The Fund is an actively managed exchange traded fund (“ETF”) that is a fund of funds. As an actively managed fund, the Fund does not seek to replicate the performance of an index. The Fund seeks to achieve its investment objective by investing through other. ETFs in foreign and domestic fixed income securities. The fixed income securities in which the ETFs invest are U.S. Treasuries, investment grade U.S. bonds, high-yield U.S. bonds (also known as “junk” bonds), U.S. aggregate bond, municipal bonds and international government bonds of any maturity and duration. The advisor uses proprietary quantitative models with discretionary implementation to allocate the Fund’s assets. The advisor uses both internal and external market research sources to inform, guide, and make investment decisions.

The adviser uses its proprietary investment model to rank 5 major fixed income asset classes (U.S. Treasuries, investment grade U.S. bonds, high-yield U.S. bonds, U.S. aggregate bond, and international government bond) based on the strongest combination of yield spread and price momentum (higher price momentum and lower yield spreads). A yield spread is the difference between yields on fixed income securities of varying maturities, credit ratings and risk, which is calculated by deducting the yield of one instrument from another. Price momentum measures the rate of the rise or fall in stock prices. The three highest-ranked asset classes are allocated to the portfolio, while the two lowest ranked asset classes are left out of the portfolio. In addition, if an asset class is not displaying positive momentum, it is not included in the portfolio even it is one of the three highest ranked asset classes. To represent the aforementioned asset classes, the adviser utilizes low-cost, index-tracking ETFs. These ETFs must have a competitive expense ratio, illustrate the ability to closely track the desired asset class’s benchmark, and maintain an appropriate amount of daily trading volume to help avoid liquidity issues.

This process is repeated monthly. The weighting for any individual asset class depends on the prevailing market conditions, with a maximum weight of 56.67% for high-yield U.S. bonds and U.S. Treasuries and a maximum weight of 21.67% for U.S. aggregate bond, investment grade U.S. bonds, and international government bonds. When 2 or less asset classes meet the model’s price momentum criteria, the Fund may invest heavily in U.S. Treasuries and U.S. short-term bonds until more asset classes become favorable for investing.