an Underlying Fund’s accountant,
custodian, transfer agent and administrator), and the issuers of securities in which the Underlying Funds invest, have the ability
to cause disruptions and impact business operations, potentially resulting in financial losses, interference with the Fund’s
or an Underlying Fund’s ability to calculate its NAV, impediments to trading, the inability of Fund shareholders to transact
business, violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or
other compensation costs, or additional compliance costs. In addition, substantial costs may be incurred in order to prevent any
cyber incidents in the future. While the Adviser has established business continuity plans in the event of, and risk management
systems to prevent, such cyber-attacks, there are inherent limitations in such plans and systems including the possibility that
certain risks have not been identified. Furthermore, the Fund cannot control the cyber security plans and systems put in place
by service providers to the Funds and the Underlying Funds, and issuers in which the Underlying Funds invest. The Fund and its
shareholders could be negatively impacted as a result.
Dividend-Paying
Securities Risk. A company issuing dividend-paying securities may fail and have to decrease or eliminate its dividend.
In such an event, an Underlying Fund, and in turn a Fund, may not only lose the dividend payout but the stock price of the company
may fall.
Equity
Risk. Underlying Funds that invest in common stocks are subject to market, economic and business risks that will cause
their price to fluctuate over time. Historically, the equity markets have moved in cycles, and the value of an Underlying Fund’s
equity securities may fluctuate drastically from day to day. Individual companies may report poor results or be negatively affected
by industry and/or economic trends and developments. The prices of securities issued by such companies may suffer a decline in
response. These factors contribute to price volatility. An investment in the Funds may be more suitable for long-term investors
who can bear the risk of these fluctuations. In the event an issuer is liquidated or declares bankruptcy, the claims of owners
of bonds and preferred stock take precedence over the claims of those who own common stock.
ESG
Investing Risk. ESG investing risk is the risk stemming from the ESG factors that the Underlying Funds may apply
in selecting securities. The Underlying Funds may invest in companies with measurably high ESG ratings relative to their sector
peers, and screen out particular companies that do not meet their ESG criteria. This may affect the Underlying Funds’ and
the Fund’s exposure to certain companies or industries and cause the Underlying Funds to forego certain investment opportunities.
The Underlying Funds’ results may be lower than other funds that do not seek to invest in companies based on ESG ratings
and/or screen out certain companies or industries. The Underlying Funds may seek to identify companies that they believe may have
a societal impact outcome, but investors may differ in their views of what constitutes positive or negative societal impact outcomes.
Exchange-Traded
Fund Risk. In addition to risks generally associated with investments in investment company securities, ETFs are subject
to the following risks that do not apply to traditional mutual funds: (i) an ETF’s shares may trade at a market price that
is above or below their NAV; (ii) an active trading market for an ETF’s shares may not develop or be maintained; (iii)
the ETF may employ an investment strategy that utilizes high leverage ratios; or (iv) trading of an ETF’s shares may be
halted if the listing exchange’s officials deem such action appropriate, the shares are de-listed from the exchange, or
the activation of market-wide “circuit breakers (which are tied to large decreases in stock prices) halts stock
trading generally. Certain ETFs may be thinly traded and experience large spreads between the “ask price quoted
by the seller and the “bid price offered by a buyer.
Fixed
Income Securities Risk. To the extent a Fund invests in Underlying Funds that invest in fixed income securities, the Fund
will be subject to fixed income securities risk. While fixed income securities normally fluctuate less in price than stocks, there
have been extended periods of increases in interest rates that have caused significant declines in fixed income securities prices.
The values of fixed income securities may be affected by changes in the credit rating or financial condition of their issuers.
Generally, the lower the credit rating of a security, the higher the degree of risk as to the payment of interest and return of
principal.
Credit
Risk. The issuer of a fixed income security may not be able to make interest and principal payments when due. Generally, the
lower the credit rating of a security, the greater the risk that the issuer will default on its obligation.
Duration
Risk. Prices of fixed income securities with longer effective maturities are more sensitive to interest rate changes than
those with shorter effective maturities.
Income
Risk. A Fund’s income could decline due to falling market interest rates. In a falling interest rate environment,
a Fund may be required to invest in Underlying Funds that invest their assets in lower-yielding securities. Because interest rates
vary, it is impossible to predict the income or yield of a Fund for any particular period.
Interest
Rate Risk. The value of a Fund may fluctuate based upon changes in interest rates and market conditions. As interest rates
increase, the value of an Underlying Fund’s income-producing investments may go down. For example, bonds tend to decrease
in value when interest rates rise. Debt obligations with longer maturities typically offer higher yields, but are subject to greater
price movements as a result of interest rate changes than debt obligations with shorter maturities.
Prepayment
Risk. The Fund may invest in Underlying Funds that invest in securities that are subject to fluctuations in yield, due to
prepayment rates that may be faster or slower than expected.
Rating
Risk. If a rating agency gives a debt security a lower rating, the value of the debt security will decline because investors
will demand a higher rate of return.
Foreign
Custody Risk. The Underlying Funds may hold foreign securities and cash with foreign banks, agents, and securities
depositories appointed by the Underlying Fund’s custodian (each a “Foreign Custodian). Some Foreign Custodians
may be recently organized or new to the foreign custody business. In some countries, Foreign Custodians may be subject to little
or no regulatory oversight over or independent evaluation of their operations. Further, the laws of certain countries may place
limitations on the Underlying Fund’s ability to recover its assets if a Foreign Custodian enters bankruptcy. Investments
in emerging markets may be subject to even greater custody risks than investments in more developed markets. Custody services
in emerging market countries are very often undeveloped and may be considerably less well-regulated than in more developed countries,
and thus may not afford the same level of investor protection as would apply in developed countries.
Foreign
Securities Risk. Foreign securities are subject to special risks, including political, social or economic instability,
and differences in taxation, auditing and other financial practices. The Underlying Funds may invest in securities of foreign
issuers that are traded or denominated in U.S. dollars primarily through depositary receipts. Depositary receipts may be available
through “sponsored or “unsponsored facilities. Holders of unsponsored depositary receipts
generally bear all of the costs of the unsponsored facility. The depository of an unsponsored facility is frequently under no
obligation to distribute shareholder communications received from the issuer of the deposited security or to pass through, to
the holders of the receipts, voting rights with respect to the deposited securities. The depository of unsponsored depositary
receipts may provide less information to receipt holders. Investments in emerging markets securities by Underlying Funds are subject
to higher risks than those in developed countries because there is greater uncertainty in less established markets and economies.
Growth
Risk. If an Underlying Fund adviser’s perceptions of a company’s growth potential are wrong, the securities
purchased by that Underlying Fund may not perform as expected, thereby reducing the Underlying Fund’s and the Fund’s
return.
High-Yield
Securities (“Junk Bond) Risk. Underlying Funds that invest in high-yield securities and unrated securities
of similar credit quality (commonly known as “junk bonds) may be subject to greater levels of interest rate and
credit risk than funds that do not invest in such securities. Junk bonds are considered predominately speculative with respect
to the issuer’s continuing ability to make principal and interest payments. An economic downturn or period of rising interest
rates could adversely affect the market for these securities and reduce an Underlying Fund’s ability to sell these securities
(liquidity risk). If the issuer of a security is in default with respect to interest or principal payments, the Underlying Fund
may lose its entire investment, which will affect the Underlying Fund’s and the Fund’s return.
Index
Management Risk. To the extent the Funds invest in an Underlying Fund that is intended to track a target index, it is
subject to the risk that the Underlying Fund may track its target index less closely. For example, an adviser to the Underlying
Fund may select securities that are not fully representative of the index, and the Underlying Fund’s transaction expenses,
and the size and timing of its cash flows, may result in the Underlying Fund’s performance being different than that of
its index. Additionally, the Underlying Fund will generally reflect the performance of its target index even when the index does
not perform well.
Industry
or Sector Focus Risk. Underlying Funds in which the Fund invests may focus their investments in a particular industry
or sector, and accordingly the Fund’s shares may be more volatile and fluctuate more than shares of a fund investing in
a broader range of securities. An Underlying Fund may invest in a specific industry or sector in order to capitalize on performance
momentum or reduce downside exposure due to significant changes in market conditions, economic conditions, or geopolitical conditions.
Large-Capitalization
Companies Risk. Large capitalization companies as a group could fall out of favor with the market, causing the Underlying
Funds and the Fund to underperform investments that focus solely on small- or medium- capitalization stocks.
Low
Volatility Risk. Underlying Funds with investments in low volatility companies are seen as having a lower risk profile
than the overall markets. However, a portfolio comprised of low volatility Underlying Funds may not produce investment exposure
that has lower variability to changes in market levels. Investing in low volatility Underlying Funds may limit a Fund’s
gains in rising markets.
Management
Risk. Each Fund is subject to the risk of poor selection in Underlying Funds. The Underlying Funds in the Fund may not
perform as well as expected, and/or the Fund’s portfolio management practices may not work to achieve their desired result.
If the Adviser’s perception of an Underlying Fund’s value is not realized in the expected time frame, the Fund’s
overall performance may suffer.
Market
Risk. The NAV of a Fund will change with changes in the market value of its portfolio positions. Investors may lose money.
Although the Fund will invest in Underlying Funds that the Adviser believes will produce less volatility, there is no guarantee
that the Underlying Funds will perform as expected. The prices of securities held by the Funds may decline in response to conditions
affecting the general economy, overall market changes, local, regional or global political, social or economic instability, and
currency, interest rate and commodity price fluctuations.
Periods
of unusually high financial market volatility and restrictive credit conditions, at times limited to a particular sector or geographic
area, have occurred in the past and may be expected to recur in the future. Some countries, including the United States, have
adopted or have signaled protectionist trade measures, relaxation of the financial industry regulations that followed the financial
crisis, and/or reductions to corporate taxes. The scope of these policy changes is still developing, but the equity and debt markets
may react strongly to expectations of change, which could increase volatility, particularly if a resulting policy runs counter
to the market’s expectations. The outcome of such changes cannot be foreseen at the present time. In addition, geopolitical
and other risks, including environmental and public health risks, may add to instability in the world economy and markets generally.
As a result of increasingly interconnected global economies and financial markets, the value and liquidity of a Fund’s
investments may be negatively affected by events impacting a country or region, regardless of whether the Fund invests in issuers
located in or with significant exposure to such country or region.
A
recent outbreak of respiratory disease caused by a novel coronavirus was first detected in China in December 2019 and has spread
internationally. The outbreak has resulted in closing borders and quarantines, enhanced health screenings, cancellations, disrupted
supply chains and customer activity, and has produced general concern and uncertainty. The impact of this coronavirus, and other
epidemics and pandemics that may arise in the future, could affect national and global economies, individual companies and the
market in general in a manner that cannot be foreseen at the present time. Health crises caused by the recent outbreak may heighten
other pre-existing political, social and economic risks in a country or region. In the event of a pandemic or an outbreak, there
can be no assurance that the Funds and their service providers will be able to maintain normal business operations for an extended
period of time or will not lose the services of key personnel on a temporary or long-term basis due to illness or other reasons.
The full impacts of a pandemic or disease outbreaks are unknown, resulting in a high degree of uncertainty for potentially extended
periods of time.
Mid-Capitalization
Companies Risk. The Funds may each invest in Underlying Funds that invest in mid-cap company securities. Investing in
securities of companies with mid-sized capitalizations tends to be riskier than investing in securities of companies with large
capitalizations. Securities of companies with mid-sized capitalizations tend to be more volatile than those of large cap companies
and, on occasion, may fluctuate in the opposite direction of large cap company securities or the broader stock market averages.
New
Fund Risk. There can be no assurance that a newly organized Fund will grow to or maintain an economically viable size,
in which case the Board may determine to liquidate the Fund. Liquidation can be initiated without shareholder approval by the
Board if it determines it is in the best interest of shareholders. As a result, the timing of any liquidation may not be favorable
to certain individual shareholders.
Small-Capitalization
Companies Risk. The Underlying Funds may invest in small-capitalization companies. Small-capitalization companies may
be more volatile than, and not as readily marketable as, those of larger companies. Small companies may also have limited product
lines, markets or financial resources and may be dependent on relatively small or inexperienced management groups. Additionally,
the trading volume of small-cap company securities may make them more difficult to sell than those of larger companies. Moreover,
the lack of an efficient market for the securities may make them difficult to value. Furthermore, while securities of small
capitalization companies may offer greater opportunity for capital appreciation than larger companies, investment in such companies
presents greater risks than investment in larger, more established companies. Indeed, historically, small capitalization stocks
have been more volatile in price than larger capitalization stocks. Among the reasons for the greater price volatility of these
securities are the lower degree of liquidity in the markets for such stocks, and the potentially greater sensitivity of such small
companies to changes in or failure of management, and to many other changes in competitive, business, industry and economic conditions,
including risks associated with limited product lines, markets, management depth, or financial resources. Besides exhibiting greater
volatility, small company stocks may, to a degree, fluctuate independently of larger company stocks. Small company stocks may
decline in price as large company stocks rise, or rise in price as large company stocks decline. Additionally, while the markets
in securities of small companies have grown rapidly in recent years, such securities may trade less frequently and in smaller
volume than more widely held securities. The values of these securities may fluctuate more sharply than those of other securities,
and Underlying Funds may experience some difficulty in establishing or closing out positions in these securities at prevailing
market prices. There may be less publicly available information about the issuers of these securities or less market interest
in such securities than in the case of larger companies, and it may take a longer period of time for the prices of such securities
to reflect the full value of their issuers’ underlying earnings potential or assets.
Underlying
Funds Risk. Investing in Underlying Funds may result in duplication of expenses, including advisory fees, in addition
to the Fund’s own expenses. The risk of owning an Underlying Fund generally reflects the risks of owning the underlying
investments the Underlying Fund holds. The Fund may incur brokerage fees in connection with its purchase of ETF shares.
When the Funds invest in an Underlying Fund, the Funds will be subject to substantially the same risks as those associated with
the direct ownership of securities comprising the Underlying Fund or index on which the ETF or index mutual fund is based and
the value of a Fund’s investments will fluctuate in response to the performance and risks of the underlying investments
or index. Since the Funds invest in other investment companies that invest in equity securities, risks associated with investments
in other investment companies will include stock market risk. In addition to the brokerage costs associated with the Underlying
Fund’s purchase and sale of the underlying securities, ETFs and mutual funds incur fees that are separate from those of
the Funds. As a result, the Funds’ shareholders will indirectly bear a proportionate share of the operating expenses of
the ETFs and mutual funds, in addition to Fund expenses. Because the Funds are not required to hold shares of Underlying Funds
for any minimum period, they may be subject to, and may have to pay, short-term redemption fees imposed by the Underlying Funds.
The Funds have no control over the investments and related risks taken by the Underlying Funds in which they invest. The Investment
Company Act of 1940, as amended (the “1940 Act) and the related rules and regulations adopted thereunder impose
conditions on investment companies that invest in other investment companies. As a result, the Funds are generally restricted
on the amount of shares they may acquire of another investment company to shares amounting to no more than 3% of the outstanding
voting shares of such other investment company.
Temporary
Investments. Each Fund may depart from its principal investment strategy in response to adverse market, economic, political
or other conditions by taking a temporary defensive position (up to 100% of its assets) in cash, cash equivalents and all types
of money market and short-term debt securities. The value of money market instruments tends to fall when current interest rates
rise. Money market instruments are generally less sensitive to interest rate changes than longer-term securities. If a Fund were
to take a temporary defensive position, it may be unable to achieve its investment objective for a period of time.
Disclosure
of Portfolio Holdings
A
description of the Company’s policies and procedures with respect to the disclosure of each Fund’s portfolio securities
is available in the Funds’ SAI. The SAI is incorporated herein.
MANAGEMENT
OF THE FUNDS
Investment
Adviser
The
Adviser’s principal address is 620 South Main Street, Bountiful, Utah 84010. The Adviser provides investment management
and investment advisory services to investment companies and other institutional accounts. The Adviser is 100% privately-owned,
and was founded in 2010.
Pursuant
to an investment advisory agreement with the Company, the Adviser is entitled to an advisory fee computed daily and payable monthly
at the annual rate of 0.75% of each Fund’s net assets. The Adviser has contractually agreed to waive management fees and
reimburse expenses through December 31, 2021 to the extent that Total Annual Fund Operating Expenses (excluding certain items
discussed below) of a Fund exceed 1.70% of the average daily net assets attributable to the Fund’s Class I Shares.
In
determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses with respect to a Fund, the following
expenses are not taken into account and could cause net Total Annual Fund Operating Expenses to exceed 1.70%: acquired fund fees
and expenses, fund services administrative fee, short sale dividend expenses, brokerage commissions, extraordinary items, interest
or taxes. This contractual limitation may not be terminated before December 31, 2021 without the approval of the Board. If at
any time the Total Annual Fund Operating Expenses for that year are less than 1.70%, the Adviser is entitled to reimbursement
by that Fund of the advisory fees forgone and other payments remitted by the Adviser to the Fund within three years from the date
on which such waiver or reimbursement was made, provided such reimbursement does not cause the Fund to exceed expense limitations
that were in effect at the time of the waiver or reimbursement.
A
discussion regarding the basis for the Board’s approval of the investment advisory agreement for the Funds with the Adviser
will be available in the Funds’ first Semi-Annual or Annual Report to Shareholders.
Portfolio
Managers
The
President of the Adviser, David Harden, is primarily responsible for the day-to-day management of each Fund’s investment
portfolio. Mr. Harden founded the Adviser in 2010. He started his career in 1993 and has worked for such firms as Fidelity Investments,
Wellington Management and Evergreen Investments. From 2007 to 2012, Mr. Harden worked with Ensign Peak Advisors, Inc., most recently
as Vice President and Senior Portfolio Manager, where he managed and oversaw day-to-day research, portfolio management and trading
for all index, quantitative and low volatility strategies.
Matthew
Hanna is a Portfolio Manager of the Adviser and is responsible for the day-to-day management of each Fund’s investment
portfolio. Mr. Hanna joined the Adviser in 2017 as a Portfolio Manager. At the Adviser, Mr. Hanna focuses on all aspects
of the investment process with a primary focus on quantitative investment management. Some of Mr. Hanna’s key responsibilities
are factor research, optimization methodologies, asset allocation, and portfolio risk management. Mr. Hanna was previously employed
at Raymond James for over 10 years in the Asset Management Services. Mr. Hanna’s role as an officer involved leading research
on asset allocation, risk management, and global market analysis on over $35 billion. Mr. Hanna earned his Master of Science in
Finance from the University of Tampa. He is a CFA Charterholder, Certified FRM, and CAIA Charterholder.
Aash
Shah is a Portfolio Manager of the Adviser and is responsible for the day-to-day management of each Fund’s investment portfolio.
Mr. Shah joined the Adviser in 2017 as a Portfolio Manager. Mr. Shah has over 26 years of investment management experience
including over 21 years as a portfolio manager. Previously, Mr. Shah managed small, mid, and large cap funds for Federated Investors
in both New York City and Pittsburgh. Mr. Shah also managed private client portfolios for Key Bank in Denver prior to joining
the Adviser. Mr. Shah has a Bachelor’s degree from the University of Pittsburgh Swanson School of Engineering and an MBA
in Finance and Accounting from the Tepper School at Carnegie Mellon University. He also holds a CFA charter.
The
SAI provides additional information about the portfolio managers’ compensation, other accounts managed by the portfolio
managers and the portfolio managers’ ownership of shares of the Funds.
SHAREHOLDER
INFORMATION
Pricing
of Fund Shares
The
Fund is sold at its NAV. The NAV per share of each class of shares of the Funds is calculated as follows:
|
|
Value
of Assets Attributable to a Fund
|
|
NAV
=
|
|
-
Value of Liabilities Attributable to the same Fund
|
|
|
|
Number
of Outstanding Shares of the Fund
|
|
Each
Fund’s NAV is calculated once daily at the close of regular trading hours on the NYSE (generally 4:00 p.m. Eastern time)
on each day the NYSE is open. The NYSE is generally open Monday through Friday, except national holidays. The NYSE also may be
closed on national days of mourning or due to natural disaster or other extraordinary events or emergency. A Fund will effect
purchases of Fund shares at the NAV next calculated after receipt by the Transfer Agent of your purchase order in good order.
The Funds will effect redemptions of Fund shares at the NAV next calculated after receipt by the Transfer Agent of your redemption
request in good order.
A
Fund’s equity securities listed on any national or foreign exchange market system will be valued at the last sale price,
except for the National Association of Securities Dealers Automatic Quotation System (“NASDAQ). Equity securities
listed on the NASDAQ will be valued at the official closing price. Equity securities traded in the over-the-counter market are
valued at their closing prices. If there were no transactions on that day, equity securities will be valued at the mean of the
last bid and ask prices prior to the market close. Fixed income securities are valued using an independent pricing service, which
considers such factors as security prices, yields, maturities and ratings, and deemed representative of market values at the close
of the market.
Investments
in other open-end investment companies are valued based on the NAV of those investment companies (which may use fair value pricing
as discussed in their prospectuses). Investments in exchange-traded funds will be valued at their market price.
If
market quotations are unavailable or deemed unreliable by the Funds’ administrator, in consultation with the Adviser, securities
will be valued by the Adviser in accordance with procedures adopted by the Board and under the Board’s ultimate supervision.
Relying on prices supplied by pricing services or dealers or using fair valuation involves the risk that the values used by a
Fund to price its investments may be higher or lower than the values used by other investment companies and investors to price
the same investments.
Market
Timing
In
accordance with the policy adopted by its Board, the Company discourages and does not accommodate market timing and other excessive
trading practices. Purchases should be made with a view to longer-term investment only. Excessive short-term (market timing) trading
practices may disrupt portfolio management strategies, increase brokerage and administrative costs, harm Fund performance and
result in dilution in the value of Fund shares held by long-term shareholders. The Company and the Adviser reserve the right to
(i) reject a purchase or exchange order, (ii) delay payment of immediate cash redemption proceeds for up to seven calendar days,
(iii) revoke a shareholder’s privilege to purchase Fund shares (including exchanges), or (iv) limit the amount of any exchange
involving the purchase of Fund shares. An investor may receive notice that their purchase order or exchange has been rejected
after the day the order is placed or after acceptance by a financial intermediary. It is currently expected that a shareholder
would receive notice that its purchase order or exchange has been rejected within 48 hours after such purchase order or exchange
has been received by the Company in good order. The Company and the Adviser will not be liable for any loss resulting from rejected
purchase orders. To minimize harm to the Company and its shareholders (or the Adviser), the Company (or the Adviser) will exercise
its right if, in the Company’s (or the Adviser’s) judgment, an investor has a history of excessive trading or if
an investor’s trading, in the judgment of the Company (or the Adviser), has been or may be disruptive to a Fund. No waivers
of the provisions of the policy established to detect and deter market timing and other excessive trading activity are permitted
that would harm a Fund and its shareholders or would subordinate the interests of a Fund and its shareholders to those of the
Adviser or any affiliated person or associated person of the Adviser.
There
is no assurance that the Adviser will be able to identify market timers, particularly if they are investing through intermediaries.
If
necessary, the Company may prohibit additional purchases of Fund shares by a financial intermediary or by certain customers of
the financial intermediary. Financial intermediaries may also monitor their customers’ trading activities in the Funds.
The criteria used by intermediaries to monitor for excessive trading may differ from the criteria used by the Company. If a financial
intermediary fails to enforce the Company’s excessive trading policies, the Company may take certain actions, including
terminating the relationship.
Fund
Services Administrative Fee
Each
Fund pays compensation to the Adviser for fund services in accordance with an Administrative Services Agreement between the Company
and the Adviser (in such capacity, the “Servicing Agent). The Servicing Agent receives a monthly fee equal
to 0.25% on an annualized basis of the net assets of each Fund (the “Fund Services Administrative Fee). The
Servicing Agent may delegate some or all of its servicing responsibilities to one or more Service Organizations. Over time,
the Fund Services Administrative Fee increases the cost of your investment in the Funds’ shares because these fees are
paid out of the Funds’ assets on an on-going basis.
For purposes of the Administrative Services Agreement, fund services include, but are not limited to: (i) assisting in the maintenance
of the Funds’ records containing information relating to shareholders of the Funds; (ii) providing administrative assistance
to shareholders concerning the establishment or maintenance of an account with the Funds; (iii) assisting in processing purchase,
exchange and redemption requests from shareholders and facilitating settlement with the Funds for any shareholder transactions
submitted; (iv) processing all dividend payments, including capital gain or other payments authorized by the Fund and distributed
to and received by the Servicing Agent or the Service Organization; (v) providing sub-transfer agent or sub-accounting services
for Fund beneficial owners; (vi) assisting in the communications between shareholders and the Funds; and (vii) supervising other
aspects of the Funds’ operations and providing other shareholder or administrative services to the Funds.
A Service Organization receiving compensation from the Fund Services Administrative Fee generally represents in a service agreement
with the Servicing Agent that all compensation payable to the Service Organization in connection with the investment of their
assets in the Funds will be disclosed by the Service Organization to its customers. The Funds do not monitor the actual services
being performed by a Service Organization under the service agreement. The Funds also do not monitor the reasonableness
of the total compensation that a Service Organization may receive, including any service fee that the Service Organization may
receive from the Funds and any compensation the Service Organization may receive directly from its clients.
Purchase
of Fund Shares
Shares
representing interests in Class I Shares of a Fund are offered continuously for sale by Quasar Distributors, LLC (the “Distributor).
Purchases
Through Intermediaries. Shares of the Funds may also be available through Service Organizations. Certain features of the shares,
such as the initial and subsequent investment minimums and certain trading restrictions, may be modified or waived by Service
Organizations. Service Organizations may impose additional or different condition than the Funds on purchases, redemptions or
exchanges of shares. Service Organizations may also independently establish and charge their customers or program participants
transaction fees, account fees, administrative charges or other amounts in connection with purchases, redemptions and exchanges
of shares in addition to any fees imposed by the fees and which charges and fees would not be imposed if shares are purchased
directly from the Company. These additional fees may vary and over time could increase the cost of an investment in the Funds
and lower investment returns. Each Service Organization is responsible for transmitting to its customers and program participants
a schedule of any such fees and information regarding any additional or different conditions regarding purchases, redemptions
and exchanges. Shareholders who are customers of a Service Organization should contact the Service Organization acting on your
behalf concerning the fees (if any) charged in connection with a purchase or redemption of shares and should read this Prospectus
in light of the terms governing your accounts with the Service Organization. Service Organizations will be responsible for promptly
transmitting client or customer purchase and redemption orders to the Company in accordance with their agreements with the Company
or its agent and with clients or customers. Service Organizations or, if applicable, their designees that have entered into agreements
with the Company or its agent may enter confirmed purchase orders on behalf of clients and customers, with payment to follow no
later than the Company’s pricing on the following Business Day. If payment is not received by such time, the Service Organization
could be held liable for resulting fees or losses. The Company will be deemed to have received a purchase or redemption order
when a Service Organization, or, if applicable, its authorized designee, accepts a purchase or redemption order in good order
if the order is actually received by the Company in good order not later than the next business morning. If a purchase order is
not received by a Fund in good order, the Transfer Agent will contact the financial intermediary to determine the status of the
purchase order. Orders received by the Company in good order will be priced at the appropriate Fund’s NAV next computed
after they are deemed to have been received by the Service Organization or its authorized designee.
The
Adviser and/or its affiliates may make payments to Service Organizations for the shareholder and administrative services provided
by them. These payments are made out of the Adviser’s resources, including the Fund Services Administrative Fees paid to
the Adviser under the Funds’ Administrative Services Agreement. The actual services provided by these Service Organizations,
and the payments made for such services, vary from firm to firm. The payments may be based on a fixed dollar amount for each account
and position maintained by the Service Organization and/or a percentage of the value of shares held by investors through the Service
Organization. For administration, sub-accounting, transfer agency and/or other services, the Fund, the Adviser, the Distributor
or their affiliates may pay Service Organizations and certain recordkeeping organizations a fee (the “Service Fee)
relating to the average annual NAV of accounts with the Company maintained by such Service Organizations or recordkeepers. The
Service Fee payable to any one Service Organization is determined based upon a number of factors, including the nature and quality
of services provided, the operations processing requirements of the relationship and the standardized fee schedule of the Service
Organization or recordkeeper. These payments may be material to the Service Organizations relative to other compensation
paid by the Funds, the Adviser and/or its affiliates and may be in addition to other fees and payments, such as revenue sharing
or “shelf space fees and event support, other non-cash compensation and charitable contributions paid to or at the
request of such firms. Also, the payments may differ depending on the Fund and may vary from amounts paid to the Funds’
transfer agent for providing similar services to other accounts.
Shares
of a Fund may also be available on brokerage platforms of firms that have agreements with the Company to offer such shares when
acting solely on an agency basis for the purchase or sale of such shares. If you transact in shares of a Fund through one of these
programs, you may be required to pay a commission and/or other forms of compensation to the broker.
General.
You may also purchase shares of the Funds at the NAV per share next calculated after your order is received by the Transfer
Agent in good order as described below. Each Fund’s NAV is calculated once daily at the close of regular trading hours
on the NYSE (generally 4:00 p.m. Eastern time) on each day the NYSE is open. After an initial purchase is made, the Transfer Agent
will set up an account for you on the Company’s records. The minimum initial investment in a Fund is $1,000. The minimum
initial investment requirements may be reduced or waived from time to time. For purposes of meeting the minimum initial purchase,
purchases by clients that are part of endowments, foundations or other related groups may be combined. You can purchase shares
of the Funds only on days the NYSE is open and through the means described below. Shares may be purchased by principals and employees
of the Adviser and its subsidiaries and by their spouses and children either directly or through any trust that has the principal,
employee, spouse or child as the primary beneficiaries, their individual retirement accounts, or any pension and profit-sharing
plan of the Adviser and its subsidiaries without being subject to the minimum investment limitations.
Initial
Investment By Mail. Subject to acceptance by the Funds, an account may be opened by completing and signing an Account
Application and mailing it to the Transfer Agent at the address noted below, together with a check payable to the Fund that you
are purchasing. All checks must be in U.S. Dollars drawn on a domestic bank. The Funds will not accept payment in cash or money
orders. The Funds do not accept post-dated checks or any conditional order or payment. To prevent check fraud, the Funds will
not accept third party checks, Treasury checks, credit card checks, traveler’s checks or starter checks for the purchase
of shares.
Regular
Mail
|
Overnight
or Express Mail
|
|
|
Summit
Global Investments Funds
|
Summit
Global Investments Funds
|
c/o
U.S. Bank Global Fund Services
|
c/o
U.S. Bank Global Fund Services
|
P.O.
Box 701
|
615
East Michigan Street, 3rd Floor
|
Milwaukee,
WI 53201-0701
|
Milwaukee,
WI 53202-5207
|
The
Funds do not consider the U.S. Postal Service or other independent delivery services to be their agents. Therefore, deposit in
the mail or with such services, or receipt at the Transfer Agent’s post office box, of purchase orders or redemption requests
does not constitute receipt by the Transfer Agent of the Fund. Receipt of purchase orders or redemption requests is based on when
the order is received at the Transfer Agent’s offices.
Shares
will be purchased at the NAV next computed after the time the application and funds are received in proper order and accepted
by the Funds. The Transfer Agent will charge a $25 fee against a shareholder’s account, in addition to any loss sustained
by the Funds, for any payment that is returned. It is the policy of the Funds not to accept applications under certain circumstances
or in amounts considered disadvantageous to shareholders. The Funds reserve the right to reject any application.
Initial
Investment By Wire. If you are making your first investment in the Funds, before you wire funds, the Transfer Agent must have
a completed account application. You may mail or overnight deliver your account application to the Transfer Agent. Upon receipt
of your completed account application, the Transfer Agent will establish an account for you. The account number assigned will
be required as part of the instruction that should be provided to your bank to send the wire. Your bank must include both the
name of the Fund you are purchasing, the account number, and your name so that monies can be correctly applied. Your bank should
transmit funds by wire to:
Wire
Instructions:
U.S.
Bank National Association
777
East Wisconsin Ave
Milwaukee
WI 53202
ABA
075000022
Credit:
U.S.
Bancorp Fund Services
Account
#112-952-137
For
Further Credit to:
[Summit
Fund Name]
(shareholder
registration)
(shareholder
account number)
Wired
funds must be received prior to 4:00 p.m. Eastern time to be eligible for same day pricing. The Funds and U.S. Bank, N.A. are
not responsible for the consequences of delays resulting from the banking or Federal Reserve wire system, or from incomplete wiring
instructions.
Subsequent
Investments – By Wire. Before sending your wire, please contact the Transfer Agent to advise them of your intent to
wire funds. This will ensure prompt and accurate credit upon receipt of your wire.
Telephone
Purchase. Investors may purchase additional shares of the Funds by calling 1-855-744-8500. If you did not decline this option
on your account application, and your account has been open for at least 7 business days, telephone orders, in amounts of $100
or more, will be accepted via electronic funds transfer from your bank account through the Automated Clearing House (“ACH)
network. You must have banking information established on your account prior to making a purchase. If your order is received prior
to 4 p.m. Eastern time, your shares will be purchased at the NAV calculated on the day your order is placed.
In
order to arrange for telephone options after an account has been opened or to change your bank account, a written request must
be sent to the Transfer Agent. The request must be signed by each shareholder of the account and may require a signature guarantee,
signature verification from a Signature Validation Program member, or other form of signature authentication from a financial
institution source.
Additional
Investments. Additional investments may be made at any time by purchasing shares at the NAV per share of a Fund by mailing
a check to the Transfer Agent at the address noted above under “Investment by Mail or by wiring as outlined above
under “Investment by Wire. Initial and additional purchases made by check or electronic funds transfer (ACH) cannot
be redeemed until payment of the purchase has been collected. This may take up to 15 calendar days from the purchase date. Shareholders
can avoid this delay by utilizing the wire purchase option.
Automatic
Investment Plan. Once your account has been opened with the initial minimum investment, you may make additional purchases
at regular intervals through an automatic investment plan (the “Automatic Investment Plan). The Automatic Investment
Plan provides a convenient method to have monies deducted from your bank account, for investment into a Fund, on a monthly, quarterly,
semi-annual or annual basis. Investors must invest at least $100 on a monthly basis via the Automatic Investment Plan. In order
to participate in the Automatic Investment Plan, your financial institution must be a member of the ACH network. If your bank
rejects your payment, the Funds’ transfer agent will charge a $25 fee to your account. To begin participating in the Automatic
Investment Plan, please complete the Automatic Investment Plan section on the account application or call the Funds’ Transfer
Agent at 1-855-744-8500 for instructions. Any request to change or terminate your Automatic Investment Plan should be submitted
to the Transfer Agent five (5) days prior to effective date.
Purchases
in Kind. In certain circumstances, shares of the Funds may be purchased “in kind (i.e. in exchange for securities,
rather than cash). The securities rendered in connection with an in-kind purchase must be liquid securities that are not restricted
as to transfer and have a value that is readily ascertainable in accordance with the Company’s valuation procedures. Securities
accepted by a Fund will be valued, as set forth in this Prospectus, as of the time of the next determination of NAV after such
acceptance. The shares of the Fund that are issued to the investor in exchange for the securities will be determined as of the
same time. All dividends, subscriptions, or other rights that are reflected in the market price of accepted securities at the
time of valuation become the property of the Fund and must be delivered to the Fund by the investor upon receipt from the issuer.
A Fund will not accept securities in exchange for its shares unless such securities are, at the time of the exchange, eligible
to be held by the Fund and satisfy such other conditions as may be imposed by the Adviser or the Company. Purchases in-kind may
result in the recognition of gain or loss for federal income tax purposes on securities transferred to the Funds.
Other
Purchase Information. The Company reserves the right, in its sole discretion, to suspend the offering of shares or to reject
purchase orders when, in the judgment of management, such suspension or rejection is in the best interest of the Funds. The Adviser
will monitor each Fund’s total assets and may, subject to Board approval, decide to close a Fund at any time to new investments
or to new accounts due to concerns that a significant increase in the size of the Fund may adversely affect the implementation
of the Fund’s strategy. The Adviser, subject to Board approval, may also choose to reopen a Fund to new investments at
any time, and may subsequently close the Fund again should concerns regarding the Fund’s size recur. If a Fund closes to
new investments, the Fund may be offered only to certain existing shareholders of the Fund and certain other persons who may be
subject to cumulative, maximum purchase amounts, as follows:
a.
persons who already hold shares of the closed Fund directly or through accounts maintained by brokers by arrangement with the
Adviser;
b.
employees of the Adviser and their spouses, parents and children; and
c.
Directors of the Company.
Distributions
to all shareholders of a closed Fund will continue to be reinvested unless a shareholder elects otherwise. The Adviser, subject
to the Board’s discretion, reserves the right to implement specific purchase limitations at the time of closing, including
limitations on current shareholders.
Purchases
of a Fund’s shares will be made in full and fractional shares of the Fund calculated to three decimal places. Certificates
for shares will not be issued.
Shares
may be purchased and subsequent investments may be made by principals and employees of the Adviser and their family members, either
directly or through their IRAs and by any pension and profit-sharing plan of the Adviser, without being subject to the minimum
investment limitation.
The
Adviser is authorized to waive the minimum initial and subsequent investment requirements.
Good
Order. A purchase request is considered to be in good order when all necessary information is provided and all required documents
are properly completed, signed and delivered (i.e. the purchase request includes the name of the Fund; the dollar amount of shares
to be purchased; your account application or investment stub; and a check payable to the Fund). Purchase requests not in good
order may be rejected.
Customer
Identification Program. In compliance with the USA PATRIOT Act of 2001, please note that the Transfer Agent will verify certain
information on your account application as part of the Company’s Anti-Money Laundering Program. As requested on the account
application, you must supply your full name, date of birth, social security number and permanent street address. If you are opening
the account in the name of a legal entity (e.g., partnership, limited liability company, business trust, corporation, etc.), you
must also supply the identity of the beneficial owners. Mailing addresses containing only a P. O. Box will not be accepted. If
you need additional assistance when completing your account application, please contact the Transfer Agent at 1-855-744-8500.
Applications
without the required information, may not be accepted. After acceptance, to the extent permitted by applicable law or its customer
identification program, the Company reserves the right (a) to place limits on transactions in any account until the identity of
the investor is verified; or (b) to refuse an investment in a Company portfolio or to involuntarily redeem an investor’s
shares and close an account in the event that an investor’s identity is not verified. The Company and its agents will not
be responsible for any loss in an investor’s account resulting from the investor’s delay in providing all required
identifying information or from closing an account and redeeming an investor’s shares when an investor’s identity
cannot be verified.
Redemption
of Fund Shares
You
may redeem shares of the Funds at the next NAV calculated after a redemption request is received by the Transfer Agent in good
order. A Fund’s NAV is calculated once daily at the close of regular trading hours on the NYSE (generally 4:00 p.m. Eastern
time) on each day the NYSE is open. You can redeem shares of a Fund only on days the NYSE is open and through the means described
below.
You
may redeem shares of a Fund by mail, or, if you are authorized, by telephone. The value of shares redeemed may be more or less
than the purchase price, depending on the market value of the investment securities held by the Fund.
Redemption
By Mail. Your redemption requests should be addressed to [Summit Fund Name], c/o U.S. Bank Global Fund Services, P.O. Box
701, Milwaukee, Wisconsin 53201-0701, or for overnight delivery to [Summit Fund Name], c/o U.S. Bank Global Fund Services, 615
East Michigan Street, Milwaukee, Wisconsin 53202 and must include:
A
signature guarantee, from either a Medallion program member or a non-Medallion program member, is required in the following situations:
|
•
|
If
ownership is being changed on your account;
|
|
•
|
When
redemption proceeds are payable or sent to any person, address or bank account not on
record; and
|
|
•
|
When
a redemption request is received by the Transfer Agent and the account address has changed
within the last 15 calendar days.
|
The
Funds may waive any of the above requirements in certain instances. In addition to the situations described above, the Funds and/or
the Transfer Agent reserve the right to require a signature guarantee in other instances based on the circumstances relative to
the particular situation.
Non-financial
transactions, including establishing or modifying certain services on an account, may require a signature guarantee, signature
verification from a Signature Validation Program member, or other acceptable form of authentication from a financial institution
source.
Signature
guarantees will generally be accepted from domestic banks, brokers, dealers, credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings associations, as well as from participants in the NYSE Medallion Signature
Program and the Securities Transfer Agents Medallion Program (“STAMP”). A notary public is not an acceptable signature
guarantor.
The
Funds do not consider the U.S. Postal Service or other independent delivery services to be their agents. Therefore, deposit in
the mail or with such services, or receipt at the Transfer Agent’s post office box, of purchase orders or redemption requests
does not constitute receipt by the Transfer Agent of the Funds. Receipt of purchase orders or redemption requests is based on
when the order is received at the Transfer Agent’s offices.
Redemption
By Telephone. If you did not decline telephone options on your account application, you may initiate a redemption of shares
in the amount up to the total value of the account by calling the Transfer Agent at 1-855-744-8500.
Investors
may have a check sent to the address of record, proceeds may be wired to a shareholder’s bank account of record, or funds
may be sent via electronic funds transfer through the ACH network, also to the bank account of record. Wires are subject to a
$15 fee paid by the investor, but the investor does not incur any charge when proceeds are sent via the ACH system. Once a telephone
transaction has been placed, it cannot be canceled or modified after the close of regular trading on the NYSE (generally, 4:00
p.m., Eastern time).
In
order to arrange for telephone options after an account has been opened or to change your bank account, a written request must
be sent to the Transfer Agent. The request must be signed by each shareholder of the account and may require a signature guarantee,
signature verification from a Signature Validation Program member, or other form of signature authentication from a financial
institution source.
Telephone
trades must be received by or prior to market close. During periods of high market activity, shareholders may encounter higher
than usual call waits. Please allow sufficient time to place your telephone transaction.
Before
executing an instruction received by telephone, the Transfer Agent will use reasonable procedures to confirm that the telephone
instructions are genuine. The telephone call may be recorded and the caller may be asked to verify certain personal identification
information. If the Funds or their agents follow these procedures, they cannot be held liable for any loss, expense or cost arising
out of any telephone redemption request that is reasonably believed to be genuine. This includes fraudulent or unauthorized requests.
If an account has more than one owner or authorized person, the Funds will accept telephone instructions from any one owner or
authorized person.
Exchange
Privilege. You can exchange your Class I shares of a Fund for Class I shares in an identically registered account of another
Fund on any day that both the Fund and the Fund into which you are exchanging are open for business. Any new account established
through an exchange will be subject to the minimum investment requirements applicable to the shares acquired. Exchanges will be
executed on the basis of the relative NAV of the shares exchanged. Consequently, you may receive fewer shares or more shares than
originally owned, depending on that day’s NAVs. Your total value of the initially held shares will equal the total value
of the new shares. Be sure to read the current Prospectus for the Fund into which you are exchanging.
An
exchange of shares of one Fund for shares of another Fund is considered a sale and generally results in a capital gain or loss
for federal income tax purposes unless you are a tax-exempt investor or hold your shares through a tax-deferred account such as
an individual retirement account. Such tax-deferred arrangements may be taxed later upon withdrawal of monies from those arrangements.
IRA
and other retirement plan redemptions. If you have an IRA, you must indicate on your written redemption request whether
or not to withhold federal income tax. Redemption requests failing to indicate an election to have tax withheld will be subject
to 10% withholding.
Shares
held in IRA accounts may be redeemed by telephone at 1-855-744-8500. Investors will be asked whether or not to withhold taxes
from any distribution.
Other
Redemption Information. Redemption proceeds for shares of a Fund recently purchased by check or electronic funds transfer
through the ACH network may not be distributed until payment for the purchase has been collected, which may take up to fifteen
calendar days from the purchase date. Shareholders can avoid this delay by utilizing the wire purchase option. Redemption proceeds
will ordinarily be paid within seven business days after a redemption request is received by the Transfer Agent in good order.
The Company may suspend the right of redemption or postpone the date at times when the NYSE or the bond market is closed or under
any emergency circumstances as determined by the SEC. The Fund typically expects to meet redemption requests by paying out proceeds
from cash or cash equivalent holdings, or by selling portfolio securities. In stressed market conditions, redemption methods may
include redeeming in kind.
If
the Board determines that it would be detrimental to the best interests of the remaining shareholders of a Fund to make payment
wholly or partly in cash, redemption proceeds may be paid in whole or in part by an in-kind distribution of readily marketable
securities held by the Fund instead of cash in conformity with applicable rules of the SEC and the Company’s Policy and
Procedure Related to the Processing of In-Kind Redemptions. Investors generally will incur brokerage charges on the sale of portfolio
securities so received in the payment of redemptions. If a shareholder receives redemption proceeds in-kind, the shareholder will
bear the market risk of the securities received in the redemption until their disposition and should expect to incur transaction
costs upon the disposition of the securities. The Company has elected, however, to be governed by Rule 18f-1 under the 1940 Act,
so that each Fund is obligated to redeem its shares solely in cash up to the lesser of $250,000 or 1% of its NAV during any 90-day
period for any one shareholder of the Fund.
Good
Order. A redemption request is considered to be in good order when your request includes: (1) the name of the Fund, (2) the
number of shares or dollar amount to be redeemed, (3) the account number and (4) signatures by all of the shareholders whose names
appear on the account registration with a signature guarantee, if applicable. Redemption requests not in good order may be delayed.
Involuntary
Redemption. The Funds reserve the right to redeem your account at any time the value of the account falls below $500 as the
result of a redemption or an exchange request.
You
will be notified in writing that the value of your account is less than $500 and will be allowed 30 days to make additional investments
before the redemption is processed.
The
Funds may assert the right to redeem your shares at current NAV at any time and without prior notice if, and to the extent that,
such redemption is necessary to reimburse a Fund for any loss sustained by reason of your failure to make full payment for shares
of the Fund you previously purchased or subscribed for.
Dividends
and Distributions
Each
Fund will distribute substantially all of the net investment income and net realized capital gains, if any, of the Fund to the
Fund’s shareholders. All distributions are reinvested in the form of additional full and fractional shares unless you elect
otherwise.
Each
Fund will declare and pay dividends from net investment income annually. Net realized capital gains (including net short-term
capital gains), if any, will be distributed at least annually.
The
ex-dividend, record and payable dates of any annual distribution will be available by calling 855-744-8500.
All
distributions are reinvested in the form of additional full and fractional shares unless you elect one the following options:
(1) receive dividends in cash while reinvesting capital gain distributions in additional Fund shares; (2) receive capital gain
distributions in cash while reinvesting dividends in additional Fund shares; or (3) receive all distributions in cash. If you
elect to receive distributions and/or capital gains paid in cash, and the U.S. Postal Service cannot deliver the check, or if
a check remains outstanding for six months, the Funds reserve the right to reinvest the distribution check in your account, at
a Fund’s current NAV, and to reinvest all subsequent distributions. You may change the distribution option on your account
as any time. You should notify the Transfer Agent in writing or by telephone at least five (5) days prior to the next distribution.
Taxes
The
following is a summary of certain United States tax considerations relevant under current law, which may be subject to change
in the future. Except where otherwise indicated, the discussion relates to investors who are individual United States citizens
or residents. You should consult your tax adviser for further information regarding federal, state, local and/or foreign tax consequences
relevant to your specific situation.
Distributions.
Each Fund contemplates distributing as dividends each year all or substantially all of its taxable income, including its net
capital gain (the excess of net long-term capital gain over net short-term capital loss). Except as otherwise discussed below,
you will be subject to federal income tax on Fund distributions regardless of whether they are paid in cash or reinvested in additional
shares. Fund distributions attributable to short-term capital gains and net investment income will generally be taxable to you
as ordinary income, except as discussed below.
Distributions
attributable to the net capital gain of a Fund will be taxable to you as long-term capital gain, no matter how long you have owned
your Fund shares. The maximum long-term capital gain rate applicable to individuals, estates, and trusts is currently 23.8% (which
includes a 3.8% Medicare tax). You will be notified annually of the tax status of distributions to you.
Distributions
of “qualifying dividends” will also generally be taxable to you at long-term capital gain rates, as long as certain
requirements are met. In general, if 95% or more of the gross income of a Fund (other than net capital gain) consists of dividends
received from domestic corporations or “qualified” foreign corporations (“qualifying dividends”), then
all distributions paid by the Fund to individual shareholders will be taxed at long-term capital gains rates. But if less than
95% of the gross income of a Fund (other than net capital gain) consists of qualifying dividends, then distributions paid by the
Fund to individual shareholders will be qualifying dividends only to the extent they are derived from qualifying dividends earned
by the Fund. For the lower rates to apply, you must have owned your Fund shares for at least 61 days during the 121-day period
beginning on the date that is 60 days before a Fund’s ex-dividend date (and the Fund will need to have met a similar holding
period requirement with respect to the shares of the corporation paying the qualifying dividend). The amount of a Fund’s
distributions that qualify for this favorable treatment may be reduced as a result of the Fund’s securities lending activities
(if any), a high portfolio turnover rate or investments in debt securities or non-qualified foreign corporations.
Each
Fund may make distributions to you of “section 199A dividends” with respect to qualified dividends that it receives
with respect to such Fund’s investments in REITs. A section 199A dividend is any dividend or part of such dividend that
such Fund pays to you and reports as a section 199A dividend in written statements furnished to you. Distributions paid by a Fund
that are eligible to be treated as section 199A dividends for a taxable year may not exceed the “qualified REIT dividends”
received by such Fund from a REIT reduced by the Fund’s allocable expenses. Section 199A dividends may be taxed to individuals
and other non-corporate shareholders at a reduced effective federal income tax rate, provided you have satisfied a holding period
requirement for such Fund’s shares and satisfied certain other conditions. For the lower rates to apply, you must have owned
your applicable Fund shares for at least 46 days during the 91-day period beginning on the date that is 45 days before the Fund’s
ex-dividend date, but only to the extent that you are not under an obligation (under a short-sale or otherwise) to make related
payments with respect to positions in substantially similar or related property.
Distributions
from a Fund will generally be taxable to you in the taxable year in which they are paid, with one exception. Distributions declared
by a Fund in October, November or December and paid in January of the following year are taxed as though they were paid on December
31.
The
Funds may be subject to foreign withholding or other foreign taxes on income or gain from certain foreign securities. If more
than 50% of the value of the total assets of a Fund consists of stocks and securities (including debt securities) of foreign corporations
at the close of a taxable year, a Fund may elect, for federal income tax purposes, to treat certain foreign taxes paid by it,
including generally any withholding and other foreign income taxes, as paid by its shareholders. If a Fund makes this election,
the amount of those foreign taxes paid by a Fund will be included in its shareholders’ income pro rata (in addition to taxable
distributions actually received by them), and each such shareholder will be entitled either (1) to credit that proportionate amount
of taxes against U.S. federal income tax liability as a foreign tax credit or (2) to take that amount as an itemized deduction.
If a Fund is not eligible or chooses not to make this election, the Fund will be entitled to deduct any such foreign taxes in
computing the amounts it is required to distribute.
A
portion of distributions paid by a Fund to shareholders that are corporations may also qualify for the dividends-received deduction
for corporations, subject to certain holding period requirements and debt financing limitations. The amount of the dividends qualifying
for this deduction may, however, be reduced as a result of a Fund’s securities lending activities (if any), by a high portfolio
turnover rate or by investments in debt securities or foreign corporations.
If
you purchase shares just before a distribution, the purchase price will reflect the amount of the upcoming distribution, but you
will be taxed on the entire amount of the distribution received, even though, as an economic matter, the distribution simply constitutes
a return of capital. This adverse tax result is known as “buying into a dividend.”
Sales
of Shares. You will generally recognize taxable gain or loss for federal income tax purposes on a sale or redemption of your
shares based on the difference between your cost basis in the shares and the amount you receive for them. Generally, you will
recognize long-term capital gain or loss if you have held your Fund shares for over twelve months at the time you dispose of them.
Any
loss realized on shares held for six months or less will be treated as a long-term capital loss to the extent of any capital gain
dividends that were received on the shares. Additionally, any loss realized on a disposition of shares of a Fund may be disallowed
under “wash sale” rules to the extent the shares disposed of are replaced with other shares of the same Fund within
a period of 61 days beginning 30 days before and ending 30 days after the shares are disposed of, such as pursuant to a dividend
reinvestment in shares of a Fund. If disallowed, the loss will be reflected in an upward adjustment to the basis of the shares
acquired.
For
shares acquired on or after January 1, 2012, each Fund (or relevant broker or financial adviser) is required to compute and report
to the Internal Revenue Service (“IRS”) and furnish to Fund shareholders cost basis information when such shares are
sold. The Funds have elected to use the average cost method, unless you instruct a Fund to use a different IRS-accepted cost basis
method, or choose to specifically identify your shares at the time of each sale. If your account is held by your broker or other
financial adviser, they may select a different cost basis method. In these cases, please contact your broker or other financial
adviser to obtain information with respect to the available methods and elections for your account. You should carefully review
the cost basis information provided by the Funds and make any additional basis, holding period or other adjustments that are required
when reporting these amounts on your federal and state income tax returns. Fund shareholders should consult with their tax advisers
to determine the best IRS-accepted cost basis method for their tax situation and to obtain more information about how the cost
basis reporting requirements apply to them.
IRAs
and Other Tax-Qualified Plans. The one major exception to the preceding tax principles is that distributions on, and sales
and redemptions of, shares held in an IRA (or other tax-qualified plan) will not be currently taxable unless such shares were
acquired with borrowed funds.
Backup
Withholding. Each Fund may be required in certain cases to withhold and remit to the IRS a percentage of taxable dividends
or gross proceeds realized upon sale payable to shareholders who have failed to provide a correct tax identification number in
the manner required, or who are subject to withholding by the IRS for failure to properly include on their return payments of
taxable interest or dividends, or who have failed to certify to the Fund that they are not subject to backup withholding when
required to do so or that they are “exempt recipients.” The current backup withholding rate is 24%.
U.S.
Tax Treatment of Foreign Shareholders. Generally, nonresident aliens, foreign corporations and other foreign investors are
subject to a 30% withholding tax on dividends paid by a U.S. corporation, although the rate may be reduced for an investor that
is a qualified resident of a foreign country with an applicable tax treaty with the United States. In the case of a regulated
investment company such as a Fund, however, certain categories of dividends are exempt from the 30% withholding tax. These generally
include dividends attributable to a Fund’s net capital gains (the excess of net long-term capital gains over net short-term
capital losses), dividends attributable to a Fund’s interest income from U.S. obligors, and dividends attributable to net
short-term capital gains of a Fund.
Foreign
shareholders will generally not be subject to U.S. tax on gains realized on the sale or redemption of shares of a Fund, except
that a nonresident alien individual who is present in the United States for 183 days or more in a calendar year will be taxable
on such gains and on capital gain dividends from the Fund.
In
contrast, if a foreign investor conducts a trade or business in the United States and the investment in a Fund is effectively
connected with that trade or business, then the foreign investor’s income from the Fund will generally be subject to U.S.
federal income tax at graduated rates in a manner similar to the income of a U.S. citizen or resident.
Each
Fund will also generally be required to withhold 30% tax on certain payments to foreign entities that do not provide a Form W-8BEN-E
that evidences their compliance with, or exemption from, specified information reporting requirements under the Foreign Account
Tax Compliance Act.
All
foreign investors should consult their own tax advisers regarding the tax consequences in their country of residence of an investment
in a Fund.
Shares
of the Fund have not been registered for sale outside of the United States and certain U.S. territories.
State
and Local Taxes. You may also be subject to state and local taxes on income and gain from Fund shares. State income taxes
may not apply, however, to the portions of the Fund’s distributions, if any, that are attributable to interest on U.S. government
securities. You should consult your tax adviser regarding the tax status of distributions in your state and locality. More information
about taxes is contained in the Funds’ SAI.
Householding.
In an effort to decrease costs, the Funds intend to reduce the number of duplicate prospectuses and annual and semi-annual
reports you receive by sending only one copy of each to those addresses shared by two or more accounts and to shareholders we
reasonably believe are from the same family or household. Once implemented, if you would like to discontinue householding for
your accounts, please call the Transfer Agent toll-free at 1-855-744-8500 to request individual copies of these documents. Once
the Funds receive notice to stop householding, we will begin sending individual copies thirty days after receiving your request.
This policy does not apply to account statements.
Lost
Shareholder, Inactive Accounts and Unclaimed Property. It is important that the Funds maintains a correct address for each
shareholder. An incorrect address may cause a shareholder’s account statements and other mailings to be returned to the
Fund. Based upon statutory requirements for returned mail, the Fund will attempt to locate the shareholder or rightful owner of
the account. If the Fund is unable to locate the shareholder, then it will determine whether the shareholder’s account can
legally be considered abandoned. Your mutual fund account may be transferred to the state government of your state of residence
if no activity occurs within your account during the “inactivity period” specified in your state’s abandoned
property laws. The Fund is legally obligated to escheat (or transfer) abandoned property to the appropriate state’s unclaimed
property administrator in accordance with statutory requirements. The shareholder’s last known address of record determines
which state has jurisdiction. Please proactively contact the Transfer Agent at 1-855-744-8500 (toll free) at least annually to
ensure your account remains in active status.
If
you are a resident of the state of Texas, you may designate a representative to receive notifications that, due to inactivity,
your mutual fund account assets may be delivered to the Texas Comptroller. Please contact the Transfer Agent if you wish to complete
a Texas Designation of Representative form.
NO
PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR IN THE FUNDS’
SAI INCORPORATED HEREIN BY REFERENCE, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ITS DISTRIBUTOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING
BY THE COMPANY OR BY THE DISTRIBUTOR IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
No
financial highlights are presented because the Funds had not commenced investment operations prior to the date of this Prospectus.
PRIVACY
NOTICE
FACTS
|
WHAT
DO THE SUMMIT GLOBAL INVESTMENTS FUNDS DO WITH YOUR PERSONAL INFORMATION?
|
Why?
|
Financial
companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all
sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read
this notice carefully to understand what we do.
|
What?
|
The
types of personal information we collect and share depend on the product or service you
have with us. This information can include:
•
Social Security number
•
account balances
•
account transactions
•
transaction history
•
wire transfer instructions
•
checking account information
When
you are no longer our customer, we continue to share your information as described in this notice.
|
How?
|
All
financial companies need to share customers’ personal information to run their everyday business. In the section below,
we list the reasons financial companies can share their customers’ personal information; the reasons Summit Global
Investments Funds chooses to share; and whether you can limit this sharing.
|
Reasons
we can share your information
|
Do
the Summit Global
Investments
Funds share?
|
Can
you limit this sharing?
|
For
our everyday business purpose —
such
as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report
to credit bureaus
|
Yes
|
No
|
For
our marketing purposes —
to
offer our products and services to you
|
Yes
|
No
|
For
joint marketing with other financial companies
|
Yes
|
No
|
For
affiliates’ everyday business purposes —
information
about your transactions and experiences
|
Yes
|
No
|
For
affiliates’ everyday business purposes —
information
about your creditworthiness
|
No
|
We
don’t share
|
For
our affiliates to market to you
|
No
|
We
don’t share
|
For
nonaffiliates to market to you
|
No
|
We
don’t share
|
Questions?
|
Call
1-888-251-4847 or go to www.sgiam.com
|
What
we do
|
|
How
do the Summit Global Investments Funds protect my personal information?
|
To
protect your personal information from unauthorized access and use, we use security measures that comply with federal law.
These measures include computer safeguards and secured files and buildings.
|
How
do the Summit Global Investments Funds collect my personal information?
|
We
collect your personal information, for example, when you
•
open an account
•
provide account information
•
give us your contact information
•
make a wire transfer
•
tell us where to send the money
We
also collect your information from others, such as credit bureaus, affiliates, or other companies.
|
Why
can’t I limit all sharing?
|
Federal
law gives you the right to limit only
•
sharing for affiliates’ everyday business purposes - information about your creditworthiness
•
affiliates from using your information to market to you
•
sharing for nonaffiliates to market to you
State
laws and individual companies may give you additional rights to limit sharing.
|
Definitions
|
|
Affiliates
|
Companies
related by common ownership or control. They can be financial and
nonfinancial
companies.
•
Our affiliates include Summit Global Investments, LLC, the investment adviser to the SGI U.S. Large
Cap Equity Fund, SGI U.S. Small Cap Equity Fund, SGI Global Equity Fund, SGI U.S. Large Cap Equity VI Portfolio, SGI Peak
Growth Fund, SGI Prudent Growth Fund, and SGI Conservative Fund.
|
Nonaffiliates
|
Companies
not related by common ownership or control. They can be financial
and
nonfinancial companies.
• SGI
U.S. Large Cap Equity Fund, SGI U.S. Small Cap Equity Fund, SGI Global Equity Fund, SGI U.S. Large Cap Equity VI Portfolio,
SGI Peak Growth Fund, SGI Prudent Growth Fund, and SGI Conservative Fund don’t share with nonaffiliates so they
can market to you.
|
Joint
marketing
|
A
formal agreement between nonaffiliated financial companies that together market financial
products or services to you.
• SGI
U.S. Large Cap Equity Fund, SGI U.S. Small Cap Equity Fund, SGI Global Equity Fund, SGI U.S. Large Cap Equity VI Portfolio,
SGI Peak Growth Fund, SGI Prudent Growth Fund, and SGI Conservative Fund may share your information with other financial
institutions with whom they have joint marketing arrangements who may suggest additional fund services or other investment
products which may be of interest to you. We do not currently have any joint marketing arrangements with other financial
institutions.
|
FOR
MORE INFORMATION
This
Prospectus contains important information you should know before you invest. Read it carefully and keep it for future reference.
More information about the Funds is available free of charge, upon request, including:
Annual/Semi-Annual
Reports:
As
of the date of this Prospectus, annual and semi-annual reports for the Funds are not yet available as the Funds had not commenced
operations. The annual and semi-annual reports will provide additional information about the Funds’ investments, as well
as the most recent financial reports and portfolio listings. The annual report will contain a discussion of the market conditions
and investment strategies that affected the Funds’ performance during the last fiscal year.
Statement
of Additional Information:
The
Funds’ SAI, dated June 8, 2020, has been filed with the SEC. The SAI, which includes additional information about the Funds,
along with the Funds’ annual and semi-annual reports, once available, will be available on the Adviser’s website at
www.sgiam.com or may be obtained free of charge by calling 855-744-8500. The SAI, as supplemented from time to time, is incorporated
by reference into this Prospectus and is legally considered a part of this Prospectus.
Shareholder
Account Service Representatives:
Representatives
are available to discuss account balance information, mutual fund prospectuses, literature, programs and services available. Hours:
9:00 a.m. to 8:00 p.m. (Eastern time) Monday-Friday. Call: 855-744-8500.
Purchases
and Redemptions:
Call
your registered representative or 855-744-8500.
Written
Correspondence
Post
Office Address:
|
|
Summit
Global Investments Funds
c/o
U.S. Bank Global Fund Services
PO
Box 701
Milwaukee,
WI 53201-0701
|
Street
Address:
|
|
Summit
Global Investments Funds
c/o
U.S. Bank Global Fund Services
615
East Michigan Street
Milwaukee,
WI 53202
|
Securities
and Exchange Commission:
You
may view and copy information about the Company and the Funds, including the SAI, by visiting the EDGAR Database on the SEC’s
Internet site at www.sec.gov. You may also obtain copies of Fund documents by paying a duplicating fee and sending an electronic
request to the following e-mail address: publicinfo@sec.gov.
INVESTMENT
COMPANY ACT FILE NO. 811-05518
STATEMENT
OF ADDITIONAL INFORMATION
SGI
PEAK GROWTH FUND
Class
I Shares (Ticker: SGPKX)
SGI
PRUDENT GROWTH FUND
Class
I Shares (Ticker: SGPGX)
SGI
CONSERVATIVE FUND
Class
I Shares (Ticker: SGCIX)
June
8, 2020
Investment
Adviser:
SUMMIT
GLOBAL INVESTMENTS, LLC (the “Adviser)
each
a series of THE RBB FUND, INC
This
Statement of Additional Information (“SAI) provides supplementary information pertaining to the SGI Peak Growth
Fund (the “Peak Growth Fund), SGI Prudent Growth Fund (the “Prudent Growth Fund), and the SGI Conservative
Fund (the “Conservative Fund) (each a “Fund and together the “Funds) of The RBB Fund,
Inc. (the “Company). The Funds are each authorized to issue a single class of shares – Class I Shares (collectively,
the “Shares). This SAI is not a prospectus and should be read only in conjunction with the Funds’ Prospectus
dated June 8, 2020 (the “Prospectus). Copies of the Prospectus and Annual and Semi-Annual Reports, when available,
may be obtained free of charge by calling toll-free 855-744-8500.
TABLE
OF CONTENTS
INVESTMENT
OBJECTIVES
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1
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PRINCIPAL
INVESTMENT POLICIES AND RISKS
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1
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NON-PRINCIPAL
INVESTMENT POLICIES AND RISKS
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9
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INVESTMENT
LIMITATIONS
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17
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DISCLOSURE
OF PORTFOLIO HOLDINGS
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18
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PORTFOLIO
TURNOVER
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19
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MANAGEMENT
OF THE COMPANY
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19
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CODE
OF ETHICS
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28
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PROXY
VOTING
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28
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CONTROL
PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
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28
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INVESTMENT
ADVISORY AND OTHER SERVICES
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28
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INVESTMENT
ADVISER
|
28
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PORTFOLIO
MANAGERS
|
29
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ADMINISTRATION
AND ACCOUNTING AGREEMENT
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30
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CUSTODIAN
AGREEMENT
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31
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TRANSFER
AGENCY AGREEMENT
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31
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DISTRIBUTION
AGREEMENT AND PLAN OF DISTRIBUTION
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31
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FUNDS
SERVICES ADMINISTRATIVE FEE
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32
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PAYMENTS
TO FINANCIAL INTERMEDIARIES
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33
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FUND
TRANSACTIONS
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33
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PURCHASE
AND REDEMPTION INFORMATION
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35
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TELEPHONE
TRANSACTION PROCEDURES
|
36
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VALUATION
OF SHARES
|
36
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TAXES
|
37
|
ADDITIONAL
INFORMATION CONCERNING COMPANY SHARES
|
38
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MISCELLANEOUS
|
38
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FINANCIAL
STATEMENTS
|
39
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APPENDIX
A
|
A-1
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APPENDIX
B
|
B-1
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GENERAL
INFORMATION
The
Company is an open-end management investment company currently consisting of 37 separate portfolios. The Company is
registered under the Investment Company Act of 1940, as amended, (the “1940 Act) and was organized as a
Maryland corporation on February 29, 1988. This SAI pertains to Shares of the SGI Peak Growth Fund, SGI Prudent
Growth Fund, and SGI Conservative Fund, each a diversified portfolio. Summit Global Investments, LLC (“Summit
or the “Adviser) serves as the investment adviser to the Funds.
INVESTMENT
OBJECTIVES
The
following supplements the information contained in the Prospectus concerning the investment objectives and policies of the Funds.
The Funds will implement their respective investment strategies by investing in securities of affiliated and unaffiliated open-end
mutual funds, closed-end funds, and exchange-traded funds (“ETFs) (collectively, “Underlying Funds). Certain
of the descriptions of the investments or techniques set forth below reflect that the investments and techniques are occurring
indirectly through investments in Underlying Funds.
During
unusual economic or market conditions, or for temporary defensive or liquidity purposes, each Fund may invest up to 100% of its
assets in money market instruments that would not ordinarily be consistent with each Fund’s objective.
There
can be no guarantee that a Fund will achieve its investment objective. A Fund may not necessarily invest in all of the instruments
or use all of the investment techniques permitted by the Funds’ Prospectus and this SAI, or invest in such instruments
or engage in such techniques to the full extent permitted by the Funds’ investment policies and limitations.
PRINCIPAL
INVESTMENT POLICIES AND RISKS
American,
European and Global Depositary Receipts. The Underlying Funds in which the Funds invest may hold American Depository
Receipts (“ADRs). ADRs, as well as other “hybrid forms of ADRs, including European Depositary
Receipts (“EDRs) and Global Depositary Receipts (“GDRs), which are certificates evidencing ownership
of shares of a foreign issuer. These certificates are issued by depository banks and generally trade on an established market
in the United States or elsewhere. The underlying shares are held in trust by a custodian bank or similar financial institution
in the issuer’s home country. The depository bank may not have physical custody of the underlying securities at all
times and may charge fees for various services, including forwarding dividends and interest and corporate actions. ADRs
are alternatives to directly purchasing the underlying foreign securities in their national markets and currencies. However,
ADRs continue to be subject to many of the risks associated with investing directly in foreign securities. See “Foreign
Securities for more information on the risks of investing in foreign securities.
Cyber
Security Risk. Each Fund and its service providers may be prone to operational and information security risks resulting from
breaches in cyber security. A breach in cyber security refers to both intentional and unintentional events that may cause a Fund
to lose proprietary information, suffer data corruption, or lose operational capacity. Breaches in cyber security include, among
other behaviors, stealing or corrupting data maintained online or digitally, denial of service attacks on websites, the unauthorized
release of confidential information or various other forms of cyber-attacks. Cyber security breaches affecting the Funds, or the
Adviser, custodian, transfer agent, intermediaries and other third-party service providers may adversely impact the Funds. For
instance, cyber security breaches may interfere with the processing of shareholder transactions, impact a Fund’s ability
to calculate its NAVs, cause the release of private shareholder information or confidential business information, impede trading,
subject the Funds to regulatory fines or financial losses and/or cause reputational damage. A Fund may also incur additional costs
for cyber security risk management purposes. Similar types of cyber security risks are also present for issuers of securities
in which a Fund may invest (i.e. Underlying Funds), which could result in material adverse consequences for such issuers and may
cause the Fund’s investment in such companies to lose value. While the Funds and their service providers have established
IT and data security programs and have in place business continuity plans and other systems designed to prevent losses and mitigate
cyber security risk, there are inherent limitations in such plans and systems, including the possibility that certain risks have
not been identified or that cyber-attacks may be highly sophisticated. Furthermore, the Funds have limited ability to prevent
or mitigate cyber security incidents affecting third-party service providers.
Investing
in Emerging Markets. The Funds may invest in Underlying Funds that invest in securities of issuers located in emerging markets.
Securities in emerging markets are less liquid and subject to greater price volatility, and have a smaller market capitalization,
than the U.S. securities markets. In certain countries, there may be fewer publicly traded securities and the market may be dominated
by a few issues or sectors. Issuers and securities markets in such countries are not subject to as extensive and frequent accounting,
financial and other reporting requirements or as comprehensive government regulations as are issuers and securities markets in
the U.S. In particular, the assets and profits appearing on the financial statements of emerging country issuers may not reflect
their financial position or results of operations in the same manner as financial statements for U.S. issuers. Substantially less
information may be publicly available about emerging market issuers than is available about issuers in the United States.
Emerging
markets are typically marked by a high concentration of market capitalization and trading volume in a small number of issuers
representing a limited number of industries, as well as a high concentration of ownership of such securities by a limited number
of investors. Certain emerging markets are in the earliest stages of their development. Even the markets for relatively widely
traded securities in emerging markets may not be able to absorb, without price disruptions, a significant increase in trading
volume or trades of a size customarily undertaken by institutional investors in the securities markets of developed countries.
The limited size of many of these markets can cause prices to be erratic for reasons apart from factors that affect the soundness
and competitiveness of the securities issuers. For example, prices may be unduly influenced by traders who control large positions
in these markets. Additionally, market making and arbitrage activities are generally less extensive in such markets, which may
contribute to increased volatility and reduced liquidity of such markets. The limited liquidity of emerging country securities
may also affect the Fund’s ability to value accurately its portfolio securities or to acquire or dispose of securities
at the price and time it wishes to do so or in order to meet redemption requests.
Antiquated
legal systems in certain emerging markets may have an adverse impact on the Funds’ investments. For example, while the
potential liability of a shareholder in a U.S. corporation for acts of the corporation is generally limited to the amount of the
shareholder’s investment, the notion of limited liability is less clear in certain emerging markets. Similarly, the rights
of investors in emerging market companies may be more limited than those of shareholders in U.S. corporations.
Transaction
costs, including brokerage commissions or dealer mark-ups, in emerging markets may be higher than in the United States and other
developed securities markets. In addition, existing laws and regulations are often inconsistently applied. As legal systems in
emerging countries develop, foreign investors may be adversely affected by new or amended laws and regulations. In circumstances
where adequate laws exist, it may not be possible to obtain swift and equitable enforcement of the law.
Foreign
investment in the securities markets of certain emerging countries is restricted or controlled to varying degrees. These restrictions
may limit an Underlying Fund’s investment in certain emerging countries and may increase the expenses of the Underlying
Fund and, consequently, the Fund. Certain emerging countries require governmental approval prior to investments by foreign persons
or limit investment by foreign persons to only a specified percentage of an issuer’s outstanding securities or a specific
class of securities which may have less advantageous terms (including price) than securities of the company available for purchase
by nationals. In addition, the repatriation of both investment income and capital from emerging countries may be subject to restrictions
which require governmental consents or prohibit repatriation entirely for a period of time. Even where there is no outright restriction
on repatriation of capital, the mechanics of repatriation may affect certain aspects of the operation of an Underlying Fund. An
Underlying Fund may be required to establish special custodial or other arrangements before investing in certain emerging countries.
Emerging
countries may be subject to a substantially greater degree of economic, political and social instability than is the case in the
United States and most Western European countries. This instability may result from, among other things, the following: (i) authoritarian
governments or military involvement in political and economic decision making, including changes or attempted changes in governments
through extra-constitutional means; (ii) popular unrest associated with demands for improved conditions; (iii) internal
insurgencies; (iv) hostile relations with neighboring countries; (v) ethnic, religious and racial disaffection or conflict;
and (vi) the absence of developed legal structures governing foreign private investments and private property. Such economic,
political and social instability could disrupt the principal financial markets in which an Underlying Fund may invest and adversely
affect the value of the Fund’s assets. The Fund’s investments can also be adversely affected by any increase in
taxes or by political, economic or diplomatic developments.
The
economies of emerging countries may differ unfavorably from the U.S. economy in growth of gross domestic product, rate of inflation,
capital reinvestment, resources, self-sufficiency and balance of payments. Many emerging countries have experienced in the past,
and continue to experience, high rates of inflation. In certain countries, inflation has at times accelerated rapidly to hyperinflationary
levels, creating a negative interest rate environment and sharply eroding the value of outstanding financial assets in those countries.
Other emerging countries, on the other hand, have recently experienced deflationary pressures and are in economic recessions.
The economies of many emerging countries are heavily dependent upon international trade and are accordingly affected by protective
trade barriers and the economic conditions of their trading partners. In addition, the economies of some emerging countries are
vulnerable to weakness in world prices for their commodity exports. The Underlying Fund’s income and, in some cases, capital
gains from foreign stocks and securities will be subject to applicable taxation in certain of the countries in which it invests,
and treaties between the U.S. and such countries may not be available in some cases to reduce the otherwise applicable tax rates.
Equity
Securities. The Underlying Funds in which the Funds invest may hold equity securities, which represent ownership interests
in a company and consist of common stocks, preferred stocks, warrants to acquire common stock, and securities convertible into
common stock. Investments in equity securities in general are subject to market risks that may cause their prices to fluctuate
over time. Fluctuations in the value of equity securities in which an Underlying Fund invests will cause the net asset value (“NAV)
of the Underlying Fund to fluctuate. The Underlying Funds purchase equity securities traded in the U.S. on registered exchanges
or the over-the-counter market. Equity securities are described in more detail below:
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Common
Stock. Common stock represents an equity or ownership interest in an issuer. In the event an issuer is liquidated or
declares bankruptcy, the claims of owners of bonds and preferred stock take precedence over the claims of those who own common
stock.
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Preferred
Stock. Preferred stock represents an equity or ownership interest in an issuer that pays dividends at a specified rate
and that has precedence over common stock in the payment of dividends. In the event an issuer is liquidated or declares
bankruptcy, the claims of owners of bonds take precedence over the claims of those who own preferred and common stock.
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Warrants. Warrants
are instruments that entitle the holder to buy an equity security at a specific price for a specific period of time. Changes
in the value of a warrant do not necessarily correspond to changes in the value of its underlying security. The price of a
warrant may be more volatile than the price of its underlying security, and a warrant may offer greater potential for capital
appreciation as well as capital loss. Warrants do not entitle a holder to dividends or voting rights with respect to the
underlying security and do not represent any rights in the assets of the issuing company. A warrant ceases to have value if
it is not exercised prior to its expiration date. These factors can make warrants more speculative than other types of
investments.
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Convertible
Securities. Convertible securities are bonds, debentures, notes, preferred stocks or other securities that may be converted
or exchanged (by the holder or by the issuer) into shares of the underlying common stock (or cash or securities of equivalent
value) at a stated exchange ratio. A convertible security may also be called for redemption or conversion by the issuer after
a particular date and under certain circumstances (including a specified price) established upon issue. If a convertible security
held by an Underlying Fund is called for redemption or conversion, the Underlying Fund could be required to tender it for redemption,
convert it into the underlying common stock, or sell it to a third party.
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Convertible
securities generally have less potential for gain or loss than common stocks. Convertible securities generally provide yields
higher than the underlying common stocks, but generally lower than comparable non-convertible securities. Because of this higher
yield, convertible securities generally sell at a price above their “conversion value, which is the current market
value of the stock to be received upon conversion. The difference between this conversion value and the price of convertible
securities will vary over time depending on changes in the value of the underlying common stocks and interest rates. When the
underlying common stocks decline in value, convertible securities will tend not to decline to the same extent because of the interest
or dividend payments and the repayment of principal at maturity for certain types of convertible securities. However, securities
that are convertible other than at the option of the holder generally do not limit the potential for loss to the same extent as
securities convertible at the option of the holder. When the underlying common stocks rise in value, the value of convertible
securities may also be expected to increase. At the same time, however, the difference between the market value of convertible
securities and their conversion value will narrow, which means that the value of convertible securities will generally not increase
to the same extent as the value of the underlying common stocks. Because convertible securities may also be interest-rate sensitive,
their value may increase as interest rates fall and decrease as interest rates rise. Convertible securities are also subject
to credit risk, and are often lower-quality securities.
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Small
and Medium Capitalization Issuers.Investing in equity securities of small and medium capitalization companies often involves
greater risk than is customarily associated with investments in larger capitalization companies. This increased risk may be due
to the greater business risks of smaller size, limited markets and financial resources, narrow product lines and frequent lack
of depth of management. The securities of smaller companies are often traded in the over-the-counter market and even if listed
on a national securities exchange may not be traded in volumes typical for that exchange. Consequently, the securities of smaller
companies are less likely to be liquid, may have limited market stability, and may be subject to more abrupt or erratic market
movements than securities of larger, more established companies or the market averages in general.
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Exchange-Traded
Funds (“ETFs). Each Fund may invest in open-end investment companies whose shares are listed for trading on
a national securities exchange or the Nasdaq Market System. ETF shares typically trade like shares of common stock and provide
investment results that generally correspond to the price and yield performance of the component stocks of a widely recognized
index. There can be no assurance, however, that this can be accomplished, as it may not be possible for an ETF to replicate the
composition and relative weightings of the securities of its corresponding index. Additionally, some ETFs are actively-managed
by an investment adviser and/or sub-advisers and do not seek to provide investment results that correspond to an index.
ETFs
are subject to risks of an investment in a broadly based portfolio of common stocks, including the risk that the general level
of stock prices may decline, thereby adversely affecting the value of such investment. An actively-managed ETF may not perform
as well as its investment adviser and/or sub-advisers expect, and/or the actively-managed ETF’s portfolio management practices
might not work to achieve the desired result. Individual shares of an ETF are generally not redeemable at their NAV, but trade
on an exchange during the day at prices that are normally close to, but not the same as, their NAV. There is no assurance that
an active trading market will be maintained for the shares of an ETF or that market prices of the shares of an ETF will be close
to their NAVs.
Investments
in securities of ETFs beyond the limitations set forth in Section 12(d)(1)(A) of the 1940 Act are subject to certain
terms and conditions set forth in an exemptive order issued by the SEC to the exchange-traded fund. Section 12(d)(1)(A) states
that a mutual fund may not acquire shares of other investment companies, such as ETFs, in excess of: 3% of the total outstanding
voting stock of the investment company; 5% of its total assets invested in the investment company; or more than 10% of the fund’s
total assets were to be invested in the aggregate in all investment companies. The purchase of shares of ETFs may result in duplication
of expenses, including advisory fees, in addition to a mutual fund’s own expenses.
Foreign
Custody Risk. An Underlying Fund may hold foreign securities and cash with foreign banks, agents, and securities depositories
appointed by the Underlying Fund’s custodian (each a “Foreign Custodian). Some Foreign Custodians may be
recently organized or new to the foreign custody business. In some countries, Foreign Custodians may be subject to little or no
regulatory oversight over or independent evaluation of their operations. Further, the laws of certain countries may place limitations
on an Underlying Fund’s ability to recover its assets if a Foreign Custodian enters bankruptcy. Investments in emerging
markets may be subject to even greater custody risks than investments in more developed markets. Custody services in emerging
market countries are very often undeveloped and may be considerably less well-regulated than in more developed countries, and
thus may not afford the same level of investor protection as would apply in developed countries.
Foreign
Securities. An Underlying Fund’s investments in foreign securities involve higher costs than investments in U.S. securities,
including higher transaction costs as well as the imposition of additional taxes by foreign governments. In addition, foreign
investments may include additional risks associated with currency exchange rates, less complete financial information about the
issuers, less market liquidity and political stability. Volume and liquidity in most foreign bond markets are less than in the
United States and, at times, volatility or price can be greater than in the United States. Future political and economic information,
the possible imposition of withholding taxes on interest income, the possible seizure or nationalization of foreign holdings,
the possible establishment of exchange controls, or the adoption of other governmental restrictions, might adversely affect the
payment of principal and interest on foreign obligations. Inability to dispose of securities due to settlement problems could
result either in losses to an Underlying Fund due to subsequent declines in value of the securities, or, if the underlying investment
company has entered into a contract to sell the securities, could result in possible liability to the purchaser. Individual foreign
economies may differ favorably or unfavorably from the U.S. economy in such respects as growth or gross national product, rate
of inflation, capital reinvestment, resource self-sufficiency and balance of payments position. Fixed commissions on foreign securities
exchanges are generally higher than negotiated commissions on U.S. exchanges. There is generally less government supervision and
regulation of securities exchanges, brokers, dealers and listed companies than in the United States.
Settlement
mechanics may be slower or less reliable than within the United States, thus increasing the risk of delayed settlements of portfolio
transactions or loss of certificates for portfolio securities. Foreign markets also have different clearance and settlement procedures,
and in certain markets there have been times when settlements have been unable to keep pace with the volume of securities transactions,
making it difficult to conduct such transactions. Such delays in settlement could result in temporary periods when a portion of
the assets of an underlying investment company is uninvested and no return is earned thereon. The inability of an underlying investment
company to make intended security purchases due to settlement problems could cause the underlying investment company to miss attractive
investment opportunities.
Each
Fund values its securities and other assets in U.S. dollars. As a result, if an Underlying Fund invests in securities denominated
in foreign currencies, the NAV of the Underlying Fund’s shares may fluctuate with U.S. dollar exchange rates as well as
the price changes of the Underlying Fund’s securities in the various local markets and currencies. Thus, an increase in
the value of the U.S. dollar compared to the currencies in which an Underlying Fund makes its investments could reduce the effect
of increases and magnify the effect of decreases in the price of the Underlying Fund’s securities in their local markets.
Conversely, a decrease in the value of the U.S. dollar may have the opposite effect of magnifying the effect of increases and
reducing the effect of decreases in the prices of an Underlying Fund’s securities in its foreign markets. In addition to
favorable and unfavorable currency exchange rate developments, each Underlying Fund is subject to the possible imposition of exchange
control regulations or freezes on convertibility of currency.
If
an Underlying Fund invests in obligations of foreign branches of U.S. banks (Eurodollars) and U.S. branches of foreign banks (Yankee
dollars) or foreign branches of foreign banks, these investments involve risks that are different from investments in securities
of U.S. banks, including potential unfavorable political and economic developments, different tax provisions, seizure of foreign
deposits, currency controls, interest limitations or other governmental restrictions which might affect payment of principal or
interest. An Underlying Fund may also invest in debt securities issued or guaranteed by foreign governments, including Yankee
bonds, which are issued by foreign governments and their agencies and foreign corporations, but pay interest in U.S. dollars and
are typically issued in the United States.
European
countries can be affected by the significant fiscal and monetary controls that the European Economic and Monetary Union (“EMU)
imposes for membership. Europe’s economies are diverse, its governments are decentralized, and its cultures vary
widely. Several European Union (“EU) countries, including Greece, Ireland, Italy, Spain and Portugal, have
faced budget issues, some of which may have negative long-term effects for the economies of those countries and other EU countries.
There is continued concern about national-level support for the euro and the accompanying coordination of fiscal and wage policy
among EMU member countries. Member countries are required to maintain tight control over inflation, public debt, and budget
deficit to qualify for membership in the EMU. These requirements can severely limit the ability of EMU member countries
to implement monetary policy to address regional economic conditions.
In
June of 2016, the United Kingdom (the “UK) approved a referendum to leave the EU, commonly referred to as “Brexit,
which sparked depreciation in the value of the British pound and heightened risk of continued worldwide economic volatility. Pursuant
to Article 50 of the Treaty of Lisbon, the UK gave notice in March 2017 of its withdrawal from the EU and commenced negotiations
on the terms of withdrawal. Following years of negotiations and multiple withdrawal deadline extensions, the UK withdrew from
the EU on January 31, 2020. A transition period, currently set to last through December 31, 2020, will be used for the UK and
EU to negotiate their future relationship. The effects of this withdrawal will depend, in part, on agreements the UK negotiates
to retain access to EU markets either during the transitional period or more permanently including, but not limited to, current
trade and finance agreements. As a result of the UK’s exit from the EU, the Funds and the Underlying Funds may be exposed
to volatile trading markets and significant and unpredictable currency fluctuations over a short period of time, and potentially
lower economic growth in the UK, Europe and globally. Securities issued by companies domiciled in the UK could be subject to changing
regulatory and tax regimes. Banking and financial services companies that operate in the UK or EU could be disproportionately
affected by Brexit. Further insecurity in EU membership or the abandonment of the euro could exacerbate market and currency volatility
and negatively affect an Underlying Fund’s investments in securities of issuers located in the EU. The effects of these
actions, especially if they occur in a disorderly fashion, are not clear but could be significant and far-reaching.
Investment
Company Shares. Each Fund may invest in shares of other investment companies to the extent permitted by applicable law
and subject to certain restrictions. These investment companies typically incur fees that are separate from those fees incurred
directly by a Fund. A Fund’s purchase of such investment company securities results in the layering of expenses, such that
shareholders would indirectly bear a proportionate share of the operating expenses of such investment companies, including advisory
fees, in addition to paying the Fund’s expenses. Unless an exception is available, Section 12(d)(1)(A) of the
1940 Act prohibits a fund from (i) acquiring more than 3% of the voting shares of any one investment company, (ii) investing
more than 5% of its total assets in any one investment company, and (iii) investing more than 10% of its total assets in
all investment companies combined. These limits will not apply to the investment of uninvested cash balances in shares of
registered or unregistered money market funds whether affiliated or unaffiliated. The foregoing exemption, however, only
applies to an unregistered money market fund that (i) limits its investments to those in which a money market fund may invest
under Rule 2a-7 of the 1940 Act, and (ii) undertakes to comply with all the other provisions of Rule 2a-7.
Each
Fund may invest in investment companies that seek to track the composition and/or performance of specific indexes or portions
of specific indexes. Certain of these investment companies, including ETFs and certain closed-end funds, are traded on a securities
exchange. The market prices of index-based investments will fluctuate in accordance with changes in the underlying portfolio securities
of the investment company and also due to supply and demand of the investment company’s shares on the exchange upon which
the shares are traded. Index-based investments may not replicate or otherwise match the composition or performance of their specified
index due to transaction costs, among other things.
Investments
by a Fund in other investment companies, including ETFs, will be subject to the limitations of the 1940 Act except as permitted
by SEC orders. The Funds may rely on SEC orders that permit them to invest in certain ETFs beyond the limits contained in
the 1940 Act, subject to certain terms and conditions. Generally, these terms and conditions require Board of Directors
of the Company (the “Board) to approve policies and procedures relating to certain of a Fund’s investments
in ETFs. These policies and procedures require, among other things, that (i) the Adviser conducts a Fund’s investment
in ETFs without regard to any consideration received by the Fund or any of its affiliated persons and (ii) the Adviser certifies
to the Board quarterly that it has not received any consideration in connection with an investment by the Fund in an ETF, or if
it has, the amount and purpose of the consideration will be reported to the Board and an equivalent amount of advisory fees shall
be waived by the Adviser.
Certain
investment companies whose securities are purchased by a Fund may not be obligated to redeem such securities in an amount exceeding
1% of the investment company’s total outstanding securities during any period of less than 30 days. Therefore, such
securities that exceed this amount may be illiquid.
If
required by the 1940 Act, the Funds expect to vote the shares of other investment companies that are held by it in the same proportion
as the vote of all other holders of such securities.
Real
Estate Investment Trust Securities. An Underlying Fund may invest in real estate investment trusts (“REITs).
REITs generally invest directly in real estate, in mortgages or in some combination of the two. Individual REITs may own a limited
number of properties and may concentrate in a particular region or property type. A REIT is a corporation, or a business trust
that would otherwise be taxed as a corporation, which meets the definitional requirements of the Internal Revenue Code of 1986,
as amended (the “Code). The Code permits a qualifying REIT to deduct dividends paid, thereby effectively eliminating
corporate level Federal income tax and making the REIT a pass-through vehicle for Federal income tax purposes. To meet the definitional
requirements of the Code, a REIT must, among other things, invest substantially all of its assets in interests in real estate
(including mortgages and other REITs) or cash and government securities, derive most of its income from rents from real property
or interest on loans secured by mortgages on real property, and distribute to shareholders annually a substantial portion of its
otherwise taxable income.
Generally,
REITs can be classified as equity REITs, mortgage REITs and hybrid REITs. Equity REITs invest the majority of their assets directly
in real property and derive their income primarily from rents and capital gains from appreciation realized through property sales.
Mortgage REITs invest the majority of their assets in real estate mortgages and derive their income primarily from interest payments.
Hybrid REITs combine the characteristics of both equity and mortgage REITs. The values of securities issued by REITs are affected
by tax and regulatory requirements and by perceptions of management skill. They also are subject to heavy cash flow dependency,
defaults by borrowers or tenants, self-liquidation and the possibility of failing to qualify for tax-free status under the Code
or to maintain exemption from the 1940 Act. Unexpected high rates of default on the mortgages held by a mortgage pool may adversely
affect the value of a mortgage-backed security and could result in losses to a mortgage REIT. The risk of such defaults is generally
higher in the case of mortgage pools that include subprime mortgages. To the extent that a mortgage REIT’s portfolio is
exposed to lower-rated, unsecured or subordinated instruments, the risk of loss may increase, which may have a negative impact
on the Fund.
The
REITs in which the Underlying Funds may invest may be affected by economic forces and other factors related to the real estate
industry. REITs are sensitive to factors such as changes in real estate values, property taxes, interest rates, cash flow of underlying
real estate assets, occupancy rates, government regulations affecting zoning, land use and rents, and management skill and creditworthiness
of the issuer. Companies in the real estate industry may also be subject to liabilities under environmental and hazardous waste
laws. REITS whose underlying assets include long-term health care properties; such as nursing, retirement and assisted living
homes, may be impacted by federal regulations concerning the health care industry. Each Fund will indirectly bear its proportionate
share of expenses, including management fees, paid by each REIT in which an Underlying Fund invests in addition to the expenses
of the Fund. Each Fund is also subject to the risk that the REITs in which an Underlying Fund invests will fail to qualify for
tax-free pass-through of income under the Code, and/or fail to qualify for an exemption from registration as an investment company
under the 1940 Act. Mortgage REITs may be affected by the quality of the credit extended. A REIT’s return may be adversely
affected when interest rates are high or rising.
Investing
in REITs may involve risks similar to those associated with investing in small capitalization companies. REITs may have limited
financial resources, may trade less frequently and in a limited volume and may be subject to more abrupt or erratic price movements
than larger company securities. Historically, small capitalization stocks, such as REITs, have been more volatile in price than
the larger capitalization stocks included in the S&P 500®.
Risk
Considerations of Lower Rated Securities. An Underlying Fund may invest in fixed income securities that are not investment
grade but are rated as low as B by Moody’s or B by S&P (or their equivalents). In the event that the rating on a security
held in an Underlying Fund’s portfolio is downgraded by a rating service, such action may be considered by the Underlying
Fund’s investment adviser in its evaluation of the overall investment merits of that security, but will not necessarily
result in the sale of the security. The widespread expansion of government, consumer and corporate debt within the U.S. economy
has made the corporate sector, especially cyclically sensitive industries, more vulnerable to economic downturns or increased
interest rates. An economic downturn could severely disrupt the market for high yield fixed income securities and adversely affect
the value of outstanding fixed income securities and the ability of the issuers to repay principal and interest.
An
Underlying Fund may invest in high yield debt obligations, such as bonds and debentures, issued by corporations and other business
organizations. High yield fixed income securities (commonly known as “junk bonds) are considered speculative investments
while generally providing greater income than investments in higher rated securities, involve greater risk of loss of principal
and income (including the possibility of default or bankruptcy of the issuers of such securities) and may involve greater volatility
of price (especially during periods of economic uncertainty or change) than securities in the higher rating categories. Since
yields vary over time, no specific level of income can ever be assured.
The
prices of high yield fixed income securities have been found to be less sensitive to interest rate changes than higher-rated investments
but more sensitive to adverse economic changes or individual corporate developments. Also, during an economic downturn or substantial
period of rising interest rates, highly leveraged issuers may experience financial stress, which would adversely affect their
ability to service their principal and interest payment obligations, to meet projected business goals and to obtain additional
financing. If the issuer of a fixed income security owned by an Underlying Fund defaulted, the Underlying Fund could incur additional
expenses in attempting to obtain a recovery. In addition, periods of economic uncertainty and changes can be expected to result
in increased volatility of market prices of high yield fixed income securities and an Underlying Fund’s NAV to the extent
it holds such securities.
High
yield fixed income securities also present risks based on payment expectations. For example, high yield fixed income securities
may contain redemption or call provisions. If an issuer exercises these provisions in a declining interest rate market, an Underlying
Fund may, to the extent it holds such fixed income securities, have to replace the securities with a lower yielding security,
which may result in a decreased return for investors. Conversely, a high yield fixed income security’s value will decrease
in a rising interest rate market, as will the value of an Underlying Fund’s assets, to the extent it holds such fixed income
securities. In addition, to the extent that there is no established retail secondary market, there may be thin trading of
high yield fixed income securities, and this may have an impact on the Underlying Fund’s investment adviser’s ability
to accurately value such securities and on the Underlying Fund’s ability to dispose of such securities. Adverse publicity
and investor perceptions, whether or not based on fundamental analysis, may decrease the values and liquidity of high yield fixed
income securities, especially in a thinly traded market.
New
laws proposed or adopted from time to time may have an impact on the market for high yield securities.
Finally,
there are risks involved in applying credit or dividend ratings as a method for evaluating high yield securities. For example,
ratings evaluate the safety of principal and interest or dividend payments, not market value risk of high yield securities. Also,
since rating agencies may fail to timely change the credit ratings to reflect subsequent events, an Underlying Fund may need to
monitor the issuers of high yield securities in its portfolio, if any, to determine if the issuers will have sufficient cash flow
and profits to meet required principal and interest payments, and to assure the security’s liquidity so an Underlying Fund
can meet redemption requests.
Risk
Considerations of Medium Grade Securities. Debt obligations in the lowest investment grade (i.e., BBB or Baa),
referred to as “medium grade obligations, have speculative characteristics, and changes in economic conditions and
other factors are more likely to lead to weakened capacity to make interest payments and repay principal on these obligations
than is the case for higher rated securities. In the event that a security purchased by a Fund is subsequently downgraded below
investment grade, the Adviser will consider such event in its determination of whether the Fund should continue to hold the security.
Special
Note Regarding Market Events. Events in the financial sector over the past several years have resulted in reduced liquidity
in credit and fixed income markets and an unusually high degree of volatility in the financial markets, both domestically and
internationally. While entire markets have been impacted, issuers that have exposure to the real estate, mortgage and credit markets
have been particularly affected. These events and the potential for continuing market turbulence may have an adverse effect
on each Fund’s investments. It is uncertain how long these conditions will continue.
The
instability in the financial markets has led the U.S. government to take a number of unprecedented actions designed to support
certain financial institutions and certain segments of the financial markets. Federal, state and foreign governments, regulatory
agencies, and self-regulatory organizations may take actions that affect the regulation of the instruments in which the Funds
invest, or the issuers of such instruments, in ways that are unforeseeable. Such legislation or regulation could limit or preclude
each Fund’s ability to achieve its investment objective.
Governments
or their agencies may also acquire distressed assets from financial institutions and acquire ownership interests in those institutions.
The implications of government ownership and disposition of these assets are unclear, and such ownership or disposition may have
positive or negative effects on the liquidity, valuation and performance of a Fund.
U.S.
Government Securities. An Underlying Fund may invest in U.S. government securities. Securities issued or guaranteed
by the U.S. government or its agencies or instrumentalities include U.S. Treasury securities, which are backed by the full faith
and credit of the U.S. Treasury and which differ only in their interest rates, maturities, and times of issuance. U.S. Treasury
bills have initial maturities of one-year or less; U.S. Treasury notes have initial maturities of one to ten years; and U.S. Treasury
bonds generally have initial maturities of greater than ten years. Certain U.S. government securities are issued or guaranteed
by agencies or instrumentalities of the U.S. government including, but not limited to, obligations of U.S. government agencies
or instrumentalities such as Federal National Mortgage Association (“Fannie Mae), Federal Home Loan Mortgage Corporation
(“Freddie Mac), Government National Mortgage Association (“Ginnie Mae), the Small Business Administration,
the Federal Farm Credit Administration, the Federal Home Loan Banks, Banks for Cooperatives (including the Central Bank for Cooperatives),
the Federal Land Banks, the Federal Intermediate Credit Banks, the Tennessee Valley Authority, the Export-Import Bank of the United
States, the Commodity Credit Corporation, the Federal Financing Bank, the Student Loan Marketing Association, the National Credit
Union Administration and the Federal Agricultural Mortgage Corporation (“Farmer Mac).
Some
obligations issued or guaranteed by U.S. government agencies and instrumentalities, including, for example, Ginnie Mae pass-through
certificates, are supported by the full faith and credit of the U.S. Treasury. Other obligations issued by or guaranteed by federal
agencies, such as those securities issued by Fannie Mae, are supported by the discretionary authority of the U.S. government to
purchase certain obligations of the federal agency, while other obligations issued by or guaranteed by federal agencies, such
as those of the Federal Home Loan Banks, are supported by the right of the issuer to borrow from the U.S. Treasury, while the
U.S. government provides financial support to such U.S. government-sponsored federal agencies, no assurance can be given that
the U.S. government will always do so, since the U.S. government is not so obligated by law. U.S. Treasury notes and bonds typically
pay coupon interest semi-annually and repay the principal at maturity.
The
extreme and unprecedented volatility and disruption that impacted the capital and credit markets during late 2008 and into 2009
have led to increased market concerns about Freddie Mac’s and Fannie Mae’s ability to withstand future credit losses
associated with securities held in their investment portfolios, and on which they provide guarantees, without the direct support
of the federal government. On September 6, 2008, both Freddie Mac and Fannie Mae were placed under the conservatorship
of the Federal Housing Finance Agency (“FHFA). Under the plan of conservatorship, the FHFA has assumed control
of, and generally has the power to direct, the operations of Freddie Mac and Fannie Mae, and is empowered to exercise all powers
collectively held by their respective shareholders, directors and officers, including the power to (1) take over the assets
of and operate Freddie Mac and Fannie Mae with all the powers of the shareholders, the directors, and the officers of Freddie
Mac and Fannie Mae and conduct all business of Freddie Mac and Fannie Mae; (2) collect all obligations and money due to Freddie
Mac and Fannie Mae; (3) perform all functions of Freddie Mac and Fannie Mae which are consistent with the conservator’s
appointment; (4) preserve and conserve the assets and property of Freddie Mac and Fannie Mae; and (5) contract for assistance
in fulfilling any function, activity, action or duty of the conservator. In addition, in connection with the actions taken
by the FHFA, the U.S. Treasury Department (the “Treasury) has entered into certain preferred stock purchase agreements
with each of Freddie Mac and Fannie Mae which establish the Treasury as the holder of a new class of senior preferred stock in
each of Freddie Mac and Fannie Mae, which stock was issued in connection with financial contributions from the Treasury to Freddie
Mac and Fannie Mae. The conditions attached to the financial contribution made by the Treasury to Freddie Mac and Fannie
Mae and the issuance of this senior preferred stock place significant restrictions on the activities of Freddie Mac and Fannie
Mae. Freddie Mac and Fannie Mae must obtain the consent of the Treasury to, among other things, (i) make any payment
to purchase or redeem its capital stock or pay any dividend other than in respect of the senior preferred stock, (ii) issue
capital stock of any kind, (iii) terminate the conservatorship of the FHFA except in connection with a receivership, or (iv) increase
its debt beyond certain specified levels. In addition, significant restrictions are placed on the maximum size of each of
Freddie Mac’s and Fannie Mae’s respective portfolios of mortgages and mortgage-backed securities portfolios, and
the purchase agreements entered into by Freddie Mac and Fannie Mae provide that the maximum size of their portfolios of these
assets must decrease by a specified percentage each year. The future status and role of Freddie Mac and Fannie Mae could
be impacted by (among other things) the actions taken and restrictions placed on Freddie Mac and Fannie Mae by the FHFA in its
role as conservator, the restrictions placed on Freddie Mac’s and Fannie Mae’s operations and activities as a result
of the senior preferred stock investment made by the Treasury, market responses to developments at Freddie Mac and Fannie Mae,
and future legislative and regulatory action that alters the operations, ownership, structure and/or mission of these institutions,
each of which may, in turn, impact the value of, and cash flows on any mortgage-backed securities guaranteed by Freddie Mac and
Fannie Mae.
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U.S.
Treasury Obligations. U.S. Treasury obligations consist of bills, notes and bonds issued by the U.S. Treasury and separately
traded interest and principal component parts of such obligations that are transferable through the federal book-entry system
known as Separately Traded Registered Interest and Principal Securities (“STRIPS) and Treasury Receipts (“TRs).
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Receipts.
Interests in separately traded interest and principal component parts of U.S. government obligations that are issued by banks
or brokerage firms and are created by depositing U.S. government obligations into a special account at a custodian bank. The custodian
bank holds the interest and principal payments for the benefit of the registered owners of the certificates or receipts. The custodian
bank arranges for the issuance of the certificates or receipts evidencing ownership and maintains the register. TRs and STRIPS
are interests in accounts sponsored by the U.S. Treasury. Receipts are sold as zero coupon securities.
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U.S.
Government Zero Coupon Securities. STRIPS and receipts are sold as zero coupon securities, that is, fixed income securities
that have been stripped of their unmatured interest coupons. Zero coupon securities are sold at a (usually substantial) discount
and redeemed at face value at their maturity date without interim cash payments of interest or principal. The amount of this discount
is accreted over the life of the security, and the accretion constitutes the income earned on the security for both accounting
and tax purposes. Because of these features, the market prices of zero coupon securities are generally more volatile than the
market prices of securities that have similar maturity but that pay interest periodically. Zero coupon securities are likely to
respond to a greater degree to interest rate changes than are non-zero coupon securities with similar maturity and credit qualities.
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U.S.
Government Agencies. Some obligations issued or guaranteed by agencies of the U.S. government are supported by the full faith
and credit of the U.S. Treasury, others are supported by the right of the issuer to borrow from the Treasury, while still others
are supported only by the credit of the instrumentality. Guarantees of principal by agencies or instrumentalities of the U.S.
government may be a guarantee of payment at the maturity of the obligation so that in the event of a default prior to maturity
there might not be a market and thus no means of realizing on the obligation prior to maturity. Guarantees as to the timely payment
of principal and interest do not extend to the value or yield of these securities nor to the value of an Underlying Fund’s
shares.
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Inflation-Protected
Securities. An Underlying Fund may invest in inflation-protected securities issued by the U.S. Treasury, known as “TIPs
or “Treasury Inflation-Protected Securities, which are debt securities whose principal and interest payments are
adjusted for inflation and interest is paid on the adjusted amount. The inflation adjustment, which is typically applied monthly
to the principal of the bond, follows a designated inflation index, such as the consumer price index. A fixed coupon rate is applied
to the inflation-adjusted principal so that as inflation rises, both the principal value and the interest payments increase. This
can provide investors with a hedge against inflation, as it helps preserve the purchasing power of the investment. Inflation-protected
securities normally will decline in price when real interest rates rise. (A real interest rate is calculated by subtracting the
inflation rate from a nominal interest rate. For example, if a 10-year Treasury note is yielding 5% and inflation is 2%, the real
interest rate is 3%.) If inflation is negative, the principal and income of an inflation-protected security will decline and could
result in losses for a Fund.
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Any
increase in principal for an inflation-protected security resulting from inflation adjustments is considered by Internal Revenue
Service regulations to be taxable income in the year it occurs. For direct holders of an inflation-protected security, this means
that taxes must be paid on principal adjustments even though these amounts are not received until the bond matures. By contrast,
an Underlying Fund holding these securities distributes both interest income and the income attributable to principal adjustments
in the form of cash or reinvested shares, which are taxable to shareholders.
NON-PRINCIPAL
INVESTMENT POLICIES AND RISKS
Borrowing.
Each Fund may borrow money from a bank equal to 5% of its total assets for temporary purposes to meet redemptions or to pay dividends.
Borrowing may exaggerate changes in the NAV of a Fund’s shares and in the return on a Fund’s portfolio. Although
the principal of any borrowing will be fixed, a Fund’s assets may change in value during the time the borrowing is outstanding.
A Fund may be required to liquidate portfolio securities at a time when it would be disadvantageous to do so in order to make
payments with respect to any borrowing. A Fund may be required to earmark or segregate liquid assets in an amount sufficient
to meet its obligations in connection with such borrowings. In an interest rate arbitrage transaction, a Fund borrows money at
one interest rate and lends the proceeds at another, higher interest rate. These transactions involve a number of risks,
including the risks that the borrower will fail or otherwise become insolvent or that there will be a significant change in prevailing
interest rates.
Commercial
Paper. Commercial paper is the term used to designate unsecured short-term promissory notes issued by corporations and other
entities. Maturities on these issues vary from a few to 270 days.
Corporate
Obligations. An Underlying Fund may invest in debt obligations, such as bonds and debentures, issued by corporations and other
business organizations without limit on credit quality or maturity. See Appendix “A to this SAI for a description
of corporate debt ratings. An issuer of debt obligations may default on its obligation to pay interest and repay principal. Also,
changes in the financial strength of an issuer or changes in the credit rating of a security may affect its value.
Forward
Commitment and When-Issued Transactions. An Underlying Fund may purchase or sell securities on a when-issued or forward commitment
basis (subject to its investment policies and restrictions). These transactions involve a commitment by an Underlying Fund to
purchase or sell securities at a future date (ordinarily one or two months later). The price of the underlying securities
(usually expressed in terms of yield) and the date when the securities will be delivered and paid for (the settlement date) are
fixed at the time the transaction is negotiated. When-issued purchases and forward commitments are negotiated directly with the
other party, and such commitments are not traded on exchanges.
When-issued
purchases and forward commitments enable an Underlying Fund to lock in what is believed to be an attractive price or yield on
a particular security for a period of time, regardless of future changes in interest rates. For instance, in periods of rising
interest rates and falling prices, an Underlying Fund might sell securities it owns on a forward commitment basis to limit its
exposure to falling prices. In periods of falling interest rates and rising prices, an Underlying Fund might sell securities it
owns and purchase the same or a similar security on a when-issued or forward commitment basis, thereby obtaining the benefit of
currently higher yields. When-issued securities or forward commitments involve a risk of loss if the value of the security to
be purchased declines prior to the settlement date.
The
value of securities purchased on a when-issued or forward commitment basis and any subsequent fluctuations in their value are
generally reflected in the computation of an Underlying Fund’s NAV starting on the date of the agreement to purchase the
securities, and the Underlying Fund is subject to the rights and risks of ownership of the securities on that date. An Underlying
Fund may not earn interest on the securities it has committed to purchase until they are paid for and delivered on the settlement
date. When an Underlying Fund makes a forward commitment to sell securities it owns, the proceeds to be received upon settlement
are included in the Underlying Fund’s assets. Fluctuations in the market value of the underlying securities may not be
reflected in the Underlying Fund’s NAV as long as the commitment to sell remains in effect. Settlement of when-issued purchases
and forward commitment transactions generally takes place within two months after the date of the transaction, but an Underlying
Fund may agree to a longer settlement period.
An
Underlying Fund may dispose of or renegotiate a commitment after it is entered into. An Underlying Fund also may sell securities
it has committed to purchase before those securities are delivered to the Underlying Fund on the settlement date. The Underlying
Fund may realize a capital gain or loss in connection with these transactions, and its distributions from any net realized capital
gains will be taxable to shareholders.
Futures
and Options on Futures. Futures contracts provide for the future sale by one party and purchase by another party of
a specified amount of a specific security at a specified future time and at a specified price. An option on a futures contract
gives the purchaser the right, in exchange for a premium, to assume a position in a futures contract at a specified exercise price
during the term of the option. An Underlying Fund may reduce the risk that it will be unable to close out a futures contract by
only entering into futures contracts that are traded on a national futures exchange regulated by the Commodities Futures Trading
Commission (“CFTC). Underlying Funds may use futures contracts and related options for: bona fide hedging;
attempting to offset changes in the value of securities held or expected to be acquired or be disposed of; attempting to minimize
fluctuations in foreign currencies; attempting to gain exposure to a particular market, index or instrument; or other risk management
purposes.
With
respect to investments in swap transactions, commodity futures, commodity options or certain other derivatives used for purposes
other than bona fide hedging purposes, an investment company must meet one of the following tests under the amended regulations
in order to claim an exemption from being considered a “commodity pool or a CPO. First, the aggregate initial margin
and premiums required to establish an investment company’s positions in such investments may not exceed five percent (5%)
of the liquidation value of the investment company’s portfolio (after accounting for unrealized profits and unrealized
losses on any such investments). Alternatively, the aggregate net notional value of such instruments, determined at the time of
the most recent position established, may not exceed one hundred percent (100%) of the liquidation value of the investment company’s
portfolio (after accounting for unrealized profits and unrealized losses on any such positions). In addition to meeting one of
the foregoing trading limitations, the investment company may not market itself as a commodity pool or otherwise as a vehicle
for trading in the commodity futures, commodity options or swaps and derivatives markets. In the event that an investment adviser
was required to register as a CPO with respect to an Underlying Fund, the disclosure and operations of the Underlying Fund would
need to comply with all applicable CFTC regulations.
An
index futures contract is a bilateral agreement pursuant to which two parties agree to take or make delivery of an amount of cash
equal to a specified dollar amount times the difference between the index value at the close of trading of the contract and the
price at which the futures contract is originally struck. No physical delivery of the securities comprising the index is made;
generally, contracts are closed out prior to the expiration date of the contract.
When
an Underlying Fund purchases or sells a futures contract, or sells an option thereon, the Underlying Fund is required to “cover
its position in order to limit leveraging and related risks. To cover its position, an Underlying Fund may segregate (and
mark-to-market on a daily basis) cash or liquid securities that, when added to any amounts deposited with a futures commission
merchant as margin, are equal to the market value of the futures contract or otherwise “cover its position in a
manner consistent with the 1940 Act or the rules and SEC interpretations thereunder. The segregated account functions as
a practical limit on the amount of leverage which an Underlying Fund may undertake and on the potential increase in the speculative
character of the Underlying Fund’s outstanding portfolio securities. Additionally, such segregated accounts will
generally assure the availability of adequate funds to meet the obligations of an Underlying Fund arising from such investment
activities.
An
Underlying Fund may also cover its long position in a futures contract by purchasing a put option on the same futures contract
with a strike price (i.e., an exercise price) as high or higher than the price of the futures contract. In the alternative,
if the strike price of the put is less than the price of the futures contract, an Underlying Fund will segregate cash or
liquid securities equal in value to the difference between the strike price of the put and the price of the futures contract.
An Underlying Fund may also cover its long position in a futures contract by taking a short position in the instruments underlying
the futures contract, or by taking positions in instruments with prices which are expected to move relatively consistently with
the futures contract. An Underlying Fund may cover its short position in a futures contract by taking a long position in
the instruments underlying the futures contracts, or by taking positions in instruments with prices which are expected to move
relatively consistently with the futures contract.
An
Underlying Fund may cover its sale of a call option on a futures contract by taking a long position in the underlying futures
contract at a price less than or equal to the strike price of the call option. In the alternative, if the long position
in the underlying futures contract is established at a price greater than the strike price of the written (sold) call, the Underlying
Fund will maintain in a segregated account cash or liquid securities equal in value to the difference between the strike price
of the call and the price of the futures contract. An Underlying Fund may also cover its sale of a call option by taking
positions in instruments with prices which are expected to move relatively consistently with the call option. An Underlying
Fund may cover its sale of a put option on a futures contract by taking a short position in the underlying futures contract at
a price greater than or equal to the strike price of the put option, or, if the short position in the underlying futures contract
is established at a price less than the strike price of the written put, the Underlying Fund will maintain in a segregated account
cash or liquid securities equal in value to the difference between the strike price of the put and the price of the futures contract.
An Underlying Fund may also cover its sale of a put option by taking positions in instruments with prices which are expected to
move relatively consistently with the put option.
There
are significant risks associated with an Underlying Fund’s use of futures contracts and related options, including the
following: (1) the success of a hedging strategy may depend on the investment adviser of an Underlying Fund’s ability
to predict movements in the prices of individual securities, fluctuations in markets and movements in interest rates; (2) there
may be an imperfect or no correlation between the changes in market value of the securities held by the Underlying Fund and the
prices of futures and options on futures; (3) there may not be a liquid secondary market for a futures contract or option;
(4) trading restrictions or limitations may be imposed by an exchange; and (5) government regulations may restrict trading
in futures contracts and options on futures. In addition, some strategies reduce an Underlying Fund’s exposure to price
fluctuations, while others tend to increase its market exposure.
Illiquid
Investments. Pursuant to Rule 22e-4 under the 1940 Act, each Fund may invest up to 15% of its net assets in illiquid
investments. An illiquid investment is an investment that a Fund reasonably expects cannot be sold or disposed of in current market
conditions within 7 calendar days or less without the sale or disposition significantly changing the market value of the investment.
To the extent an investment held by a Fund is deemed to be an illiquid investment or a less liquid investment, the Fund will be
exposed to greater liquidity risk.
The
Company has implemented a liquidity risk management program and related procedures to identify illiquid investments pursuant to
Rule 22e-4. If the limitation on illiquid investments is exceeded, other than by a change in market values, the condition
will be reported to the Board and, when required, to the SEC.
Initial
Public Offerings. To the extent consistent with its investment policies and limitations, an Underlying Fund may purchase stock
in an initial public offering (“IPO). An IPO is a company’s first offering of stock to the public. Risks
associated with IPOs may include considerable fluctuation in the market value of IPO shares due to certain factors, such as the
absence of a prior public market, unseasoned trading, a limited number of shares available for trading, lack of information about
the issuer and limited operating history. The purchase of IPO shares may involve high transaction costs. When an Underlying Fund’s
asset base is small, a significant portion of the Underlying Fund’s performance could be attributable to investments in
IPOs, because such investments would have a magnified impact on the underlying investment company. As an Underlying Fund’s
assets grow, the effect of the Underlying Fund’s investments in IPOs on the Underlying Fund’s performance probably
will decline, which could reduce the Underlying Fund’s performance. Because of the price volatility of IPO shares, an Underlying
Fund may choose to hold IPO shares for a very short period of time. This may increase the turnover of an Underlying Fund’s
portfolio and may lead to increased expenses to the Underlying Fund, such as commissions and transaction costs. In addition, an
Underlying Fund cannot guarantee continued access to IPOs.
Large
Shareholder Purchase and Redemption Risk. Each Fund may experience adverse effects when certain large shareholders purchase
or redeem large amounts of shares of the Fund. Such large shareholder redemptions may cause a Fund to sell its securities
at times when it would not otherwise do so, which may negatively impact the Fund’s NAV and liquidity. Similarly,
large share purchases may adversely affect the Fund’s performance to the extent that the Fund is delayed in investing new
cash and is required to maintain a larger cash position than it ordinarily would. In addition, a large redemption could
result in the Fund’s current expenses being allocated over a smaller asset base, leading to an increase in the Fund’s
expense ratio. However, this risk may be limited to the extent that the Adviser and a Fund have entered into a fee waiver
and/or expense reimbursement arrangement.
Temporary
Investment Positions. During unusual economic or market conditions, or for temporary defensive or liquidity purposes,
each Fund may invest up to 100% of its assets in (i) cash; (ii) cash equivalents; (iii) short-term debt securities; and (iv) money
market instruments (the types of which are discussed below) that would not ordinarily be consistent with the Fund’s objective.
For purposes of these policies, money market securities include (i) short-term U.S. government securities, including custodial
receipts evidencing separately traded interest and principal components of securities issued by the U.S. Treasury; (ii) commercial
paper rated in the highest short-term rating category by a nationally recognized statistical ratings organization (“NRSRO),
such as S&P Global Ratings (“S&P) or Moody’s Investors Service (“Moody’s), or
determined by the Adviser to be of comparable quality at the time of purchase; (iii) short-term bank obligations (certificates
of deposit, time deposits and bankers’ acceptances) of U.S. domestic banks, foreign banks and foreign branches of domestic
banks, and commercial banks with assets of at least $1 billion as of the end of their most recent fiscal year; and (iv) repurchase
agreements involving such securities. Each of these types of money market securities is discussed in more detail below.
For a description of ratings, see Appendix A to this SAI. If a Fund were to take a temporary defensive position, it may be unable
to achieve its investment objective for a period of time. In anticipation of or in response to adverse market, economic, political
or other conditions, a Fund may take temporary defensive positions (up to 100% of its assets) in cash, cash equivalents and all
types of money market and short-term debt securities. If a Fund were to take a temporary defensive position, it may be unable
to achieve its investment objective for a period of time.
Obligations
of Domestic Banks, Foreign Banks and Foreign Branches of U.S. Banks. An Underlying Fund may invest in obligations issued
by banks and other savings institutions. Investments in bank obligations include obligations of domestic branches of foreign banks
and foreign branches of domestic banks. Such investments in domestic branches of foreign banks and foreign branches of domestic
banks may involve risks that are different from investments in securities of domestic branches of U.S. banks. These risks
may include future unfavorable political and economic developments, possible withholding taxes on interest income, seizure or
nationalization of foreign deposits, currency controls, interest limitations, or other governmental restrictions which might affect
the payment of principal or interest on the securities held by an Underlying Fund. Additionally, these institutions may be subject
to less stringent reserve requirements and to different accounting, auditing, reporting and recordkeeping requirements than those
applicable to domestic branches of U.S. banks. In addition, investments in bank loans may not be deemed to be securities
and may not have the protections of the federal securities laws. Bank obligations include the following:
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Bankers’
Acceptances. Bankers’ acceptances are bills of exchange or time drafts drawn on and accepted by a commercial
bank. Corporations use bankers’ acceptances to finance the shipment and storage of goods and to furnish dollar exchange.
Maturities are generally six months or less.
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Certificates
of Deposit. Certificates of deposit are interest-bearing instruments with a specific maturity. They are issued by banks and
savings and loan institutions in exchange for the deposit of funds and normally can be traded in the secondary market prior to
maturity. Certificates of deposit with penalties for early withdrawal will be considered illiquid.
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Time
Deposits. Time deposits are non-negotiable receipts issued by a bank in exchange for the deposit of funds. Like a certificate
of deposit, it earns a specified rate of interest over a definite period of time; however, it cannot be traded in the secondary
market. Time deposits with a withdrawal penalty or that mature in more than seven days are considered to be illiquid securities.
|
Options.
Each Fund may purchase and write put and call options on securities and securities indices and enter into related closing transactions.
A put option on a security gives the purchaser of the option the right to sell, and the writer of the option the obligation to
buy, the underlying security at any time during the option period. A call option on a security gives the purchaser of the option
the right to buy, and the writer of the option the obligation to sell, the underlying security at any time during the option period.
The premium paid to the writer is the consideration for undertaking the obligations under the option contract.
Put
and call options on securities indices are similar to options on securities except that options on an index give the holder the
right to receive, upon exercise of the option, an amount of cash if the closing level of the underlying index is greater than
(or less than, in the case of puts) the exercise price of the option. This amount of cash is equal to the difference between the
closing price of the index and the exercise price of the option, expressed in dollars multiplied by a specified number. Thus,
unlike options on individual securities, all settlements are in cash, and gain or loss depends on price movements in the particular
market represented by the index generally, rather than the price movements in individual securities.
All
options written on indices or securities must be covered. When a Fund writes an option on a security or an index, it will establish
a segregated account containing cash or liquid securities in an amount at least equal to the market value of the option and will
maintain the account while the option is open or will otherwise cover the transaction.
A
Fund may trade put and call options on securities and securities indices, as the Adviser determines is appropriate in seeking
the Fund’s investment objective, and except as restricted by the Fund’s investment limitations. See “Investment
Limitations.
The
initial purchase (sale) of an option contract is an “opening transaction. In order to close out an option position,
a Fund may enter into a “closing transaction, which is simply the sale (purchase) of an option contract on the same
security with the same exercise price and expiration date as the option contract originally opened. If a Fund is unable to effect
a closing purchase transaction with respect to an option it has written, it will not be able to sell the underlying security until
the option expires or the Fund delivers the security upon exercise.
A
Fund may purchase put and call options on securities to protect against a decline in the market value of the securities in its
portfolio or to anticipate an increase in the market value of securities that the Fund may seek to purchase in the future. A Fund
purchasing put and call options pays a premium therefor. If price movements in the underlying securities are such that exercise
of the options would not be profitable for a Fund, loss of the premium paid may be offset by an increase in the value of the Fund’s
securities or by a decrease in the cost of acquisition of securities by the Fund.
A
Fund may write covered call options on securities as a means of increasing the yield on its assets and as a means of providing
limited protection against decreases in its market value. When a Fund writes an option, if the underlying securities do not increase
or decrease to a price level that would make the exercise of the option profitable to the holder thereof, the option generally
will expire without being exercised and the Fund will realize as profit the premium received for such option. When a call option
of which a Fund is the writer is exercised, the Fund will be required to sell the underlying securities to the option holder at
the strike price, and will not participate in any increase in the price of such securities above the strike price. When a put
option of which a Fund is the writer is exercised, the Fund will be required to purchase the underlying securities at a price
in excess of the market value of such securities.
A
Fund may purchase and write options on an exchange or over-the-counter. Over-the-counter options (“OTC options)
differ from exchange-traded options in several respects. They are transacted directly with dealers and not with a clearing corporation,
and therefore entail the risk of non-performance by the dealer. OTC options are available for a greater variety of securities
and for a wider range of expiration dates and exercise prices than are available for exchange-traded options. Because OTC options
are not traded on an exchange, pricing is done normally by reference to information from a market maker. It is the SEC’s
position that OTC options are generally illiquid.
The
market value of an option generally reflects the market price of an underlying security. Other principal factors affecting market
value include supply and demand, interest rates, the pricing volatility of the underlying security and the time remaining until
the expiration date.
Risks
associated with options transactions include: (1) the success of a hedging strategy may depend on an ability to predict movements
in the prices of individual securities, fluctuations in markets and movements in interest rates; (2) there may be an imperfect
correlation between the movement in prices of options and the securities underlying them; (3) there may not be a liquid secondary
market for options; and (4) while a Fund will receive a premium when it writes covered call options, it may not participate
fully in a rise in the market value of the underlying security.
Pandemic
Risk. Disease outbreaks that affect local economies or the global economy may materially and adversely impact the Funds and/or
the Adviser’s business. For example, uncertainties regarding the novel Coronavirus (COVID-19) outbreak have resulted
in serious economic disruptions across the globe. These types of outbreaks can be expected to cause severe decreases in core business
activities such as manufacturing, purchasing, tourism, business conferences and workplace participation, among others. These disruptions
lead to instability in the market place, including stock market losses and overall volatility, as has occurred in connection with
COVID-19. In the face of such instability, governments may take extreme and unpredictable measures to combat the spread of disease
and mitigate the resulting market disruptions and losses. The Adviser has in place business continuity plans reasonably designed
to ensure that it maintains normal business operations, and it periodically tests those plans. However, in the event of a pandemic
or an outbreak, there can be no assurance that the Adviser or the Funds’ service providers will be able to maintain normal
business operations for an extended period of time or will not lose the services of key personnel on a temporary or long-term
basis due to illness or other reasons. The full impacts of a pandemic or disease outbreaks are unknown, resulting in a high degree
of uncertainty for potentially extended periods of time.
Repurchase
Agreements. Each Fund may enter into repurchase agreements with financial institutions. A repurchase agreement is an
agreement under which a Fund acquires a fixed income security (generally a security issued by the U.S. government or an agency
thereof, a banker’s acceptance, or a certificate of deposit) from a commercial bank, broker, or dealer, and simultaneously
agrees to resell such security to the seller at an agreed upon price and date (normally, the next business day). Because
the security purchased constitutes collateral for the repurchase obligation, a repurchase agreement may be considered a loan that
is collateralized by the security purchased. The acquisition of a repurchase agreement may be deemed to be an acquisition of the
underlying securities as long as the obligation of the seller to repurchase the securities is collateralized fully. The
Funds follow certain procedures designed to minimize the risks inherent in such agreements. These procedures include effecting
repurchase transactions only with creditworthy financial institutions whose condition will be continually monitored by the Adviser.
The repurchase agreements entered into by a Fund will provide that the underlying collateral at all times shall have a value at
least equal to 102% of the resale price stated in the agreement and consist only of securities permissible under Section 101(47)(A)(i) of
the Bankruptcy Code (the Adviser monitors compliance with this requirement). Under all repurchase agreements entered into by a
Fund, the custodian or its agent must take possession of the underlying collateral. In the event of a default or bankruptcy by
a selling financial institution, a Fund will seek to liquidate such collateral. However, the exercising of a Fund’s right
to liquidate such collateral could involve certain costs or delays and, to the extent that proceeds from any sale upon a default
of the obligation to repurchase were less than the repurchase price, the Fund could suffer a loss. It is the current policy of
the Funds, not to invest in repurchase agreements that do not mature within seven days if any such investment, together with any
other illiquid assets held by that Fund, amounts to more than 15% of the Fund’s total assets. The investments of a Fund
in repurchase agreements, at times, may be substantial when, in the view of the Adviser, liquidity or other considerations so
warrant.
Restricted
Securities. Each Fund may purchase securities which are not registered under the Securities Act of 1933 (“1933
Act) but which may be sold to “qualified institutional buyers in accordance with Rule 144A under the
1933 Act (“Restricted Securities). These securities will not be considered illiquid so long as it is determined
by the Adviser that an adequate trading market exists for the securities. This investment practice could have the effect of increasing
the level of illiquidity in an underlying investment company during any period that qualified institutional buyers become uninterested
in purchasing restricted securities. In reaching liquidity decisions, the Adviser may consider, among others, the following
factors: (1) the unregistered nature of the security; (2) the frequency of trades and quotes for the security; (3) the
number of dealers wishing to purchase or sell the security and the number of other potential purchasers; (4) dealer undertakings
to make a market in the security; and (5) the nature of the security and the nature of the marketplace trades (e.g., the
time needed to dispose of the security, the method of soliciting offers and the mechanics of the transfer).
The
purchase price and subsequent valuation of Restricted Securities normally reflect a discount from the price at which such securities
trade when they are not restricted, since the restriction makes them less liquid. The amount of the discount from the prevailing
market price is expected to vary depending upon the type of security, the character of the issuer, the party who will bear the
expenses of registering the Restricted Securities and prevailing supply and demand conditions.
As
consistent with each Fund’s respective investment objective, the Funds may also invest in Section 4(2) commercial
paper. Section 4(2) commercial paper is issued in reliance on an exemption from registration under Section 4(2) of
the 1933 Act and is generally sold to institutional investors who purchase for investment. Any resale of such commercial paper
must be in an exempt transaction, usually to an institutional investor through the issuer or investment dealers who make a market
in such commercial paper. The Company believes that Section 4(2) commercial paper is liquid to the extent it meets the
criteria established by the Board. The Company intends to treat such commercial paper as liquid and not subject to the investment
limitations applicable to illiquid securities or restricted securities.
Reverse
Repurchase Agreements. Each Fund may enter into reverse repurchase agreements with respect to portfolio securities for temporary
purposes (such as to obtain cash to meet redemption requests) when the liquidation of portfolio securities is deemed disadvantageous
or inconvenient by the Adviser. Reverse repurchase agreements involve the sale of securities held by a Fund subject to the Fund’s
agreement to repurchase the securities at an agreed-upon price, date and rate of interest. Such agreements may be considered borrowings
under the 1940 Act and may be entered into only for temporary or emergency purposes. While reverse repurchase transactions are
outstanding, the Fund will maintain in a segregated account with the Fund’s custodian or a qualified sub-custodian, cash
or liquid securities of an amount at least equal to the market value of the securities, plus accrued interest, subject to the
agreement and will monitor the account to ensure that such value is maintained. Reverse repurchase agreements involve the risk
that the market value of the securities sold by a Fund may decline below the price of the securities the Fund is obligated to
repurchase and the interest received on the cash exchanged for the securities.
Rights
Offerings and Purchase Warrants. Rights offerings and purchase warrants are privileges issued by a corporation which
enable the owner to subscribe to and purchase a specified number of shares of the corporation at a specified price during a specified
period of time. Subscription rights normally have a short lifespan to expiration. The purchase of rights or warrants involves
the risk that a Fund could lose the purchase value of a right or warrant if the right to subscribe to additional shares is not
executed prior to the right’s or warrant’s expiration. Also, the purchase of rights and/or warrants involves the
risk that the effective price paid for the right and/or warrant added to the subscription price of the related security may exceed
the value of the subscribed security’s market price such as when there is no movement in the level of the underlying security.
Special
Situation Companies. An Underlying Fund may invest in “Special Situations. The term “Special Situation
shall be deemed to refer to a security of a company in which an unusual and possibly non-repetitive development is taking place
which, in the opinion of the Underlying Fund’s investment adviser, may cause the security to attain a higher market value
independently, to a degree, of the trend in the securities market in general. The particular development (actual or prospective),
which may qualify a security as a Special Situation, may be one of many different types.
Such
developments may include, among others, a technological improvement or important discovery or acquisition which, if the expectation
for it materialized, would effect a substantial change in the company’s business; a reorganization; a recapitalization
or other development involving a security exchange or conversion; a merger, liquidation or distribution of cash, securities or
other assets; a breakup or workout of a holding company; litigation which, if resolved favorably, would improve the value of the
company’s stock; a new or changed management; or material changes in management policies. A Special Situation may often
involve a comparatively small company, which is not well known, and which has not been closely watched by investors generally,
but it may also involve a large company. The fact, if it exists, that an increase in the company’s earnings, dividends
or business is expected, or that a given security is considered to be undervalued, would not in itself be sufficient to qualify
as a Special Situation. An Underlying Fund may invest in securities (even if not Special Situations) which are appropriate investments
for the Underlying Fund. Underlying Funds are not required to invest any minimum percentage of their aggregate portfolio in “Special
Situations, nor are they required to invest any minimum percentage of their aggregate portfolio in securities other than
“Special Situations.
INVESTMENT
LIMITATIONS
Each
Fund has adopted the following fundamental investment limitations which may not be changed with respect to a Fund without the
affirmative vote of the holders of a majority of the Fund’s outstanding shares (as defined in Section 2(a) (42)
of the 1940 Act). As used in this SAI and in the Prospectus, “shareholder approval and a “majority of the
outstanding shares of a Fund means, with respect to the approval of an investment advisory agreement, a distribution plan
or a change in a fundamental investment limitation, the lesser of (1) 67% of the shares of the Fund represented at a meeting
at which the holders of more than 50% of the outstanding shares of the Fund are present in person or by proxy, or (2) more
than 50% of the outstanding shares of the Fund. Unless otherwise noted, a Fund’s investment goals and strategies described
in the Prospectus may be changed by the Board without the approval of the Fund’s shareholders.
Each
Fund may not:
1.
Purchase any securities which would cause 25% or more of the total assets of the Fund to be invested in the securities of one
or more issuers conducting their principal business activities in the same industry, provided that this limitation does not apply
to investments in obligations issued or guaranteed by the U.S. government or its agencies and instrumentalities and repurchase
agreements involving such securities.
2.
Borrow money in an amount exceeding 331/3% of the value of its total assets, provided that, for purposes of this limitation,
investment strategies which either obligate the Fund to purchase securities or require the Fund to segregate assets are not considered
to be borrowings. Asset coverage of at least 300% is required for all borrowings, except where the Fund has borrowed money
for temporary purposes in amounts not exceeding 5% of its total assets.
3.
Make loans if, as a result, more than 331/3% of its total assets would be lent to other parties, except that the Fund
may (i) purchase or hold debt instruments in accordance with its investment objective and policies; (ii) enter into
repurchase agreements; and (iii) lend its securities.
4.
Purchase or sell real estate, physical commodities, or commodities contracts, except that the Fund may purchase (i) marketable
securities issued by companies which own or invest in real estate (including REITs), commodities, or commodities contracts; and
(ii) commodities contracts relating to financial instruments, such as financial futures contracts and options on such contracts.
5.
Issue senior securities as defined in the 1940 Act except as permitted by rule, regulation or order of the SEC.
6.
Act as an underwriter of securities of other issuers except as it may be deemed an underwriter in selling a portfolio security.
Each
Fund may invest in securities issued by other investment companies within the limits prescribed by the 1940 Act. As a shareholder
of another investment company, a Fund would bear, along with other shareholders, its pro rata portion of the other investment
company’s expenses, including advisory fees. These expenses would be in addition to the advisory and other expenses that
a Fund bears directly in connection with its own operations.
Securities
held by a Fund generally may not be purchased from, sold or loaned to the Adviser or its affiliates or any of their directors,
officers or employees, acting as principal, unless pursuant to a rule or exemptive order under the 1940 Act.
If
a percentage restriction under one of a Fund’s investment policies or limitations or the use of assets is adhered to at
the time a transaction is effected, later changes in percentages resulting from changing values will not be considered a violation
(except with respect to any restrictions that may apply to borrowings or senior securities issued by the Fund).
DISCLOSURE
OF PORTFOLIO HOLDINGS
The
Company has adopted, on behalf of the Funds, a policy relating to the selective disclosure of a Fund’s portfolio holdings
by the Adviser, Board, officers, or third party service providers, in accordance with regulations that seek to ensure that disclosure
of information about portfolio holdings is in the best interest of Fund shareholders. The policies relating to the disclosure
of a Fund’s portfolio holdings are designed to allow disclosure of portfolio holdings information where necessary to the
Fund’s operation without compromising the integrity or performance of the Fund. It is the policy of the Company that
disclosure of a Fund’s portfolio holdings to a select person or persons prior to the release of such holdings to the public
(“selective disclosure) is prohibited, unless there are legitimate business purposes for selective disclosure.
The
Company discloses portfolio holdings information as required in regulatory filings and shareholder reports, discloses portfolio
holdings information as required by federal and state securities laws and may disclose portfolio holdings information in response
to requests by governmental authorities. As required by the federal securities laws, including the 1940 Act, the Company
will disclose each Fund’s portfolio holdings in applicable regulatory filings, including shareholder reports, reports on
Form N-CSR, Form N-CEN, and Form N-PORT or such other filings, reports or disclosure documents as the applicable regulatory
authorities may require.
Generally,
after the 30th business day of the month following each calendar quarter end, each Fund may provide, at the Adviser’s discretion,
its portfolio holdings to various rating and ranking organizations. In addition, generally after the 30th business day of the
month following each calendar quarter end, each Fund may post to its website a list of its top ten holdings or full portfolio
holdings at the discretion of the Adviser. The timing, frequency and type (i.e., ratings/rankings/holdings) of disclosure may
change at the Adviser’s discretion, as well as whether to post to each Fund’s website.
The
Company may distribute or authorize the distribution of information about a Fund’s portfolio holdings that is not publicly
available to its third-party service providers, which include U.S. Bank, N.A., the custodian; U.S. Bancorp Fund Services, LLC,
doing business as U.S. Bank Global Fund Services (“Fund Services), the administrator, accounting agent and transfer
agent; Ernst & Young LLP, the Funds’ independent registered public accounting firm; Faegre Drinker Biddle & Reath
LLP, legal counsel; FilePoint, the financial printer; the Funds’ proxy voting service(s); and the Company’s liquidity
classification agent. These service providers are required to keep such information confidential, and are prohibited from trading
based on the information or otherwise using the information except as necessary in providing services to a Fund. Such holdings
are released on conditions of confidentiality, which include appropriate trading prohibitions. “Conditions of confidentiality
include confidentiality terms included in written agreements, implied by the nature of the relationship (e.g. attorney-client
relationship), or required by fiduciary or regulatory principles (e.g., custody services provided by financial institutions).
Portfolio holdings may also be provided earlier to shareholders and their agents who receive redemptions in kind that reflect
a pro rata allocation of all securities held in a Fund’s portfolio.
Portfolio
holdings may also be disclosed, upon authorization by a designated officer of the Adviser, to (i) certain independent reporting
agencies recognized by the SEC as acceptable agencies for the reporting of industry statistical information and (ii) financial
consultants to assist them in determining the suitability of the Funds as an investment for their clients, in each case in accordance
with the anti-fraud provisions of the federal securities laws and the Company’s and the Adviser’s fiduciary duties
to Fund shareholders. Disclosures to financial consultants are also subject to a confidentiality agreement and/or trading
restrictions. The foregoing disclosures are made pursuant to the Company’s policy on selective disclosure of portfolio
holdings. The Board or a committee thereof may, in limited circumstances, permit other selective disclosure of portfolio
holdings subject to a confidentiality agreement and/or trading restrictions.
The
Adviser reserves the right to refuse to fulfill any request for portfolio holdings information from a shareholder or non-shareholder
if it believes that providing such information will be contrary to the best interests of a Fund.
The
Board provides ongoing oversight of the Company’s policies and procedures and compliance with such policies and procedures.
As part of this oversight function, the Board receives from the Company’s Chief Compliance Officer (“CCO)
as necessary, reports on compliance with these policies and procedures. In addition, the Board receives an annual assessment
of the adequacy and effectiveness of the policies and procedures with respect to a Fund, and any changes thereto, and an annual
review of the operation of the policies and procedures. Any violation of the policy set forth above as well as any corrective
action undertaken to address such violation must be reported by the Adviser, director, officers or third party service providers
to the Company’s CCO, who will determine whether the violation should be reported immediately to the Board or at its next
quarterly Board meeting.
PORTFOLIO
TURNOVER
Portfolio
turnover measures the percentage of a Fund’s total portfolio market value that was purchased or sold during the period.
A Fund’s turnover rate provides an indication of how transaction costs (which are not included in the Fund’s expenses)
may affect the Fund’s performance. Also, funds with a high turnover may be more likely to distribute capital gains that
may be taxable to shareholders.
No
portfolio turnover rate information is provided for the Funds because the Funds had not commenced operations prior to the date
of this SAI.
MANAGEMENT
OF THE COMPANY
The
business and affairs of the Company are managed under the oversight of the Board of Directors, subject to the laws of the State
of Maryland and the Company’s Charter. The Directors are responsible for deciding matters of overall policy and overseeing
the actions of the Company’s service providers. The officers of the Company conduct and supervise the Company’s
daily business operations.
Directors
who are not deemed to be “interested persons of the Company (as defined in the 1940 Act) are referred to as “Independent
Directors. Directors who are deemed to be “interested persons of the Company are referred to as “Interested
Directors. The Board is currently composed of seven Independent Directors and one Interested Director. The Board has selected
Arnold M. Reichman, an Independent Director, to act as Chairman. Mr. Reichman’s duties include presiding at meetings of
the Board and interfacing with management to address significant issues that may arise between regularly scheduled Board and Committee
meetings. In the performance of his duties, Mr. Reichman will consult with the other Independent Directors and the Company’s
officers and legal counsel, as appropriate. The Chairman may perform other functions as requested by the Board from time to time.
The
Board meets as often as necessary to discharge its responsibilities. Currently, the Board conducts regular, in-person meetings
at least four times a year, and holds special in-person or telephonic meetings as necessary to address specific issues that require
attention prior to the next regularly scheduled meeting. The Board also relies on professionals, such as the Company’s
independent registered public accounting firms and legal counsel, to assist the Directors in performing their oversight responsibilities.
The
Board has established nine standing committees — Audit, Contract, Executive, Investment and Liquidity Risk, Nominating
and Governance, Product Development, Regulatory Oversight, Strategic Oversight, and Valuation Committees. The Board may establish
other committees, or nominate one or more Directors to examine particular issues related to the Board’s oversight responsibilities,
from time to time. Each Committee meets periodically to perform its delegated oversight functions and reports its findings and
recommendations to the Board. For more information on the Committees, see the section entitled “Standing Committees.
The
Board has determined that the Company’s leadership structure is appropriate because it allows the Board to effectively
perform its oversight responsibilities.
Directors
and Executive Officers
The
Directors and executive officers of the Company, their ages, business addresses and principal occupations during the past five
years are set forth below.
Name,
Address,
and
Age
|
|
Position(s)
Held
with
Company
|
|
Term
of Office
and
Length
of
Time
Served1
|
|
Principal
Occupation(s)
During
Past 5 Years
|
|
Number
of
Portfolios in
Fund
Complex
Overseen
by
Director*
|
|
Other
Directorships
Held
by Director
in
the Past 5 Years
|
INDEPENDENT
DIRECTORS
|
Julian
A. Brodsky
615 East Michigan Street, Milwaukee WI 53202
Age: 86
|
|
Director
|
|
1988
to present
|
|
From
1969 to 2011, Director and Vice Chairman, Comcast Corporation (cable television and communications).
|
|
37
|
|
AMDOCS
Limited (service provider to telecommunications companies).
|
J.
Richard Carnall
615 East Michigan Street, Milwaukee WI 53202
Age: 81
|
|
Director
|
|
2002
to present
|
|
Since
1984, Director of Haydon Bolts, Inc. (bolt manufacturer) and Parkway Real Estate Company
(subsidiary of Haydon Bolts, Inc.); since 2004, Director of Cornerstone Bank.
|
|
37
|
|
None
|
Gregory
P. Chandler
615 East Michigan Street, Milwaukee WI 53202
Age: 53
|
|
Director
|
|
2012
to present
|
|
Since
2020, Chief Financial Officer, Avocado Systems Inc. (cyber security software provider);
2009-2020, Chief Financial Officer, Emtec, Inc. (information technology consulting/services).
|
|
37
|
|
Emtec,
Inc. (until December 2019); FS Investment Corporation (business development company)
(until December 2018); FS Energy and Power Fund (business development company); Wilmington
Funds (12 portfolios) (registered investment company).
|
Name,
Address,
and
Age
|
|
Position(s)
Held
with
Company
|
|
Term
of Office
and
Length
of
Time
Served1
|
|
Principal
Occupation(s)
During
Past 5 Years
|
|
Number
of
Portfolios in
Fund
Complex
Overseen
by
Director*
|
|
Other
Directorships
Held
by Director
in
the Past 5 Years
|
Nicholas
A. Giordano
615 East Michigan Street, Milwaukee WI 53202
Age: 77
|
|
Director
|
|
2006 to
present
|
|
Since
1997, Consultant, financial services organizations.
|
|
37
|
|
IntriCon
Corporation
(biomedical
device
manufacturer);
Kalmar
Pooled Investment Trust (registered investment company) (until September 2017); Wilmington Funds (12 portfolios) (registered investment
company); Independence Blue Cross (healthcare insurance).
|
Arnold
M. Reichman
615 East Michigan Street, Milwaukee WI 53202
Age: 72
|
|
Chairman
Director
|
|
2005
to present
1991
to present
|
|
From
2006-2016, Co-Founder and Chief Executive Officer, Lifebooker, LLC (online beauty and
health appointment booking service).
|
|
37
|
|
Independent
Trustee of EIP Investment Trust (registered investment company).
|
Brian
T. Shea
615
East Michigan Street, Milwaukee WI 53202
Age: 59
|
|
Director
|
|
2018 to
present
|
|
From
2014-2017, Chief Executive Officer, BNY Mellon Investment Services (fund services, global
custodian and securities clearing firm); from 1983-2014, Chief Executive Officer and
various positions, Pershing LLC (broker dealer, clearing and custody firm).
|
|
37
|
|
WisdomTree
Investments, Inc. (asset management company) (until March 2019); Fidelity National Information
Services, Inc. (financial services technology company); Ameriprise Financial, Inc. (financial
services company).
|
Robert
A. Straniere
615 East Michigan Street, Milwaukee WI 53202
Age: 79
|
|
Director
|
|
2006
to present
|
|
Since
2009, Administrative Law Judge, New York City; since 1980, Founding Partner, Straniere
Law Group (law firm).
|
|
37
|
|
Reich
and Tang Group (asset management)(until 2015).
|
Name,
Address,
and
Age
|
|
Position(s)
Held
with
Company
|
|
Term
of Office
and
Length
of
Time
Served1
|
|
Principal
Occupation(s)
During
Past 5 Years
|
|
Number
of
Portfolios in
Fund
Complex
Overseen
by
Director*
|
|
Other
Directorships
Held
by Director
in
the Past 5 Years
|
INTERESTED
DIRECTOR2
|
Robert
Sablowsky
615 East Michigan Street, Milwaukee WI 53202
Age: 82
|
|
Vice
Chairman
Director
|
|
2016
to present
1991
to present
|
|
Since
2002, Senior Director – Investments and prior thereto, Executive Vice President,
of Oppenheimer & Co., Inc. (a registered broker-dealer).
|
|
37
|
|
None
|
OFFICERS
|
Salvatore
Faia, JD,
CPA, CFE
Vigilant Compliance, LLC
Gateway Corporate
Center Suite 216
223 Wilmington West Chester Pike
Chadds
Ford, PA 19317
Age: 57
|
|
President
Chief
Compliance Officer
|
|
2009
to present
2004
to present
|
|
Since
2004, President, Vigilant Compliance, LLC (investment management services company); since
2005, Independent Trustee of EIP Investment Trust (registered investment company).
|
|
N/A
|
|
N/A
|
James
G. Shaw
615 East Michigan Street, Milwaukee WI 53202
Age: 59
|
|
Treasurer
and
Secretary
|
|
2016
to present
|
|
Since
2016, Treasurer and Secretary of The RBB Fund, Inc.; from 2005 to 2016, Assistant Treasurer
of The RBB Fund, Inc.; from 1995 to 2016, Senior Director and Vice President of BNY Mellon
Investment Servicing (US) Inc. (financial services company).
|
|
N/A
|
|
N/A
|
Craig
A. Urciuoli 615 East Michigan Street, Milwaukee WI 53202
Age: 45
|
|
Director
of Marketing & Business Development
|
|
2019
to present
|
|
Since
2019, Director of Marketing & Business Development, The RBB Fund, Inc.; from 2000-2019,
Managing Director, Third Avenue Management LLC.
|
|
N/A
|
|
N/A
|
Jennifer
Witt
615
East Michigan Street, Milwaukee WI 53202
Age:
37
|
|
Assistant
Treasurer
|
|
2018
to present
|
|
Since
2016, Assistant Vice President, U.S. Bank Global Fund Services (fund administrative services
firm); from 2007 to 2016, Supervisor, Nuveen Investments (registered investment company).
|
|
N/A
|
|
N/A
|
Name,
Address,
and
Age
|
|
Position(s)
Held
with
Company
|
|
Term
of Office
and
Length
of
Time
Served1
|
|
Principal
Occupation(s)
During
Past 5 Years
|
|
Number
of
Portfolios in
Fund
Complex
Overseen
by
Director*
|
|
Other
Directorships
Held
by Director
in
the Past 5 Years
|
Edward
Paz
615
East Michigan Street, Milwaukee WI 53202
Age:
49
|
|
Assistant
Secretary
|
|
2016
to present
|
|
Since
2007, Vice President and Counsel, U.S. Bank Global Fund Services (fund administrative
services firm).
|
|
N/A
|
|
N/A
|
Michael
P. Malloy
One Logan Square
Suite 2000
Philadelphia, PA 19103
Age: 60
|
|
Assistant
Secretary
|
|
1999
to present
|
|
Since
1993, Partner, Faegre Drinker Biddle & Reath LLP (law firm).
|
|
N/A
|
|
N/A
|
Jillian
L. Bosmann
One
Logan Square Suite 2000
Philadelphia,
PA 19103
Age:
41
|
|
Assistant
Secretary
|
|
2017
to present
|
|
Partner,
Faegre Drinker Biddle & Reath LLP (law firm) (2017-Present); Faegre Drinker Biddle
& Reath LLP (2006-Present).
|
|
N/A
|
|
N/A
|
*
|
Each
Director oversees 37 portfolios of the Company.
|
1.
|
Subject
to the Company’s Retirement Policy, each Director may continue to serve as a Director until the last day of the calendar
year in which the applicable Director attains age 75 or until his successor is elected and qualified or his death, resignation
or removal. The Board reserves the right to waive the requirements of the Policy with respect to an individual Director. The Board
has approved waivers of the policy with respect to Messrs. Brodsky, Carnall, Giordano, Sablowsky and Straniere. Each officer holds
office at the pleasure of the Board until the next special meeting of the Company or until his or her successor is duly elected
and qualified, or until he or she dies, resigns or is removed.
|
2.
|
Mr.
Sablowsky is considered an “interested person of the Company as that term is defined in the 1940 Act and is referred
to as an “Interested Director. Mr. Sablowsky is considered an “Interested Director of the Company
by virtue of his position as a senior officer of Oppenheimer & Co., Inc., a registered broker-dealer.
|
Director
Experience, Qualifications, Attributes and/or Skills
The
information above includes each Director’s principal occupations during the last five years. Each Director possesses
extensive additional experience, skills and attributes relevant to his qualifications to serve as a Director. The cumulative
background of each Director led to the conclusion that each Director should serve as a Director of the Company. Mr. Giordano
has years of experience as a consultant to financial services organizations and also serves on the boards of other registered
investment companies. Mr. Reichman brings decades of investment management experience to the Board, in addition to senior
executive-level management experience. Mr. Straniere has been a practicing attorney for over 30 years and has served
on the boards of an asset management company and another registered investment company. Mr. Brodsky has over 40 years
of senior executive-level management experience in the cable television and communications industry. Mr. Sablowsky
has demonstrated leadership and management abilities as evidenced by his senior executive-level positions in the financial services
industry. Mr. Carnall has decades of senior executive-level management experience in the banking and financial services
industry and also serves on the boards of various corporations and a bank. Mr. Chandler has demonstrated leadership and management
abilities as evidenced by his senior executive-level positions in the investment technology consulting/services and investment
banking/brokerage industries, and also serves on various boards. Mr. Shea has demonstrated leadership and management abilities
as evidenced by his senior executive-level positions in the brokerage, clearing and investment services industry, including service
on the boards of industry regulatory organizations and a university.
Standing
Committees
The
responsibilities of each Committee of the Board and its members are described below.
Audit
Committee. The Board has an Audit Committee comprised of three Independent Directors. The current members of the Audit Committee
are Messrs. Brodsky, Chandler and Giordano. The Audit Committee, among other things, reviews results of the annual audit and approves
the firm(s) to serve as independent auditors. The Audit Committee convened three times during the fiscal year ended August 31,
2019.
Contract
Committee. The Board has a Contract Committee comprised of the Interested Director and three Independent Directors. The current
members of the Contract Committee are Messrs. Brodsky, Chandler, Sablowsky and Straniere. The Contract Committee reviews and makes
recommendations to the Board regarding the approval and continuation of agreements and plans of the Company. The Contract Committee
convened four times during the fiscal year ended August 31, 2019.
Executive
Committee. The Board has an Executive Committee comprised of the Interested Director and three Independent Directors. The
current members of the Executive Committee are Messrs. Chandler, Giordano, Reichman and Sablowsky. The Executive Committee may
generally carry on and manage the business of the Company when the Board is not in session. The Executive Committee did not meet
during the fiscal year ended August 31, 2019.
Investment
and Liquidity Risk Committee. The Board has an Investment and Liquidity Risk Committee comprised of the Interested
Director and two Independent Directors. The current members of the Investment and Liquidity Risk Committee are Messrs. Reichman,
Sablowsky and Shea. The Investment and Liquidity Risk Committee ensures that the Company’s investment advisers have adopted
investment risk and liquidity management policies and procedures. The Investment and Liquidity Risk Committee met one time during
the fiscal year ended August 31, 2019.
Nominating
and Governance Committee. The Board has a Nominating and Governance Committee comprised of three Independent Directors. The
current members of the Nominating and Governance Committee are Messrs. Carnall, Giordano and Reichman. The Nominating and Governance
Committee recommends to the Board all persons to be nominated as Directors of the Company. The Nominating and Governance Committee
will consider nominees recommended by shareholders. Recommendations should be submitted to the Committee care of the Company’s
Secretary. The Nominating and Governance Committee convened two times during the fiscal year ended August 31, 2019.
Product
Development Committee. The Board has a Product Development Committee comprised of the Interested Director and one Independent
Director. The current members of the Product Development Committee are Messrs. Reichman and Sablowsky. The Product Development
Committee oversees the process regarding the addition of new investment advisers and investment products to the Company. The Product
Development Committee convened two times during the fiscal year ended August 31, 2019.
Regulatory
Oversight Committee. The Board has a Regulatory Oversight Committee comprised of the Interested Director and four Independent
Directors. The current members of the Regulatory Oversight Committee are Messrs. Carnall, Reichman, Sablowsky, Shea and Straniere.
The Regulatory Oversight Committee monitors regulatory developments in the mutual fund industry and focuses on various regulatory
aspects of the operation of the Company. The Regulatory Oversight Committee convened four times during the fiscal year ended August
31, 2019.
Strategic
Oversight Committee. The Board has a Strategic Oversight Committee comprised of the Interested Director and three Independent
Directors. The current members of the Strategic Oversight Committee are Messrs. Carnall, Chandler, Reichman and Sablowsky. The
Strategic Oversight Committee assists the Board in its oversight and review of the Company’s strategic plan and operations.
The Strategic Oversight Committee did not meet during the fiscal year ended August 31, 2019.
Valuation
Committee. The Board has a Valuation Committee comprised of the Interested Director and two officers of the Company. The members
of the Valuation Committee are Messrs. Faia, Sablowsky and Shaw. The Valuation Committee is responsible for reviewing fair value
determinations. The Valuation Committee convened four times during the fiscal year ended August 31, 2019.
Risk
Oversight
The
Board performs its risk oversight function for the Company through a combination of (1) direct oversight by the Board as
a whole and Board committees and (2) indirect oversight through the Company’s investment advisers and other service
providers, Company officers and the Company’s CCO. The Company is subject to a number of risks, including but not
limited to investment risk, compliance risk, operational risk, reputational risk, credit risk and counterparty risk. Day-to-day
risk management with respect to the Company is the responsibility of the Company’s investment advisers or other service
providers (depending on the nature of the risk) that carry out the Company’s investment management and business affairs.
Each of the investment advisers and the other service providers have their own independent interest in risk management and their
policies and methods of risk management will depend on their functions and business models and may differ from the Company’s
and each other’s in the setting of priorities, the resources available or the effectiveness of relevant controls.
The
Board provides risk oversight by receiving and reviewing on a regular basis reports from the Company’s investment advisers
or other service providers, receiving and approving compliance policies and procedures, periodic meetings with the Company’s
portfolio managers to review investment policies, strategies and risks, and meeting regularly with the Company’s CCO to
discuss compliance reports, findings and issues. The Board also relies on the Company’s investment advisers and other
service providers, with respect to the day-to-day activities of the Company, to create and maintain procedures and controls to
minimize risk and the likelihood of adverse effects on the Company’s business and reputation.
Board
oversight of risk management is also provided by various Board Committees. For example, the Audit Committee meets with the
Company’s independent registered public accounting firms to ensure that the Company’s respective audit scopes include
risk-based considerations as to the Company’s financial position and operations.
The
Board may, at any time and in its discretion, change the manner in which it conducts risk oversight. The Board’s
oversight role does not make the Board a guarantor of the Company’s investments or activities.
Director
Ownership of Shares of the Company
The
following table sets forth the dollar range of equity securities beneficially owned by each Director in all of the portfolios
of the Company (which for each Director comprise all registered investment companies within the Company’s family of investment
companies overseen by him), as of December 31, 2019:
Name
of Director
|
Dollar
Range of Equity Securities in the Funds*
|
Aggregate
Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Director within the Family of Investment
Companies
|
Julian
A. Brodsky
|
None
|
Over
$100,000
|
J.
Richard Carnall
|
None
|
$10,001-$50,000
|
Gregory
P. Chandler
|
None
|
$10,001-$50,000
|
Nicholas
A. Giordano
|
None
|
$10,001-$50,000
|
Arnold
M. Reichman
|
None
|
Over
$100,000
|
Brian
T. Shea
|
None
|
$10,001-$50,000
|
Robert
A. Straniere
|
None
|
$1-$10,000
|
Robert
Sablowsky
|
None
|
Over
$100,000
|
*
|
The
Funds had not commenced operations prior to the date of this SAI.
|
Directors’
and Officers’ Compensation
Effective
April 1, 2019, the Company pays each Director a retainer at the rate of $125,000 annually, $10,000 for each regular meeting of
the Board, $3,500 for each committee meeting attended in-person, and $2,000 for each committee meeting attended telephonically
or special meeting of the Board attended in-person or telephonically. The Chairman of the Audit Committee and Chairman of the
Regulatory Oversight Committee each receives an additional fee of $20,000 for his services. The Chairman of the Contract Committee
and the Chairman of the Nominating and Governance Committee each receives an additional fee of $10,000 per year for his services.
The Chairman of the Investment and Liquidity Risk Committee receives an additional fee of $7,500 per year for his services. The
Vice Chairman of the Board receives an additional fee of $35,000 per year for his services in this capacity and the Chairman of
the Board receives an additional fee of $75,000 per year for his services in this capacity.
From
January 1, 2018, to March 31, 2019, the Company paid each Director a retainer at the rate of $100,000 annually, $10,000 for each
regular meeting of the Board, $3,500 for each committee meeting attended in-person, and $2,000 for each committee meeting attended
telephonically or special meeting of the Board attended in-person or telephonically. The Chairman of the Audit Committee and Chairman
of the Regulatory Oversight Committee each received an additional fee of $15,000 for his services. The Chairman of the Contract
Committee received an additional fee of $10,000 per year for his services, and the Chairman of the Nominating and Governance Committee
and Chairman of the Investment and Liquidity Risk Committee each received an additional fee of $7,500 per year for his services.
The Vice Chairman of the Board received an additional fee of $25,000 per year for his services in this capacity and the Chairman
of the Board received an additional fee of $50,000 per year for his services in this capacity.
Directors
are reimbursed for any reasonable out-of-pocket expenses incurred in attending meetings of the Board or any committee thereof.
An employee of Vigilant Compliance, LLC serves as President and Chief Compliance Officer of the Company. Vigilant Compliance,
LLC is compensated for the services provided to the Company, and such compensation is determined by the Board. For the fiscal
year ended August 31, 2019, Vigilant Compliance LLC received $770,742 in the aggregate from all series of the Company for
its services. Employees of the Company serve as Treasurer, Secretary and Director of Marketing & Business Development,
and are compensated for services provided. For the fiscal year ended August 31, 2019, each of the following members of the Board
and the Treasurer and Secretary received compensation from the Company in the following amounts:
Name
of
Director/Officer
|
|
Aggregate
Compensation
from the
Funds*
|
|
Pension
or
Retirement
Benefits Accrued
|
|
Estimated
Annual
Benefits
Upon
Retirement
|
|
Total
Compensation
From
Fund
Complex
Paid to
Directors
or Officer
|
Independent
Directors:
|
|
|
|
|
|
|
|
|
Julian
A. Brodsky, Director
|
|
$0
|
|
N/A
|
|
N/A
|
|
$148,750
|
J.
Richard Carnall, Director
|
|
$0
|
|
N/A
|
|
N/A
|
|
$152,250
|
Gregory
P. Chandler, Director
|
|
$0
|
|
N/A
|
|
N/A
|
|
$178,500
|
Nicholas
A. Giordano, Director
|
|
$0
|
|
N/A
|
|
N/A
|
|
$156,875
|
Arnold
M. Reichman, Director and Chairman
|
|
$0
|
|
N/A
|
|
N/A
|
|
$208,500
|
Brian
T. Shea, Director
|
|
$0
|
|
N/A
|
|
N/A
|
|
$152,500
|
Robert
A. Straniere, Director
|
|
$0
|
|
N/A
|
|
N/A
|
|
$155,750
|
Interested
Director:
|
|
$0
|
|
|
|
|
|
|
Robert
Sablowsky, Director
|
|
$0
|
|
N/A
|
|
N/A
|
|
$205,250
|
Officer:
|
|
|
|
|
|
|
|
|
James
G. Shaw, Treasurer and Secretary
|
|
$0
|
|
N/A
|
|
N/A
|
|
$288,000
|
*
|
The
Funds had not commenced operations prior to the date of this SAI.
|
Each
compensated Director is entitled to participate in the Company’s deferred compensation plan (the “DC Plan).
Under the DC Plan, a compensated Director may elect to defer all or a portion of his compensation and have the deferred compensation
treated as if it had been invested by the Company in shares of one or more of the portfolios of the Company. The amount paid to
the Directors under the DC Plan will be determined based upon the performance of such investments.
As
of December 31, 2019, the Independent Directors and their respective immediate family members (spouse or dependent children)
did not own beneficially or of record any securities of the Company’s investment advisers or distributor, or of any person
directly or indirectly controlling, controlled by, or under common control with the investment advisers or distributor.
CODE
OF ETHICS
The
Company and the Adviser have each adopted a code of ethics under Rule 17j-1 of the 1940 Act that permits personnel subject
to the codes to invest in securities, including securities that may be purchased or held by the Company, subject to certain restrictions.
PROXY
VOTING
The
Board has delegated the responsibility of voting proxies with respect to the portfolio securities purchased and/or held by the
Funds to the Adviser, subject to the Board’s continuing oversight. In exercising its voting obligations, the Adviser
is guided by its general fiduciary duty to act prudently and in the interest of the Funds. The Adviser will consider factors
affecting the value of a Fund’s investments and the rights of shareholders in its determination on voting portfolio securities.
The
Adviser will vote proxies in accordance with its proxy policies and procedures, which are included in Appendix B to this SAI.
The
Company is required to disclose annually each Fund’s complete proxy voting record on Form N-PX. Each Fund’s
proxy voting record for the most recent 12-month period ended June 30th will be available upon request by calling 1-855-744-8500
or by writing to the Fund at: Summit Global Investments Funds, c/o U.S. Bank Global Fund Services, PO Box 701, Milwaukee, Wisconsin
53201-0701. Each Fund’s Form N-PX will also be available on the SEC’s website at www.sec.gov.
CONTROL
PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As
the Funds had not commenced operations prior to the date of this SAI, none of the Directors beneficially own shares of the Fund.
Any shareholder that owns 25% or more of the outstanding shares of a portfolio or class may be presumed to “control
(as that term is defined in the 1940 Act) the portfolio or class. Shareholders controlling a portfolio or class could have the
ability to vote a majority of the shares of the portfolio or class on any matter requiring approval of the shareholders of the
portfolio or class.
INVESTMENT
ADVISORY AND OTHER SERVICES
INVESTMENT
ADVISER
Summit
Global Investments, LLC (“Summit or the “Adviser) is a limited liability company registered with the
State of Utah in October 2010. The Adviser is 100% privately-owned and is controlled by David Harden.
Advisory
Agreement with the Company. The Adviser renders advisory services to the Funds pursuant to an Investment Advisory Agreement
dated June 8, 2020. Subject to the supervision of the Board, the Adviser will provide for the overall management of the Funds
including (i) the provision of a continuous investment program for the Funds, including investment research and management
with respect to all securities, investments, cash and cash equivalents, (ii) the determination from time to time of the securities
and other investments to be purchased, retained, or sold by the Funds, and (iii) the placement from time to time of orders
for all purchases and sales of securities and other investments made for the Funds. The Adviser will provide the services
rendered by it in accordance with each Fund’s investment objective, restrictions and policies as stated in the Prospectus
and in this SAI. The Adviser will not be liable for any error of judgment, mistake of law, or for any loss suffered by the
Funds in connection with the performance of the Advisory Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting from willful misfeasance, bad faith or gross negligence
on the part of the Adviser in the performance of its duties, or from reckless disregard of its obligations and duties under the
Advisory Agreement.
For
its services to the Funds, the Adviser is entitled to an advisory fee computed daily and payable monthly at the annual rate of
0.75% of the average daily net assets attributable to each Fund’s respective Class I Shares. The Adviser has contractually
agreed to waive its management fees and reimburse expenses through December 31, 2021, to the extent that the Fund’s total
annual operating expenses (excluding acquired fund fees and expenses, fund services administrative fee, short sale dividend expenses,
brokerage commissions, extraordinary items, interest and taxes) exceed 1.70% of the average daily net assets attributable to each
Fund’s respective Class I Shares. If at any time a Fund’s Total Annual Fund Operating Expenses are less than 1.70%,
then the Adviser is entitled to reimbursement by the Fund of the advisory fees forgone and other payments remitted by the Adviser
to the Fund within three years from the date on which such waiver or reimbursement was made, provided such reimbursement does
not cause the Fund to exceed expense limitations that were in effect at the time of the waiver or reimbursement.
The
Adviser will pay all expenses incurred by it in connection with its activities under the Advisory Agreement. Each Fund bears
all of its own expenses not specifically assumed by the Adviser. General expenses of the Company not readily identifiable
as belonging to a portfolio of the Company are allocated among all investment portfolios by or under the direction of the Board
in such manner as it deems to be fair and equitable. Expenses borne by a Fund include, but are not limited to the following (or
a Fund’s share of the following): (a) the cost (including brokerage commissions) of securities purchased or sold by
the Fund and any losses incurred in connection therewith; (b) fees payable to and expenses incurred on behalf of the Fund
by the Adviser; (c) filing fees and expenses relating to the registration and qualification of the Company and the Fund’s
shares under federal and/or state securities laws and maintaining such registrations and qualifications; (d) fees and salaries
payable to the Company’s Directors and officers; (e) taxes (including any income or franchise taxes) and governmental
fees; (f) costs of any liability and other insurance or fidelity bonds; (g) any costs, expenses or losses arising out
of a liability of or claim for damages or other relief asserted against the Company or the Fund for violation of any law; (h) legal,
accounting and auditing expenses, including legal fees of special counsel for the independent Directors; (i) charges of custodians
and other agents; (j) expenses of setting in type and printing prospectuses, statements of additional information and supplements
thereto for existing shareholders, reports, statements, and confirmations to shareholders and proxy material that are not attributable
to a class; (k) costs of mailing prospectuses, statements of additional information and supplements thereto to existing shareholders,
as well as reports to shareholders and proxy materials that are not attributable to a class; (1) any extraordinary expenses;
(m) fees, voluntary assessments and other expenses incurred in connection with membership in investment company organizations;
(n) costs of mailing and tabulating proxies and costs of shareholders’ and Directors’ meetings; (o) costs
of independent pricing services to value a portfolio’s securities; and (p) the costs of investment company literature
and other publications provided by the Company to its Directors and officers. Distribution expenses, transfer agency expenses,
expenses of preparation, printing and mailing prospectuses, statements of additional information, proxy statements and reports
to shareholders, and organizational expenses and registration fees, identified as belonging to a particular class of the Company,
are allocated to such class.
No
advisory fee information is provided for the Funds because the Funds had not commenced operations prior to the date of this SAI.
The
Advisory Agreement provides that the Adviser shall at all times have all rights in and to each Fund’s name and all investment
models used by or on behalf of the Fund. The Adviser may use each Fund’s name or any portion thereof in connection
with any other mutual fund or business activity without the consent of any shareholder, and the Company has agreed to execute
and deliver any and all documents required to indicate its consent to such use.
PORTFOLIO
MANAGERS
This
section includes information about the Fund’s portfolio managers, including information about other accounts they manage,
the dollar range of Fund shares they own and how they are compensated.
Description
of Compensation. As of the date of this SAI, The Adviser compensates the Funds’ portfolio managers for their
management of the Funds. The portfolio managers are compensated through equity ownership of the Adviser, adjusted to reflect
current market rates, and therefore compensation is in part based on the value of a Fund’s net assets and other client
accounts they are managing. The Adviser’s Board of Managers reviews the compensation of each portfolio manager periodically
and may make modifications in compensation as it deems necessary to reflect changes in the market.
Other
Accounts. In addition to the Funds, each portfolio manager is responsible for the day-to-day management of certain other
accounts, as listed below. The information below is provided as of December 31, 2019.
Name
of Portfolio Manager
or
Team Member
|
|
Type
of Accounts
|
|
Total
# of
Accounts
Managed
|
|
Total
Assets
|
|
# of Accounts
Managed that
Advisory Fee
Based on
Performance
|
|
Total Assets
that Advisory
Fee Based on
Performance
(in millions)
|
David
Harden
|
|
Other
Registered Investment Companies:
|
|
3
|
|
$644
million
|
|
0
|
|
$0
|
|
|
Other
Pooled Investment Vehicles:
|
|
3
|
|
$166
million
|
|
0
|
|
$0
|
|
|
Other
Accounts:
|
|
1,197
|
|
$310
million
|
|
0
|
|
$0
|
|
|
|
|
|
|
|
|
|
|
|
Mathew
Hanna
|
|
Other
Registered Investment Companies:
|
|
3
|
|
$644
million
|
|
0
|
|
$0
|
|
|
Other
Pooled Investment Vehicles:
|
|
3
|
|
$166
million
|
|
0
|
|
$0
|
|
|
Other
Accounts:
|
|
1,197
|
|
$310
million
|
|
0
|
|
$0
|
|
|
|
|
|
|
|
|
|
|
|
Aash
Shah
|
|
Other
Registered Investment Companies:
|
|
3
|
|
$644
million
|
|
0
|
|
$0
|
|
|
Other
Pooled Investment Vehicles:
|
|
3
|
|
$166
million
|
|
0
|
|
$0
|
|
|
Other
Accounts:
|
|
1,197
|
|
$310
million
|
|
0
|
|
$0
|
Conflict
of Interest. The portfolio managers’ management of other accounts may give rise to potential conflicts of interest
in connection with his management of a Fund’s investments, on the one hand, and the investments of the other accounts,
on the other. The other accounts may have the same investment objective as a Fund. Therefore, a potential conflict
of interest may arise as a result of the identical investment objectives, whereby a portfolio manager could favor one account
over another. Another potential conflict could include the portfolio managers’ knowledge about the size, timing and
possible market impact of Fund trades, whereby a portfolio manager could use this information to the advantage of other accounts
and to the disadvantage of a Fund. However, the Adviser has established policies and procedures to ensure that the purchase
and sale of securities among all accounts it manages are fairly and equitably allocated.
Securities
Ownership. No portfolio manager ownership information is provided for the Funds because the Funds had not commenced
operations prior to the date of this SAI.
ADMINISTRATION
AND ACCOUNTING AGREEMENT
Fund
Services, located at 615 East Michigan Street, Milwaukee, Wisconsin 53202, serves as fund administrator to the Funds pursuant
to a fund administration servicing agreement and serves as fund accountant pursuant to a fund accounting servicing agreement (the
“Administration Agreements). Under the fund accounting servicing agreement, Fund Services has agreed to furnish
to the Funds statistical and research data, clerical, accounting and bookkeeping services, and certain other services required
by the Funds. Under the fund administration servicing agreement, Fund Services has agreed to provide fund administration
services to the Company. These services include the preparation and coordination of the Company’s annual post-effective
amendment filing and supplements to the Funds’ registration statement, the preparation and assembly of board meeting materials,
and certain other services necessary to the Company’s fund administration. In addition, Fund Services has agreed to
prepare and file various reports with the appropriate regulatory agencies and prepare materials required by the SEC or any state
securities commission having jurisdiction over the Funds.
The
Administration Agreements provide that Fund Services shall be obligated to exercise reasonable care in the performance of its
duties and that Fund Services shall not be liable for any error of judgment or mistake of law or any loss suffered by the Company
in connection with its duties under the Administration Agreements, except a loss resulting from Fund Services’ refusal
or failure to comply with the terms of the applicable Administration Agreement or from its bad faith, negligence or willful misconduct
in the performance of its duties thereunder.
Fund
Services receives a fee under the Administration Agreements based on the average daily net assets of the Company. No administration
fee information is provided for Funds because the Funds had not commenced operations prior to the date of this SAI.
CUSTODIAN
AGREEMENT
U.S.
Bank, N.A., (the “Custodian), 1555 North RiverCenter Drive, Milwaukee, Wisconsin 53212, is custodian of the Funds’
assets pursuant to a custodian agreement (the “Custodian Agreement). Under the Custodian Agreement, the Custodian: (a) maintains
a separate account or accounts in the name of the Funds; (b) holds and transfers portfolio securities on account of the Funds;
(c) accepts receipts and makes disbursements of money on behalf of the Funds; (d) collects and receives all income and
other payments and distributions on account of the Funds’ portfolio securities; and (e) makes periodic reports to
the Board concerning the Funds’ operations. The Custodian is authorized to select one or more banks or trust companies
to serve as sub-custodian on behalf of the Funds, provided that the Custodian remains responsible for the performance of all of
its duties under the Custodian Agreement and holds the Funds harmless from the acts and omissions of any affiliate, sub-custodian
or domestic sub-custodian. For its services to the Funds under the Custodian Agreement, the Custodian receives a fee based
on the Funds’ average gross assets calculated daily and payable monthly. Transaction charges and out-of-pocket expenses
are also charged to the Funds. The Custodian and Fund Services are affiliates.
TRANSFER
AGENCY AGREEMENT
Fund
Services, 615 East Michigan Street, Milwaukee, Wisconsin 53202, serves as the transfer and dividend disbursing agent for the Fund
pursuant to a transfer agency and servicing agreement (the “Transfer Agency Agreement), under which Fund Services:
(a) issues and redeems shares of the Funds; (b) addresses and mails all communications by the Funds to record owners
of the shares, including reports to shareholders, dividend and distribution notices and proxy materials for its meetings of shareholders;
(c) maintains shareholder accounts and, if requested, sub-accounts; and (d) makes periodic reports to the Board concerning
the operations of the Funds. Fund Services may, subject to the Board’s approval, assign its duties as transfer and
dividend disbursing agent to any affiliate. For its services to the Funds under the Transfer Agency Agreement, Fund Services receives
an annual fee based on the number of accounts in the Funds and the Funds’ average gross assets calculated daily and payable
monthly. Transaction charges and out-of-pocket expenses are also charged to the Funds.
Fund
Services also provides services relating to the implementation of the Company’s Anti-Money Laundering Program. In
addition, Fund Services provides services relating to the implementation of the Funds’ Customer Identification Program,
including verification of required customer information and the maintenance of records with respect to such verification.
DISTRIBUTION
AGREEMENT AND PLAN OF DISTRIBUTION
Quasar
Distributors, LLC (the “Distributor), whose principal business address is 111 East Kilbourn Avenue, Suite 1250,
Milwaukee, Wisconsin 53202, serves as the underwriter to the Funds pursuant to the terms of a distribution agreement (the “Distribution
Agreement). The Distributor is a registered broker-dealer and is a member of the Financial Industry Regulatory Authority
(“FINRA). The Distributor is not affiliated with the Company or the Adviser.
Under
the Distribution Agreement with the Funds, the Distributor acts as the agent of the Company in connection with the continuous
offering of shares of the Funds. The Distributor continually distributes shares of the Funds on a best efforts basis.
The Distributor has no obligation to sell any specific quantity of Fund shares. The Distributor and its officers have no
role in determining the investment policies or which securities are to be purchased or sold by the Company.
The
Distributor may enter into agreements with selected broker-dealers, banks or other financial intermediaries for distribution of
shares of the Funds. With respect to certain financial intermediaries and related fund “supermarket platform
arrangements, the Funds and/or the Adviser, rather than the Distributor, typically enter into such agreements. These financial
intermediaries may charge a fee for their services and may receive shareholder service or other fees from parties other than the
Distributor. These financial intermediaries may otherwise act as processing agents and are responsible for promptly transmitting
purchase, redemption and other requests to the Funds.
Investors
who purchase shares through financial intermediaries will be subject to the procedures of those intermediaries through which they
purchase shares, which may include charges, investment minimums, cutoff times and other restrictions in addition to, or different
from, those listed herein. Information concerning any charges or services will be provided to customers by the financial
intermediary through which they purchase shares. Investors purchasing shares of the Funds through financial intermediaries
should acquaint themselves with their financial intermediary’s procedures and should read the Prospectus in conjunction
with any materials and information provided by their financial intermediary. The financial intermediary, and not its customers,
will be the shareholder of record, although customers may have the right to vote shares depending upon their arrangement with
the financial intermediary. The Distributor does not receive compensation from the Funds for its distribution services except
the distribution/service fees with respect to the shares of those classes for which a Rule 12b-1 distribution plan is effective.
The Adviser pays the Distributor a fee for certain distribution-related services.
The
Distribution Agreement has an initial term of up to two years and will continue in effect only if such continuance is specifically
approved at least annually by the Board or by vote of a majority of the Fund’s outstanding voting securities in accordance
with the 1940 Act. The Distribution Agreement is terminable without penalty by the Company on behalf of the Funds on no
less than 60 days’ written notice when authorized either by a vote of a majority of the outstanding voting securities
of the Funds or by vote of a majority of the members of the Board who are not “interested persons (as defined in
the 1940 Act) of the Company and have no direct or indirect financial interest in the operation of the Distribution Agreement,
or by the Distributor, and will automatically terminate in the event of its “assignment (as defined in the 1940 Act).
The Distribution Agreement provides that the Distributor shall not be liable for any loss suffered by the Company in connection
with the performance of the Distributor’s obligations and duties under the Distribution Agreement, except a loss resulting
from the Distributor’s willful misfeasance, bad faith or negligence in the performance of such duties and obligations,
or by reason of its reckless disregard thereof.
FUND
SERVICES ADMINISTRATIVE FEE
Each
Fund pays compensation to the Adviser for fund services in accordance with an Administrative Services Agreement between the Company
and the Adviser (in such capacity, the “Servicing Agent). The Servicing Agent receives a monthly fee equal
to 0.25% on an annualized basis of the net assets of each Fund (the “Fund Services Administrative Fee). The
Servicing Agent may delegate some or all of its servicing responsibilities to one or more Service Organizations. Over time,
the Fund Services Administrative Fee increases the cost of your investment in the Funds’ shares because these fees are
paid out of the Funds’ assets on an on-going basis.
For
purposes of the Administrative Services Agreement, fund services include, but are not limited to: (i) assisting in the maintenance
of the Funds’ records containing information relating to shareholders of the Funds; (ii) providing administrative assistance
to shareholders concerning the establishment or maintenance of an account with the Funds; (iii) assisting in processing purchase,
exchange and redemption requests from shareholders and facilitating settlement with the Funds for any shareholder transactions
submitted; (iv) processing all dividend payments, including capital gain or other payments authorized by the Fund and distributed
to and received by the Servicing Agent or the Service Organization; (v) providing sub-transfer agent or sub-accounting services
for Fund beneficial owners; (vi) assisting in the communications between shareholders and the Funds; and (vii) supervising other
aspects of the Funds’ operations and providing other shareholder or administrative services to the Funds.
A
Service Organization receiving compensation from the Fund Services Administrative Fee generally represents in a service agreement
with the Servicing Agent that all compensation payable to the Service Organization in connection with the investment of their
assets in the Funds will be disclosed by the Service Organization to its customers. The Funds do not monitor the actual services
being performed by a Service Organization under the service agreement. The Funds also do not monitor the reasonableness
of the total compensation that a Service Organization may receive, including any service fee that the Service Organization may
receive from the Funds and any compensation the Service Organization may receive directly from its clients.
PAYMENTS
TO FINANCIAL INTERMEDIARIES
The
Adviser and/or its affiliates, at their discretion, may make payments from their own resources and not from Fund assets to affiliated
or unaffiliated brokers, dealers, banks (including bank trust departments), trust companies, registered investment advisers, financial
planners, retirement plan administrators, insurance companies, and any other institution having a service, administration, or
any similar arrangement with the Funds, their service providers or their respective affiliates, as incentives to help market and
promote the Funds and/or in recognition of their distribution, marketing, administrative services, and/or processing support.
These
additional payments may be made to financial intermediaries that sell Fund shares or provide services to the Funds, the Distributor
or shareholders of the Funds through the financial intermediary’s retail distribution channel and/or fund supermarkets.
Payments may also be made through the financial intermediary’s retirement, qualified tuition, fee-based advisory, wrap
fee bank trust, or insurance (e.g., individual or group annuity) programs. These payments may include, but are not limited to,
placing a Fund in a financial intermediary’s retail distribution channel or on a preferred or recommended fund list; providing
business or shareholder financial planning assistance; educating financial intermediary personnel about a Fund; providing access
to sales and management representatives of the financial intermediary; promoting sales of Fund shares; providing marketing and
educational support; maintaining share balances and/or for sub-accounting, administrative or shareholder transaction processing
services. A financial intermediary may perform the services itself or may arrange with a third party to perform the services.
The
Adviser and/or its affiliates may also make payments from their own resources to financial intermediaries for costs associated
with the purchase of products or services used in connection with sales and marketing, participation in and/or presentation at
conferences or seminars, sales or training programs, client and investor entertainment and other sponsored events. The costs
and expenses associated with these efforts may include travel, lodging, sponsorship at educational seminars and conferences, entertainment
and meals to the extent permitted by law.
Revenue
sharing payments may be negotiated based on a variety of factors, including the level of sales, the amount of Fund assets attributable
to investments in a Fund by financial intermediaries’ customers, a flat fee or other measures as determined from time to
time by the Adviser and/or its affiliates. A significant purpose of these payments is to increase the sales of Fund shares,
which in turn may benefit the Adviser through increased fees as Fund assets grow.
FUND
TRANSACTIONS
Subject
to policies established by the Board and applicable rules, the Adviser is responsible for the execution of portfolio transactions
and the allocation of brokerage transactions for the Funds. In executing portfolio transactions, the Adviser seeks to obtain
the best price and most favorable execution for the Funds, taking into account such factors as the price (including the applicable
brokerage commission or dealer spread), size of the order, difficulty of execution and operational facilities of the firm involved.
While the Adviser generally seeks reasonably competitive commission rates, payment of the lowest commission or spread is not necessarily
consistent with obtaining the best price and execution in particular transactions.
Brokerage
Transactions
Generally,
equity securities, both listed and over-the-counter, are bought and sold through brokerage transactions for which commissions
are payable. Purchases from underwriters will include the underwriting commission or concession, and purchases from dealers serving
as market makers will include a dealer’s mark-up or reflect a dealer’s mark-down. Money market securities and other
debt securities are usually bought and sold directly from the issuer or an underwriter or market maker for the securities. Generally,
the Fund will not pay brokerage commissions for such purchases. When a debt security is bought from an underwriter, the purchase
price will usually include an underwriting commission or concession. The purchase price for securities bought from dealers serving
as market makers will similarly include the dealer’s mark up or reflect a dealer’s mark down. When a Fund executes
transactions in the over-the-counter market, it will generally deal with primary market makers unless prices that are more favorable
are otherwise obtainable.
In
addition, the Adviser may place a combined order for two or more accounts they manage, including the Funds, engaged in the purchase
or sale of the same security if, in its judgment, joint execution is in the best interest of each participant and will result
in best price and execution. Transactions involving commingled orders are allocated in a manner deemed equitable to each account
and each Fund. Although it is recognized that, in some cases, the joint execution of orders could adversely affect the price or
volume of the security that a particular account or Fund may obtain, it is the opinion of the Adviser and the Board that the advantages
of combined orders outweigh the possible disadvantages of separate transactions. Nonetheless, the Adviser believes that the ability
of a Fund to participate in higher volume transactions will generally be beneficial to the Fund.
No
brokerage commissions information is provided for the Funds because the Funds had not commenced operations prior to the date of
this SAI.
No
ownership information of regular broker-dealers is provided for the Funds because the Funds had not commenced operations prior
to the date of this SAI.
Brokerage
Selection
The
Company does not expect to use one particular broker or dealer, and when one or more brokers is believed capable of providing
the best combination of price and execution, the Adviser may select a broker based upon brokerage or research services provided
to the Adviser. The Adviser may pay a higher commission than otherwise obtainable from other brokers in return for such services
only if a good faith determination is made that the commission is reasonable in relation to the services provided.
Section 28(e) of
the Securities Exchange Act of 1934, as amended, permits an investment adviser, under certain circumstances, to cause a fund to
pay a broker or dealer a commission for effecting a transaction in excess of the amount of commission another broker or dealer
would have charged for effecting the transaction in recognition of the value of brokerage and research services provided by the
broker or dealer. In addition to agency transactions, the Adviser may receive brokerage and research services in connection with
certain riskless principal transactions, in accordance with applicable SEC guidance. Brokerage and research services include:
(1) furnishing advice as to the value of securities, the advisability of investing in, purchasing or selling securities,
and the availability of securities or purchasers or sellers of securities; (2) furnishing analyses and reports concerning
issuers, industries, securities, economic factors and trends, portfolio strategy, and the performance of accounts; and (3) effecting
securities transactions and performing functions incidental thereto (such as clearance, settlement, and custody). In the case
of research services, the Adviser believes that access to independent investment research is beneficial to their investment decision-making
processes and, therefore, to the Funds.
To
the extent research services may be a factor in selecting brokers, such services may be in written form or through direct contact
with individuals and may include information as to particular companies and securities as well as market, economic, or institutional
areas and information which assists in the valuation and pricing of investments. Examples of research-oriented services for which
the Adviser might utilize Fund commissions include research reports and other information on the economy, industries, sectors,
groups of securities, individual companies, statistical information, political developments, technical market action, pricing
and appraisal services, credit analysis, risk measurement analysis, performance and other analysis. The Adviser may use research
services furnished by brokers in servicing all client accounts and not all services may necessarily be used in connection with
the account that paid commissions to the broker providing such services. Information so received by the Adviser will be in addition
to and not in lieu of the services required to be performed by the Adviser under the Advisory Agreement. Any advisory or other
fees paid to the Adviser are not reduced as a result of the receipt of research services.
In
some cases, the Adviser may receive a service from a broker that has both a “research and a “non-research
use. When this occurs, the Adviser makes a good faith allocation, under all the circumstances, between the research and non-research
uses of the service. The percentage of the service that is used for research purposes may be paid for with client commissions,
while the Adviser will use its own funds to pay for the percentage of the service that is used for non-research purposes. In making
this good faith allocation, the Adviser faces a potential conflict of interest, but the Adviser believes that its allocation procedures
are reasonably designed to ensure that it appropriately allocates the anticipated use of such services to their research and non-research
uses.
From
time to time, the Funds may purchase new issues of securities for clients in a fixed price offering. In these situations, the
seller may be a member of the selling group that will, in addition to selling securities, provide the Adviser with research services.
FINRA has adopted rules expressly permitting these types of arrangements under certain circumstances. Generally, the seller
will provide research “credits in these situations at a rate that is higher than that which is available for typical
secondary market transactions. These arrangements may not fall within the safe harbor of Section 28(e).
No
soft-dollar arrangement information is provided for the Funds because the Funds had not commenced operations prior to the date
of this SAI.
PURCHASE
AND REDEMPTION INFORMATION
Read
the Funds’ Prospectus for information regarding the purchase and redemption of Fund shares. The following information supplements
information in the Funds’ Prospectus.
You
may purchase shares through an account maintained by your brokerage firm, financial institutions and industry professionals (“Service
Organizations) and you may also purchase shares directly by mail or wire. The Company reserves the right, if conditions
exist which make cash payments undesirable, to honor any request for redemption or repurchase of a Fund’s shares by making
payment in whole or in part in securities chosen by the Company and valued in the same way as they would be valued for purposes
of computing a Fund’s NAV. If payment is made in securities, a shareholder may incur transaction costs in converting
these securities into cash. A shareholder will also bear any market risk or tax consequences as a result of a payment in
securities. The Company has elected, however, to be governed by Rule 18f-1 under the 1940 Act so that a Fund is obligated
to redeem its shares solely in cash up to the lesser of $250,000 or 1% of its NAV during any 90-day period for any one shareholder
of the Fund. A shareholder will bear the risk of a decline in market value and any tax consequences associated with a redemption
in securities.
Under
the 1940 Act, the Company may suspend the right to redemption or postpone the date of payment upon redemption for any period during
which the New York Stock Exchange, Inc. (the “NYSE) is closed (other than customary weekend and holiday closings),
or during which the SEC restricts trading on the NYSE or determines an emergency exists as a result of which disposal or valuation
of portfolio securities is not reasonably practicable, or for such other periods as the SEC may permit. (The Company may
also suspend or postpone the recordation of the transfer of its shares upon the occurrence of any of the foregoing conditions).
Shares
of the Funds are subject to redemption by the Company, at the redemption price of such shares as in effect from time to time,
including, without limitation: (1) to reimburse the Funds for any loss sustained by reason of the failure of a shareholder
to make full payment for shares purchased by the shareholder or to collect any charge relating to a transaction effected for the
benefit of a shareholder as provided in the Prospectus from time to time; (2) if such redemption is, in the opinion of the
Board, desirable in order to prevent the Company or the Funds from being deemed a “personal holding company within
the meaning of the Code; (3) or if the net income with respect to any particular class of common stock should be negative
or it should otherwise be appropriate to carry out the Company’s responsibilities under the 1940 Act.
Each
Fund has the right to redeem your shares at current NAV at any time and without prior notice if, and to the extent that, such
redemption is necessary to reimburse the Fund for any loss sustained by reason of your failure to make full payment for shares
of the Fund you previously purchased or subscribed for.
Other
Purchase Information
If
shares of the Funds are held in a “street name account with an authorized dealer, all recordkeeping, transaction
processing and payments of distributions relating to the beneficial owner’s account will be performed by the authorized
dealer, and not by a Fund and its Transfer Agent. Since the Funds will have no record of the beneficial owner’s transactions,
a beneficial owner should contact the authorized dealer to purchase, redeem or exchange shares, to make changes in or give instructions
concerning the account or to obtain information about the account. The transfer of shares in a “street name
account to an account with another dealer or to an account directly with a Fund involves special procedures and will require the
beneficial owner to obtain historical purchase information about the shares in the account from the authorized dealer.
TELEPHONE
TRANSACTION PROCEDURES
The
Company’s telephone transaction procedures include the following measures: (1) requiring the appropriate telephone
transaction privilege forms; (2) requiring the caller to provide the names of the account owners, the account social security
number and name of the Fund, all of which must match the Company’s records; (3) requiring the Company’s service
representative to complete a telephone transaction form, listing all of the above caller identification information; (4) permitting
exchanges (if applicable) only if the two account registrations are identical; (5) requiring that redemption proceeds be
sent only by check to the account owners of record at the address of record, or by electronic funds transfer through the ACH network
or by wire only to the owners of record at the bank account of record; (6) sending a written confirmation for each telephone
transaction to the owners of record at the address of record within five (5) business days of the call; and (7) maintaining
tapes of telephone transactions for six months, if the Company elects to record shareholder telephone transactions. For accounts
held of record by broker-dealers, financial institutions, securities dealers, financial planners and other industry professionals,
additional documentation or information regarding the scope of a caller’s authority is required. Finally, for telephone
transactions in accounts held jointly, additional information regarding other account holders is required. Shares held in IRA
accounts may be redeemed by telephone at 1-855-744-8500. Investors will be asked whether or not to withhold taxes from any distribution.
VALUATION
OF SHARES
In
accordance with procedures adopted by the Board, the NAV per share of each Fund is calculated by determining the value of the
net assets attributed to the Fund and dividing by the number of outstanding shares of the Fund. All securities are valued on each
Business Day as of the close of regular trading on the NYSE (normally, but not always, 4:00 p.m. Eastern Time) or such other
time as the NYSE or National Association of Securities Dealers Automated Quotations System (“NASDAQ) market may
officially close. The term “Business Day means any day the NYSE is open for trading, which is Monday through Friday
except for holidays. The NYSE is generally closed on the following holidays: New Year’s Day (observed), Martin Luther King, Jr.
Day, Washington’s Birthday (observed), Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
The
time at which transactions and shares are priced and the time by which orders must be received may be changed in case of an emergency
or if regular trading on the NYSE is stopped at a time other than 4:00 p.m. Eastern Time. The Company reserves the right
to reprocess purchase, redemption and exchange transactions that were initially processed at a NAV other than the Fund’s
official closing NAV (as the same may be subsequently adjusted), and to recover amounts from (or distribute amounts to) shareholders
based on the official closing NAV. The Company reserves the right to advance the time by which purchase and redemption orders
must be received for same business day credit as otherwise permitted by the SEC. In addition, the Fund may compute its NAV as
of any time permitted pursuant to any exemption, order or statement of the SEC or its staff.
The
securities of each Fund are valued under the direction of the Funds’ administrator and under the general supervision of
the Board. Prices are generally determined using readily available market prices. Subject to the approval of the Board,
the Funds may employ outside organizations, which may use a matrix or formula method that takes into consideration market indices,
matrices, yield curves and other specific adjustments in determining the approximate market value of portfolio investments.
This may result in the investments being valued at a price that differs from the price that would have been determined had the
matrix or formula method not been used. All cash, receivables, and current payables are carried on a Fund’s books
at their face value. Other assets, if any, are valued at fair value as determined in good faith by the Funds’ Valuation
Committee under the direction of the Board.
The
procedures used by any pricing service and its valuation results are reviewed by the officers of the Company under the general
supervision of the Board.
An
Underlying Fund may hold portfolio securities that are listed on foreign exchanges. These securities may trade on weekends
or other days when the Underlying Funds and the Funds do not calculate NAV. As a result, the value of these investments
may change on days when you cannot purchase or sell Fund shares.
TAXES
The
following summarizes certain additional tax considerations generally affecting the Funds and their shareholders that are not described
in the Prospectus. No attempt is made to present a detailed explanation of the tax treatment of the Funds or their shareholders,
and the discussions here and in the Prospectus are not intended as a substitute for careful tax planning. Potential investors
should consult their tax advisers with specific reference to their own tax situations.
The
discussions of the federal tax consequences in the Prospectus and this SAI are based on the Code and the regulations issued under
it, and court decisions and administrative interpretations, as in effect on the date of this SAI. Future legislative or
administrative changes or court decisions may significantly alter the statements included herein, and any such changes or decisions
may be retroactive.
General
Each
Fund intends to qualify as a regulated investment company under Subchapter M of Subtitle A, Chapter 1, of the Code. As such, each
Fund generally is exempt from federal income tax on its net investment income and realized capital gains that it distributes to
shareholders. To qualify for treatment as a regulated investment company, each Fund must meet three important tests each year.
First,
a Fund must derive with respect to each taxable year at least 90% of its gross income from dividends, interest, certain payments
with respect to securities loans, gains from the sale or other disposition of stock or securities or foreign currencies, other
income derived with respect to the Fund’s business of investing in stock, securities or currencies, or net income derived
from interests in qualified publicly traded partnerships.
Second,
generally, at the close of each quarter of a Fund’s taxable year, at least 50% of the value of the Fund’s assets
must consist of cash and cash items, U.S. government securities, securities of other regulated investment companies, and securities
of other issuers as to which the Fund has not invested more than 5% of the value of its total assets in securities of the issuer
and as to which the Fund does not hold more than 10% of the outstanding voting securities of the issuer, and no more than 25%
of the value of the Fund’s total assets may be invested in the securities of (1) any one issuer (other than U.S. government
securities and securities of other regulated investment companies), (2) two or more issuers that the Fund controls and which
are engaged in the same or similar trades or businesses or (3) one or more qualified publicly traded partnerships.
Third,
a Fund must distribute an amount equal to at least the sum of 90% of its investment company taxable income (net investment income
and the excess of net short-term capital gain over net long-term capital loss) before taking into account any deduction for dividends
paid, and 90% of its tax-exempt income, if any, for the year.
Each
Fund intends to comply with these requirements. If a Fund were to fail to make sufficient distributions, it could be liable for
corporate income tax and for excise tax in respect of the shortfall or, if the shortfall is large enough, the Fund could be disqualified
as a regulated investment company. If for any taxable year a Fund were not to qualify as a regulated investment company, all its
taxable income would be subject to tax at regular corporate rates without any deduction for distributions to shareholders. In
that event, shareholders would recognize dividend income on distributions to the extent of the Fund’s current and accumulated
earnings and profits, and corporate shareholders could be eligible for the dividends-received deduction.
The
Code imposes a nondeductible 4% excise tax on regulated investment companies that fail to distribute each year an amount equal
to specified percentages of their ordinary taxable income and capital gain net income (excess of capital gains over capital losses).
Each Fund intends to make sufficient distributions or deemed distributions each year to avoid liability for this excise tax.
Taxation
of Certain Investments
The
tax principles applicable to transactions in financial instruments, such as futures contracts and options, that may be engaged
in by a Fund, and investments in passive foreign investment companies (“PFICs), are complex and, in some cases,
uncertain. Such transactions and investments may cause a Fund to recognize taxable income prior to the receipt of cash, thereby
requiring the Fund to liquidate other positions, or to borrow money, so as to make sufficient distributions to shareholders to
avoid corporate-level tax. Moreover, some or all of the taxable income recognized may be ordinary income or short-term capital
gain, so that the distributions may be taxable to shareholders as ordinary income.
In
addition, in the case of any shares of a PFIC in which a Fund invests, the Fund may be liable for corporate-level tax on any ultimate
gain or distributions on the shares if the Fund fails to make an election to recognize income annually during the period of its
ownership of the shares.
State
and Local Taxes
Although
the Funds each expect to qualify as a “regulated investment company and to be relieved of all or substantially all
federal income taxes, depending upon the extent of its activities in states and localities in which its offices are maintained,
in which its agents or independent contractors are located or in which it is otherwise deemed to be conducting business, each
Fund may be subject to the tax laws of such states or localities.
ADDITIONAL
INFORMATION CONCERNING COMPANY SHARES
The
Company has authorized capital of 100 billion shares of common stock at a par value of $0.001 per share. Currently, 87.823 billion
shares have been classified into 189 classes; however, the Company only has 48 active share classes that have begun investment
operations. Under the Company’s charter, the Board has the power to classify and reclassify any unissued shares of common
stock from time to time.
Each
share that represents an interest in a Fund has an equal proportionate interest in the assets belonging to the Fund with each
other share that represents an interest in the Fund, even where a share has a different class designation than another share representing
an interest in the Fund. Shares of the Company do not have preemptive or conversion rights. When issued for payment
as described in the Prospectus, shares of the Company will be fully paid and non-assessable.
The
Company does not currently intend to hold annual meetings of shareholders except as required by the 1940 Act or other applicable
law. The Company’s amended By-Laws provide that shareholders owning at least ten percent of the outstanding shares
of all classes of common stock of the Company have the right to call for a meeting of shareholders to consider the removal of
one or more directors. To the extent required by law, the Company will assist in shareholder communication in such matters.
Holders
of shares of each class of the Funds will vote in the aggregate and not by class on all matters, except where otherwise required
by law. Further, shareholders of the Company will vote in the aggregate and not by portfolio except as otherwise required by law
or when the Board determines that the matter to be voted upon affects only the interests of the shareholders of a particular portfolio
or class of shares. Rule 18f-2 under the 1940 Act provides that any matter required to be submitted by the provisions of
such Act or applicable state law, or otherwise, to the holders of the outstanding voting securities of an investment company such
as the Company shall not be deemed to have been effectively acted upon unless approved by the holders of a majority of the outstanding
voting securities of each portfolio affected by the matter. Rule 18f-2 further provides that a portfolio shall be deemed
to be affected by a matter unless it is clear that the interests of each portfolio in the matter are identical or that the matter
does not affect any interest of the portfolio. Under Rule 18f-2 the approval of an investment advisory agreement or distribution
agreement or any change in a fundamental investment objective or fundamental investment policy would be effectively acted upon
with respect to a portfolio only if approved by the holders of a majority of the outstanding voting securities of such portfolio.
However, the Rule also provides that the ratification of the selection of independent public accountants and the election
of directors are not subject to the separate voting requirements and may be effectively acted upon by shareholders of an investment
company voting without regard to a portfolio. Shareholders of the Company are entitled to one vote for each full share held
(irrespective of class or portfolio) and fractional votes for fractional shares held. Voting rights are not cumulative and,
accordingly, the holders of more than 50% of the aggregate shares of common stock of the Company may elect all of the Directors.
Notwithstanding
any provision of Maryland law requiring a greater vote of shares of the Company’s common stock (or of any class voting
as a class) in connection with any corporate action, unless otherwise provided by law (for example by Rule 18f-2 discussed
above), or by the Company’s Articles of Incorporation and By-Laws, the Company may take or authorize such action upon the
favorable vote of the holders of more than 50% of all of the outstanding shares of Common Stock voting without regard to class
(or portfolio).
MISCELLANEOUS
Anti-Money
Laundering Program
The
Funds have established an Anti-Money Laundering Compliance Program (the “Program) as required by the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT
Act). To ensure compliance with this law, the Funds’ Program provides for the development of internal practices,
procedures, and controls, designation of anti-money laundering compliance officers, an ongoing training program, and an independent
audit function to determine the effectiveness of the Program.
Procedures
to implement the Program include, but are not limited to, determining that certain of their service providers have established
proper anti-money laundering procedures, reporting suspicious and/or fraudulent activity, and conducting a complete and thorough
review of all new account applications. The Funds will not transact business with any person or legal entity whose identity and
beneficial owners, if applicable, cannot be adequately verified under the provisions of the USA PATRIOT Act.
Counsel
The
law firm of Faegre Drinker Biddle & Reath LLP, One Logan Square, Suite 2000, Philadelphia, Pennsylvania 19103-6996, serves
as independent counsel to the Company and the Independent Directors.
Independent
Registered Public Accounting Firm
Ernst
& Young LLP, One Commerce Square, 2005 Market Street, Suite 700, Philadelphia, Pennsylvania 19103, serves as the Funds’
independent registered public accounting firm, and in that capacity audits the Funds’ financial statements.
FINANCIAL
STATEMENTS
Financial
statements certified by an independent registered public accounting firm will be submitted to shareholders at least annually.
The Funds had not commenced operations prior to the date of this SAI and do not yet have financial statements. Once available,
copies of the Funds’ Annual and Semi-Annual Report to Shareholders may be obtained, without charge, upon request by calling
the telephone number listed on the cover of this SAI.
APPENDIX
A
DESCRIPTION
OF SECURITIES RATINGS
Short-Term
Credit Ratings
An
S&P Global Ratings short-term issue credit rating is generally assigned to those obligations considered short-term
in the relevant market. The following summarizes the rating categories used by S&P Global Ratings for short-term issues:
“A-1
- A short-term obligation rated “A-1 is rated in the highest category by S&P Global Ratings. The obligor’s
capacity to meet its financial commitments on the obligation is strong. Within this category, certain obligations are designated
with a plus sign (+). This indicates that the obligor’s capacity to meet its financial commitment on these obligations
is extremely strong.
“A-2
- A short-term obligation rated “A-2 is somewhat more susceptible to the adverse effects of changes in circumstances
and economic conditions than obligations in higher rating categories. However, the obligor’s capacity to meet its
financial commitments on the obligation is satisfactory.
“A-3
- A short-term obligation rated “A-3 exhibits adequate protection parameters. However, adverse economic conditions
or changing circumstances are more likely to weaken an obligor’s capacity to meet its financial commitments on the obligation.
“B
- A short-term obligation rated “B is regarded as vulnerable and has significant speculative characteristics.
The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties that could
lead to the obligor’s inadequate capacity to meet its financial commitments.
“C
- A short-term obligation rated “C is currently vulnerable to nonpayment and is dependent upon favorable business,
financial, and economic conditions for the obligor to meet its financial commitments on the obligation.
“D
- A short-term obligation rated “D is in default or in breach of an imputed promise. For non-hybrid capital
instruments, the “D rating category is used when payments on an obligation are not made on the date due, unless
S&P Global Ratings believes that such payments will be made within any stated grace period. However, any stated grace
period longer than five business days will be treated as five business days. The “D rating also will be used
upon the filing of a bankruptcy petition or the taking of a similar action and where default on an obligation is a virtual certainty,
for example due to automatic stay provisions. A rating on an obligation is lowered to “D if it is subject
to a distressed exchange offer.
Local Currency and Foreign Currency Ratings - S&P Global Ratings’ issuer credit ratings make a distinction between
foreign currency ratings and local currency ratings. A foreign currency rating on an issuer will differ from the local currency
rating on it when the obligor has a different capacity to meet its obligations denominated in its local currency, versus obligations
denominated in a foreign currency.
“NR – This indicates that a rating has not been assigned or is no longer assigned.
Moody’s Investors Service (“Moody’s) short-term ratings
are forward-looking opinions of the relative credit risks of financial obligations with an original maturity of thirteen months
or less and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial
loss suffered in the event of default or impairment.
Moody’s
employs the following designations to indicate the relative repayment ability of rated issuers:
“P-1
- Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.
“P-2
- Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations.
“P-3
- Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations.
“NP
- Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.
“NR
- Is assigned to an unrated issuer.
Fitch,
Inc. / Fitch Ratings Ltd. (“Fitch) short-term issuer or obligation rating is based in all cases on the short-term
vulnerability to default of the rated entity and relates to the capacity to meet financial obligations in accordance with the
documentation governing the relevant obligation. Short-term deposit ratings may be adjusted for loss severity. Short-term
ratings are assigned to obligations whose initial maturity is viewed as “short-term based on market convention.
Typically, this means up to 13 months for corporate, sovereign, and structured obligations and up to 36 months for obligations
in U.S. public finance markets. The following summarizes the rating categories used by Fitch for short-term obligations:
“F1
- Securities possess the highest short-term credit quality. This designation indicates the strongest intrinsic capacity
for timely payment of financial commitments; may have an added “+ to denote any exceptionally strong credit feature.
“F2
- Securities possess good short-term credit quality. This designation indicates good intrinsic capacity for timely payment
of financial commitments.
“F3
- Securities possess fair short-term credit quality. This designation indicates that the intrinsic capacity for timely payment
of financial commitments is adequate.
“B
- Securities possess speculative short-term credit quality. This designation indicates minimal capacity for timely payment
of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions.
“C
- Securities possess high short-term default risk. Default is a real possibility.
“RD
- Restricted default. Indicates an entity that has defaulted on one or more of its financial commitments, although it continues
to meet other financial obligations. Typically applicable to entity ratings only.
“D
- Default. Indicates a broad-based default event for an entity, or the default of a short-term obligation.
Plus
(+) or minus (-) - The “F1 rating may be modified by the addition of a plus (+) or minus (-) sign to show the relative
status within that major rating category.
“NR
- Is assigned to an unrated issue of a rated issuer.
The
DBRS® Ratings Limited (“DBRS) short-term debt rating scale provides an opinion on
the risk that an issuer will not meet its short-term financial obligations in a timely manner. Ratings are based on quantitative
and qualitative considerations relevant to the issuer and the relative ranking of claims. The R-1 and R-2 rating categories
are further denoted by the sub-categories “(high), “(middle), and “(low).
The
following summarizes the ratings used by DBRS for commercial paper and short-term debt:
“R-1 (high) - Short-term debt rated “R-1 (high) is of the highest credit quality. The capacity
for the payment of short-term financial obligations as they fall due is exceptionally high. Unlikely to be adversely affected
by future events.
“R-1 (middle)
- Short-term debt rated “R-1 (middle) is of superior credit quality. The capacity for the payment of short-term
financial obligations as they fall due is very high. Differs from “R-1 (high) by a relatively modest degree.
Unlikely to be significantly vulnerable to future events.
“R-1 (low)
- Short-term debt rated “R-1 (low) is of good credit quality. The capacity for the payment of short-term financial
obligations as they fall due is substantial. Overall strength is not as favorable as higher rating categories. May
be vulnerable to future events, but qualifying negative factors are considered manageable.
“R-2 (high)
- Short-term debt rated “R-2 (high) is considered to be at the upper end of adequate credit quality. The capacity
for the payment of short-term financial obligations as they fall due is acceptable. May be vulnerable to future events.
“R-2 (middle)
- Short-term debt rated “R-2 (middle) is considered to be of adequate credit quality. The capacity for the
payment of short-term financial obligations as they fall due is acceptable. May be vulnerable to future events or may be
exposed to other factors that could reduce credit quality.
“R-2 (low) - Short-term debt rated “R-2 (low) is considered to be at the lower end of adequate credit
quality. The capacity for the payment of short-term financial obligations as they fall due is acceptable. May be vulnerable
to future events. A number of challenges are present that could affect the issuer’s ability to meet such obligations.
“R-3
- Short-term debt rated “R-3 is considered to be at the lowest end of adequate credit quality. There is a
capacity for the payment of short-term financial obligations as they fall due. May be vulnerable to future events and the
certainty of meeting such obligations could be impacted by a variety of developments.
“R-4
- Short-term debt rated “R-4 is considered to be of speculative credit quality. The capacity for the payment
of short-term financial obligations as they fall due is uncertain.
“R-5
- Short-term debt rated “R-5 is considered to be of highly speculative credit quality. There is a high level
of uncertainty as to the capacity to meet short-term financial obligations as they fall due.
“D
- Short-term debt rated “D is assigned when the issuer has filed under any applicable bankruptcy, insolvency or
winding up statute or there is a failure to satisfy an obligation after the exhaustion of grace periods, a downgrade to “D
may occur. DBRS may also use “SD (Selective Default) in cases where only some securities are impacted, such
as the case of a “distressed exchange.
Long-Term
Credit Ratings
The
following summarizes the ratings used by S&P Global Ratings for long-term issues:
“AAA
- An obligation rated “AAA has the highest rating assigned by S&P Global Ratings. The obligor’s
capacity to meet its financial commitments on the obligation is extremely strong.
“AA
- An obligation rated “AA differs from the highest-rated obligations only to a small degree. The obligor’s
capacity to meet its financial commitments on the obligation is very strong.
“A
- An obligation rated “A is somewhat more susceptible to the adverse effects of changes in circumstances and economic
conditions than obligations in higher-rated categories. However, the obligor’s capacity to meet its financial commitments
on the obligation is still strong.
“BBB
- An obligation rated “BBB exhibits adequate protection parameters. However, adverse economic conditions or
changing circumstances are more likely to weaken the obligor’s capacity to meet its financial commitments on the obligation.
“BB,
“B, “CCC, “CC and “C - Obligations rated “BB, “B,
“CCC, “CC and “C are regarded as having significant speculative characteristics.
“BB indicates the least degree of speculation and “C the highest. While such obligations will
likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposure to adverse
conditions.
“BB
- An obligation rated “BB is less vulnerable to nonpayment than other speculative issues. However, it faces
major ongoing uncertainties or exposure to adverse business, financial, or economic conditions that could lead to the obligor’s
inadequate capacity to meet its financial commitments on the obligation.
“B
- An obligation rated “B is more vulnerable to nonpayment than obligations rated “BB, but the obligor
currently has the capacity to meet its financial commitments on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor’s capacity or willingness to meet its financial commitments on the obligation.
“CCC
- An obligation rated “CCC is currently vulnerable to nonpayment and is dependent upon favorable business, financial,
and economic conditions for the obligor to meet its financial commitments on the obligation. In the event of adverse business,
financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitments on the obligation.
“CC
- An obligation rated “CC is currently highly vulnerable to nonpayment. The “CC rating is used
when a default has not yet occurred but S&P Global Ratings expects default to be a virtual certainty, regardless of the anticipated
time to default.
“C
- An obligation rated “C is currently highly vulnerable to nonpayment, and the obligation is expected to have lower
relative seniority or lower ultimate recovery compared with obligations that are rated higher.
“D
- An obligation rated “D is in default or in breach of an imputed promise. For non-hybrid capital instruments,
the “D rating category is used when payments on an obligation are not made on the date due, unless S&P Global
Ratings believes that such payments will be made within five business days in the absence of a stated grace period or within the
earlier of the stated grace period or 30 calendar days. The “D rating also will be used upon the filing of
a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due
to automatic stay provisions. An obligation’s rating is lowered to “D if it is subject to a distressed
exchange offer.
Plus
(+) or minus (-) - The ratings from “AA to “CCC may be modified by the addition of a plus (+) or minus
(-) sign to show relative standing within the rating categories.
“NR
- This indicates that a rating has not been assigned, or is no longer assigned.
Local
Currency and Foreign Currency Risks - S&P Global Ratings’ issuer credit ratings make a distinction between foreign
currency ratings and local currency ratings. An issuer’s foreign currency rating will differ from its local currency
rating on it when the obligor has a different capacity to meet its obligations denominated in its local currency, versus obligations
denominated in a foreign currency.
Moody’s
long-term ratings are forward-looking opinions of the relative credit risks of financial obligations with an original
maturity of one year or more. Such ratings reflect both on the likelihood of default or impairment on contractual financial
obligations and the expected financial loss suffered in the event of default or impairment. The following summarizes the
ratings used by Moody’s for long-term debt:
“Aaa
- Obligations rated “Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.
“Aa
- Obligations rated “Aa are judged to be of high quality and are subject to very low credit risk.
“A
- Obligations rated “A are judged to be upper-medium grade and are subject to low credit risk.
“Baa
- Obligations rated “Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess
certain speculative characteristics.
“Ba
- Obligations rated “Ba are judged to be speculative and are subject to substantial credit risk.
“B
- Obligations rated “B are considered speculative and are subject to high credit risk.
“Caa
- Obligations rated “Caa are judged to be speculative of poor standing and are subject to very high credit risk.
“Ca
- Obligations rated “Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery
of principal and interest.
“C
- Obligations rated “C are the lowest rated and are typically in default, with little prospect for recovery of principal
or interest.
Note:
Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from “Aa through “Caa.
The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.
“NR
- Is assigned to unrated obligations.
The
following summarizes long-term ratings used by Fitch:
“AAA
- Securities considered to be of the highest credit quality. “AAA ratings denote the lowest expectation of
credit risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments.
This capacity is highly unlikely to be adversely affected by foreseeable events.
“AA
- Securities considered to be of very high credit quality. “AA ratings denote expectations of very low credit
risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly
vulnerable to foreseeable events.
“A
- Securities considered to be of high credit quality. “A ratings denote expectations of low credit risk.
The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable
to adverse business or economic conditions than is the case for higher ratings.
“BBB
- Securities considered to be of good credit quality. “BBB ratings indicate that expectations of credit risk
are currently low. The capacity for payment of financial commitments is considered adequate, but adverse business or economic
conditions are more likely to impair this capacity.
“BB
- Securities considered to be speculative. “BB ratings indicate that there is an elevated vulnerability to
credit risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial
alternatives may be available to allow financial commitments to be met.
“B
- Securities considered to be highly speculative. “B ratings indicate that material credit risk is present.
“CCC
- A “CCC rating indicates that substantial credit risk is present.
“CC
- A “CC rating indicates very high levels of credit risk.
“C
- A “C rating indicates exceptionally high levels of credit risk.
Defaulted
obligations typically are not assigned “RD or “D ratings but are instead rated in the “CCC
to “C rating categories, depending on their recovery prospects and other relevant characteristics. Fitch believes
that this approach better aligns obligations that have comparable overall expected loss but varying vulnerability to default and
loss.
Plus
(+) or minus (-) may be appended to a rating to denote relative status within major rating categories. Such suffixes are
not added to the “AAA obligation rating category, or to corporate finance obligation ratings in the categories below
“CCC.
“NR
- Is assigned to an unrated issue of a rated issuer.
The
DBRS long-term rating scale provides an opinion on the risk of default. That is, the risk that an issuer will
fail to satisfy its financial obligations in accordance with the terms under which an obligation has been issued. Ratings
are based on quantitative and qualitative considerations relevant to the issuer, and the relative ranking of claims. All
rating categories other than AAA and D also contain subcategories “(high) and “(low). The absence
of either a “(high) or “(low) designation indicates the rating is in the middle of the category.
The following summarizes the ratings used by DBRS for long-term debt:
“AAA - Long-term debt rated “AAA is of the highest credit quality. The capacity for the payment
of financial obligations is exceptionally high and unlikely to be adversely affected by future events.
“AA
- Long-term debt rated “AA is of superior credit quality. The capacity for the payment of financial obligations
is considered high. Credit quality differs from “AAA only to a small degree. Unlikely to be significantly
vulnerable to future events.
“A - Long-term debt rated “A is of good credit quality. The capacity for the payment of financial
obligations is substantial, but of lesser credit quality than “AA. May be vulnerable to future events, but
qualifying negative factors are considered manageable.
“BBB
- Long-term debt rated “BBB is of adequate credit quality. The capacity for the payment of financial obligations
is considered acceptable. May be vulnerable to future events.
“BB
- Long-term debt rated “BB is of speculative, non-investment grade credit quality. The capacity for the payment
of financial obligations is uncertain. Vulnerable to future events.
“B
- Long-term debt rated “B is of highly speculative credit quality. There is a high level of uncertainty as
to the capacity to meet financial obligations.
“CCC,
“CC and “C - Long-term debt rated in any of these categories is of very highly speculative credit
quality. In danger of defaulting on financial obligations. There is little difference between these three categories, although
“CC and “C ratings are normally applied to obligations that are seen as highly likely to default,
or subordinated to obligations rated in the “CCC to “B range. Obligations in respect of which
default has not technically taken place but is considered inevitable may be rated in the “C category.
“D
- A security rated “D is assigned when the issuer has filed under any applicable bankruptcy, insolvency or winding
up statute or there is a failure to satisfy an obligation after the exhaustion of grace periods, a downgrade to “D
may occur. DBRS may also use “SD (Selective Default) in cases where only some securities are impacted, such
as the case of a “distressed exchange.
Municipal
Note Ratings
An
S&P Global Ratings U.S. municipal note rating reflects S&P Global Ratings’ opinion about the liquidity
factors and market access risks unique to the notes. Notes due in three years or less will likely receive a note rating.
Notes with an original maturity of more than three years will most likely receive a long-term debt rating. In determining
which type of rating, if any, to assign, S&P Global Ratings’ analysis will review the following considerations:
|
●
|
Amortization
schedule - the larger the final maturity relative to other maturities, the more likely it will be treated as a note; and
|
|
●
|
Source
of payment - the more dependent the issue is on the market for its refinancing, the more likely it will be treated as a note.
|
Municipal
Short-Term Note rating symbols are as follows:
“SP-1
- A municipal note rated “SP-1 exhibits a strong capacity to pay principal and interest. An issue determined
to possess a very strong capacity to pay debt service is given a plus (+) designation.
“SP-2
- A municipal note rated “SP-2 exhibits a satisfactory capacity to pay principal and interest, with some vulnerability
to adverse financial and economic changes over the term of the notes.
“SP-3
- A municipal note rated “SP-3 exhibits a speculative capacity to pay principal and interest.
“D
- This rating is assigned upon failure to pay the note when due, completion of a distressed exchange offer, or the filing of a
bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due
to automatic stay provisions.
Moody’s
uses the global short-term Prime rating scale (listed above under Short-Term Credit Ratings) for commercial paper issued
by U.S. municipalities and nonprofits. These commercial paper programs may be backed by external letters of credit or liquidity
facilities, or by an issuer’s self-liquidity.
For
other short-term municipal obligations, Moody’s uses one of two other short-term rating scales, the Municipal Investment
Grade (“MIG) and Variable Municipal Investment Grade (“VMIG) scales provided below.
Moody’s
uses the MIG scale for U.S. municipal cash flow notes, bond anticipation notes and certain other short-term obligations, which
typically mature in three years or less. Under certain circumstances, Moody’s uses the MIG scale for bond anticipation
notes with maturities of up to five years.
MIG
Scale
“MIG-1
- This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable
liquidity support, or demonstrated broad-based access to the market for refinancing.
“MIG-2
- This designation denotes strong credit quality. Margins of protection are ample, although not as large as in the preceding
group.
“MIG-3
- This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access
for refinancing is likely to be less well-established.
“SG
- This designation denotes speculative-grade credit quality. Debt instruments in this category may lack sufficient margins
of protection.
“NR
- Is assigned to an unrated obligation.
In
the case of variable rate demand obligations (“VRDOs), a two-component rating is assigned: a long or short-term
debt rating and a demand obligation rating. The long-term rating addresses the issuer’s ability to meet scheduled
principal and interests payments. The short-term demand obligation rating addresses the ability of the issuer or the liquidity
provider to make payments associated with the purchase-price-upon demand feature (“demand feature) of the VRDO.
The short-term demand obligation rating uses the VMIG scale. VMIG ratings with liquidity support use as an input the short-term
Counterparty Risk Assessment of the support provider, or the long-term rating of the underlying obligor in the absence of third
party liquidity support. Transitions of VMIG Ratings of demand obligations with conditional liquidity support differ from
transitions on the Prime scale to reflect the risk that external liquidity support will terminate if the issuer’s long-term
rating drops below investment grade.
Moody’s
typically assigns the VMIG short-term demand obligation rating if the frequency of the demand feature is less than every three
years. If the frequency of the demand feature is less than three years but the purchase price is payable only with remarketing
proceeds, the short-term demand obligation rating is “NR.
“VMIG-1
- This designation denotes superior credit quality. Excellent protection is afforded by the superior short-term credit strength
of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.
“VMIG-2
- This designation denotes strong credit quality. Good protection is afforded by the strong short-term credit strength of
the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.
“VMIG-3
- This designation denotes acceptable credit quality. Adequate protection is afforded by the satisfactory short-term credit
strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon
demand.
“SG
- This designation denotes speculative-grade credit quality. Demand features rated in this category may be supported by
a liquidity provider that does not have a sufficiently strong short-term rating or may lack the structural and/or legal protections
necessary to ensure the timely payment of purchase price upon demand.
“NR
- Is assigned to an unrated obligation.
About
Credit Ratings
An
S&P Global Ratings issue credit rating is a forward-looking opinion about the creditworthiness of an obligor
with respect to a specific financial obligation, a specific class of financial obligations, or a specific financial program (including
ratings on medium-term note programs and commercial paper programs). It takes into consideration the creditworthiness of
guarantors, insurers, or other forms of credit enhancement on the obligation and takes into account the currency in which the
obligation is denominated. The opinion reflects S&P Global Ratings’ view of the obligor’s capacity and
willingness to meet its financial commitments as they come due, and this opinion may assess terms, such as collateral security
and subordination, which could affect ultimate payment in the event of default.
Ratings
assigned on Moody’s global long-term and short-term rating scales are forward-looking opinions of the relative
credit risks of financial obligations issued by non-financial corporates, financial institutions, structured finance vehicles,
project finance vehicles, and public sector entities.
Fitch’s
credit ratings relating to issuers are an opinion on the relative ability of an entity to meet financial commitments,
such as interest, preferred dividends, repayment of principal, insurance claims or counterparty obligations. Fitch credit
ratings are used by investors as indications of the likelihood of receiving the money owed to them in accordance with the terms
on which they invested. Fitch’s credit ratings cover the global spectrum of corporate, sovereign financial, bank,
insurance, and public finance entities (including supranational and sub-national entities) and the securities or other obligations
they issue, as well as structured finance securities backed by receivables or other financial assets.
Credit
ratings provided by DBRS are forward-looking opinions about credit risk which reflect the creditworthiness of an
issuer, rated entity, security and/or obligation. Credit ratings are not statements of fact. While historical statistics
and performance can be important considerations, credit ratings are not based solely on such; they include subjective considerations
and involve expectations for future performance that cannot be guaranteed. To the extent that future events and economic
conditions do not match expectations, credit ratings assigned to issuers, entities, securities and/or obligations can change.
Credit ratings are also based on approved and applicable methodologies (“Methodologies), which are periodically
updated and when material changes are deemed necessary, this may also lead to rating changes.
Credit
ratings typically provide an opinion on the risk that investors may not be repaid in accordance with the terms under which the
obligation was issued. In some cases, credit ratings may also include consideration for the relative ranking of claims and
recovery, should default occur. Credit ratings are meant to provide opinions on relative measures of risk and are not based
on expectations of any specific default probability, nor are they meant to predict such.
The
data and information on which DBRS bases its opinions is not audited or verified by DBRS, although, DBRS conducts a reasonableness
review of information received and relied upon in accordance with its Methodologies and policies.
DBRS
uses rating symbols as a concise method of expressing its opinion to the market, but there are a limited number of rating categories
for the possible slight risk differentials that exist across the rating spectrum and DBRS does not assert that credit ratings
in the same category are of “exactly the same quality.
APPENDIX
B
Proxy
Voting
Issue
Rule 206(4)-6
under the Advisers Act requires every investment adviser to adopt and implement written policies and procedures, reasonably designed
to ensure that the adviser votes proxies in the best interest of its clients. The procedures must address material conflicts
that may arise in connection with proxy voting. The Rule further requires the adviser to provide a concise summary
of the adviser’s proxy voting process and offer to provide copies of the complete proxy voting policy and procedures to
clients upon request. Lastly, the Rule requires that the adviser disclose to clients how they may obtain information
on how the adviser voted their proxies.
SUMMIT
GLOBAL INVESTMENTS, LLC does vote proxies on behalf of its clients.
Policy
SUMMIT
GLOBAL INVESTMENTS, LLC does vote proxies on behalf of its clients.
Procedures:
1.
|
Upon
receipt of proxy voting request, review items to be voted upon and Board recommendations.
|
2.
|
Log
into the proper online voting site and vote in accordance with Board recommendations unless otherwise notified by the Investment
Committee.
|
3.
|
Document
the company, items voted on, and how SUMMIT GLOBAL INVESTMENTS, LLC voted on the proxy spreadsheet.
|
Procedures
for SUMMIT GLOBAL INVESTMENTS, LLC’s Receipt of Class Actions
The
following procedures outline SUMMIT GLOBAL INVESTMENTS, LLC’s receipt of “Class Action documents from
clients and custodians. It is SUMMIT GLOBAL INVESTMENTS, LLC’s position not to file these “Class Action
documents, but if received will follow these guidelines:
1. If “Class Action documents are received by SUMMIT GLOBAL INVESTMENTS, LLC
from the Client, SUMMIT GLOBAL INVESTMENTS, LLC will gather any requisite information it has and forward to the
client, to enable the client to file the “Class Action at the client’s discretion. SUMMIT GLOBAL
INVESTMENTS, LLC will not file “Class Actions on behalf of any client.
2. Similarly, if “Class Action documents are received by SUMMIT GLOBAL INVESTMENTS, LLC from the Custodian,
SUMMIT GLOBAL INVESTMENTS, LLC will gather any requisite information it has and forward to the client, to enable the client to
file the “Class Action at the client’s discretion. SUMMIT GLOBAL INVESTMENTS, LLC will not file
“Class Actions on behalf of any client.
B-1
THE RBB FUND, INC.
PEA 266/270
PART C: OTHER INFORMATION
(a)
|
|
Articles of Incorporation.
|
(c)
|
|
Instruments Defining Rights of Security Holders.
|
(d)
|
|
Investment Advisory Contracts.
|
(e)
|
|
Underwriting Contracts.
|
(f)
|
|
Bonus or Profit Sharing Contracts.
|
(h)
|
|
Other Material Contracts.
|
(l)
|
|
Initial Capital Agreements.
|
|
(2)
|
Subscription Agreement between Registrant and Planco Financial Services, Inc., relating to Classes O and P is incorporated herein by reference to Post-Effective Amendment No. 5 to the Registrant’s Registration Statement (No. 33-20827) filed on December 14, 1990. (P)
|
|
(3)
|
Subscription Agreement between Registrant and Planco Financial Services, Inc., relating to Class Q is incorporated herein by reference to Post-Effective Amendment No. 5 to the Registrant’s Registration Statement (No. 33-20827) filed on December 14, 1990. (P)
|
Amended
Rule 18f-3 Plan is incorporated herein by reference to Post-Effective Amendment No. 256 to the Registrant’s Registration
Statement (No. 33-20827) filed on December 20, 2019.
|
Item 29.
|
PERSONS
CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
|
None.
Sections 1, 2, 3 and 4 of Article VIII of Registrant’s
Articles of Incorporation, as amended, incorporated herein by reference as Exhibits (a)(1) and (a)(3), provide as follows:
Section 1. To the fullest extent that limitations
on the liability of directors and officers are permitted by the Maryland General Corporation Law, no director or officer of the
Corporation shall have any liability to the Corporation or its shareholders for damages. This limitation on liability applies to
events occurring at the time a person serves as a director or officer of the Corporation whether or not such person is a director
or officer at the time of any proceeding in which liability is asserted.
Section 2. The Corporation shall indemnify
and advance expenses to its currently acting and its former directors to the fullest extent that indemnification of directors is
permitted by the Maryland General Corporation Law. The Corporation shall indemnify and advance expenses to its officers to the
same extent as its directors and to such further extent as is consistent with law. The Board of Directors may by law, resolution
or agreement make further provision for indemnification of directors, officers, employees and agents to the fullest extent permitted
by the Maryland General Corporation law.
Section 3. No provision of this Article shall
be effective to protect or purport to protect any director or officer of the Corporation against any liability to the Corporation
or its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Section 4. References to the Maryland General
Corporation Law in this Article are to the law as from time to time amended. No further amendment to the Articles of Incorporation
of the Corporation shall decrease, but may expand, any right of any person under this Article based on any event, omission or proceeding
prior to such amendment. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of Registrant pursuant to the foregoing provisions, or otherwise, Registrant has been
advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than
the payment by Registrant of expenses incurred or paid by a director, officer or controlling person of Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities
being registered, Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
Section 12 of the Investment Advisory Agreement
between Registrant and Boston Partners Global Investors, Inc. (“Boston Partners”) (f/k/a Robeco Investment Management,
Inc.), incorporated herein by reference to exhibit (d)(9), provides for the indemnification of Boston Partners against certain
losses.
Section 12 of the Investment Advisory Agreement
between Registrant and Bogle Investment Management, L.P. (“Bogle”), dated September 15, 1999 and incorporated herein
by reference to exhibit (d)(2) provides for the indemnification of Bogle against certain losses.
Section 12 of the Investment Advisory Agreement
between the Registrant and Schneider Capital Management (“Schneider”) incorporated herein by reference as exhibit (d)(1)
provides for the indemnification of Schneider against certain losses.
Section 12 of each of the Investment Advisory
Agreements between the Registrant and Matson Money, Inc. (f/k/a Abundance Technologies, Inc.), (“Matson Money”) incorporated
herein by reference as exhibits (d)(3) and (d)(39) provides for the indemnification of Matson Money against certain losses.
Section 12 of each of the Investment Advisory
Agreements between the Registrant and Summit Global Investments, LLC (“SGI”) incorporated herein by reference as exhibits
(d)(7), (d)(11), (d)(34), (d)(81) and (d)(86) provides for the indemnification of SGI against certain losses.
Section 12 of each of the Investment Advisory
Agreements with Abbey Capital Limited (“Abbey Capital”) incorporated herein by reference as exhibits (d)(13), (d)(60)
and (d)(61) provides for the indemnification of Abbey Capital against certain losses.
Section 13 of each of the Investment Advisory
Agreements with Abbey Capital incorporated herein by reference as exhibits (d)(14) and (d)(71) provides for the indemnification
of Abbey Capital against certain losses.
Section 12 of each of the Investment Advisory
Agreements between the Registrant and Altair Advisers LLC (“Altair”) incorporated herein by reference as exhibits (d)(23)
and (d)(55) provide for indemnification of Altair against certain losses.
Section 12 of each of the Investment Advisory
Agreements between the Registrant and Campbell & Company Investment Adviser LLC (“CCIA”) incorporated herein by
reference as exhibits (d)(25), (d)(26), (d)(46), (d)(47), (d)(77), and (d)(78) provide for indemnification of CCIA against certain
losses.
Section 12 of the Investment Advisory Agreement
between the Registrant, Boston Partners, and CCIA incorporated herein by reference as exhibit (d)(75) provides for indemnification
of Boston Partners and CCIA against certain losses.
Section 12 of each of the Investment Advisory
Agreements between the Registrant and Motley Fool Asset Management, LLC (“Motley Fool”) incorporated herein by reference
to exhibits (d)(51), (d)(54), and (d)(73) provides for indemnification of Motley Fool against certain losses.
Section 12 of the Investment Advisory Agreement
between the Registrant and Orinda Asset Management LLC (“Orinda”) incorporated herein by reference to exhibit (d)(44)
provides for indemnification of Orinda against certain losses.
Section 8 of each of the Distribution Agreements
between Registrant and Quasar Distributors, LLC incorporated herein by reference to exhibits (e)(1) – (e)(8), (e)(10) and
(e)(14) provide for the indemnification of Quasar Distributors, LLC against certain losses.
Section 7 of the Distribution Agreement between
Registrant and Foreside Funds Distributors, LLC incorporated herein by reference to exhibit (e)(9) provides for the indemnification
of Foreside Funds Distributors, LLC against certain losses.
|
Item 31.
|
BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISERS.
|
|
1.
|
Bogle Investment Management, LP:
|
The sole business activity of Bogle
Investment Management, LP (“Bogle”), 2310 Washington Street, Suite 310, Newton Lower Falls, MA 02462, is to serve as
an investment adviser. Bogle is registered under the Investment Advisers Act of 1940.
The directors and officers have not
held any positions with other companies during the last two fiscal years.
|
2.
|
Schneider Capital Management Company:
|
The sole business activity of Schneider
Capital Management Company (“Schneider”), 1000 Westlakes Drive, Suite 150, Berwyn, Pennsylvania 19312, is to serve
as an investment adviser. Schneider is registered under the Investment Advisers Act of 1940. Information as to the directors and
officers of Schneider is as follows:
Name and Position with Schneider
|
Other Company
|
Position With Other Company
|
Arnold C. Schneider, III
|
Turnbridge Management Partners Corp.
|
President
|
President and Chief Investment Officer
|
|
|
|
3.
|
Boston Partners Global Investors, Inc.
|
The sole business activity of Boston
Partners Global Investors, Inc. (“Boston Partners”), One Grand Central Place, 60 East 42nd Street, Suite 1550, New
York, New York 10165, is to serve as an investment adviser. Boston Partners provides investment advisory services to the Boston
Partners Funds and the WPG Partners Funds.
Boston Partners is registered under
the Investment Advisers Act of 1940 and serves as an investment adviser to domestic and foreign institutional investors, investment
companies, commingled trust funds, private investment partnerships and collective investment vehicles. Information as to the directors
and officers of Boston Partners is as follows:
Name and Position with Boston Partners
|
Other Company
|
Position With Other Company
|
Joseph F. Feeney, Jr.
Chief Executive Officer,
Chief Investment Officer
|
Robeco US Holding, Inc.
|
Director
|
William George Butterly, III
General Counsel, Director of Sustainability & Engagement
|
Robeco Institutional Asset Management US Inc.
|
Chief Legal Officer, Chief Compliance Officer & Secretary
|
|
Boston Partners Securities LLC
|
Chief Legal Officer
|
|
Robeco Trust Company
|
Chief Operating Officer, Secretary & Director
|
|
RobecoSAM USA, Inc.
|
Chief Legal Officer, Chief Compliance Officer & Secretary
|
|
Robeco Boston Partners (UK) Limited
|
Director, Chief Operating Officer & Secretary
|
Gregory Varner
Chief Financial Officer
|
|
|
Matthew Davis
Chief Administrative Officer
|
Robeco Institutional Asset Management US Inc.
|
President, Treasurer & Director
|
|
Boston Partners Securities LLC
|
Chief Financial Officer
|
|
Robeco Trust Company
|
Director, President, Chief Financial Officer, Treasurer & Director
|
|
Robeco Boston Partners (UK) Limited
|
Chief Financial Officer
|
Mark Kuzminskas
Chief Operating Officer
|
|
|
David Steyn
Director
|
Orix Corporation Europe N.V.
|
Chief Executive Officer
|
Leni M. Boeren
Director
|
Orix Corporation Europe N.V.
|
Chief Operating Officer
|
|
Robeco Institutional Asset Management B.V.
|
Director
|
|
RobecoSAM AG
|
Director
|
|
RobecoSAM USA, Inc.
|
Director
|
Martin Mlynár
Director
|
Corestone Investment Managers AG
|
Chief Executive Officer
|
|
Source Capital AG
|
Board Member
|
|
Source Capital Holding AG
|
Board Member
|
The sole business activity of Matson
Money, Inc. (“Matson Money”), 5955 Deerfield Blvd., Mason, Ohio 45040, is to serve as an investment adviser. Matson
Money is registered under the Investment Advisers Act of 1940.
Below is a list of each executive
officer and director of Matson Money indicating each business, profession, vocation or employment of a substantial nature in which
each such person has been engaged within the last two years, for his or her own account or in the capacity of director, officer,
partner or trustee.
Name and Position with Matson Money, Inc.
|
Name of Other Company
|
Position With Other Company
|
Mark E. Matson
CEO
|
Keep It Tight Fitness, LLC
|
50% owner
|
Mark E. Matson
CEO
|
The Matson Family Foundation
|
100% owner
|
Michelle Matson
Vice President/ Secretary
|
None
|
None
|
Daniel J. List
Chief Compliance Officer
|
None
|
None
|
|
5.
|
Summit Global Investments, LLC:
|
The sole business activity of Summit
Global Investments, LLC (“SGI”), 620 South Main Street, Bountiful, Utah 84010, is to serve as an investment adviser.
SGI is registered under the Investment Advisers Act of 1940.
The only employment of a substantial
nature of each of SGI’s directors and officers is with SGI.
|
6.
|
Abbey Capital Limited:
|
The only employment of a substantial
nature of each of Abbey Capital Limited directors and officers is with Abbey Capital Limited.
The only employment of a substantial
nature of each of Altair Advisers LLC directors and officers is with Altair Advisers LLC.
|
8.
|
Campbell & Company Investment Adviser LLC:
|
The principal business activity of
Campbell & Company Investment Adviser LLC (“CCIA”), 2850 Quarry Lake Drive, Baltimore, Maryland 21209, is to serve
as an investment adviser. CCIA is registered under the Investment Advisers Act of 1940.
Below is a list of each executive
officer and director of CCIA indicating each business, profession, vocation or employment of a substantial nature in which each
such person has been engaged within the last two years, for his or her own account or in the capacity of director, officer, partner
or trustee.
Name and Position with CCIA
|
Name of Other Company
|
Position With Other Company
|
G. Williams Andrews
Chief Executive Officer
|
Campbell & Company, LP
|
Chief Executive Officer
|
|
Campbell & Company, LLC
|
Director and Chief Executive Officer
|
|
Campbell Financial Services, LLC
|
Director
|
|
Campbell Core Offshore Limited
|
Director
|
|
Campbell Equity Advantage Offshore Fund Limited
|
Director
|
|
Campbell Advantage Offshore Limited
|
Director
|
|
Campbell Offshore Fund Limited
|
Director
|
Dr. Kevin Cole
Chief Investment Officer
|
Campbell & Company, LP
|
Chief Investment Officer
|
|
Campbell & Company, LLC
|
Director and Chief Investment Officer
|
Thomas P. Lloyd
General Counsel & Secretary
|
Campbell & Company, LP
|
General Counsel, Chief Compliance Officer, and Secretary
|
|
Campbell & Company, LLC
|
Director and Secretary
|
|
Campbell Core Offshore Limited
|
Director
|
|
Campbell Financial Services, LLC
|
Director, President, Chief Compliance Officer, and Secretary
|
|
Campbell Advantage Offshore Limited
|
Director
|
Gabriel A. Morris
Chief Operating Officer
|
Campbell & Company, LP
|
Chief Operating Officer
|
|
Campbell Financial Services, LLC
|
Director, Chief Financial Officer, Chief Operating Officer, and Treasurer
|
|
Campbell & Company, LLC
|
Director and Chief Operating Officer
|
|
9.
|
Motley Fool Asset Management, LLC:
|
A description of any other business,
profession, vocation, or employment of a substantial nature in which Motley Fool Asset Management, LLC and each director, officer,
or partner of Motley Fool Asset Management, LLC is or has been engaged within the last two fiscal years for his or her own account
or in the capacity of director, employee, partner or trustee, is set forth in the Form ADV of Motley Fool Asset Management, LLC,
as filed with the SEC on December 17, 2019, and is incorporated herein by this reference.
|
10.
|
Orinda Asset Management, LLC:
|
A description of any other business,
profession, vocation, or employment of a substantial nature in which Orinda Asset Management, LLC and each director, officer, or
partner of Orinda Asset Management, LLC is or has been engaged within the last two fiscal years for his or her own account or in
the capacity of director, employee, partner or trustee, is set forth in the Form ADV of Orinda Asset Management LLC, as filed with
the SEC on March 26, 2020, and is incorporated herein by this reference.
|
Item 32.
|
PRINCIPAL UNDERWRITER
|
(a)(1) Quasar Distributors,
LLC, acts as principal underwriter for the following investment companies registered under the Investment Company Act of 1940,
as amended:
Advisors Series Trust
|
Majority Shares ETF Trust
|
Aegis Funds
|
Managed Portfolio Series
|
Allied Asset Advisors Funds
|
Manager Directed Portfolios
|
Alpha Architect ETF Trust
|
Matrix Advisors Fund Trust
|
Angel Oak Funds Trust
|
Matrix Advisors Value Fund, Inc.
|
Barrett Opportunity Fund, Inc.
|
Monetta Trust
|
BMT Investment Funds
|
Nicholas Equity Income Fund, Inc.
|
Bridges Investment Fund, Inc.
|
Nicholas Fund, Inc.
|
Brookfield Investment Funds
|
Nicholas High Income Fund, Inc.
|
Buffalo Funds
|
Nicholas II, Inc.
|
Chestnut Street Fund
|
Nicholas Ltd Edition, Inc.
|
Cushing® Mutual Funds Trust
|
North Capital Funds Trust
|
DoubleLine Funds Trust
|
Permanent Portfolio Family of Funds
|
ETF Series Solutions
|
Perritt Funds, Inc.
|
First American Funds, Inc.
|
PRIMECAP Odyssey Funds
|
FundX Investment Trust
|
Procure ETF Trust I
|
Glenmede Fund, Inc.
|
Procure ETF Trust II
|
Glenmede Portfolios
|
Professionally Managed Portfolios
|
GoodHaven Funds Trust
|
Prospector Funds, Inc.
|
Greenspring Fund, Inc.
|
Provident Mutual Funds, Inc.
|
Harding Loevner Funds, Inc.
|
RBB Fund, Inc.
|
Hennessy Funds Trust
|
RBC Funds Trust
|
Horizon Funds
|
Series Portfolios Trust
|
Hotchkis & Wiley Funds
|
Thompson IM Funds, Inc.
|
Intrepid Capital Management Funds Trust
|
TIGERSHARES Trust
|
Jacob Funds, Inc.
|
TrimTabs ETF Trust
|
Jensen Quality Growth Fund Inc.
|
Trust for Professional Managers
|
Kirr Marbach Partners Funds, Inc.
|
Trust for Advised Portfolios
|
Listed Funds Trust
|
USCA Fund Trust
|
LKCM Funds
|
USQ Core Real Estate Fund
|
LoCorr Investment Trust
|
Wall Street EWM Funds Trust
|
Lord Asset Management Trust
|
Wisconsin Capital Funds, Inc.
|
MainGate Trust
|
YCG Funds
|
(a)(2) Foreside Funds
Distributors LLC serves as principal underwriter for the following investment companies registered under the Investment Company
Act of 1940, as amended:
|
4.
|
Matthews International Funds (d/b/a Matthews Asia Funds)
|
|
5.
|
Motley Fool Funds, Series of The RBB Fund, Inc.
|
|
7.
|
Old Westbury Funds, Inc.
|
|
9.
|
Versus Capital Multi-Manager Real Estate Income Fund LLC (f/k/a
Versus Global Multi-Manager Real Estate Income Fund LLC)
|
|
10.
|
Versus Capital Real Assets Fund LLC
|
(b)(1) The following are
the Officers and Manager of Quasar Distributors, LLC, one of the Registrant’s underwriters.
Name
|
Address
|
Position with Underwriter
|
Position with Registrant
|
Richard J. Berthy
|
Three Canal Plaza, Suite 100, Portland, ME 04101
|
President, Treasurer and Manager
|
None
|
Teresa M.K. Cowan
|
111 East Kilbourn Avenue, Suite 1250, Milwaukee, WI 53202
|
Vice President
|
None
|
Mark A. Fairbanks
|
Three Canal Plaza, Suite 100, Portland, ME 04101
|
Vice President
|
None
|
Jennifer K. DiValerio
|
899 Cassatt Road, 400 Berwyn Park, Suite 110, Berwyn, PA 19312
|
Vice President
|
None
|
Jennifer E. Hoopes
|
Three Canal Plaza, Suite 100, Portland, ME 04101
|
Secretary
|
None
|
Susan L. LaFond
|
111 East Kilbourn Avenue, Suite 1250, Milwaukee, WI 53202
|
Chief Compliance Officer – Distribution Services
|
None
|
Jennifer A. Brunner
|
111 East Kilbourn Avenue, Suite 1250, Milwaukee, WI 53202
|
Chief Compliance Officer – Dealer Clearing Services
|
None
|
Weston Sommers
|
Three Canal Plaza, Suite 100, Portland, ME 04101
|
Financial Operations Principal
|
None
|
|
(b)(2)
|
The following are the Officers and Manager of Foreside Funds Distributors LLC, one of the Registrant’s underwriters.
|
Name
|
Address
|
Position with Underwriter
|
Position with Registrant
|
Richard J. Berthy
|
Three Canal Plaza, Suite 100, Portland, ME 04101
|
President, Treasurer and Manager
|
None
|
Mark A. Fairbanks
|
Three Canal Plaza, Suite 100, Portland, ME 04101
|
Vice President
|
None
|
Jennifer K. DiValerio
|
899 Cassatt Road, 400 Berwyn Park, Suite 110, Berwyn, PA 19312
|
Vice President
|
None
|
Susan K. Moscaritolo
|
899 Cassatt Road, 400 Berwyn Park, Suite 110, Berwyn, PA 19312
|
Vice President and Chief Compliance Officer
|
None
|
Jennifer E. Hoopes
|
Three Canal Plaza, Suite 100, Portland, ME 04101
|
Secretary
|
None
|
|
Item 33.
|
LOCATION
OF ACCOUNTS AND RECORDS
|
|
(1)
|
Boston Partners Global Investors, Inc., One Grand Central Place, 60 East 42nd Street, Suite 1550, New York, New York 10165 (records relating to its function as investment adviser).
|
|
(2)
|
Schneider Capital Management Co., 1000 Westlakes Drive, Suite 150, Berwyn, Pennsylvania 19312 (records relating to its function as investment adviser).
|
|
(3)
|
Bogle Investment Management, L.P., 2310 Washington Street, Suite 310, Newton Lower Falls, Massachusetts 02462 (records relating to its function as investment adviser).
|
|
(4)
|
Matson Money, Inc. (formerly Abundance Technologies, Inc.), 5955 Deerfield Blvd., Mason, Ohio 45040 (records relating to its function as investment adviser).
|
|
(5)
|
Summit Global Investments, LLC, 620 South Main Street, Bountiful, Utah 84010 (records relating to its function as investment adviser).
|
|
(6)
|
Abbey Capital Limited, 1-2 Cavendish Row, Dublin 1, Ireland (records relating to its function as investment adviser).
|
|
(7)
|
Altair Advisers LLC, 303 West Madison, Suite 600, Chicago, Illinois 60606 (records relating to its function as investment adviser).
|
|
(8)
|
Campbell & Company Investment Adviser LLC, 2850 Quarry Lake Drive, Baltimore, Maryland 21209 (records relating to its function as investment adviser).
|
|
(9)
|
Motley Fool Asset Management, LLC, 2000 Duke Street, Suite 275, Alexandria, Virginia 22314 (records relating to its function as investment adviser).
|
|
(10)
|
Orinda Asset Management, LLC, 3390 Mt. Diablo Boulevard, Suite 250, Lafayette, California 94549 (records relating to its function as investment adviser).
|
|
(11)
|
U.S. Bancorp Fund Services, LLC, 615 East Michigan Street, Milwaukee, Wisconsin 53202 (records relating to its function as administrator, transfer agent and dividend disbursing agent).
|
|
(12)
|
U.S. Bank, N.A., 1555 North RiverCenter Drive, Suite 302, Milwaukee, Wisconsin, 53212 (records relating to its function as custodian).
|
|
(13)
|
Quasar Distributors, LLC, 111 East Kilbourn Avenue, Suite 1250, Milwaukee, Wisconsin 53202 (records relating to its function as underwriter).
|
|
(14)
|
Foreside Funds Distributors LLC, 899 Cassatt Road, 400 Berwyn Park, Suite 110, Berwyn, Pennsylvania 19312 (records related to its function as underwriter).
|
|
Item 34.
|
MANAGEMENT
SERVICES
|
None.
|
(a)
|
Registrant hereby undertakes to hold a meeting of shareholders for the purpose of considering the removal of directors in the event the requisite number of shareholders so request.
|
|
(b)
|
Registrant hereby undertakes to furnish each person to whom a prospectus is delivered a copy of Registrant’s latest annual report to shareholders upon request and without charge.
|
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, as amended (the “1933 Act”), and the Investment Company Act of 1940, as amended, the Registrant certifies
that it meets all of the requirements for effectiveness of this Post-Effective Amendment to its Registration Statement under Rule
485(b) under the 1933 Act and has duly caused this Post-Effective Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereto duly authorized, in the City of Chadds Ford, and Commonwealth of Pennsylvania on June 8, 2020.
|
THE RBB FUND, INC.
|
|
|
|
|
|
By:
|
/s/ Salvatore Faia
|
|
|
|
Salvatore Faia
|
|
|
|
President
|
|
Pursuant to the requirements of the 1933 Act,
this Amendment to Registrant’s Registration Statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/ Salvatore Faia
|
|
President (Principal Executive Officer) and Chief Compliance Officer
|
|
June 8, 2020
|
Salvatore Faia
|
|
|
|
|
|
|
|
|
/s/ James G. Shaw
|
|
Treasurer (Chief Financial Officer) and Secretary
|
|
June 8, 2020
|
James G. Shaw
|
|
|
|
|
|
|
|
|
|
*J. Richard Carnall
|
|
Director
|
|
June 8, 2020
|
J. Richard Carnall
|
|
|
|
|
|
|
|
|
|
*Julian A. Brodsky
|
|
Director
|
|
June 8, 2020
|
Julian A. Brodsky
|
|
|
|
|
|
|
|
|
|
*Arnold M. Reichman
|
|
Director
|
|
June 8, 2020
|
Arnold M. Reichman
|
|
|
|
|
|
|
|
|
|
*Robert Sablowsky
|
|
Director
|
|
June 8, 2020
|
Robert Sablowsky
|
|
|
|
|
|
|
|
|
|
*Robert Straniere
|
|
Director
|
|
June 8, 2020
|
Robert Straniere
|
|
|
|
|
|
|
|
|
|
*Nicholas A. Giordano
|
|
Director
|
|
June 8, 2020
|
Nicholas A. Giordano
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*Gregory P. Chandler
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Director
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June 8, 2020
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Gregory P. Chandler
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*Brian T. Shea
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Director
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June 8, 2020
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Brian T. Shea
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*By:
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/s/ Salvatore Faia
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Salvatore Faia
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Attorney-in-Fact
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THE RBB FUND, INC.
(the “Company”)
POWER OF ATTORNEY
Know All Men by These Presents,
that the undersigned, Julian A. Brodsky, hereby constitutes and appoints Salvatore Faia, Michael P. Malloy, James G. Shaw, Edward
Paz, and Robert Amweg, his true and lawful attorneys, to execute in his name, place, and stead, in his capacity as Director or
officer, or both, of the Company, the Registration Statement and any amendments thereto and all instruments necessary or incidental
in connection therewith, and to file the same with the Securities and Exchange Commission; and said attorneys shall have full power
and authority to do and perform in his name and on his behalf, in any and all capacities, every act whatsoever requisite or necessary
to be done in the premises, as fully and to all intents and purposes as he might or could do in person, said acts of said attorneys
being hereby ratified and approved.
DATED:
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February 16, 2017
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/s/ Julian A. Brodsky
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Julian A. Brodsky
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THE RBB FUND, INC.
(the “Company”)
POWER OF ATTORNEY
Know All Men by These Presents,
that the undersigned, J. Richard Carnall, hereby constitutes and appoints Salvatore Faia, Michael P. Malloy, James G. Shaw, Edward
Paz, and Robert Amweg, his true and lawful attorneys, to execute in his name, place, and stead, in his capacity as Director or
officer, or both, of the Company, the Registration Statement and any amendments thereto and all instruments necessary or incidental
in connection therewith, and to file the same with the Securities and Exchange Commission; and said attorneys shall have full power
and authority to do and perform in his name and on his behalf, in any and all capacities, every act whatsoever requisite or necessary
to be done in the premises, as fully and to all intents and purposes as he might or could do in person, said acts of said attorneys
being hereby ratified and approved.
DATED:
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February 16, 2017
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/s/ J. Richard Carnall
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J. Richard Carnall
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THE RBB FUND, INC.
(the “Company”)
POWER OF ATTORNEY
Know All Men by These Presents,
that the undersigned, Nicholas A. Giordano, hereby constitutes and appoints Salvatore Faia, Michael P. Malloy, James G. Shaw, Edward
Paz, and Robert Amweg, his true and lawful attorneys, to execute in his name, place, and stead, in his capacity as Director or
officer, or both, of the Company, the Registration Statement and any amendments thereto and all instruments necessary or incidental
in connection therewith, and to file the same with the Securities and Exchange Commission; and said attorneys shall have full power
and authority to do and perform in his name and on his behalf, in any and all capacities, every act whatsoever requisite or necessary
to be done in the premises, as fully and to all intents and purposes as he might or could do in person, said acts of said attorneys
being hereby ratified and approved.
DATED:
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February 16, 2017
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/s/ Nicholas A. Giordano
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Nicholas A. Giordano
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THE RBB FUND, INC.
(the “Company”)
POWER OF ATTORNEY
Know All Men by These Presents,
that the undersigned, Arnold M. Reichman, hereby constitutes and appoints Salvatore Faia, Michael P. Malloy, James G. Shaw, Edward
Paz, and Robert Amweg, his true and lawful attorneys, to execute in his name, place, and stead, in his capacity as Director or
officer, or both, of the Company, the Registration Statement and any amendments thereto and all instruments necessary or incidental
in connection therewith, and to file the same with the Securities and Exchange Commission; and said attorneys shall have full power
and authority to do and perform in his name and on his behalf, in any and all capacities, every act whatsoever requisite or necessary
to be done in the premises, as fully and to all intents and purposes as he might or could do in person, said acts of said attorneys
being hereby ratified and approved.
DATED:
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February 16, 2017
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/s/ Arnold M. Reichman
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Arnold M. Reichman
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THE RBB FUND, INC.
(the “Company”)
POWER OF ATTORNEY
Know All Men by These Presents,
that the undersigned, Robert Sablowsky, hereby constitutes and appoints Salvatore Faia, Michael P. Malloy, James G. Shaw, Edward
Paz, and Robert Amweg, his true and lawful attorneys, to execute in his name, place, and stead, in his capacity as Director or
officer, or both, of the Company, the Registration Statement and any amendments thereto and all instruments necessary or incidental
in connection therewith, and to file the same with the Securities and Exchange Commission; and said attorneys shall have full power
and authority to do and perform in his name and on his behalf, in any and all capacities, every act whatsoever requisite or necessary
to be done in the premises, as fully and to all intents and purposes as he might or could do in person, said acts of said attorneys
being hereby ratified and approved.
DATED:
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February 16, 2017
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/s/ Robert Sablowsky
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Robert Sablowsky
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THE RBB FUND, INC.
(the “Company”)
POWER OF ATTORNEY
Know All Men by These Presents,
that the undersigned, Robert A. Straniere, hereby constitutes and appoints Salvatore Faia, Michael P. Malloy, James G. Shaw, Edward
Paz, and Robert Amweg, his true and lawful attorneys, to execute in his name, place, and stead, in his capacity as Director or
officer, or both, of the Company, the Registration Statement and any amendments thereto and all instruments necessary or incidental
in connection therewith, and to file the same with the Securities and Exchange Commission; and said attorneys shall have full power
and authority to do and perform in his name and on his behalf, in any and all capacities, every act whatsoever requisite or necessary
to be done in the premises, as fully and to all intents and purposes as he might or could do in person, said acts of said attorneys
being hereby ratified and approved.
DATED:
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February 16, 2017
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/s/ Robert Straniere
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Robert Straniere
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THE RBB FUND, INC.
(the “Company”)
POWER OF ATTORNEY
Know All Men by These Presents,
that the undersigned, Gregory P. Chandler, hereby constitutes and appoints Salvatore Faia, Michael P. Malloy, James G. Shaw, Edward
Paz, and Robert Amweg, his true and lawful attorneys, to execute in his name, place, and stead, in his capacity as Director or
officer, or both, of the Company, the Registration Statement and any amendments thereto and all instruments necessary or incidental
in connection therewith, and to file the same with the Securities and Exchange Commission; and said attorneys shall have full power
and authority to do and perform in his name and on his behalf, in any and all capacities, every act whatsoever requisite or necessary
to be done in the premises, as fully and to all intents and purposes as he might or could do in person, said acts of said attorneys
being hereby ratified and approved.
DATED:
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February 17, 2017
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/s/ Gregory P. Chandler
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Gregory P. Chandler
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THE RBB FUND, INC.
(the “Company”)
POWER OF ATTORNEY
Know All Men by These Presents,
that the undersigned, Brian T. Shea, hereby constitutes and appoints Salvatore Faia, Michael P. Malloy, James G. Shaw, Edward Paz,
and Robert Amweg, his true and lawful attorneys, to execute in his name, place, and stead, in his capacity as Director or officer,
or both, of the Company, the Registration Statement and any amendments thereto and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission; and said attorneys shall have full power and authority
to do and perform in his name and on his behalf, in any and all capacities, every act whatsoever requisite or necessary to be done
in the premises, as fully and to all intents and purposes as he might or could do in person, said acts of said attorneys being
hereby ratified and approved.
DATED:
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May 10, 2018
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/s/ Brian T. Shea
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Brian T. Shea
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PEA 266/270
EXHIBIT
|
DESCRIPTION
|
(d)(46)
|
Investment Advisory Agreement (Campbell Systematic Macro Fund) between Registrant and Campbell & Company Investment Adviser LLC
|
(d)(47)
|
Investment Advisory Agreement (Campbell Systematic Macro Fund) between Campbell Systematic Macro Offshore Limited and Campbell & Company Investment Adviser LLC
|
(d)(48)
|
Expense Limitation and Reimbursement Agreement (Campbell Systematic Macro Fund) between Registrant and Campbell & Company Investment Adviser LLC
|
(d)(84)
|
Amended Appendix A to Expense Limitation and Reimbursement Agreement (SGI Funds) between Registrant and Summit Global Investments, LLC
|
(d)(85)
|
Amended Appendix A to Expense Limitation and Reimbursement Agreement (Boston Partners Investment Funds) between Registrant and Boston Partners Global Investors, Inc.
|
(d)(86)
|
Investment Advisory Agreement (SGI Peak Growth Fund, SGI Prudent Growth Fund, and SGI Conservative Fund) between Registrant and Summit Global Investments, LLC
|
(d)(87)
|
Addendum No. 7 to Investment Advisory Agreement (Boston Partners Small Cap Value Fund II, Boston Partners Emerging Markets Fund and Boston Partners Emerging Markets Long/Short Fund) between Registrant and Boston Partners Global Investors, Inc.
|
(e)(14)(a)
|
Novation Agreement between Registrant, Quasar Distributors, LLC, and Motley Fool Asset Management, LLC
|
(g)(2)
|
First Amendment to the Amended and Restated Custody Agreement between Registrant and U.S. Bank National Association
|
(h)(8)
|
First Amendment to the Amended and Restated Fund Accounting Servicing Agreement between Registrant and U.S. Bancorp Fund Services, LLC
|
(h)(9)
|
First Amendment to the Amended and Restated Fund Administration Servicing Agreement between Registrant and U.S. Bancorp Fund Services, LLC
|
(h)(10)
|
First Amendment to the Amended and Restated Transfer Agent Servicing Agreement between Registrant and U.S. Bancorp Fund Services, LLC
|
(i)(2)
|
Consent of Counsel
|
(l)(30)
|
Purchase Agreement (Campbell Systematic Macro Fund) between Registrant and Campbell & Company Investment Adviser LLC
|
(l)(39)
|
Purchase Agreement (SGI Peak Growth Fund, SGI Prudent Growth Fund, and SGI Conservative Fund) between Registrant and Summit Global Investments, LLC
|
(p)(11)
|
Code of Ethics of Driehaus Capital Management LLC
|
Motley Fool 100 Index ETF (AMEX:TMFC)
過去 株価チャート
から 11 2024 まで 12 2024
Motley Fool 100 Index ETF (AMEX:TMFC)
過去 株価チャート
から 12 2023 まで 12 2024