The fund normally invests at least 80% of its net assets (including any borrowings for investment purposes) in equity securities and derivatives that have similar economic characteristics to equity securities or the equity markets. The fund may purchase the stocks of companies of any size and invest in any type of equity security, but its focus will typically be on common stocks of large-cap U.S. companies.

The fund seeks to achieve its objective by investing in a broad portfolio of U.S. large-cap stocks while using hedging strategies designed to mitigate tail risk (i.e., the threat of significant losses during an equity market drawdown) and provide strong risk-adjusted returns with lower volatility than the overall equity markets. The fund seeks to cushion volatility during equity market downturns and incorporate modest leverage in a way that preserves returns that may be generated from stock selection while reducing the volatility inherent in investments in equity securities over time.

While the adviser invests with an awareness of the outlook for certain industries and sectors, the adviser generally relies on fundamental, bottom-up research in selecting stocks for the fund. The adviser does not emphasize either a growth or value style of investing but generally seeks stocks that the adviser believes have the most favorable combination of company fundamentals, earnings potential, and relative valuation. Sector allocations are largely the result of the fund’s focus on bottom-up stock selection.

The fund may use a variety of derivatives for a number of purposes. Specifically, the fund incorporates hedging and tail risk mitigating strategies primarily through the use of a derivatives overlay that is generally designed to manage the fund’s overall volatility and correlation to equity markets. The derivatives overlay typically involves buying and/or selling futures and options that reference particular U.S. large-cap equity securities, equity indexes,

and U.S. Treasury securities. However, other derivatives and strategies may be employed in efforts to mitigate tail risk or dampen the fund’s overall volatility, as well as for other purposes.

The fund is “nondiversified,” meaning it may invest a greater portion of its assets in fewer issuers than is permissible for a “diversified” fund.

At times, the fund may have a significant portion of its assets invested in the same economic sector, such as the information technology sector.