The Fund seeks to generate capital appreciation in rising and falling markets.
The Fund seeks to generate capital appreciation in rising and falling markets using a model-based long/short strategy that invests primarily in exchange-traded funds, inverse exchange-traded funds and other mutual funds that are representative of various U.S. large cap equity indices.
The Fund’s investment adviser utilizes a model in pursuing the Fund’s investment objective. The model produces long or short signals by using technical analysis that attempts to gauge the direction of the overall market by determining market breadth. Market breadth is a technique used in technical analysis that seeks to determine overall market direction by analyzing the number of companies/sectors advancing relative to the number declining or which companies/sectors are exhibiting positive vs. negative momentum.
The model uses a multi-step process in portfolio construction:
- The model analyzes GICS (Global Industry Classification Standard) industry groups over multiple time frames using a combination if trend following and mean reversion indicators with each industry group determined to be bullish or bearish.
- Industry groups are then cap-weighted to generate the overall composite score which will determine a bullish or bearish market state.
- Market states can move between bullish and bearish market states based on the direction and magnitude of change in the overall composite score.
- The Adviser uses these signals in determining portfolio allocations between long and short equity positions. These components are combined in a rules-based framework which determines allocations of 100% long or 100% short positions in U.S. large cap equity indices. The Fund does not short securities but invests in inverse exchange-traded funds in implementing its “short” strategy.
1 Load waivable. Please review prospectus for qualification. Other fees and expenses do apply to investments in the Fund.
2 The adviser may waive the Class I shares minimum account requirements if the adviser believes that the aggregated accounts of a financial intermediary will meet the minimum initial investment requirement. Lower minimum initial and additional investments may also be applicable in certain other circumstances, including purchases by certain tax deferred retirement programs.
Definition of terms:
Long: Buying a security such as a stock, commodity or currency, with the expectation that the asset will rise in value.
Short: Any sale that is completed by the delivery of a security borrowed by the seller. Short sellers assume they will be able to buy the stock at a lower amount that the price at which they sold short.
S&P 500 Index: An unmanaged composite of 500 large capitalization companies. This index is widely used by professional investors as a performance benchmark for large-cap stocks. You cannot invest directly in an index and unmanaged index returns do not reflect any fees, expenses or sales charges.
Futures Contracts: A contractual agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a pre-determined price in the future.