Under normal circumstances, the Fund invests primarily in a combination of futures contracts on the S&P 500 or NASDAQ (“Index Futures”), and investments, in money market funds, U.S. Treasury securities, and short term bonds (“Fixed Income Investments”). The Fund, however, may invest in exchange-traded funds (“ETFs”) and open-end mutual funds that provide exposure to broad-based U.S. equity securities indices (collectively, with Index Futures, “Portfolio Instruments”) rather than in Index Futures. Investments by the Fund in mutual funds or ETFs would be determined in the discretion of the Adviser based on several factors, including: market volatility, liquidity of trading vehicles, and trade execution costs. The percentage of the Fund’s net assets invested in futures contracts may fluctuate over time but under normal circumstances is generally expected to represent less than 10% of the Fund’s net assets based on mark-to-market values. However, the Fund’s notional exposure from derivative instruments may at times equal 100% of the Fund’s net assets. Under normal circumstances, the balance of the Fund’s net assets generally will be invested in Fixed Income Investments in an effort to generate income for the Fund.

In managing the Fund, the Adviser utilizes a tactical, systematic strategy that relies on a proprietary algorithmic model developed by the Adviser that incorporates mean-reversion analysis (the “Model”). Mean reversion refers to the concept that the market price of a particular equity securities index (“Index Market Exposure”) will, over time, typically return to a price within its recent historical trading range. For example, if the price of a given Index Market Exposure was to drop rapidly, the Model may signal this to be a buying opportunity for that Index Market Exposure, based on the belief that the price for the Index Market Exposure is likely to revert back to a higher price more consistent with the Index Market Exposure’s recent historical trading range. The Model also incorporates additional quantitative trading indicators that include relative strength, momentum, moving averages, breakouts and overbought/oversold conditions and trend-identification. Mean reversion is the primary indicator of a buying opportunity for the Fund, while the additional quantitative trading indicators confirm the existence of a buying opportunity. The additional quantitative trading indicators may be applied in the discretion of Adviser based on its assessment of the prevailing market environment.

The Model evaluates the historical trading range for a given Index Market Exposure to identify instances when the Index Market Exposure trades outside this range. Based on prevailing market conditions and short-term price movement analysis, the Model indicates when short term opportunities for gains may exist. The Model generally defines historical trading range as the spread between an Index Market Exposure’s highest and lowest trade price during a short period of time, typically 1-20 days. The Model generates daily signals (“buy” or “no buy”) for a particular Index Market Exposure indicating whether or not, taking into account the prevailing market environment, a short-term trading opportunity has been identified. The Fund generally exits positions when the Model indicates that the trading price for an Index Market Exposure position has risen above (fallen below) the Model’s pre-defined price thresholds. When the Model’s signals prompt the Fund to divest, in whole or in part, from Portfolio Instruments, the Fund typically will invest in money market funds, ultra-short term bond funds and comparable investments (collectively, “Defensive Investments”) in an effort to preserve capital. The Adviser selects among Defensive Investments primarily based on the Adviser’s assessment of their current yield. The Fund typically invests in Defensive Investments, sometimes for extended periods of time, until the Model indicates “buy” signals in the equity markets.

Trades involving Portfolio Instruments generally are short-term in nature (1 to 14 days), depending on prevailing market conditions, which may involve active and frequent trading and high portfolio turnover. However, certain trades could span longer periods of time, depending on market conditions. At times, the Systematic Opportunities Fund’s investments may be indirectly focused on one or more sectors or areas of the economy.