U.S. SECURITIES AND EXCHANGE COMMISSION
Matthew J. Beck
This Prospectus has information about the
Fund that you should know before you invest. You should read it carefully and keep it with your investment records.
The U.S. Securities and Exchange Commission
has not approved or disapproved the Fund’s shares or passed on the accuracy or adequacy of this Prospectus. Any representation
to the contrary is a criminal offense.
Beginning on January 1, 2021, as permitted
by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the Fund’s shareholder reports will
no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary,
such as a broker-dealer or bank. 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 Fund electronically by contacting the Fund at 1-833-517-1010 or, if you own these shares
through a financial intermediary, you may contact your financial intermediary.
You may elect to receive all future reports
in paper free of charge. You can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by
contacting the Fund at 1-833-517-1010. If you own shares through a financial intermediary, you may contact your financial intermediary
or follow instructions included with this disclosure to elect to continue to receive paper copies of your shareholder reports.
Your election to receive reports in paper will apply to all funds held with the fund complex or at your financial intermediary.
HOW TO BUY SHARES
Shares are available for purchase from
the Fund every day the NYSE is open for business, at the NAV next calculated after receipt of a purchase order in proper form.
The Fund reserves the right to reject any purchase request and/or suspend its offering of shares at any time. Investors who purchase
shares through a broker-dealer or other financial intermediary may be charged a fee by such broker-dealer or intermediary. The
Fund mails you confirmations of all purchases or redemptions of Fund shares if shares are purchased directly through the Fund.
Certificates representing Fund shares are not issued.
Minimum Initial Investment
The minimum initial investment amount for
all regular accounts is $50,000. This minimum investment requirement may be waived or reduced for any reason at the discretion
of the Fund.
Opening an Account
An account may be opened by mail or bank
wire if it is submitted in proper form, as follows:
By Mail. To open a new account
by mail:
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Complete and sign the account application.
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Enclose a check payable to the Evolutionary Tree Innovators Fund.
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Mail the application and the check to the Transfer Agent at the following address:
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Evolutionary Tree Innovators Fund
c/o Ultimus Fund Solutions, LLC
P.O. Box 46707
Cincinnati, Ohio 45246-0707
Shares will be issued at the NAV next computed
after receipt of your application, in proper form, and check. All purchases must be made in U.S. dollars and checks must be drawn
on U.S. financial institutions. The Fund does not accept cash, drafts, “starter” checks, travelers checks, credit card
checks, post-dated checks, non-U.S. financial institution checks, cashier’s checks under $10,000, or money orders. In addition,
the Fund does not accept checks made payable to third parties. When shares are purchased by check, the proceeds from the redemption
of those shares will not be paid until the purchase check has been converted to federal funds, which could take up to 15 calendar
days from the date of purchase. If an order to purchase shares is canceled because your check does not clear, you will be responsible
for any resulting losses or other fees incurred by the Fund or the Transfer Agent in the transaction.
By sending your check to the Transfer Agent,
please be aware that you are authorizing the Transfer Agent to make a one-time electronic debit from your account at the financial
institution indicated on your check. Your bank account will be debited as early as the same day the Transfer Agent receives your
payment in the amount of your check; no additional amount will be added to the total. The transaction will appear on your bank
statement. Your original check will be destroyed once processed, and you will not receive your canceled check back. If the Transfer
Agent cannot post the transaction electronically, you authorize the Transfer Agent to present an image copy of your check for payment.
By Wire. To open a new account
by wire of federal funds, call the Transfer Agent at 1-833-517-1010 to obtain the necessary information to instruct your financial
institution to wire your investment. A representative will assist you in obtaining an account application, which must be completed,
signed and faxed (or mailed) to the Transfer Agent before payment by wire will be accepted.
The Fund requires advance notification
of all wire purchases in order to ensure that the wire is received in proper form and that your account is subsequently credited
in a timely fashion. Failure to notify the Transfer Agent prior to the transmittal of the bank wire may result in a delay in purchasing
shares of the Fund. An order, following proper advance notification to the Transfer Agent, is considered received when the Fund’s
custodian, receives payment by wire. If your account application was faxed to the Transfer Agent, you must also mail the completed
account application to the Transfer Agent on the same day the wire payment is made. See “Opening an Account – By Mail”
above. Your financial institution may charge a fee for wiring funds. Shares will be issued at the NAV next computed after receipt
of your wire in proper form.
Through Your Broker or Financial
Institution. Shares of the Fund may be purchased through certain brokerage firms and financial institutions that are authorized
to accept orders on behalf of the Fund at the NAV next determined after your order is received by such organization in proper form.
These organizations are authorized to designate other intermediaries to receive purchase orders on the Fund’s behalf. The
Fund will be deemed to have received a purchase or redemption order when an authorized broker or, if applicable, a broker’s
authorized designee, receives the order in proper form. Certain financial intermediaries may charge fees for purchase and/or redemption
transactions by customers, depending upon the nature and terms of the financial intermediaries’ particular platform. Additionally,
investors purchasing shares from a broker or other financial intermediary may be required to pay a commission in connection with
such purchases. Such investor should consult with their financial intermediary regarding any commissions and other fees and expenses
of the shares being purchased. These organizations may charge you transaction fees on purchases of Fund shares and may impose other
charges or restrictions or account options that differ from those applicable to shareholders who purchase shares directly through
the Fund. These organizations may be the shareholders of record of your shares. The Fund is not responsible for ensuring that these
organizations carry out their obligations to their customers. Shareholders investing in this manner should look to the organization
through which they invest for specific instructions on how to purchase and redeem shares.
Subsequent Investments
Once an account is open, additional purchases
of Fund shares may be made at any time for a minimum amount of $1,000 for all regular accounts. Additional purchases must be submitted
in proper form as described below. Additional purchases may be made:
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By sending a check, made payable to the Evolutionary Tree Innovators Fund, c/o Ultimus Fund Solutions, LLC, P.O. Box 46707, Cincinnati, Ohio 45246-0707. Be sure to note your account number on the memo line of your check. The shareholder will be responsible for any fees incurred or losses suffered by the Fund as a result of any check returned for insufficient funds.
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By wire to the Fund account as described under “Opening an Account – By Wire.” Shareholders are required to call the Transfer Agent at 1-833-517-1010 before wiring funds.
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Through your brokerage firm or other financial institution.
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Automatic Investment Plan and Direct Deposit Plans
You may make automatic monthly investments
in the Fund from your bank, savings and loan or other depository institution. The minimum investments under the automatic investment
plan must be at least $100 under the plan and are made on the 15th and/or last business day of the month. The Transfer Agent currently
pays the costs of this service, but reserves the right, upon 30 days written notice, to make reasonable charges. Your depository
institution may impose its own charge for making transfers from your account.
Your employer may offer a direct deposit
plan, which will allow you to have all or a portion of your paycheck transferred automatically to purchase shares of the Fund.
Social Security recipients may have all or a portion of their social security check transferred automatically to purchase shares
of the Fund. Please call 1-833-517-1010 for more information about the automatic investment plan and direct deposit plans.
Purchases in Kind
The Fund may accept securities in lieu
of cash in payment for the purchase of shares of the Fund. The acceptance of such securities is at the sole discretion of the Adviser
based upon the suitability of the securities as an investment for the Fund, the marketability of such securities, and other factors
which the Fund may deem appropriate. If accepted, the securities will be valued using the same criteria and methods utilized for
valuing securities to compute the Fund’s NAV.
Customer Identification and Verification
To help the government fight the funding
of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information
that identifies each person that opens a new account, and to determine whether such person’s name appears on government lists
of known or suspected terrorists and terrorist organizations. As a result, the Fund must obtain the following information for each
person that opens a new account:
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Date of birth (for individuals);
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Residential or business street address (although post office boxes are still permitted for mailing); and
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Social security number, other taxpayer identification number, or other identifying number.
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You may also be asked for a copy of your
driver’s license, passport, or other identifying document in order to verify your identity. In addition, it may be necessary
to verify your identity by cross-referencing your identification information with a consumer report or other electronic database.
Additional information may be required to open accounts for corporations and other entities. Federal law prohibits the Fund
and other financial institutions from opening a new account unless they receive the minimum identifying information listed above.
After an account is opened, the Fund may
restrict your ability to purchase additional shares until your identity is verified. The Fund also may close your account or take
other appropriate action if it is unable to verify your identity within a reasonable time. If your account is closed for this reason,
your shares will be redeemed at the NAV next calculated after the account is closed. In that case, your redemption proceeds may
be worth more or less than your original investment. The Fund will not be responsible for any loss incurred due to the Fund’s
inability to verify your identity.
Frequent Trading Policies
Frequent purchases and redemptions of Fund
shares by a shareholder may harm other Fund shareholders by interfering with the efficient management of the Fund’s portfolio,
increasing brokerage and administrative costs, and potentially diluting the value of the Fund’s shares. The Fund does not
accommodate frequent purchases or redemptions of Fund shares that result in disruptive trading.
The Board has adopted policies and procedures
in an effort to detect and prevent disruptive trading, including market timing in the Fund. The Fund, through its service providers,
monitors shareholder trading activity to ensure it complies with the Fund’s policies. The Fund prepares reports illustrating
purchase and redemption activity to detect disruptive trading activity. When monitoring shareholder purchases and redemptions,
the Fund does not apply a quantitative definition to frequent trading. Instead the Fund uses a subjective approach that permits
it to reject any purchase orders that it believes may be indicative of market timing or disruptive trading. The right to reject
a purchase order applies to any purchase order, including a purchase order placed by financial intermediaries. The Fund may also
modify any terms or conditions of purchases of Fund shares or withdraw all or any part of the offering made by this Prospectus.
The Fund’s policies and procedures to prevent disruptive trading activity are applied uniformly to all shareholders. These
actions, in the Board’s opinion, should help reduce the risk of abusive trading in the Fund.
When financial intermediaries establish
omnibus accounts in the Fund for their clients, the Fund reviews trading activity at the omnibus account level and looks for activity
that may indicate potential frequent trading or disruptive trading. If the Fund detects potentially disruptive trading activity,
the Fund will seek the assistance of the intermediary to investigate that trading activity and take appropriate action, including
prohibiting additional purchases of Fund shares by the intermediary and/or its client. Each intermediary that offers the Fund’s
shares through an omnibus account has entered into an information sharing agreement with the Fund designed to assist the Fund in
stopping future disruptive trading. Intermediaries may apply frequent trading policies that differ from those described in this
Prospectus. If you invest in the Fund through an intermediary, please read that firm’s program materials carefully to learn
of any rules or fees that may apply.
Although the Fund has taken steps to discourage
frequent purchases and redemptions of Fund shares, it cannot guarantee that such trading will not occur.
HOW TO REDEEM SHARES
Shares of the Fund may be redeemed on any
day on which the Fund computes its NAV. Shares are redeemed at their NAV next determined after the Transfer Agent receives your
redemption request in proper form as described below. Redemption requests may be made by mail or by telephone.
By Mail. You may redeem shares by
mailing a written request to Evolutionary Tree Innovators Fund, c/o Ultimus Fund Solutions, LLC, P.O. Box 46707, Cincinnati, Ohio
45246-0707. Written requests must state the shareholder’s name, the account number and the shares or dollar amount to be
redeemed and be signed exactly as the shares are registered with the Fund.
Signature Guarantees. If the shares
to be redeemed have a value of greater than $50,000, or if the payment of the proceeds of a redemption of any amount is to be sent
to a person other than the shareholder of record or to an address other than that on record with the Fund, you must have all signatures
on written redemption requests guaranteed. If the name(s) or the address on your account has changed within the previous 15 days
of your redemption request, the request must be made in writing with your signature guaranteed, regardless of the value of the
shares being redeemed. The Transfer Agent will accept signatures guaranteed by a domestic bank or trust company, broker, dealer,
clearing agency, savings association or other financial institution that participates in the Securities Transfer Agents Medallion
Program (“STAMP”) sponsored by the Securities Transfer Association. Signature guarantees from financial institutions
that do not participate in STAMP will not be accepted. A notary public cannot provide a signature guarantee. The Transfer Agent
has adopted standards for accepting signature guarantees from the above institutions. The Fund and the Transfer Agent reserve the
right to amend these standards at any time without notice.
Redemption requests by corporate and fiduciary
shareholders must be accompanied by appropriate documentation establishing the authority of the person seeking to act on behalf
of the account. Forms of resolutions and other documentation to assist in compliance with the Transfer Agent’s procedures
may be obtained by calling the Transfer Agent.
By Telephone. Unless you specifically
decline the telephone redemption privilege on your account application, you may also redeem shares having a value of $50,000 or
less by telephone by calling the Transfer Agent at 1-833-517-1010.
Telephone redemptions may be requested
only if the proceeds are to be sent to the shareholder of record and mailed to the address on record with the Fund. Account designations
may be changed by sending the Transfer Agent a written request with all signatures guaranteed as described above. Upon request,
redemption proceeds of $100 or more may be transferred electronically from an account you maintain with a financial institution
by an Automated Clearing House (“ACH”) transaction, and proceeds of $1,000 or more may be transferred by wire, in either
case to the account registration stated on the account application. Shareholders may be charged a fee of $15 by the Fund’s
custodian for outgoing wires.
The Transfer Agent requires personal identification
before accepting any redemption request by telephone, and telephone redemption instructions may be recorded. If reasonable procedures
are followed by the Transfer Agent, neither the Transfer Agent nor the Fund will be liable for losses due to unauthorized or fraudulent
telephone instructions. “Reasonable procedures” include but are not limited to the Transfer Agent confirming that the
account is eligible for telephone transactions, requesting some form of personal identification (e.g., social security number,
date of birth, etc.) from you prior to acting on telephonic instructions, and getting a verbal confirmation from you on a recorded
line at the time of the transaction. In the event of drastic economic or market changes, a shareholder may experience difficulty
in redeeming shares by telephone. If such a case should occur, redemption by mail should be considered.
Through Your Broker or Financial Institution.
You may also redeem your shares through a brokerage firm or financial institution that has been authorized to accept orders
on behalf of the Fund at the NAV next determined after your order is received by such organization in proper form. These organizations
are authorized to designate other intermediaries to receive redemption orders on the Fund’s behalf. The Fund calculates its
NAV as of the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time). Your brokerage firm or financial institution
may require a redemption request to be received, in proper form, at an earlier time during the day in order for your redemption
to be effective as of the day the order is received. Such an organization may charge you transaction fees on redemptions of Fund
shares and may impose other charges or restrictions or account options that differ from those applicable to shareholders who redeem
shares directly through the Transfer Agent.
Receiving Payment
The length of time the Fund typically
expects to pay redemption proceeds is the same regardless of whether the payment is made by check, wire or ACH. The Fund typically
expects to pay redemption proceeds for shares redeemed within the following days after receipt by the Transfer Agent of a redemption
request in proper form:
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For payment by check, the Fund typically expects to mail the check within one (1) to three (3) business days; and
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For payment by wire or ACH, the Fund typically expects to process the payment within one (1) to three (3) business days.
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Payment of redemption proceeds may take
longer than the time the Fund typically expects and may take up to 7 calendar days as permitted under the Investment Company Act
of 1940, as amended (the “1940 Act”). Under unusual circumstances as permitted by the SEC, the Fund may suspend the
right of redemption or delay payment of redemption proceeds for more than 7 calendar days. When shares are purchased by check or
through ACH, the proceeds from the redemption of those shares will not be paid until the purchase check or ACH transfer has been
converted to federal funds, which could take up to 15 calendar days.
Minimum Account Balance
Due to the high cost of maintaining shareholder
accounts, the Fund may involuntarily redeem shares in an account, and pay the proceeds to the shareholder, if the shareholder’s
activity causes the account balance to fall below the investment minimum (the “Minimum Account Balance”). Such automatic
redemptions may cause a taxable event for the shareholder. An automatic redemption does not apply, however, if the balance falls
below the Minimum Account Balance solely because of a decline in the Fund’s NAV. Before shares are redeemed to close an account,
the shareholder is notified in writing and allowed 30 calendar days to purchase additional shares to meet the Minimum Account Balance
requirement.
Automatic Withdrawal Plan
If the shares of the Fund in your account
have a value of at least $5,000, you (or another person you have designated) may receive monthly or quarterly payments in a specified
amount of not less than $100 each. There is currently no charge for this service, but the Transfer Agent reserves the right, upon
30 calendar days written notice, to make reasonable charges. Call the Transfer Agent toll-free at 1-833-517-1010 for additional
information.
Other Redemption Information
Generally, all redemptions will be paid
in cash. The Fund typically expects to satisfy redemption requests by using holdings of cash or cash equivalents or selling portfolio
assets. On a less regular basis and if the Adviser believes it is in the best interest of the Fund and its shareholders not to
sell portfolio assets, the Fund may satisfy redemption requests by using short-term borrowing from the Fund’s custodian.
These methods normally will be used during both regular and stressed market conditions. In addition to paying redemption proceeds
in cash, the Fund reserves the right to make payment for a redemption in securities rather than cash, which is known as a “redemption
in kind.” Redemptions in kind will be made only under extraordinary circumstances and if the Fund deems it advisable for
the benefit of all shareholders, such as a very large redemption that could affect Fund operations (for example, more than 1% of
the Fund’s net assets). A redemption in kind will consist of securities equal in market value to the Fund shares being redeemed,
using the same valuation procedures that the Fund uses to compute its NAV. Redemption in kind proceeds will typically be made by
delivering a pro-rata amount of the Fund’s holdings to the redeeming shareholder within 7 calendar days after the Fund’s
receipt of the redemption order in proper form. If the Fund redeems your shares in kind, you will bear the market risks associated
with maintaining or selling the securities that are transferred as redemption proceeds. In addition, when you sell these securities,
you may pay taxes and brokerage charges associated with selling the securities.
STATEMENT
OF ADDITIONAL INFORMATION
The
Evolutionary Tree Innovators Fund (the “Fund”) is a non-diversified series of Ultimus Managers Trust (the “Trust”),
an open-end management investment company. The Trust is an unincorporated business trust that was organized under Ohio law on
February 28, 2012. The Fund’s investments are managed by Evolutionary Tree Capital Management, LLC (the “Adviser”).
For further information on the Fund, please call 1-833-517-1010.
ADDITIONAL
INFORMATION ON INVESTMENTS, STRATEGIES AND RISKS
Information
contained in this SAI expands upon information contained in the Prospectus. All investments in securities and other financial
instruments involve a risk of financial loss. No assurance can be given that the Fund’s investment programs will be successful.
Investors should carefully review the descriptions of the Fund’s investments and associated risks described in the Prospectus
and this SAI. No investment in shares of the Fund should be made without first reading the Prospectus. Unless otherwise indicated,
percentage limitations apply at the time of purchase of the applicable securities.
General
Investment Risks. Prices of securities in which the Fund invests may fluctuate in response to many factors, including, but
not limited to, the activities of the individual companies whose securities the Fund owns, general market and economic conditions,
interest rates, and specific industry changes. Such price fluctuations subject the Fund to potential losses. In addition, regardless
of any one company’s particular prospects, a declining stock market may produce a decline in prices for all securities,
which could also result in losses for the Fund. Market declines may continue for an indefinite period of time, and investors should
understand that during temporary or extended bear markets, the value of all types of securities, including securities held by
the Fund, can decline.
Diversification. The
Fund is non-diversified. A non-diversified fund is a fund that does not satisfy the definition of a “diversified company”
set forth in the Investment Company Act of 1940, as amended (the “1940 Act”). A “diversified company”
means that as to 75% of the Fund’s total assets (1) no more than 5% may be invested in the securities of a single issuer,
and (2) the Fund may not hold more than 10% of the outstanding voting securities of a single issuer. As a result of being a non-diversified
fund, the Fund may invest a greater percentage of its assets in a particular issuer and hold securities in only a few issuers.
Even
though the Fund is non-diversified, it intends to qualify as a “regulated investment company” under the Internal Revenue
Code of 1986, as amended, (the “Code”) and as such, the Fund seeks to limit its investment, excluding cash, cash items
(including receivables), United States (“U.S.”) government securities and securities of other regulated investment
companies, so that at the close of each quarter of the taxable year, (1) not more than 25% of the Fund’s total assets will
be invested in the securities of a single issuer, and (2) with respect to 50% of its total assets, not more than 5% of the Fund’s
total assets will be invested in the securities of a single issuer nor represent more than 10% of the issuer’s outstanding
voting securities.
Because
the Fund may invest a great percentage of its assets in the securities of fewer issuers, the Fund is subject to the risk that
its performance may be hurt disproportionately by the poor performance of relatively few securities.
Market
Risk. Market risk is the risk that the value of the securities in the Fund’s portfolio may decline due to daily fluctuations
in the securities markets that are generally beyond the Adviser’s control, including fluctuation in interest rates, the
quality of the Fund’s investments, economic conditions and general market conditions. Certain market events could increase
volatility and exacerbate market risk, and could result in trading halts, such as changes in governments’ economic policies,
political turmoil, environmental events, trade disputes, terrorism, military action and epidemics, pandemics or other public health
issues. Any of the foregoing market events can adversely affect the economies of one or more countries or the entire global economy,
certain industries or individual issuers, and capital and security markets in ways that cannot necessarily be foreseen or quickly
addressed.
As
shown with the novel coronavirus disease that has recently emerged (COVID-19), market events (including public health crises and
concerns) can have a profound economic and business effect that results in cancellations and disruptions to supply chains and
customer activity, disruption and displacement of one or more sectors or industries, closing of borders and imposition of travel
restrictions and quarantines, general public concern and uncertainty and, in extreme cases, exchange trading halts due to rapidly
falling prices. Further, the impact of COVID-19 has caused significant volatility and declines in global financial markets, including
the U.S. financial markets. The duration and lasting impact of the COVID-19 outbreak is unclear and may not be fully known for
some time.
Market
events such as these and other types of market events may cause significant declines in the values and liquidity of many securities
and other instruments, and significant disruptions to global business activity and financial markets. Turbulence in financial
markets, and reduced liquidity in equity, credit and fixed income markets may negatively affect many issuers both domestically
and around the world, and can result in trading halts, any of which could have an adverse impact on the Fund. During periods of
market volatility, security prices (including securities held by the Fund) could change drastically and rapidly and therefore
adversely affect the Fund.
Equity
Securities. The equity portion of the Fund’s portfolio will generally be comprised of domestic and foreign issuers,
including common stocks, depositary receipts evidencing ownership in foreign common stocks, preferred stocks, securities convertible
into common stocks and securities that carry the right to buy common stocks, traded on domestic securities exchanges or over-the-counter
markets. The prices of equity securities in which the Fund invests may fluctuate in response to many factors, including, but not
limited to, the activities of the individual companies whose securities the Fund owns, general market and economic conditions,
interest rates, and specific industry changes. Such price fluctuations subject the Fund to potential losses. In addition, regardless
of any one company’s particular prospects, a declining stock market may produce a decline in prices for all equity securities,
which could also result in losses for the Fund.
Common
Stock. The Fund may purchase common stock. Prices of common stock may fluctuate in response to many factors, including, but
not limited to, the activities of the individual companies whose stock the Fund owns, general market and economic conditions,
interest rates, and specific industry changes. Such price fluctuations subject the Fund to potential loss. In addition, regardless
of any one company’s particular prospects, a declining stock market may produce a decline in prices for all stocks, which
also result in losses for the Fund.
Currency
Risk. The value of the Fund’s assets, as measured in U.S. dollars, may be affected favorably or unfavorably by changes
in currency exchange rates and exchange control regulations. As a result, the Fund’s exposure to foreign currencies may
reduce the returns of the Fund. Trading of foreign currencies also includes the risk of clearing and settling trades, which, if
prices are volatile, may be difficult.
Emerging
Markets Risk. The Fund may invest directly and indirectly in emerging market equity and fixed-income securities. In addition
to the general risk of investing in foreign securities and foreign fixed-income securities, investing in emerging markets can
involve greater and more unique risks than those associated with investing in more developed markets. The securities markets of
emerging countries are generally small, less developed, less liquid, and more volatile than securities markets of the U.S. and
other developed markets. The risks of investing in emerging markets include greater social, political and economic uncertainties.
Emerging market economics are often dependent upon a few commodities or natural resources that may be significantly adversely
affected by volatile price movements against those commodities or natural resources. Emerging market countries may experience
high levels of inflation and currency devaluation and have fewer potential buyers for investments. The securities markets and
legal systems in emerging market countries may only be in a developmental stage and may provide few, or none, of the advantages
and protections of markets or legal systems in more developed countries. Some of these countries may have in the past failed to
recognize private property rights and have at times nationalized or expropriated the assets of private companies. Additionally,
if settlements do not keep pace with the volume of securities transactions, they may be delayed, potentially causing the Fund’s
assets to be uninvested, the Fund to miss investment opportunities and potential returns, and the Fund to be unable to sell an
investment. As a result of these various risks, investments in emerging markets are considered to be speculative and may be highly
volatile.
Preferred
Stock. The Fund may invest in preferred stock. Preferred stocks are securities that represent an ownership interest providing
the holder with claims on the issuer’s earnings and assets before common stock owners but after bond owners. Unlike debt
securities, the obligations of an issuer of preferred stock, including dividend and other payment obligations, may not typically
be accelerated by the holders of such preferred stock on the occurrence of an event of default or other non-compliance by the
issuer of the preferred stock. Preferred stocks may include the obligation to pay a stated dividend. The price of preferred stocks
could depend more on the size of the dividend than on the company’s performance. If a company fails to pay the dividend,
its preferred stock is likely to drop in price. Changes in interest rates can also affect the price of preferred stock.
Warrants
and Rights. The Fund may purchase warrants and rights, or it may acquire ownership of such investments by virtue of its ownership
of common stocks. Warrants are essentially options to purchase equity securities at specific prices and are valid for a specific
period of time. Rights are similar to warrants but generally have a short duration and are distributed directly by the issuer
to its shareholders. The holders of warrants and rights have no voting rights, and receive no dividends, with respect to the equity
interests underlying warrants or rights, and will have no rights with respect to the assets of the issuer, until the warrant or
right is exercised. Investments in warrants and rights involve certain risks, including the possible lack of a liquid market for
resale, potential price fluctuations as a result of speculation or other factors, and failure of the price of the underlying security
to reach or have reasonable prospects of reaching a level at which the warrant or right can be prudently exercised (in which event
the warrant or right may expire without being exercised, resulting in a loss of the Fund’s entire investment therein).
Foreign
Securities. The Fund may invest in securities issued by foreign governments or foreign corporations, directly or indirectly
through exchange traded funds (“ETFs”) or derivative transactions (e.g., foreign currency futures). The Fund may invest
in securities of foreign issuers that trade on U.S. and foreign stock exchanges or in the form of American Depositary Receipts
(“ADRs”).
ADRs
are receipts that evidence ownership of underlying securities issued by a foreign issuer. ADRs are generally issued by a U.S.
bank or trust company to U.S. buyers as a substitute for direct ownership of a foreign security and are traded on U.S. exchanges.
ADRs, in registered form, are designed for use in the U.S. securities markets. ADRs may be purchased through “sponsored”
or “unsponsored” facilities. A sponsored facility is established jointly by the issuer of the underlying security
and a depositary. A depositary may establish an unsponsored facility without participation by the issuer of the deposited security.
The depositary of an unsponsored ADR is under no obligation to distribute shareholder communications received from the issuer
of the deposited security or to pass through voting rights with respect to the deposited security. Investments in ADRs are subject
to risks similar to those associated with direct investments in foreign securities. The Fund intends to invest primarily in foreign
securities that are listed on U.S. stock exchanges.
Investing
in the securities of foreign issuers involves special risks and considerations not typically associated with investing in U.S.
companies. The performance of foreign markets does not necessarily track U.S. markets. Foreign investments may be affected favorably
or unfavorably by changes in currency rates, exchange control regulations, and capital controls. There may be less publicly available
information about a foreign company than about a U.S. company, and foreign companies may not be subject to accounting, auditing
and financial reporting standards, and requirements comparable to those applicable to U.S. companies. Foreign securities often
trade with less frequency and volume than domestic securities and, therefore, may exhibit less liquidity and greater price volatility
than securities of U.S. companies. There may be less governmental supervision of securities markets, brokers and issuers of securities
than in the U.S. Changes in foreign exchange rates will affect the value of those securities, which are denominated or quoted
in currencies other than the U.S. dollar. Therefore, to the extent the Fund invests in a foreign security, which are denominated
or quoted in currencies other than the U.S. dollar, there is the risk that the value of such security will decrease due to changes
in the relative value of the U.S. dollar and the securities underlying foreign currency. Additional costs associated with an investment
in foreign securities may include higher custodial fees than those applicable to domestic custodial arrangements, generally higher
commission rates on foreign portfolio transactions, and transaction costs of foreign currency conversions. Investments in foreign
securities may also be subject to other risks different from those affecting U.S. investments, including local political or economic
developments, expropriation or nationalization of assets, restrictions on foreign investment and repatriation of capital, imposition
of withholding taxes on dividend or interest payments, currency blockage (which would prevent cash from being brought back to
the U.S.), limits on proxy voting and difficulty in enforcing legal rights outside the U.S. Currency exchange rates and regulations
may cause fluctuation in the value of foreign securities. In addition, foreign securities and dividends and interest payable on
those securities, may be subject to foreign taxes, including taxes withheld from payments on those securities.
Investment
Companies. The Fund may, from time to time, invest in securities of other investment companies, including, without limitation,
money market funds and ETFs. Generally, under the Investment Company Act of 1940, as amended (the “1940 Act”), a fund
may not acquire shares of another investment company if, immediately after such acquisition, (i) a fund would hold more than 3%
of the other investment company’s total outstanding shares, (ii) a fund’s investment in securities of the other investment
company would be more than 5% of the value of the total assets of the fund, or (iii) more than 10% of a fund’s total assets
would be invested in investment companies. Under certain conditions, a fund may invest in registered and unregistered money market
funds in excess of these limitations. The Fund expects to rely on Rule 12d1-1 under the 1940 Act when purchasing shares of a money
market fund. Under Rule 12d1-1, the Fund may generally invest without limitation in money market funds as long as the Fund pays
no sales charge (“sales charge”), as defined in rule 2830(b)(8) of the Conduct Rules of the Financial Industry Regulatory
Authority (“FINRA”), or service fee, as defined in rule 2830(b)(9) of the Conduct Rules of FINRA, charged in connection
with the purchase, sale, or redemption of securities issued by the money market fund (“service fee”); or the Adviser
waives its management fee in an amount necessary to offset any sales charge or service fee. The Fund generally expects to rely
on Section 12(d)(1)(F) of the 1940 Act when purchasing shares of other investment companies that are not money market funds. Under
Section 12(d)(1)(F), the Fund may generally acquire shares of another investment company unless, immediately after such acquisition,
the Fund and its affiliated persons would hold more than 3% of the investment company’s total outstanding stock (the “3%
Limitation”). To the extent the 3% Limitation applies to an investment the Fund wishes to make, the Fund may be prevented
from allocating its investments in the manner that the Adviser considers optimal. Also, under the 1940 Act, to the extent that
the Fund relies upon Section 12(d)(1)(F) in purchasing securities issued by another investment company, the Fund must either seek
instructions from its shareholders with regard to the voting of all proxies with respect to its investment in such securities
and vote such proxies only in accordance with the instructions, or vote the shares held by it in the same proportion as the vote
of all other holders of the securities. In the event that there is a vote of investment company shares held by the Fund in reliance
on Section 12(d)(1)(F), the Fund intends to vote such shares in the same proportion as the vote of all other holders of such securities.
Investments in other investment companies subjects the Fund to additional operating and management fees and expenses. For example,
Fund’s investors will indirectly bear fees and expenses charged by underlying investment companies in which the Fund invests,
in addition to the Fund’s direct fees and expenses.
Exchange
Traded Funds. The Fund may invest in ETFs. An ETF is typically an investment company registered under the 1940 Act that holds
a portfolio of common stocks designed to track the performance of a particular index or market sector. Alternatively, ETFs may
be actively managed pursuant to a particular investment strategy, similar to other non-index based investment companies. In addition,
ETFs sell and redeem their shares at net asset value (“NAV”) in large blocks (typically 50,000 of its shares) called
“creation units.” Shares representing fractional interests in these creation units are listed for trading on national
securities exchanges and can be purchased and sold in the secondary market like ordinary stocks in lots of any size at any time
during the trading day. ETFs are traded on a securities exchange based on their market value.
An
investment in an ETF generally presents the same primary risks as an investment in a conventional registered investment company
(i.e., one that is not exchange traded), including the risk that the general level of securities prices, or that the prices of
securities within a particular sector, may increase or decrease, thereby affecting the value of the shares of an ETF. In addition,
ETFs are subject to the following risks that do not apply to conventional registered investment companies: (1) the market price
of the ETF’s shares may trade at a discount to the ETF’s NAV; (2) an active trading market for an ETF’s shares
may not develop or be maintained; (3) trading of an ETF’s shares may be halted if the listing exchange deems such action
appropriate; and (4) ETF shares may be delisted from the exchange on which they trade, or “circuit breakers” (which
are tied to large decreases in stock prices) may halt trading temporarily. ETFs are also subject to the risks of the underlying
securities or sectors the ETF is designed to track.
Because
ETFs and pools that issue similar instruments bear various fees and expenses, the Fund will pay a proportionate share of these
expenses, as well as transaction costs, such as brokerage commissions. As with traditional registered investment companies, ETFs
charge asset-based fees, although these fees tend to be relatively low as compared to other type of mutual funds. ETFs do not
charge initial sales loads or redemption fees and investors pay only customary brokerage fees to buy and sell ETF shares.
The
U.S. Securities and Exchange Commission (the “SEC”) has granted orders for exemptive relief to certain ETFs that permit
investments in those ETFs by other investment companies (such as the Fund) in excess of the limits discussed above under the section
entitled “Investment Companies”. The Fund may invest in ETFs that have received such exemptive orders from the SEC,
pursuant to the conditions specified in such orders. In accordance with Section 12(d)(1)(F)(i) of the 1940 Act, the Fund may also
invest in ETFs that have not received such exemptive orders and in other investment companies in excess of these limits, as long
as the Fund (and all of its affiliated persons, including the Adviser) does not acquire more than the 3% Limitation of the total
outstanding stock of such ETF or other investment company, unless otherwise permitted to do so pursuant to permission granted
by the SEC. In purchasing ETFs, the Fund will be subject to the 3% Limitation unless (i) the ETF or the Fund has received an order
for exemptive relief from the 3% Limitation from the SEC that is applicable to the Fund; and (ii) the ETF and the Fund take appropriate
steps to comply with any conditions in such order. The SEC has issued such exemptive orders to numerous ETFs and their investment
advisers, which permit investment companies, including the Fund, to invest in such ETFs (“Exempted ETFs”) beyond the
3% Limitation, subject to certain terms and conditions, including that such investment companies enter into an agreement with
the Exempted ETF. The Fund may enter into such agreements with one or more Exempted ETFs so that the Fund will be permitted to
invest in such Exempted ETFs in excess of the 3% Limitation. If the Fund seeks to redeem shares of an ETF or other investment
company purchased in reliance on Section 12(d)(1)(F), the investment company is not obligated to redeem an amount exceeding 1%
of the investment company’s outstanding shares during a period of less than 30 days.
While
the creation and redemption of creation units helps an ETF maintain a market value close to NAV, the market value of an ETF’s
shares may differ from its NAV. This difference in price may be due to the fact that the supply and demand in the market for ETF
shares at any point in time is not always identical to the supply and demand in the market for the ETF’s underlying basket
of securities. Accordingly, there may be times when an ETF trades at a premium (creating the risk that the Fund pays more than
NAV for an ETF when making a purchase) or discount (creating the risks that the Fund’s NAV is reduced for undervalued ETFs
it holds, and that the Fund receives less than NAV when selling an ETF).
Money
Market Instruments. The Fund may invest in money market instruments, which may include U.S. Government obligations or corporate
debt obligations (including those subject to repurchase agreements) as described herein. Money market instruments also may include
Banker’s Acceptances, Certificates of Deposit of domestic branches of U.S. banks, Commercial Paper, Variable Amount Demand
Master Notes (“Master Notes”) and shares of money market investment companies. The Fund may invest in shares of money
market investment companies to the extent permitted by the 1940 Act.
Banker’s
Acceptances are time drafts drawn on and “accepted” by a bank, which are the customary means of effecting payment
for merchandise sold in import-export transactions and are a source of financing used extensively in international trade. When
a bank “accepts” such a time draft, it assumes liability for its payment. When the Fund acquires a Banker’s
Acceptance, the bank which “accepted” the time draft is liable for payment of interest and principal when due. The
Banker’s Acceptance, therefore, carries the full faith and credit of such bank.
A
Certificate of Deposit (“CD”) is an unsecured, interest bearing debt obligation of a bank.
Commercial
Paper is an unsecured, short-term debt obligation of a bank, corporation, or other borrower. Commercial Paper maturity generally
ranges from two to 270 days and is usually sold on a discounted basis rather than as an interest-bearing instrument. The Fund
will invest in Commercial Paper only if it is rated in the highest rating category by any nationally recognized statistical rating
organization (“NRSRO”) or, if not rated, if the issuer has an outstanding unsecured debt issue rated in the three
highest categories by any NRSRO or, if not so rated, is of equivalent quality in the Adviser’s assessment. Commercial Paper
may include Master Notes of the same quality.
Master
Notes are unsecured obligations which are redeemable upon demand of the holder and which permit the investment of fluctuating
amounts at varying rates of interest. Master Notes will be acquired by the Fund only through the Master Note program of the Fund’s
custodian bank, acting as administrator thereof. The Adviser will monitor, on a continuous basis, the earnings power, cash flow,
and other liquidity ratios of the issuer of a Master Note held by a Fund.
Debt
Securities. The Fund may invest in corporate debt securities and U.S. Government obligations. Corporate securities include,
but are not limited to, debt obligations offered by public or private corporations either registered or unregistered. The market
value of such securities may fluctuate in response to interest rates and the creditworthiness of the issuer. A debt instrument’s
credit quality depends on the issuer’s ability to pay interest on the security and repay the debt; the lower the credit
rating, the greater the risk that the security’s issuer will default. The credit risk of a security may also depend on the
credit quality of any bank or financial institution that provides credit enhancement for the security. In the case of corporate
debt, the Fund will normally purchase investment grade securities, meaning securities rated BBB or better by Standard & Poor’s
or any comparable rating by another NRSRO or, if unrated, as determined by the Adviser to be of comparable quality.
U.S.
Government Obligations. The Fund may invest in U.S. Government Obligations. “U.S. Government obligations” include
securities which are issued or guaranteed by the U.S. Department of Treasury (the “U.S. Treasury”), by various agencies
of the U.S. Government, and by various instrumentalities which have been established or sponsored by the U.S. Government. U.S.
Treasury obligations are backed by the “full faith and credit” of the U.S. Government. U.S. Treasury obligations include
Treasury Bills, Treasury Notes, and Treasury Bonds. Treasury Bills have initial maturities of one year or less; Treasury Notes
have initial maturities of one to ten years; and Treasury Bonds generally have initial maturities of greater than ten years.
Agencies
and instrumentalities established by the U.S. Government include the Federal Home Loan Banks, the Federal Land Bank, the Government
National Mortgage Association, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Small
Business Administration, the Bank for Cooperatives, the Federal Intermediate Credit Bank, the Federal Financing Bank, the Federal
Farm Credit Banks, the Federal Agricultural Mortgage Corporation, the Resolution Funding Corporation, the Financing Corporation
of America and the Tennessee Valley Authority. Some of these securities are supported by the full faith and credit of the U.S.
Government while others are supported only by the credit of the agency or instrumentality, which may include the right of the
issuer to borrow from the U.S. Treasury. In the case of U.S. Government obligations not backed by the full faith and credit of
the U.S. Government, the investor must look principally to the agency or instrumentality issuing or guaranteeing the obligation
for ultimate repayment, and may not be able to assert a claim against the U.S. Government itself in the event the agency or instrumentality
does not meet its commitment. U.S. Government obligations are subject to price fluctuations based upon changes in the level of
interest rates, which will generally result in all those securities changing in price in the same way, i.e., all those securities
experiencing appreciation when interest rates decline and depreciation when interest rates rise. Any guarantee of the U.S. government
will not extend to the yield or value of the Fund’s shares.
Repurchase
Agreements. The Fund may invest in repurchase agreements. A repurchase agreement transaction occurs when an investor purchases
a security (normally a U.S. government obligation from a counterparty (e.g., the Fund) with the understanding that the Fund will
later resell the security to the same counterparty (normally a member bank of the Federal Reserve or a registered government securities
dealer). The Fund’s initial purchase is essentially a loan to the counterparty that is collateralized by the security (or
securities substituted for them under the repurchase agreement). The Fund must return the security to the counterparty when the
counterparty repurchases it at a later date and higher price. The repurchase price exceeds the purchase price by an amount that
reflects an agreed upon market interest rate effective for the period of time during which the repurchase agreement is in effect.
Delivery pursuant to the resale normally will occur within one to seven days of the purchase. Repurchase agreements are considered
“loans” under the 1940 Act, collateralized by the underlying security. The Trust has implemented procedures to monitor
on a continuous basis the value of the collateral serving as security for repurchase obligations. The Adviser will consider the
creditworthiness of the counterparty. If the counterparty fails to pay the agreed upon resale price on the delivery date, the
Fund will retain or attempt to dispose of the collateral. The Fund’s risk is that such default may include any decline in
value of the collateral to an amount which is less than 100% of the repurchase price, any costs of disposing of such collateral,
and any loss resulting from any delay in foreclosing on the collateral. The Fund will not enter into any repurchase agreement
that would cause more than 15% of its net assets to be invested in repurchase agreements that extend beyond seven days.
Illiquid
Investments. The Fund may not purchase or otherwise acquire any illiquid investments if, immediately after the acquisition,
the value of illiquid investments held by the Fund would exceed 15% of the Fund’s net assets. An illiquid investment is
any investment that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days
or less without the sale or disposition significantly changing the market value of the investment. Illiquid investments pose risks
of potential delays in resale and uncertainty in valuation. Limitations on resale may have an adverse effect on the marketability
of portfolio investments and the Fund may be unable to dispose of illiquid investments promptly or at reasonable prices. Under
the supervision of the Trust’s Board of Trustees (the “Board”), the Adviser determines the liquidity of the
Fund’s investments and, through reports from the Adviser, the Trustees monitor investments in illiquid investments. If through
a change in values, net assets, or other circumstances, the Fund was in a position where more than 15% of its net assets were
invested in illiquid investments, it would seek to take appropriate steps to bring the Fund’s illiquid investments to or
below 15% of its net assets per the requirements of Rule 22e-4 of the 1940 Act. The sale of some illiquid and other types of investments
may be subject to legal restrictions.
If
the Fund invests in investments for which there is no ready market, the Fund may not be able to readily sell such investments.
Such investments are unlike investments that are traded in the open market, and which can be expected to be sold immediately if
the market is adequate. The sale price of illiquid investments once realized may be lower or higher than the Adviser’s most
recent estimate of their fair market value. Generally, less public information is available about issuers of such illiquid investments
than about companies whose investments are publicly traded.
Restricted
Securities. Within its limitation on investment in illiquid investments, the Fund may purchase restricted securities that
generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the federal securities
laws, or in a registered public offering. Where registration is required, the Fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time it decides to seek registration and the time the Fund
may be permitted to sell a security under an effective registration statement. If during such a period adverse market conditions
were to develop, the Fund might obtain a less favorable price than prevailed when it decided to seek registration of the security.
Certain
restricted securities are illiquid unless it is determined, based upon a review of the trading markets for a specific restricted
security, that such restricted security is liquid because it is so-called “4(a)(2) commercial paper” or is otherwise
eligible for resale pursuant to Rule 144A under the Securities Act of 1933 (“144A Securities”). Investing in 144A
Securities may decrease the liquidity of the Fund’s portfolio to the extent that qualified institutional buyers become for
a time uninterested in purchasing these restricted securities. The purchase price and subsequent valuation of restricted and illiquid
securities normally reflect a discount, which may be significant, from the market price of comparable securities for which a liquid
market exists.
Borrowing
Money. The Fund does not intend to borrow money for the purpose of purchasing securities, but may, subject to the restrictions
of the 1940 Act, borrow up to one-third of its total assets, including the amount of such borrowing, to maintain necessary liquidity
to make payments for redemptions of Fund shares or for temporary emergency purposes. Borrowing involves the creation of a liability
that requires the Fund to pay interest. In the event the Fund should ever borrow money under these conditions, such borrowing
could increase the Fund’s costs and thus reduce the value of the Fund’s assets. In an extreme case, if the Fund’s
current investment income were not sufficient to meet the interest expense of borrowing, it could be necessary for the Fund to
liquidate certain of its investments at an inappropriate time.
Lending
of Portfolio Securities. In order to generate additional income, the Fund may lend portfolio securities in an amount up to
33⅓% of its total assets to broker-dealers, major banks, or other recognized domestic institutional borrowers of securities
that the Adviser has determined are creditworthy under guidelines established by the Board. In determining whether the Fund will
lend securities, the Adviser will consider all relevant facts and circumstances. The Fund may not lend securities to any company
affiliated with the Adviser. Each loan of securities will be collateralized by cash, securities, or letters of credit. The Fund
might experience a loss if the borrower defaults on the loan.
The
borrower at all times during the loan must maintain with the Fund collateral in the form of cash or cash equivalents, or provide
to the Fund an irrevocable letter of credit equal in value to at least 100% of the value of the securities loaned. While the loan
is outstanding, the borrower will pay the Fund any dividends or interest paid on the loaned securities, and the Fund may invest
the cash collateral to earn additional income. Alternatively, the Fund may receive an agreed-upon amount of interest income from
the borrower who has delivered equivalent collateral or a letter of credit. It is anticipated that the Fund may share with the
borrower some of the income received on the collateral for the loan or the Fund will be paid a premium for the loan. Loans are
subject to termination at the option of the Fund or the borrower at any time. The Fund may pay reasonable administrative and custodial
fees in connection with a loan, and may pay a negotiated portion of the income earned on the cash to the borrower or placing broker.
As with other extensions of credit, there are risks of delay in recovery or even loss of rights in the collateral should the borrower
fail financially. If the Fund invests the cash collateral from the borrower, there is the risk that such investment may result
in a financial loss. In such an event, the Fund would be required to repay the borrower out the Fund’s assets.
Where
voting rights with respect to the loaned securities pass with the lending of the securities, the Adviser normally intends to call
the loaned securities to vote proxies, or to use other practicable and legally enforceable means to obtain voting rights, when
the Adviser has knowledge that, in its opinion, a material event affecting the loaned securities will occur or the Adviser otherwise
believes it necessary to vote.
Economic
and Regulatory Risks. Domestic and foreign governments and agencies thereof often adopt an active approach to managing economic
conditions within a nation, which may have material effects on the securities markets within the nation. A government may pursue
supportive policies that include, but are not limited to, lowering corporate and personal tax rates and launching simulative government
spending programs designed to improve the national economy or sectors thereof. Agencies of a government, including central banks,
may pursue supporting policies that include, but are not limited to, setting lower interest rate targets and buying and selling
securities in the public markets. Governments and agencies thereof may also attempt to slow economic growth if the pace of economic
growth is perceived to be too great and pose a long-term risk to the economy or a sector thereof. In each instance, the actions
taken may be less successful than anticipated or may have unintended adverse consequences. Such a failure or investor perception
that such efforts are failing could negatively affect securities markets generally, as well as result in higher interest rates,
increased market volatility and reduce the value and liquidity of certain securities, including securities held by the Funds.
In
addition, governments and agencies thereof may enact additional regulation or engage in deregulation that negatively impacts the
general securities markets or a sector thereof. Given the potential broad scope and sweeping nature of some regulatory actions,
the potential impact a regulatory action may have on securities held by the Fund may be difficult to determine and may not be
fully known for an extended period of time. Accordingly, regulatory actions could adversely affect the Fund.
Changing
Fixed Income Market Conditions. Following the financial crisis that began in 2007, the U.S. government and the Board of Governors
of the Federal Reserve System (the “Federal Reserve”), as well as certain foreign governments and central banks, took
steps to support financial markets, including seeking to maintain interest rates at or near historically low levels and by purchasing
large quantities of fixed income securities on the open market, such as securities issued or guaranteed by U.S. government, its
agencies or instrumentalities, (“Quantitative Easing”). Similar steps appear to be taking place again in 2020 in an
effort to support the economy during the COVID-19 pandemic. It is unclear how long these policies will last. In addition, this
and other government interventions may not work as intended, particularly if the efforts are perceived by investors as being unlikely
to achieve the desired results. When the Federal Reserve determines to “taper” or reduce Quantitative Easing and/or
raise the federal funds rate, there is a risk that interest rates across the U.S. financial system will rise. Such policy changes
may expose fixed-income and related markets to heightened volatility and may reduce liquidity for certain fixed income investments,
including fixed income investments held by the Fund, which could cause the value of the Fund’s investments and share price
to decline. To the extent that the Fund invests in derivatives tied to fixed income markets, the Fund may be more substantially
exposed to these risks than a fund that does not invest in such derivatives.
Cybersecurity
Risk. The Fund and its service providers may be subject to operational and information security risks resulting from breaches
in cybersecurity. A breach in cybersecurity refers to both intentional and unintentional events that may cause the Fund to lose
or compromise confidential, proprietary or private personal information, suffer data corruption or lose operational capacity.
Breaches in cybersecurity include, among other things, stealing or corrupting data maintained online or digitally, denial of service
attacks on websites, the unauthorized release of confidential information or various other operational disruptions. Successful
cybersecurity breaches of the Fund and/or the Fund’s investment adviser, distributor, custodian, transfer agent, or other
third-party service providers may adversely impact the Fund and its shareholders. For instance, a successful cybersecurity breach
may interfere with the processing of shareholder transactions, impact the Fund’s ability to calculate its NAV, cause the
release of private personal shareholder information, impede trading, subject the Fund to regulatory fines or financial losses,
and/or cause reputational damage. The Fund relies on third party service providers for many of the day-to-day operations, and
is therefore subject to the risk that the protections and protocols implemented by those service providers will be ineffective
in protecting the Fund from cybersecurity breaches. Similar types of cybersecurity risks are also present for issuers of securities
in which the Fund may invest, which could result in material adverse consequences for such issuers and may cause the Fund’s
investments in such companies to lose value. There is no guarantee the Fund will be successful in protecting against cybersecurity
breaches.
Temporary
Defensive Positions. The Fund may from time to time take temporary defensive positions that are inconsistent with its principal
investment strategies. If the Adviser believes a temporary defensive position is warranted in view of market conditions, the Fund
may hold cash or invest up to 100% of its assets in high-quality short-term government or corporate obligations, money market
instruments or shares of money market mutual funds. Taking a temporary defensive position may prevent the Fund from achieving
its investment objective.
Operational
Risk. An investment in the Fund involves operational risk arising from factors such as processing errors, human errors, inadequate
or failed internal or external processes, failures in systems and technology, changes in personnel and errors caused by third-party
service providers. Any of these failures or errors could result in a loss or compromise of information, regulatory scrutiny, reputational
damage or other events, any of which could have a material adverse effect on the Fund. While the Fund seeks to minimize such events
through controls and oversight, there is no guarantee that the Fund will not suffer losses due to operational risk.
Portfolio
Turnover. The portfolio turnover rate for the Fund is calculated by dividing the lesser of the Fund’s purchases or sales
of portfolio securities for the year by the monthly average value of the securities. The Fund’s portfolio turnover rate
may vary greatly from year to year as well as within a particular year, and may also be affected by cash requirements for redemption
of shares. High portfolio turnover rates will generally result in higher transaction costs to the Fund, including brokerage commissions,
and may result in additional tax consequences to the Fund’s shareholders. Portfolio turnover will not be a factor in making
buy and sell decisions for the Fund.
INVESTMENT
RESTRICTIONS
The
Fund has adopted the following fundamental investment limitations that may not be changed without the affirmative vote of a majority
of the outstanding shares of the Fund. As used in the Prospectus and this SAI, the term “majority” of the outstanding
shares of the Fund means the lesser of (1) 67% or more of the outstanding voting securities of the Fund present at a meeting,
if the holders of more than 50% of the outstanding voting securities of the Fund are present or represented at such meeting; or
(2) more than 50% of the outstanding voting securities of the Fund. Unless otherwise indicated, percentage limitations apply at
the time of purchase of the applicable securities. See the Prospectus for more information about the Fund’s investment objective
and investment strategies, each of which are not fundamental and may be changed without shareholder approval.
FUNDAMENTAL
RESTRICTIONS. As a matter of fundamental policy:
1.
Borrowing Money. The Fund will not borrow money except as permitted under the 1940 Act. For example, subject to the restrictions
of the 1940 Act the Fund may borrow money from banks to meet redemption requests or for extraordinary or emergency purposes.
2.
Senior Securities. The Fund will not issue senior securities, except as permitted by the 1940 Act, the rules and regulations
promulgated thereunder or interpretations of the SEC or its staff.
3.
Underwriting. The Fund will not act as underwriter, except to the extent that, in connection with the disposition of portfolio
securities (including restricted securities), the Fund may be deemed an underwriter under certain federal securities laws or in
connection with investments in other investment companies.
4.
Real Estate. The Fund will not directly purchase or sell real estate. This limitation is not applicable to investments
in marketable securities which are secured by or represent interests in real estate. This limitation does not preclude the Fund
from holding or selling real estate acquired as a result of the Fund’s ownership of securities or other instruments, investing
in mortgage-related securities or investing in companies engaged in the real estate business or that have a significant portion
of their assets in real estate (including real estate investment trusts).
5. Commodities.
The Fund will not purchase or sell commodities unless acquired as a result of ownership of securities or other investments. This
limitation does not preclude the Fund from purchasing or selling options, forward contracts, or futures contracts, including those
relating to indices, or options on futures contracts or indices, or from investing in securities or other instruments backed by
commodities or from investing in companies which are engaged in a commodities business or have a significant portion of their
assets in commodities.
6.
Loans. The Fund will not make loans to other persons, provided that the Fund may lend its portfolio securities in an amount
up to 33% of total Fund assets, and provided further that, for purposes of this restriction, investment in U.S. Government obligations,
short-term commercial paper, certificates of deposit, bankers’ acceptances, repurchase agreements and any other lending
arrangement permitted by the 1940 Act, any rules and regulations promulgated thereunder or interpretations of the SEC or its staff
shall not be deemed to be the making of a “loan”. For purposes of this limitation, the term “loans” shall
not include the purchase of a portion of an issue of publicly distributed bonds, debentures or other debt securities.
7. Concentration.
The Fund will not invest more than 25% of its total assets in a particular industry. This limitation is not applicable to investments
in obligations issued or guaranteed by the U.S. government (including its agencies and instrumentalities) or state or municipal
governments (and their political subdivisions) or repurchase agreements with respect thereto, or investments in registered investment
companies. If, however, the Fund invests in an investment company that concentrates its investment in a particular industry, the
Fund will consider such investment to be issued by a member of the industry in which such investment company invests. In addition,
if the Fund invests in a revenue bond tied to a particular industry, the Fund will consider such investment to be issued by a
member of the industry to which the revenue bond is tied.
With
respect to the “fundamental” investment restrictions above, if a percentage limitation is adhered to at the time of
investment, a later increase or decrease in percentage resulting from any change in value or net assets will not result in a violation
of such restriction (i.e., percentage limitations are determined at the time of purchase); provided, however, that the treatment
of the fundamental restrictions related to borrowing money and issuing senior securities are exceptions to this general rule and
are monitored on an ongoing basis.
Senior
securities may include any obligation or instrument issued by a fund evidencing indebtedness. The 1940 Act generally prohibits
funds from issuing senior securities, although it does not treat certain transactions as senior securities, such as certain borrowings,
short sales, reverse repurchase agreements, firm commitment agreements standby commitments and trading practices which would be
deemed to involve the issuance of a senior security, including options, futures and forward contracts, with appropriate earmarking
or segregation of assets to cover such obligation.
The
1940 Act permits the Fund to borrow money from banks in an amount up to one-third of its total assets (including the amount borrowed)
less its liabilities (not including any borrowings but including the fair market value at the time of computation of any other
senior securities then outstanding). In general, the Fund may not issue any class of senior security, except that the Fund may
(i) borrow from banks, provided that immediately following any such borrowing there is an asset coverage of at least 300% for
all Fund borrowings and in the event such asset coverage falls below 300% the Fund will within three days (excluding holidays
and Sundays) or such longer period as the SEC may prescribe by rules and regulation, reduce the amount of its borrowings to an
extent that the asset coverage of such borrowings shall be at least 300%, and (ii) engage in trading practices which could be
deemed to involve the issuance of a senior security, including options, futures, forward contracts and reverse repurchase agreements,
provided that the Fund earmarks or segregates liquid assets in accordance with applicable SEC regulations and interpretations.
CALCULATION
OF SHARE PRICE
The
share price or NAV of shares of the Fund is determined as of the close of the regular session of trading on the New York Stock
Exchange (the “NYSE”) on each day the NYSE is open for trading. Currently, the NYSE is open for trading on every day
except Saturdays, Sundays and the following holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
For
purposes of computing the Fund’s NAV, securities are valued at market value as of the close of regular trading on the NYSE
(normally, 4:00 p.m. Eastern Time) on each business day the NYSE is open. Securities listed on the NYSE or other exchanges are
valued based on their last sale prices on the exchanges on which they are primarily traded. If there are no sales on that day,
the securities are valued at the mean of the closing bid and ask prices on the NYSE or other primary exchange for that day. National
Association of Securities Dealers Automated Quotations (“NASDAQ”) listed securities are valued at the NASDAQ Official
Closing Price. If there are no sales on that day, the securities are valued at the mean of the most recently quoted bid and ask
prices as reported by NASDAQ. Securities traded in the over-the-counter market are valued at the last sale price, if available,
otherwise at the mean of the most recently quoted bid and ask prices.
In
the event that market quotations are not readily available or are considered unreliable due to market or other events, securities
and other assets are valued at fair value as determined in good faith in accordance with procedures adopted by the Board. Fixed-income
securities are normally valued based on prices obtained from independent third-party pricing services approved by the Board, which
are generally determined with consideration given to institutional bid and last sale prices and take into account security prices,
yield, maturity, call features, ratings, institutional-sized trading in similar groups of securities and developments related
to specific securities. Foreign securities are normally valued on the basis of fair valuation prices obtained from independent
third-party pricing services approved by the Board, which are generally determined with consideration given to any change in price
of the foreign security and any other developments related to the foreign security since the last sale price on the exchange on
which such foreign security primarily traded and the close of regular trading on the NYSE. One or more pricing services may be
utilized to determine the fair value of securities held by the Fund. The methods used by independent pricing services and the
quality of valuations so established are reviewed by the Adviser and the Fund’s administrator under the general supervision
of the Board. To the extent the assets of the Fund are invested in other open-end investment companies that are registered under
the 1940 Act and not traded on an exchange, the Fund’s NAV is calculated based upon the NAVs reported by such registered
open-end investment companies, and the prospectuses for these companies explain the circumstances under which they will use fair
value pricing and the effects of using fair value pricing.
ADDITIONAL
PURCHASE AND REDEMPTION INFORMATION
Shares
of the Fund are offered for sale on a continuous basis. Shares are sold and redeemed at their NAV, as next determined after receipt
of the purchase or redemption order in proper form.
The
Fund may suspend the right of redemption or postpone the date of payment for shares during a period when: (a) trading on the NYSE
is restricted by applicable rules and regulations of the SEC; (b) the NYSE is closed for other than customary weekend and holiday
closings; (c) the SEC has by order permitted these suspensions; or (d) an emergency exists as a result of which: (i) disposal
by the Fund of securities owned by it is not reasonably practicable, or (ii) it is not reasonably practicable for the Fund to
determine the value of its assets.
The
Fund reserves the right to make payment for a redemption in securities rather than cash, which is known as a “redemption
in kind”. Redemptions in kind will be made only under extraordinary circumstances and if the Fund deems it advisable for
the benefit of all shareholders, such as a very large redemption that could affect Fund operations (for example, more than 1%
of the Fund’s net assets). A redemption in kind will consist of liquid securities equal in market value to the Fund shares
being redeemed, using the same valuation procedures that the Fund uses to compute its NAV. Redemption in kind proceeds will typically
be made by delivering a pro-rata amount of the Fund’s holdings that are readily marketable securities to the redeeming shareholder
within 7 days after the Fund’s receipt of the redemption order in proper form. If the Fund redeems your shares in kind,
you will bear the market risks associated with maintaining or selling the securities paid as redemption proceeds. In addition,
when you sell these securities, you bear the risk that the securities have become less liquid and are difficult to sell. You also
will be responsible for any taxes and brokerage charges associated with selling the securities.
SPECIAL
SHAREHOLDER SERVICES
As
noted in the Prospectus, the Fund offers the following shareholder services:
Regular
Account. The regular account allows for voluntary investments to be made at any time. Available to individuals, custodians,
corporations, trusts, estates, corporate retirement plans and others, investors are free to make additions to and withdrawals
from their account as often as they wish. When an investor makes an initial investment in the Fund, a shareholder account is opened
in accordance with the investor’s registration instructions. Each time there is a transaction in a shareholder account,
such as an additional investment or a redemption, the shareholder will receive a confirmation statement showing the current transaction.
Automatic
Investment Plan. The automatic investment plan enables investors to make regular periodic investments in shares through automatic
charges to their checking account. With shareholder authorization and bank approval, the Fund’s transfer agent will automatically
charge the checking account for the amount specified ($100 minimum) which will be automatically invested in shares at the NAV
on or about the fifteenth and/or the last business day of the month, or both. The shareholder may change the amount of the investment
or discontinue the plan at any time by writing to the Fund.
Transfer
of Registration. To transfer shares to another owner, send a written request to Evolutionary Tree Innovators Fund, c/o Ultimus Fund Solutions,
LLC, P.O. Box 46707, Cincinnati, Ohio 45246-0707. Your request should include the following: (i) the Fund name and existing account
registration; (ii) signature(s) of the registered owner(s) exactly as the signature(s) appear(s) on the account registration;
(iii) if it is for a new account, a completed account application, or if it is an existing account, the account number; (iv) Medallion
signature guarantees (See the heading “How to Redeem Shares – Signature Guarantees” in the Prospectus); and
(v) any additional documents that are required for transfer by corporations, administrators, executors, trustees, guardians, etc.
If you have any questions about transferring shares, call or write the Fund.
MANAGEMENT
OF THE TRUST
Overall
responsibility for management and supervision of the Fund and the Trust rests with the Board. The members of the Board (the “Trustees”)
are elected by the Trust’s shareholders or existing members of the Board as permitted under the 1940 Act and the Trust’s
Agreement and Declaration of Trust (the “Declaration of Trust”). The Trustees serve for terms of indefinite duration
until death, resignation, retirement or removal from office. The Trustees, in turn, elect the officers of the Trust to actively
supervise the Trust’s day-to-day operations. The officers are elected annually. Certain officers of the Trust also may serve
as Trustees.
The
Trust will be managed by the Trustees in accordance with the laws of the State of Ohio governing business trusts. There are currently
six Trustees, five of whom are not “interested persons,” as defined by the 1940 Act, of the Trust (the “Independent
Trustees”). The Independent Trustees receive compensation for their services as Trustees and attendance at meetings of the
Board. Officers of the Trust receive no compensation from the Trust for performing the duties of their offices.
Attached
in Appendix A is a list of the Trustees and executive officers of the Trust, their year of birth and address, their present position
with the Trust, and their principal occupation during the past five years. Those Trustees who are “interested persons”
as defined in the 1940 Act and those Trustees who are Independent Trustees are identified in the table.
Leadership
Structure and Qualifications of Trustees. As noted above, the Board consists of six Trustees, five of whom are Independent
Trustees. The Board is responsible for the oversight of the series, or funds, of the Trust.
In
addition to the Fund, the Trust has other series managed by other investment advisers. The Board has engaged various investment
advisers to oversee the day-to-day management of the Trust’s series. The Board is responsible for overseeing these investment
advisers and the Trust’s other service providers in the operations of the Trust in accordance with the 1940 Act, other applicable
federal and state laws, and the Declaration of Trust.
The
Board meets at least four times throughout the year. The Board generally meets in person, but may meet by telephone as permitted
by the 1940 Act. In addition, the Trustees may meet in person or by telephone at special meetings or on an informal basis at other
times. The Independent Trustees also meet at least quarterly without the presence of any representatives of management.
Board
Leadership. The Board is led by its Chairperson, Ms. Janine L. Cohen, who is also an Independent Trustee. The Chairperson
generally presides at all Board Meetings. The Chairperson facilitates communication and coordination between the Trustees and
management. The Chairperson also reviews meeting agendas for the Board and the information provided by management to the Trustees.
The Chairperson works closely with Trust counsel and counsel to the Independent Trustees. The Chairperson is also assisted by
the Trust’s President, who, with the assistance of the Trust’s other officers, oversees the daily operations of the
Fund, including monitoring the activities of all of the Fund’s service providers.
The
Board believes that its leadership structure, including having an Independent Trustee serve as Chairperson and five out of six
Trustees as Independent Trustees, is appropriate and in the best interests of the Trust. The Board also believes its leadership
structure facilitates the orderly and efficient flow of information to the Independent Trustees from Trust management.
Board
Committees. The Board has established the following standing committees:
Committee
of Independent Trustees (the “Independent Trustees Committee”): The principal functions of the Independent Trustees
Committee are: (i) to appoint, retain and oversee the Trust’s independent registered public accounting firm; (ii) to meet
separately with the independent registered public accounting firm and receive and consider a report concerning its conduct of
the audit, including any comments or recommendations it deems appropriate; (iii) to act as the Trust’s qualified legal compliance
committee (“QLCC”), as defined in the regulations under the Sarbanes-Oxley Act; and (iv) to act as a proxy voting
committee if called upon under the Trust’s Proxy Voting Policies and Procedures when a matter with respect to which a series
of the Trust is entitled to vote presents a conflict between the interest of the series’ shareholders, on the one hand,
and those of the series’ investment manager, on the other hand. In selecting and nominating persons to serve as Independent
Trustees, the Committee will not consider nominees recommended by shareholders of the Trust. Messrs. David M. Deptula, Robert
E. Morrison, and Clifford N. Schireson, and Mses. Janine L. Cohen and Jacqueline A. Williams are the members of the Independent
Trustees Committee. Mr. Deptula is the Chairperson of the Independent Trustees Committee and presides at its meetings. The Independent
Trustees Committee met seven times during the Funds’ prior fiscal year.
Nominating
Committee (the “Nominating Committee”): The Nominating Committee nominates and selects persons to serve as members
of the Board, including Independent Trustees and “interested” Trustees. In selecting and nominating persons to serve
as Independent Trustees, the Nominating Committee will not consider nominees recommended by shareholders of the Trust unless required
by law. Messrs. Deptula, Morrison, and Schireson and Mses. Cohen and Williams are the members of the Nominating Committee. Ms.
Cohen is the Chairperson of the Nominating Committee and presides at its meetings. The Nominating Committee met twice during the
Funds’ prior fiscal year.
Qualifications
of the Trustees. The Nominating Committee reviews the experience, qualifications, attributes and skills of potential
candidates for nomination or election by the Board. In evaluating a candidate for nomination or election as a Trustee, the Nominating
Committee takes into account the contribution that the candidate would be expected to make to the diverse mix of experience, qualifications,
attributes and skills that the Nominating Committee believes contribute to the oversight of the Trust’s affairs. The Board
has concluded, based on the recommendation of the Nominating Committee, that each Trustee’s experience, qualifications,
attributes or skills on an individual basis and in combination with the other Trustees, that each Trustee is qualified to serve
on the Board. The Board believes that the Trustees’ ability to review critically, evaluate, question and discuss information
provided to them, to interact effectively with the Adviser, other service providers, legal counsel and the independent registered
public accounting firm, and to exercise effective business judgment in the performance of their duties as Trustees support this
conclusion. In determining that a particular Trustee is and will continue to be qualified to serve as a Trustee, the Board considers
a variety of criteria, none of which, in isolation, is controlling.
In
addition to the Trustee qualifications listed above, each of the Trustees has additional Trustee qualifications including, among
other things, the experience identified in the “Trustees and Executive Officers” table included in Appendix A and
as follows:
Interested
Trustee. Robert G. Dorsey is a co-founder of Ultimus Fund Solutions, LLC (“Ultimus”) and Ultimus Fund Distributors,
LLC (the “Distributor”). Mr. Dorsey serves as Vice-Chairman of Ultimus and its subsidiaries (except as otherwise noted
for FINRA-regulated broker-dealer entities). Mr. Dorsey served as President and Managing Director of Ultimus and the Distributor
from their founding in 1999 until April 2018 and served as Co-Chief Executive Officer and Managing Director of Ultimus from April
2018 until February 2019 when he assumed the role, Vice-Chairman of Ultimus and its subsidiaries (except as otherwise noted for
FINRA-related broker-dealer entities). Mr. Dorsey has over 30 years of experience in the mutual fund servicing industry. He holds
a B.S. from Christian Brothers University and is a Certified Public Accountant (inactive). Mr. Dorsey has been a Trustee since
February 2012.
Independent
Trustees. David M. Deptula has served as Vice President of Legal and Special Projects for Dayton Freight Lines, Inc. since
February 1, 2016. Prior to that position, Mr. Deptula was Vice President of Tax Treasury for Standard Register, Inc. (a company
that provides solutions for companies to manage their critical communications, previously The Standard Register Company) since
November 2011. (Standard Register, Inc. a newly formed subsidiary of Taylor Corporation, purchased assets of The Standard Register
Company on July 31, 2015.) Prior to joining Standard Register, Mr. Deptula was a Tax Partner at Deloitte Tax LLP (“Deloitte”).
Mr. Deptula joined Deloitte in 1984 and remained with Deloitte until October of 2011. During his tenure at Deloitte, he was actively
involved in providing tax accounting services to open-end mutual funds and other financial services companies. Mr. Deptula holds
a B.S. in Accounting from Wright State University and a Juris Doctor from University of Toledo. He is also a Certified Public
Accountant. Mr. Deptula has been a Trustee since June 2012.
Janine
L. Cohen, retired, was an executive at AER Advisors, Inc. (“AER”) from 2004 through her retirement in 2013. Ms. Cohen
served as the Chief Financial Officer (“CFO”) from 2004 to 2013 and Chief Compliance Officer (“CCO”) from
2008 to 2013 at AER. During her tenure at AER, she was actively involved in developing financial forecasts, business plans, and
SEC registrations. Prior to those roles at AER, Ms. Cohen was a Senior Vice President at State Street Bank. Ms. Cohen has over
30 years of experience in the financial services industry. She holds a B.S. in Accounting and Math from the University of Minnesota
and is a Certified Public Accountant. Ms. Cohen has been the Chairperson since October 2019 and a Trustee since January 2016.
Jacqueline
A. Williams has served as the Managing Member of Custom Strategies Consulting, LLC since 2017, where she provides consulting services
to investment managers. Prior to that, she served as a Managing Director of Global Investment Research for Cambridge Associates,
LLC since 2005. Earlier in her career, Ms. Williams served as a Principal at Equinox Capital Management, LLC where she was chairperson
of the stock selection committee and the firm's financial services analyst. Ms. Williams also served as an Investment Analyst
at IBJ Schroder Bank & Trust Company where she monitored U.S. financial services stocks. Ms. Williams has over 25 years of
experience in the investment management industry. Ms. Williams earned an A.B. in Religion from Duke University and a Ph.D. in
Religious Studies from Yale University. She has been a Chartered Financial Analyst charter holder since 1990. Ms. Williams has
been a Trustee since June 2019.
Clifford
N. Schireson is the founder of Schireson Consulting, LLC, which he launched in 2017. Prior to that, from 2004 to 2017, he was
Director of Institutional Services at Brandes Investment Partners, LP, an investment advisory firm, where he was a member of the
fixed-income investment committee. From 1998 to 2004, he was a Managing Director at Weiss, Peck & Greer LLC specializing in
fixed-income products for both taxable and municipal strategies for institutional clients. Mr. Schireson has over 20 years of
experience in the investment management industry. Mr. Schireson holds an A.B. in Economics from Stanford University and an M.B.A.
from Harvard Business School. Mr. Schireson has been a Trustee since June 2019.
Robert
E. Morrison serves as a Senior Vice President at Huntington Private Bank, where he has worked since 2014. From 2006 to 2014, he
served as the CEO, President and Chief Investment Officer of 5 Star Investment Management. Mr. Morrison has a B.S. in Forestry
Management from Auburn University and is a graduate of the Personal Financial Planning program of Old Dominion University. Mr.
Morrison previously served on the Ultimus Managers Trust Board of Trustees as the Founding Chairman of the Trust in 2012. Mr.
Morrison retired from the Board in 2014 as a result of a business conflict that no longer exists. Mr. Morrison has over 32 years
of financial services experience, focusing on asset management and wealth management. Mr. Morrison has been a Trustee since June
2019.
References
above to the qualifications, attributes and skills of Trustees are pursuant to requirements of the SEC, do not constitute holding
out the Board or any Trustee as having any special expertise or experience, and shall not impose any greater responsibility on
any such person or on the Board by reason thereof.
Risk
Oversight. The operation of a mutual fund, including its investment activities, generally involves a variety of risks. As
part of its oversight of the Fund, the Board oversees risk through various regular board and committee activities. The Board,
directly or through its committees, reviews reports from, among others, the Adviser, the Trust’s CCO, the Trust’s
independent registered public accounting firm, and outside legal counsel, regarding risks faced by the Fund and the risk management
programs of the Adviser, with respect to the Fund’s investment and trading activities, and certain service providers. The
actual day-to-day risk management with respect to the Fund resides with the Adviser, with respect to the Fund’s investment
and trading activities, and other service providers to the Fund. Although the risk management policies of the Adviser and the
service providers are designed to be effective, there is no guarantee that they will anticipate or mitigate all risks. Not all
risks that may affect the Fund can be identified, eliminated or mitigated and some risks simply may not be anticipated or may
be beyond the control of the Board or the Adviser or other service providers. The Independent Trustees meet separately with the
Trust’s CCO at least annually, outside the presence of management, to discuss issues related to compliance. Furthermore,
the Board receives an annual written report from the Trust’s CCO regarding the operation of the compliance policies and
procedures of the Trust and its primary service providers. As part of its oversight function, the Board also may hold special
meetings or communicate directly with Trust management or the Trust’s CCO to address matters arising between regular meetings.
The
Board also receives quarterly reports from the Adviser on the investments and securities trading of the Fund, including the Fund’s
investment performance, as well as reports regarding the valuation of the Fund’s securities. The Board also receives quarterly
reports from the Fund’s administrator (the “Administrator”), transfer agent (the “Transfer Agent”)
and distributor (the “Distributor”) on regular quarterly items and, where appropriate and as needed, on specific issues.
In addition, in its annual review of the Fund’s investment advisory agreement (the “Advisory Agreement”), the
Board reviews information provided by the Adviser relating to its operational capabilities, financial condition and resources.
The Board also conducts an annual self-evaluation that includes a review of its effectiveness in overseeing, among other things,
the number of funds in the Trust and the effectiveness of the Board’s committee structure.
Trustees’
Ownership of Fund Shares. The following table shows each Trustee’s beneficial ownership of shares of the Fund and, on
an aggregate basis, of shares of all funds within the Trust overseen by the Trustee. Information is provided as of December 31,
2019.
|
Name
of Trustee
|
Dollar
Range of Shares owned by Trustee in
|
|
The
Fund*
|
All
Funds in the Trust
|
|
Interested Trustee
|
|
|
|
Robert G. Dorsey
|
None
|
Over $100,000
|
|
Independent Trustees
|
|
|
|
David M. Deptula
|
None
|
None
|
|
Janine L. Cohen
|
None
|
None
|
|
Jacqueline A. Williams
|
None
|
None
|
|
Clifford N. Schireson
|
None
|
None
|
|
Robert E. Morrison
|
None
|
None
|
|
*
|
Because the Fund
is newly organized, none of the Trustees has any beneficial ownership of Fund shares as of the date of this SAI.
|
Ownership
In Fund Affiliates. As of the date of this SAI, none of the Independent Trustees, nor members of their immediate families,
owned, beneficially or of record, securities of the Adviser, the Distributor or any affiliate of the Adviser or Distributor.
Trustee
Compensation. No director, officer or employee of the Adviser or Distributor receives any compensation from the Trust for
serving as an officer or Trustee of the Trust. Each Independent Trustee receives a $500 per meeting fee and a $1,300 annual retainer
for each series of the Trust, except the Chairperson who receives a $1,500 annual retainer for serving as Chairperson. The Trust
reimburses each Trustee and officer for their travel and other expenses incurred in attending meetings.
The
following table provides the estimated amount of compensation payable to each of the Trustees during the Fund’s first fiscal
year of operations, which will conclude May 31, 2021:
|
Name
of Trustee
|
Compensation
From
the Fund
|
Pension
or
Retirement
Benefits Accrued
As Part of Fund
Expenses
|
Estimated
Annual Benefits
Upon Retirement
|
Total
Compensation
From all Funds
Within the Trust
|
|
Interested Trustee
|
|
Robert G. Dorsey
|
None
|
None
|
None
|
None
|
|
Independent Trustees
|
|
David M. Deptula
|
$3,000
|
None
|
None
|
$41,125
|
|
Janine L. Cohen
|
$3,200
|
None
|
None
|
$55,950
|
|
Jacqueline A. Williams
|
$3,000
|
None
|
None
|
$41,125
|
|
Clifford N. Schireson
|
$3,000
|
None
|
None
|
$41,125
|
|
Robert E. Morrison
|
$3,000
|
None
|
None
|
$41,125
|
INVESTMENT
ADVISER
Evolutionary
Tree Capital Management, LLC, located at 1199 N. Fairfax Street, Suite 801, Alexandria, Virginia 22314, serves as the investment
adviser to the Fund pursuant to an Investment Advisory Agreement dated September 4, 2020 (the “Investment Advisory Agreement”).
The Adviser was organized in 2017. The Adviser is controlled by Thomas Ricketts, who is the majority owner of the Adviser.
Subject
to the Fund’s investment objective and policies approved by the Board, the Adviser is responsible for providing the Fund
with a continuous program of investing the Fund’s assets and determining the composition of the Fund’s portfolio.
The
Investment Advisory Agreement is effective for an initial two-year period and will be renewed for periods of one year only so
long as such renewal and continuance is specifically approved at least annually by the Board or by vote of a majority of the Fund’s
outstanding voting securities, provided the continuance is also approved by a majority of the Independent Trustees. The Investment
Advisory Agreement is terminable without penalty on 60 days’ notice by the Board or by vote of a majority of the outstanding
voting securities of the Fund. The Investment Advisory Agreement provides that it will terminate automatically in the event of
its “assignment,” as such term is defined in the 1940 Act.
For
its services, the Fund pays the Adviser a monthly investment advisory fee (the “Management Fee”) computed at the annual
rate of 0.80% of its average daily net assets. The Adviser has contractually agreed, until October 31, 2023, to reduce its Management
Fee and reimburse other Fund expenses to the extent necessary to limit Total Annual Operating Expenses of the Fund (exclusive
of brokerage costs, taxes, interest, borrowing costs such as interest and dividend expenses on securities sold short, costs to
organize the Fund, acquired Fund fees and expenses, extraordinary expenses such as litigation and merger or reorganization costs
and other expenses not incurred in the ordinary course of the Fund’s business) to an amount not exceeding 0.97% of the Fund’s
average daily net assets. Any such Management Fee reductions and expense reimbursements by the Adviser are subject to repayment
by the Fund for, a period of three (3) years after the date that such fees and expenses were incurred, provided that the repayments
do not cause Total Annual Operating Expenses (exclusive of such reductions and/or reimbursements) to exceed (i) the expense limitation
then in effect, if any, and (ii) the expense limitation in effect at the time the expenses to be repaid were incurred.
The
Adviser manages the Fund’s investments in accordance with the stated investment objective and policies of the Fund, subject
to the oversight of the Board. The Adviser is responsible for investment decisions, and provides the Fund with a portfolio manager
to execute purchases and sales of securities. The Investment Advisory Agreement provides that the Adviser shall not be liable
for any error of judgment or for any loss suffered by the Trust or the Fund in connection with the performance of its duties,
except a loss resulting from a breach of fiduciary duty with respect to receipt of compensation for services (in which case any
award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the 1940 Act) 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 duties and obligations thereunder.
Because
the Fund is newly organized, no information regarding the Advisory fees paid to the Adviser is included in this SAI.
Portfolio
Manager. The Fund is managed by Thomas Ricketts (the “Portfolio Manager”), who has primary responsibility for
the day-to-day implementation of investment strategies for the Fund.
Other
Accounts Managed by Portfolio Manager. In addition to the Fund, the Portfolio Managers are responsible for the day-to-day
management of certain other accounts. The table below shows the number of, and total assets in such other accounts as of July
31, 2020.
|
Portfolio
Manager
|
Type
of Accounts
|
Total
Number
of Other
Accounts
Managed
|
Total
Assets
of Other
Accounts
Managed
(million)
|
Number
of
Accounts
Managed with
Advisory Fee
Based on
Performance
|
Total
Assets
of Accounts
Managed with
Advisory Fee
Based on
Performance
(million)
|
|
Thomas
Ricketts
|
Registered
Investment Companies
|
0
|
$0
|
0
|
$0
|
|
Other
Pooled Investment Vehicles
|
0
|
$0
|
0
|
$0
|
|
Other
Accounts
|
42
|
$41.5
|
0
|
$0
|
Potential
Conflicts of Interest. The Portfolio Manager serves as portfolio manager for the Fund and provides investment advice to other
accounts (“Other Accounts”). The Portfolio Manager’s management of Other Accounts may give rise to potential
conflicts of interest in connection with their management of the Fund’s investments, on the one hand, and the investments
of the Other Accounts, on the other. A potential conflict of interest may arise when a particular investment may be suitable for
both, the Fund and the Other Accounts, whereby the Portfolio Manager could favor one account over another. However, the Adviser
has established policies and procedures to ensure that such investments will be allocated between the Fund and the Other Accounts
pro rata based on the assets under management or in some other manner determined to be fair and equitable.
A
potential conflict of interest may arise as a result of the Portfolio Manager’s day-to-day management of the Fund and Other
Accounts. The Portfolio Manager knows the size and timing of trades for the Fund and the Other Accounts, and may be able to predict
the market impact of the Fund’s trades. It is theoretically possible that the Portfolio Manager could use this information
to the advantage of Other Accounts they manage and to the possible detriment of the Fund, or vice versa.
Compensation.
Mr. Ricketts is not compensated directly by the Fund. Rather, Mr. Ricketts is the principal owner of the Adviser and, therefore,
draws compensation from its profits. As such, performance and asset levels of the Fund will directly affect the profits of the
Adviser and indirectly the total compensation paid to Mr. Ricketts.
Ownership
of Fund Shares. Because the Fund is newly organized, the Portfolio Manager has no beneficial ownership of Fund shares as of
the date of this SAI.
PORTFOLIO
TRANSACTIONS
Pursuant
to the Investment Advisory Agreement, the Adviser determines, subject to the general supervision of the Board and in accordance
with the Fund’s investment objective, policies and restrictions, which securities are to be purchased and sold by the Fund
and which brokers are eligible to execute the Fund’s portfolio transactions.
Purchases
and sales of portfolio securities that are debt securities usually are principal transactions in which portfolio securities are
normally purchased directly from the issuer or from an underwriter or market maker for the securities. Purchases from underwriters
of portfolio securities generally include a commission or concession paid by the issuer to the underwriter, and purchases from
dealers serving as market makers may include the spread between the bid and asked prices. Transactions on stock exchanges involve
the payment of negotiated brokerage commissions. Transactions in the over-the-counter market are generally principal transactions
with dealers. With respect to the over-the-counter market, the Fund, where possible, will deal directly with the dealers who make
a market in the securities involved except under those circumstances where better price and execution are available elsewhere.
Allocation
of transactions, including their frequency, to various brokers and dealers is determined by the Adviser in its best judgment consistent
with its obligation to seek best execution and in a manner deemed fair and reasonable to shareholders. The primary consideration
is prompt execution of orders in an effective manner at the most favorable price. Other factors that may be considered include,
but are not limited to, reputation, financial strength and stability, creditworthiness, efficiency of execution and error resolution,
the actual executed price and the commission, research (including economic forecasts, fundamental and technical advice on securities,
valuation advice on market analysis); custodial and other services provided for the enhancement of the Adviser’s portfolio
management capabilities; the size and type of the transaction; the difficulty of execution and the ability to handle difficult
trades; and the operational facilities of the brokers and/or dealers involved (including back office efficiency). Subject to these
considerations, brokers who provide investment research to the Adviser may receive orders for transactions on behalf of the Fund.
Information so received is in addition to and not in lieu of services required to be performed by the Adviser and does not reduce
the fees payable to the Adviser by the Fund. Such information may be useful to the Adviser in serving both the Fund and other
clients and, conversely, supplemental information obtained by the placement of brokerage orders of other clients may be useful
to the Adviser in carrying out its obligations to the Fund In selecting a broker-dealer to execute transactions (or a series of
transactions) and determining the reasonableness of the broker-dealer’s compensation, the Adviser need not solicit competitive
bids and does not have an obligation to seek the lowest available commission cost for the reasons discussed above.
Consistent
with the foregoing, under Section 28(e) of the Securities Exchange Act of 1934, as amended, the Adviser is authorized to pay a
brokerage commission in excess of that which another broker might have charged for effecting the same transaction, in recognition
of the value of brokerage and/or research services provided by the broker. The research received by the Adviser may include, without
limitation: information on the U.S. and other world economies; information on specific industries, groups of securities, individual
companies, political and other relevant news developments affecting markets and specific securities; technical and quantitative
information about markets; analysis of proxy proposals affecting specific companies; accounting and performance systems that allow
the Adviser to determine and track investment results; and trading systems that allow the Adviser to interface electronically
with brokerage firms, custodians and other providers. Research is received in the form of written reports, telephone contacts,
personal meetings, research seminars, software programs and access to computer databases. In some instances, research products
or services received by the Adviser may also be used by the Adviser for functions that are not research related (i.e., not related
to the making of investment decisions). Where a research product or service has a mixed use, the Adviser will make a reasonable
allocation according to its use and will pay for the non-research function in cash using its own funds.
Subject
to the requirements of the 1940 Act and procedures adopted by the Board, the Fund may execute portfolio transactions through any
broker or dealer and pay brokerage commissions to a broker (i) which is an affiliated person of the Trust, or (ii) which is an
affiliated person of such person, or (iii) an affiliated person of which is an affiliated person of the Trust, the Adviser or
the Trust’s principal underwriter.
Because
the Fund is newly organized, the Fund has not paid any brokerage commissions as of the date of this SAI.
THE
DISTRIBUTOR
Ultimus
Fund Distributors, LLC, located at 225 Pictoria Drive, Suite 450, Cincinnati, Ohio 45246, is the exclusive agent for distribution
of shares of the Fund pursuant to a Distribution Agreement (the “Distribution Agreement”). The Distributor is obligated
to sell shares of the Fund on a best efforts basis only against purchase orders for the shares. Shares of the Fund are offered
to the public on a continuous basis. The Distributor is compensated for its services to the Trust under a written agreement for
such services. The Distributor is an affiliate of Ultimus. Robert G. Dorsey serves as a Vice Chairman of Ultimus and as a Trustee
of the Trust. He was a Managing Director of the Distributor from 1999 until April 2018.
By
its terms, the Distribution Agreement is for an initial term of two years and will continue in effect year-to-year thereafter
so long as such continuance is approved at least annually by (1) the Board or (2) a vote of the majority of the Fund’s outstanding
voting shares; provided that in either event continuance is also approved by a majority of the Independent Trustees, by a vote
cast in person at a meeting called for the purpose of voting such approval. The Distribution Agreement may be terminated at any
time, on sixty days written notice, without payment of any penalty, by the Trust or by the Distributor. The Distribution Agreement
automatically terminates in the event of its assignment, as defined by the 1940 Act and the rules thereunder. Under the Distribution
Agreement, the Distributor is paid $6,000 per annum for its services by the Fund and/or the Adviser.
OTHER
SERVICE PROVIDERS
Administrator,
Fund Accountant and Transfer Agent
Ultimus
Fund Solutions, LLC (“Ultimus”), located at 225 Pictoria Drive, Suite 450, Cincinnati, Ohio 45246, serves as the Administrator,
fund accountant and Transfer Agent to the Fund pursuant to a Master Services Agreement.
As
Administrator, Ultimus assists in supervising all operations of the Fund (other than those performed by the Adviser under the
Investment Advisory Agreement). Ultimus has agreed to perform or arrange for the performance of the following services (under
the Master Services Agreement, Ultimus may delegate all or any part of its responsibilities thereunder):
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prepare and assemble
reports required to be sent to the Fund’s shareholders and arrange for the printing and dissemination of such reports;
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assemble reports
required to be filed with the SEC and files such completed reports with the SEC;
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file the Fund’s
federal income and excise tax returns and the Fund’s state and local tax returns;
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assist and advise
the Fund regarding compliance with the 1940 Act and with its investment policies and limitations; and
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make such reports
and recommendations to the Board as the Board reasonably requests or deems appropriate.
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As
Fund Accountant, Ultimus maintains the accounting books and records for the Fund, including journals containing an itemized daily
record of all purchases and sales of portfolio securities, all receipts and disbursements of cash and all other debits and credits,
general and auxiliary ledgers reflecting all asset, liability, reserve, capital, income and expense accounts, including interest
accrued and interest received, and other required separate ledger accounts. Ultimus also maintains a monthly trial balance of
all ledger accounts; performs certain accounting services for the Fund, including calculation of the NAV per share, calculation
of the dividend and capital gain distributions, reconciles cash movements with the custodian, verifies and reconciles with the
custodian all daily trade activities; provides certain reports; obtains dealer quotations or prices from pricing services used
in determining NAV; and prepares an interim balance sheet, statement of income and expense, and statement of changes in net assets
for the Fund.
As
Transfer Agent, Ultimus performs the following services in connection with the Fund’s shareholders: maintains records for
the Fund’s shareholders of record; processes shareholder purchase and redemption orders; processes transfers and exchanges
of shares of the Fund on the shareholder files and records; processes dividend payments and reinvestments; and assists in the
mailing of shareholder reports and proxy solicitation materials.
Ultimus
receives fees from the Fund for its services as Administrator, Fund Accountant and Transfer Agent, and is reimbursed for certain
expenses assumed pursuant to the Master Services Agreement.
Because
the Fund is newly organized, no information regarding the fees paid by the Fund to Ultimus is included in this SAI.
The
Master Services Agreement between the Trust, on behalf of the Fund, and Ultimus, unless otherwise terminated as provided in the
Master Services Agreement, is renewed automatically for successive one-year periods.
The
Master Services Agreement provides that Ultimus shall not be liable for any error of judgment or mistake of law or any loss suffered
by the Trust in connection with the matters to which the Master Services Agreement relate, except a loss from willful misfeasance,
bad faith or gross negligence in the performance of its duties, or from the reckless disregard by Ultimus of its obligations and
duties thereunder.
Custodian
U.S.
Bank, N.A. (the “Custodian”), located at 425 Walnut Street, Cincinnati, Ohio 45202, (the “Custodian”)
serves as custodian to the Fund pursuant to a Custody Agreement. The Custodian’s responsibilities include safeguarding and
controlling the Fund’s cash and securities, handling the receipt and delivery of securities, and collecting interest and
dividends on the Fund’s investments.
Independent
Registered Public Accounting Firm
BBD,
LLP, located at 1835 Market Street, 3rd Floor, Philadelphia, Pennsylvania 19103, serves as the independent registered public accounting
firm for the Fund and to audit the financial statements of the Fund and assists in preparing the Fund’s federal, state,
and excise tax returns for the fiscal year ending May 31.
Legal
Counsel
Kilpatrick
Townsend & Stockton LLP, located at 4208 Six Forks Road, Suite 1400, Raleigh, North Carolina 27609, serves as legal counsel
to the Trust and the Trust’s Independent Trustees.
Compliance
Consulting Agreement
Under
the terms of a Compliance Consulting Agreement with the Trust, Ultimus provides an individual with the requisite background and
familiarity with the federal securities laws to serve as the Trust’s CCO and to administer the Trust’s compliance
policies and procedures. For these services, the Fund pays Ultimus a base fee of $12,000 per annum, plus an asset-based fee computed
at the annual rate of 0.01% of the average net assets of the Fund in excess of $100 million. In addition, the Fund reimburses
Ultimus for its reasonable out-of-pocket expenses relating to these compliance services.
GENERAL
INFORMATION
Other
Payments by the Fund. The Fund may enter into agreements with financial intermediaries pursuant to which the Fund may pay
financial intermediaries for non-distribution-related sub-transfer agency, administrative, sub-accounting, and other shareholder
services. Payments made pursuant to such agreements are generally based on either (1) a percentage of the average daily net assets
of Fund shareholders serviced by a financial intermediary, or (2) the number of Fund shareholders serviced by a financial intermediary.
Any payments made pursuant to such agreements may be in addition to, rather than in lieu of, distribution fees the Fund may pay
to financial intermediaries pursuant to the Fund’s distribution plan, if any.
Other
Payments by the Adviser. The Adviser, in its discretion, may make payments from its 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 Fund, its service providers or their respective affiliates, as incentives
to help market and promote the Fund and/or in recognition of its 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 Fund, the Distributor
or shareholders of the Fund 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 the 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 the 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 may also make payments from its 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 the Fund by financial intermediaries’ customers, a flat fee or other measures as determined from time
to time by the Adviser. 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.
Investors
should understand that some financial intermediaries may also charge their clients fees in connection with purchases of shares
or the provision of shareholder services.
Description
of Shares
The
Trust is an unincorporated business trust organized under Ohio law on February 28, 2012. Trust’s Declaration of Trust authorizes
the Board to divide shares into series, each series relating to a separate portfolio of investments, and to further divide shares
of a series into separate classes. In the event of a liquidation or dissolution of the Trust or an individual series or class,
shareholders of a particular series or class would be entitled to receive the assets available for distribution belonging to such
series or class. Shareholders of a series or class are entitled to participate equally in the net distributable assets of the
particular series or class involved on liquidation, based on the number of shares of the series or class that are held by each
shareholder. If any assets, income, earnings, proceeds, funds or payments are not readily identifiable as belonging to any particular
series or class, the Trustees shall allocate them among any one or more series or classes as they, in their sole discretion, deem
fair and equitable. Subject to the Declaration of Trust, determinations by the Board as to the allocation of liabilities, and
the allocable portion of any general assets, with respect to the Fund and each Fund class is conclusive.
Shares
of the Fund, when issued, are fully paid and non-assessable. Shares have no subscription, preemptive or conversion rights. Shares
do not have cumulative voting rights. Shareholders are entitled to one vote for each full share held and a fractional vote for
each fractional share held. Shareholders of all series and classes of the Trust, including the Fund, will vote together and not
separately, 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 series or class. Rule 18f-2 under the 1940 Act provides, in substance, that any
matter required to be submitted to the holders of the outstanding voting securities of an investment company such as the Trust
shall not be deemed to have been effectively acted upon unless approved by the holders of a majority of the outstanding shares
of each series or class affected by the matter. A series or class is affected by a matter unless it is clear that the interests
of each series or class in the matter are substantially identical or that the matter does not affect any interest of the series
or class. Under Rule 18f-2, the approval of an investment advisory agreement, a distribution plan or any change in a fundamental
investment policy would be effectively acted upon with respect to a series or class only if approved by a majority of the outstanding
shares of such series or class. However, the Rule also provides that the ratification of the appointment of independent accountants
and the election of Trustees may be effectively acted upon by shareholders of the Trust voting together, without regard to a particular
series or class.
Trustee
Liability
The
Declaration of Trust provides that the Trustees will not be liable in any event in connection with the affairs of the Trust, except
as such liability may arise from his or her own bad faith, willful misfeasance, gross negligence or reckless disregard of their
duties to the Trust and its holders of beneficial interest. It also provides that all third parties shall look solely to the Trust’s
property for satisfaction of claims arising in connection with the affairs of the Trust. With the exceptions stated, the Declaration
of Trust provides that a Trustee or officer is entitled to be indemnified against all liability in connection with the affairs
of the Trust.
Trust
Liability
Under
Ohio law, liabilities of the Trust to third persons, including the liabilities of any series, extend to the whole of the trust
estate to the extent necessary to discharge such liabilities. However, the Declaration of Trust contains provisions intended to
limit the liabilities of each series to the applicable series and the Trustees and officers of the Trust intend that notice of
such limitation be given in each contract, instrument, certificate, or undertaking made or issued on behalf of the Trust by the
Trustees or officers. There is no guarantee that the foregoing steps will prove effective or that the Trust will be successful
in preventing the assets of one series from being available to creditors of another series.
Code
of Ethics
The
Trust, the Adviser and the Distributor have each adopted a Code of Ethics (each a “COE” and, collectively, the “COEs”)
that is designed to prevent their respective personnel subject to the COE from engaging in deceptive, manipulative, or fraudulent
activities in connection with securities held or to be acquired by the Fund (which securities may also be held by persons subject
to the COEs). These COEs permit personnel subject to the COEs to invest in securities, including securities that may be purchased
or held by the Fund, but prohibit such personnel from engaging in personal investment activities which compete with or attempt
to take advantage of the Fund’s planned portfolio transactions. Each of these parties monitors compliance with its respective
COE.
Anti-Money
Laundering Program
The
Trust has adopted an anti-money laundering (“AML”) program, as required by applicable law, that is designed to prevent
the Funds from being used for money laundering or the financing of terrorist activities. The Trust’s AML Compliance Officer
is responsible for implementing and monitoring the operations and internal controls of the program. Compliance officers at certain
of the Funds’ service providers are also responsible for monitoring aspects of the AML program. The AML program is subject
to the continuing oversight of the Board.
Proxy
Voting Policies and Procedures
The
Trust and the Adviser have adopted Proxy Voting Policies and Procedures that describe how the Fund intends to vote proxies relating
to portfolio securities. The Proxy Voting Policies and Procedures of the Trust and the Adviser are attached to this SAI as Appendix
B and Appendix C, respectively. No later than August 31st of each year, information regarding how the Fund voted proxies relating
to portfolio securities during the prior twelve-month period ended June 30th is available without charge upon request by calling
1-833-517-1010, or on the SEC’s website at www.sec.gov.
Ownership
of Fund Shares
As
of 30 days prior to the date of this SAI, the Fund had no shares outstanding. Therefore, the Trustees and Trust officers as a
group owned less than 1% of the outstanding shares of the Fund.
Portfolio
Holdings Disclosure Policy
The
Board has adopted a policy to govern the circumstances under which disclosure regarding securities purchased, sold, and held by
the Fund (“Portfolio Securities”), may be made to shareholders of the Fund or other persons. The Trust’s CCO
is responsible for monitoring the use and disclosure of information relating to Portfolio Securities. Although no material conflicts
of interest are believed to exist that could disadvantage the Fund or its shareholders, various safeguards have been implemented
to protect the Fund and its shareholders from conflicts of interest, including: the adoption of COEs pursuant to Rule 17j-1 under
the 1940 Act designed to prevent fraudulent, deceptive or manipulative acts by officers and employees of the Trust, the Adviser
and the Distributor in connection with their personal securities transactions; the adoption by the Adviser and the Distributor
of insider trading policies and procedures designed to prevent their employees’ misuse of material non-public information;
and the adoption by the Trust of a Code of Ethics for officers that requires the Chief Executive Officer and CFO of the Trust
to report to the Board any affiliations or other relationships that could potentially create a conflict of interest with the Fund.
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Public disclosure
regarding Portfolio Securities is made in the Fund’s Annual Reports and Semi-Annual Reports to shareholders, and in
quarterly holdings reports on Form N-Q (“Official Reports”), which are available on the SEC’s website at
http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C.. Except for
such Official Reports and as otherwise expressly permitted by the Trust’s policy, shareholders and other persons may
not be provided with information regarding Portfolio Securities held, purchased or sold by the Fund.
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Information regarding
Portfolio Securities and other information regarding the investment activities of the Fund, may be disclosed to rating and
ranking organizations for use in connection with their rating or ranking of the Fund, but only if such disclosure is approved
and monitored by the Trust’s CCO. Each disclosure arrangement has been authorized by the Fund and/or the Adviser in
accordance with the Fund’s disclosure of portfolio holdings policy upon a determination that this disclosure serves
as legitimate business purpose of the Fund and that each organization is subject to a duty of confidentiality.
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Information regarding
the general market exposure of the Fund may be disclosed, if such information is also disclosed on the Fund’s website
and the information does not identify specific Portfolio Securities.
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Information regarding
Portfolio Securities as of the end of the most recent calendar quarter may be disclosed to any other person or organization
at the request of such person or organization, but only if such information is at least 30 days old.
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The Trust’s
CCO may approve the disclosure of holdings of or transactions in Portfolio Securities that is made on the same basis to all
shareholders of the Fund.
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The Fund’s
policy relating to disclosure of holdings of Portfolio Securities does not prohibit disclosure of information to the Adviser
or to other Trust service providers, including the Trust’s administrator, distributor, custodian, legal counsel, accountants
and printers/typesetters, N-PORT and N-CEN vendors, pricing and liquidity vendors and consultants or to brokers and dealers
through which the Fund purchases and sells Portfolio Securities. Below is a table that lists each service provider that may
receive non-public portfolio information along with information regarding the frequency of access to, and limitations on use
of, portfolio information.
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Type
of Service Provider
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Typical
Frequency of Access to
Portfolio
Information
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Restrictions
on Use
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Adviser
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Daily
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Contractual
and Ethical
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Administrator
and Distributor
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Daily
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Contractual
and Ethical
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Custodian
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Daily
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Ethical
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Accountants
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During
annual audit
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Ethical
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Legal
counsel
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Regulatory
filings, board meetings, and if a legal issue regarding the portfolio requires counsel’s review
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Ethical
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Printers/Typesetters
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Twice
a year – printing of Semi-Annual and Annual Reports
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No
formal restrictions in place – typesetter or printer would not receive portfolio information until at least 30 days
old
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Broker/dealers
through which the Fund purchases and sells portfolio securities
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Daily
access to the relevant purchase and/or sale – no broker/dealer has access to the Fund’s entire portfolio
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Contractual
and Ethical
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N-PORT
and N-CEN Vendors
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Monthly
or Annually
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Contractual
and Ethical
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Pricing
and Liquidity Vendors
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Daily
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Contractual
and Ethical
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Such
disclosures may be made without approval of the Trust’s CCO because the Board has determined that the Fund and its shareholders
are adequately protected by the restrictions on use in those instances listed above.
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The Trust’s
CCO may approve other arrangements under which information relating to Portfolio Securities held by the Fund, or purchased
or sold by the Fund (other than information contained in Official Reports), may be disclosed. The Trust’s CCO shall
approve such an arrangement only if he or she concludes (based on a consideration of the information to be disclosed, the
timing of the disclosure, the intended use of the information and other relevant factors) that the arrangement is reasonably
necessary to aid in conducting the ongoing business of the Trust and is unlikely to affect adversely the Fund or any shareholder
of the Fund. The Trust’s CCO must inform the Board of any such arrangements that are approved by the Trust’s CCO,
and the rationale supporting approval, at the next regular quarterly meeting of the Board following such approval.
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Neither the Adviser
or the Trust (or any affiliated person, employee, officer, trustee or director of the Adviser or the Trust) may receive any
direct or indirect compensation in consideration of the disclosure of information relating to Portfolio Securities held, purchased,
or sold by the Fund.
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Other
Expenses
In
addition to the Management Fee, the Fund pays all expenses not expressly assumed by the Adviser, including, without limitation,
the fees and expenses of its independent registered public accounting firm and of its legal counsel; the fees of the Administrator,
Distributor, and Transfer Agent; the costs of printing and mailing to shareholders Annual and Semi-Annual Reports, proxy statements,
prospectuses, SAIs and supplements thereto; bank transaction charges and custody fees; any costs associated with shareholder meetings,
including proxy solicitors’ fees and expenses; registration and filing fees; federal, state or local income or other taxes;
interest; membership fees of the Investment Company Institute and similar organizations; fidelity bond and liability insurance
premiums; and any extraordinary expenses, such as indemnification payments or damages awarded in litigation or settlements made.
Benchmark
Descriptions
The
Fund compares its performance to standardized indices or other measurements of investment performance. Specifically, the Fund
compares its performance to the S&P 500 Index. The S&P 500 Index tracks the 500 most widely held stocks on the NYSE or
NASDAQ and seeks to represent the entire stock market by reflecting the risk and return of all large cap companies. The S&P
500 Index is widely regarded as a gauge of large cap U.S. equities. The S&P 500 Index includes 500 leading companies and captures
approximately 80% coverage of available market capitalization.
ADDITIONAL
TAX INFORMATION
The
following summarizes certain additional tax considerations generally affecting the Fund and its shareholders that are not described
in the Prospectus. No attempt is made to present a detailed explanation of the tax treatment of the Fund or its shareholders.
The discussions here and in the Prospectus are not intended as a substitute for careful tax planning and are based on tax laws
and regulations that are in effect on the date hereof; such laws and regulations may be changed by legislative, judicial, or administrative
action. Investors are advised to consult their tax advisors with specific reference to their own tax situations.
The
Fund intends to qualify and remain qualified as a regulated investment company under Subchapter M of the Internal Revenue Code
of 1986, as amended (the “Code”). In order to so qualify, the Fund must elect to be a regulated investment company
or have made such an election for a previous year and must satisfy certain requirements relating to the amount of distributions
and source of its income for a taxable year. At least 90% of the gross income of the Fund must be derived from dividends, interest,
payments with respect to securities loans, gains from the sale or other disposition of stocks, securities, or foreign currencies,
and other income derived with respect to the Fund’s business of investing in such stock, securities, or currencies, and
net income derived from an investment in a “qualified publicly traded partnership” as defined in section 851(h) of
the Code (the “source-of-income test”). Any income derived by the Fund from a partnership (other than a “qualified
publicly traded partnership”) or trust is treated as derived with respect to the Fund’s business of investing in stock,
securities, or currencies only to the extent that such income is attributable to items of income that would have been qualifying
income if realized by the Fund in the same manner as by the partnership or trust.
The
Fund may not qualify as a regulated investment company for any taxable year unless it satisfies certain requirements with respect
to the diversification of its investments at the close of each quarter of the taxable year (the “asset diversification tests”).
In general, at least 50% of the value of the Fund’s total assets must be represented by cash, cash items, government securities,
securities of other regulated investment companies, and other securities which, with respect to any one issuer, do not represent
more than 5% of the total assets of the Fund nor more than 10% of the outstanding voting securities of such issuer. In addition,
not more than 25% of the value of the Fund’s total assets may be invested in the securities (other than government securities
or the securities of other regulated investment companies) of any one issuer; the securities of two or more issuers (other than
securities of another regulated investment company) if the issuers are controlled by the Fund and they are, pursuant to Treasury
Regulations, engaged in the same or similar or related trades or businesses; or the securities of one or more “qualified
publicly traded partnerships”.
The
Fund intends to satisfy all of the requirements of the source-of-income test and the asset diversification tests on an ongoing
basis for continued qualification as a regulated investment company.
If
the Fund fails to meet either the asset diversification test with respect to a taxable quarter or the source-of-income test with
respect to a taxable year, the Code provides several remedies, provided certain procedural requirements are met, which will allow
the Fund to retain its status as a “regulated investment company.” There is a remedy for failure to satisfy the asset
diversification tests, if the failure was due to reasonable cause and not willful neglect, subject to certain divestiture and
procedural requirements and the payment of a tax. In addition, there is a remedy for a de minimis failure of the asset diversification
tests, which would require corrective action but no tax. In addition, the Code allows for the remedy of a failure of the source-of-income
test, if the failure was due to reasonable cause and not willful neglect, subject to certain procedural requirements and the payment
of a tax.
Under
current tax law, qualifying corporate dividends are taxable at long-term capital gains tax rates. The long-term capital gains
rate for individual taxpayers is currently at a maximum rate of 20%, with lower rates potentially applicable to taxpayers depending
on their income levels. For 2020, individual taxpayers with taxable incomes above $441,550 ($495,600 for married taxpayers filing
jointly and $469,050 for heads of households) are subject to a 20% rate of tax on long-term capital gains and qualified dividends.
For individual taxpayers with taxable incomes not in excess of $40,000 ($80,000 for married taxpayers filing jointly and $53,600
for heads of household), the long-term capital gains rate and rate on qualified dividends is 0%. All other taxpayers are subject
to a maximum 15% rate of tax on long-term capital gains and qualified dividends. The above income thresholds are subject to adjustment
for inflation beginning in taxable years after 2018.
If
the Fund designates a dividend as a capital gains distribution, it generally will be taxable to shareholders as long-term capital
gains, regardless of how long the shareholders have held their Fund shares or whether the dividend was received in cash or reinvested
in additional shares. All taxable dividends paid by the Fund other than those designated as qualified dividend income or capital
gains distributions will be taxable as ordinary income to shareholders, whether received in cash or reinvested in additional shares.
To the extent the Fund engages in increased portfolio turnover, short-term capital gains may be realized, and any distribution
resulting from such gains will be considered ordinary income for federal tax purposes.
Shareholders
who hold Fund shares in a tax-deferred account, such as a retirement plan, generally will not have to pay tax on Fund distributions
until they receive distributions from their account.
The
Fund will designate (1) any distribution that constitutes a qualified dividend as qualified dividend income; (2) any tax-exempt
distribution as an exempt-interest dividend; (3) any distribution of long-term capital gains as a capital gain dividend; (4) any
dividend eligible for the corporate dividends received deduction; and (5) any distribution that is comprised of qualified REIT
dividend income as a Section 199A dividend as such in a written notice provided to shareholders after the close of the Fund’s
taxable year. Shareholders should note that, upon the sale or exchange of Fund shares, if the shareholder has not held such shares
for at least six months, any loss on the sale or exchange of those shares will be treated as long-term capital loss to the extent
of the capital gain dividends received with respect to the shares.
Foreign
currency gains or losses on non-U.S. dollar denominated bonds and other similar debt instruments and on any non-U.S. dollar denominated
futures contracts, options and forward contracts that are not Section 1256 contracts generally will be treated as ordinary income
or loss.
To
the extent that a distribution from the Fund is taxable, it is generally included in a shareholder’s gross income for the
taxable year in which the shareholder receives the distribution. However, if the Fund declares a dividend in October, November,
or December but pays it in January, it will be taxable to shareholders as if the dividend was received in the year it was declared.
Each year, shareholders will receive a statement detailing the tax status of any Fund distributions for that year.
The
Fund’s net realized capital gains from securities transactions will be distributed only after reducing such gains by the
amount of any available capital loss carryforwards. Capital losses may be carried forward to offset any capital gains.
A
4% nondeductible excise tax is imposed on regulated investment companies that fail to currently distribute an amount equal to
specified percentages of their ordinary taxable income and capital gain net income (excess of capital gains over capital losses).
The Fund intends to make sufficient distributions or deemed distributions of its ordinary taxable income and any capital gain
net income prior to the end of each calendar year to avoid liability for this excise tax.
If
for any taxable year the Fund does not qualify for the special federal income tax treatment afforded regulated investment companies
all of its taxable income will be subject to federal income tax at regular corporate rates (without any deduction for distributions
to its shareholders). Such distributions will be taxable to the shareholders as dividends to the extent of the Fund’s current
and accumulated earnings and profits. Such distributions may be eligible for (i) the dividends-received deduction in the case
of corporate shareholders or (ii) treatment as “qualified dividend income” in the case of noncorporate shareholders.
In
general, a shareholder who sells or redeems shares will realize a capital gain or loss, which will be long-term or short-term
depending upon the shareholder’s holding period for Fund shares. An exchange of shares is treated as a sale and any gain
may be subject to tax.
The
Fund will be required in certain cases to withhold and remit to the U.S. Treasury a percentage (currently 24%) of taxable dividends
or of gross proceeds realized upon sale paid to shareholders who have failed to provide a correct taxpayer identification number
in the manner required, who are subject to withholding by the Internal Revenue Service (the “IRS”) for failure to
include properly 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.”
Depending
upon the extent of the Fund’s 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, the Fund may be subject
to the tax laws of such states or localities. In addition, in those states and localities that have income tax laws, the treatment
of the Fund and its shareholders under such laws may differ from their treatment under federal income tax laws.
Certain
U.S. shareholders, including individuals and estates and trusts, will be subject to an additional 3.8% Medicare tax on all or
a portion of their “net investment income,” which should include dividends from the Fund and net gains from the disposition
of shares of the Fund. U.S. shareholders are urged to consult their own tax advisors regarding the implications of the additional
Medicare tax resulting from an investment in the Fund.
The
Fund will send shareholders information each year on the tax status of dividends and distributions. A dividend or capital gains
distribution paid shortly after shares have been purchased, although in effect a return of investment, is subject to federal income
taxation. Dividends from net investment income, along with capital gains, will be taxable to shareholders, whether received in
cash or reinvested in Fund shares and no matter how long the shareholder has held Fund shares, even if they reduce the NAV of
shares below the shareholder’s cost, and thus, in effect, result in a return of a part of the shareholder’s investment.
Withholding
taxes may be imposed on certain types of payments made to “foreign financial institutions” (as specifically defined
in the Code) and certain other non-U.S. entities (including financial intermediaries). A 30% withholding tax is imposed on “withholdable
payments” to a foreign financial institution or to a foreign non-financial entity, unless (i) the foreign financial institution
undertakes certain diligence and reporting obligations or (ii) the foreign non-financial entity either certifies it does not have
any substantial U.S. owners or furnishes identifying information regarding each substantial U.S. owner.
For
these purposes, a “withholdable payment” includes any U.S. source payments of interest, dividends, rents, compensation
and other fixed or determinable annual or periodical gains, profits and income. If the payee is a foreign financial institution,
it must enter into an agreement with the U.S. Treasury requiring, among other things, that it undertake to identify accounts held
by certain U.S. persons or U.S.-owned foreign entities, annually report certain information about such accounts, and withhold
30% on payments to account holders whose actions prevent it from complying with these reporting and other requirements. Non-U.S.
investors should consult their tax advisors regarding this legislation and the potential implications of this legislation on their
particular circumstances.
FINANCIAL
STATEMENTS
The
Fund is newly organized and therefore no financial information is included in this SAI. You may request a copy of the Fund’s
Annual and Semi-Annual reports, once available, at no charge by calling the Fund at 1-833-517-1010.
