# EDGAR Filing Document

**Accession Number:** 0001518042
**File Stem:** 0001580642-23-001280
**Filing Date:** 2023-3
**Character Count:** 385315
**Document Hash:** 3e69bb67bebbbe33987d42f57b224ca3
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001580642-23-001280.hdr.sgml**: 20230306

**ACCESSION NUMBER**: 0001580642-23-001280

**CONFORMED SUBMISSION TYPE**: 497

**PUBLIC DOCUMENT COUNT**: 5

**FILED AS OF DATE**: 20230306

**DATE AS OF CHANGE**: 20230306

**EFFECTIVENESS DATE**: 20230306

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NORTHERN LIGHTS FUND TRUST II
- **CENTRAL INDEX KEY:** 0001518042
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** DE

**FILING VALUES:**
- **FORM TYPE:** 497
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-174926
- **FILM NUMBER:** 23709100

**BUSINESS ADDRESS:**
- **STREET 1:** 225 PICTORIA DRIVE
- **STREET 2:** SUITE 450
- **CITY:** CINCINNATI
- **STATE:** OH
- **ZIP:** 45246
- **BUSINESS PHONE:** 631-470-2600

**MAIL ADDRESS:**
- **STREET 1:** 4221 NORTH 203RD STREET, SUITE 100
- **CITY:** ELKHORN
- **STATE:** NE
- **ZIP:** 68022

## Series and Classes Contracts Data

### Invenomic Fund (Series ID: S000057713)

---

|  |  |  |
|:---|:---|:---|
| Class Name                                      | Ticker Symbol | Class ID   |
| Invenomic Fund Institutional Class shares       | BIVIX         | C000186112 |
| Invenomic Fund Investor Class shares            | BIVRX         | C000186113 |
| Invenomic Fund Super Institutional Class shares | BIVSX         | C000211283 |

---

## Series and Classes Contracts Data

### Invenomic Fund (Series ID: S000057713)

| Class ID   | Class Name                                      | Ticker Symbol   |
|:---|:---|:---|
| C000186112 | Invenomic Fund Institutional Class shares       | BIVIX           |
| C000186113 | Invenomic Fund Investor Class shares            | BIVRX           |
| C000211283 | Invenomic Fund Super Institutional Class shares | BIVSX           |

![](image_001.jpg)

**Invenomic Fund**

**Institutional Class (Symbol: BIVIX)**

**Investor Class (Symbol: BIVRX)**

**Super Institutional Class (Symbol: BIVSX)**

**Prospectus**

**March 1, 2023**

**The U.S. Securities and Exchange Commission ("SEC") has not approved or disapproved of these securities or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.**

**Invenomic Fund**

a series of the Northern Lights Fund Trust II (the "Trust")

**Invenomic Fund**

a series of the Northern Lights Fund Trust II (the "Trust")

**<u>**TABLE OF CONTENTS**</u>**

---

| | |
|:---|:---|
| **Summary Section** | **1** |
| **Investment Strategies, Related Risks and Disclosure of Portfolio Holdings** | **7** |
| &nbsp;&nbsp;&nbsp;Investment Objective | 7 |
| &nbsp;&nbsp;&nbsp;Principal Investment Strategies | 7 |
| &nbsp;&nbsp;&nbsp;Principal Risks of Investing in the Fund | 8 |
| &nbsp;&nbsp;&nbsp;Portfolio Holdings Information | 11 |
| **Management of the Fund** | **12** |
| &nbsp;&nbsp;&nbsp;The Adviser | 12 |
| &nbsp;&nbsp;&nbsp;Portfolio Managers | 12 |
| **Shareholder Information** | **13** |
| &nbsp;&nbsp;&nbsp;Choosing a Share Class | 13 |
| &nbsp;&nbsp;&nbsp;More About Super Institutional Class Shares | 13 |
| &nbsp;&nbsp;&nbsp;More About Institutional Class Shares | 13 |
| &nbsp;&nbsp;&nbsp;More About Investor Class Shares | 13 |
| &nbsp;&nbsp;&nbsp;Share Price | 14 |
| &nbsp;&nbsp;&nbsp;How to Purchase Shares | 15 |
| &nbsp;&nbsp;&nbsp;How to Redeem Shares | 16 |
| &nbsp;&nbsp;&nbsp;Redemption Fee | 18 |
| &nbsp;&nbsp;&nbsp;Tools to Combat Frequent Transactions | 19 |
| &nbsp;&nbsp;&nbsp;Distribution of Fund Shares | 20 |
| **Distributions and Taxes** | **21** |
| &nbsp;&nbsp;&nbsp;Tax Status, Dividends and Distributions | 21 |
| **Financial Highlights** | **22** |
| **PRIVACY NOTICE** | **25** |

---

**Summary Section** 

**Investment Objective.** The investment objective of the Invenomic Fund (the "Fund") is to seek long term capital appreciation.

**Fees and Expenses of the Fund.** This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp; **Shareholder Fees**<br> *(fees paid directly from your investment)* | &nbsp;&nbsp;**Institutional<br> Class** | &nbsp;&nbsp;**Investor <br> Class** | &nbsp;&nbsp;**Super Institutional Class** |
| &nbsp;&nbsp;Maximum Sales Charge (Load) Imposed on Purchases<br> (as a percentage of offering price) |  |  |  |
| &nbsp;&nbsp;Maximum Deferred Sales Charge (Load) |  |  |  |
| &nbsp;&nbsp;Redemption Fee <br> (as a percentage of amount redeemed within 60 days of purchase) | &nbsp;&nbsp;1.00% | &nbsp;&nbsp;1.00% | &nbsp;&nbsp;1.00% |
| &nbsp;&nbsp; **Annual Fund Operating Expenses**<br> *(expenses that you pay each year as a percentage of the value of your investment)* |  |  |  |
| &nbsp;&nbsp;Management Fees | &nbsp;&nbsp;1.74% | &nbsp;&nbsp;1.74% | &nbsp;&nbsp;1.74% |
| &nbsp;&nbsp;Distribution and/or Service (Rule 12b-1) Fees | &nbsp;&nbsp;0.00% | &nbsp;&nbsp;0.25% | &nbsp;&nbsp;0.00% |
| &nbsp;&nbsp;Total Other Expenses | &nbsp;&nbsp;1.18% | &nbsp;&nbsp;1.18% | &nbsp;&nbsp;0.93% |
| &nbsp;&nbsp; Shareholder Servicing Expenses | &nbsp;&nbsp; 0.25% | &nbsp;&nbsp;0.25% |  |
| &nbsp;&nbsp; Dividends on Securities Sold Short<sup>(1)</sup> | &nbsp;&nbsp;0.59% | &nbsp;&nbsp;0.59% | &nbsp;&nbsp;0.59% |
| &nbsp;&nbsp; Interest Expense | &nbsp;&nbsp;0.10% | &nbsp;&nbsp;0.10% | &nbsp;&nbsp;0.10% |
| &nbsp;&nbsp; Expense Recapture<sup>(2)</sup> | &nbsp;&nbsp;0.03% | &nbsp;&nbsp;0.03% | &nbsp;&nbsp;0.03% |
| &nbsp;&nbsp; Remaining Other Expenses | &nbsp;&nbsp;0.21% | &nbsp;&nbsp;0.21% | &nbsp;&nbsp;0.21% |
| &nbsp;&nbsp;Acquired Funds Fees and Expenses<sup>(3)</sup> | &nbsp;&nbsp;<u>0.01%</u> | &nbsp;&nbsp;<u>0.01%</u> | &nbsp;&nbsp;<u>0.01%</u> |
| &nbsp;&nbsp;Total Annual Fund Operating Expenses | &nbsp;&nbsp;2.93% | &nbsp;&nbsp;3.18% | &nbsp;&nbsp;2.68% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) There are additional costs associated
with the use of short sales. Short-sale dividends generally reduce the market value of the securities by the amount of the dividend declared;
thus increasing the Fund's unrealized gain or reducing the Fund's unrealized loss on the securities sold short.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Total Other Expenses includes 0.03%
in recouped management fees in accordance with the operating expense limitation agreement. between Invenomic Capital Management LP (the
"Adviser") and the Fund. Pursuant to the agreement, the Adviser has agreed to waive its fees and/or absorb expenses of the
Fund to ensure that Total Annual Fund Operating Expenses (excluding any front-end or contingent deferred sales loads, brokerage fees and
commissions, acquired fund fees and expenses, borrowing costs (such as interest and dividend expense on securities sold short), taxes
and extraordinary or non-recurring expenses, including, but not limited to, litigation) for the Fund do not exceed 2.23%, 2.48% and 1.98%
of the Fund's average net assets, for Institutional Class, Investor Class shares and Super Institutional Class, respectively, through
February 28, 2024. The Adviser is permitted to receive reimbursement from the Fund for fees it waived and Fund expenses it paid, subject
to the limitation that: (1) the reimbursement for fees and expenses will be made only if payable within three years from the date the
fees and expenses were initially waived or reimbursed; and (2) the reimbursement may not be made if it would cause the expense limitation
in effect at the time of the waiver or currently in effect, whichever is lower, to be exceeded. This operating expense limitation agreement
can be terminated only by, or with the consent of, the Board of Trustees.

&nbsp;&nbsp;&nbsp;&nbsp;(3) This number represents
the combined total fees and operating expenses of underlying funds owned by the Fund and would not be a direct expense incurred by the
Fund or deducted from Fund assets. Since this number does not represent a direct operating expense of the Fund, the operating expenses
set forth in the Fund's financial highlights do not include this figure.

**Example.** This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. The fee waiver/expense reimbursement arrangement discussed in the table above is reflected only through February 28, 2024. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;**One Year** | &nbsp;&nbsp;**Three Years** | &nbsp;&nbsp;**Five Years** | &nbsp;&nbsp;**Ten Years** |
| &nbsp;&nbsp;**Institutional Class** | &nbsp;&nbsp;$296 | &nbsp;&nbsp;$901 | &nbsp;&nbsp;$1531 | &nbsp;&nbsp;$3226 |
| &nbsp;&nbsp;**Investor Class** | &nbsp;&nbsp;$321 | &nbsp;&nbsp;$974 | &nbsp;&nbsp;$1652 | &nbsp;&nbsp;$3459 |
| &nbsp;&nbsp;**Super Institutional Class** | &nbsp;&nbsp;$271 | &nbsp;&nbsp;$826 | &nbsp;&nbsp;$1408 | &nbsp;&nbsp;$2985 |

---

**Portfolio Turnover.** The Fund pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in Total Annual Fund Operating Expenses or in the Example, affect the Fund's performance. During the most recent fiscal year, the Fund's portfolio turnover rate was 149% of the average value of its portfolio.

**Principal Investment Strategies.** The Fund invests primarily in both long and short positions in equity securities principally traded in United States markets. Under normal market conditions, the Adviser seeks to be fully invested in the long portfolio (greater than 80%), while allowing the size of the short portfolio to fluctuate based on the market opportunity.

The long positions are identified by the Fund's adviser, Invenomic Capital Management, LP (the "Adviser") as securities that are both undervalued and timely, where the Adviser believes that the return potential compensates for the risk involved. The short positions are identified as securities that the Adviser believes are overvalued and that the price of the security will fall, delivering both a positive return for the Fund while simultaneously reducing the overall risk of the portfolio. The Adviser evaluates long and short positions on multiple characteristics to determine inclusion in the overall portfolio. The Adviser establishes price targets for each position, which are updated frequently. The Adviser monitors these positions and will seek to sell or cover a position when it believes that the security no longer has an attractive risk/return profile. The Adviser will maintain a diversified orientation and seek to construct a portfolio that has less volatility than the U.S. equity markets in general. Further, under normal circumstances, it is expected that the Fund's long positions will not exceed approximately 125% of the Fund's net assets.

The Fund may invest in equity securities of any type and across all market capitalizations. Equity securities in which the Fund may invest may include exchange-traded and over-the-counter common and preferred stocks, warrants, rights, convertible securities, depositary receipts, limited partnership interests, shares of other investment companies, including exchange-traded funds, and real estate investment trusts ("REITs"). The Fund may invest, from time to time, a significant portion of its assets in smaller issuers which are more volatile and less liquid than investments in issuers with larger market capitalizations. The Fund's long and short positions may involve (without limit) equity securities of foreign issuers that are traded in the markets of the United States, either directly or through American Depositary Receipts ("ADRs"), European Depository Receipts ("EDRs"), Global Depositary Receipts ("GDRs") or International Depositary Receipts ("IDRs"). The Fund may also invest up to 35% of its total assets directly in equity securities of foreign issuers that are traded outside of the United States. In general, the Fund's investments are broadly diversified over a number of industries and, as a matter of policy, the Fund is limited to investing less than 25% of its total assets in any one industry.

The Fund may invest in securities of companies operating less than three years ("unseasoned issuers") and in initial public offerings ("IPO") of securities.

The Fund may invest up to 20% of its net assets in high yield debt obligations, such as bonds and debentures, used by corporations and other business organizations. High yield debt obligations are referred to as "junk bonds" and are not considered to be investment grade. The Fund may invest up to 15% of its net assets in illiquid securities, including securities that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions on resale.

The Fund may achieve certain investment exposures, including short positions, through derivative transactions, including options on securities and options on indices. The Fund may use derivatives to enhance total return or to hedge against fluctuations in securities prices and currency exchange rates. When the Fund enters into derivative transactions, it may be required to segregate assets, or enter into offsetting positions, in accordance with applicable regulations.

**Principal Risks.** Remember that in addition to possibly not achieving your investment goals, you could lose money by investing in the Fund. The principal risks of investing in the Fund are:

* *Active Management Risk.* The Fund is actively managed with discretion and may underperform market indices or other mutual funds with similar investment
objectives.

* *ADR, EDR, GDR and IDR Risk.* ADRs, EDRs, GDRs or IDRs may be subject to some of the same risks as direct investment in foreign companies,
which includes international trade, currency, political, regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary's transaction fees. Unsponsored ADRs, EDRs, GDRs and IDRs are
organized independently and without the cooperation of the foreign issuer of the underlying securities, and involve additional risks because
U.S. reporting requirements do not apply and the issuing bank will recover shareholder distribution costs from changes in share prices
and payment of dividends. EDRs, GDRs and IDRs can involve currency risk since, unlike ADRs, they may not be U.S. dollar-denominated.

* *Derivatives Risk.* The Fund may invest in derivative instruments, including options. In general, a
derivative contract typically involves leverage, i.e., it provides long or short exposure to a reference instrument thereby providing
the potential for gain or loss from a change in the level of the market price of a security, currency or commodity (or a basket or index)
in a notional amount that exceeds the amount of cash or assets required to establish or maintain the derivative contract. In this way,
the Fund can obtain market exposure to the reference instrument which is greater than the net assets used to establish the derivative
position. The Fund's investments in derivatives may not perform as anticipated, may not be able to be closed out at a favorable
time or price, or may increase the Fund's volatility. Increases and decreases in the value of the Fund's portfolio may be
magnified when the Fund uses leverage. Futures and forward contract prices, and the prices of the related contracts in which the Fund
may trade, are highly volatile. Such prices are influenced by, among other things: changing supply and demand relationships; government
trade, fiscal, monetary and exchange control programs and policies; national and international political and economic events; and changes
in interest rates.

&nbsp;&nbsp;&nbsp;&nbsp;· Equity Risk . Common
and preferred stocks represent equity ownership in a company. The Fund's investments in equity securities may decline in value due
to factors affecting the issuing companies, their industries, or the economy and equity markets, generally. The values of equity securities
may decline for a number of reasons which directly relate to the issuing company, such as management performance, financial leverage and
reduced demand for the issuer's goods or services. They may also decline due to factors which affect a particular industry or industries,
such as labor shortages or increased production costs and competitive conditions within an industry. In addition, they may decline due
to general market conditions which are not specifically related to a company or industry, such as real or perceived adverse economic conditions,
changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment, generally.

&nbsp;&nbsp;&nbsp;&nbsp;· Exchange-Traded Funds ("ETF") Risk . Investments in ETFs carry security specific risks and market risk. Also, if the area of the market
representing the underlying index or benchmark does not perform as expected for any reason, the value of the investment in the ETF may
decline. In addition, due to transactions via market prices rather than at net asset value, the performance of an ETF may not completely
replicate the performance of the underlying index.

* *Fixed Income and Interest Rate Risk.* The value of the Fund's investments in fixed income securities
and derivatives will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed
income securities and derivatives owned by the Fund. On the other hand, if rates fall, the value of fixed income securities and derivatives
generally increases. Securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more
volatile than securities with shorter durations. Any U.S. Federal Reserve System revisions to its current policy of maintaining the federal
rates at a low level and purchasing large quantities of securities issued or guaranteed by the U.S. government, its agencies or instrumentalities
on the open market to support U.S. economic recovery will likely have a negative effort on the value of most fixed income securities and
result in an increase in price volatility of fixed income investments. 

* *Foreign Investment Risk.* Foreign investing involves risks not typically associated with U.S. investments, including, but not limited to, currency exchange
rate volatility, political, social or economic instability, and differences in taxation, auditing and other financial practices. Neither
existing SEC regulations nor regulations of any other U.S. governmental agency apply to transactions on foreign markets.

* *General Market Risk.* Foreign and domestic economic
growth and market conditions, interest rate levels, political events, terrorism, war, natural disasters,
disease/virus epidemics and other events are among the factors affecting the securities markets in which the Fund invests. There
is risk that these and other factors may adversely affect the Fund's performance. You could lose money by investing in the Fund.

* *High Yield Debt Obligations Risk.* The Fund may invest up to 20% of its net assets in high yield debt obligations, such as bonds and debentures, issued by corporations
and other business organizations. An issuer of debt obligations may default on its obligation to pay interest and repay principal. Such
high yield debt obligations are referred to as "junk bonds" and are not considered to be investment grade.

* *Illiquid Securities Risk.* Investing in illiquid securities is subject to certain risks, such as limitations on resale and uncertainty in determining
valuation. Limitations on resale may adversely affect the marketability of portfolio securities and the Fund might be unable to dispose
of restricted or other illiquid securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemptions
within seven days.

* *IPO Risk.* IPO risk is the risk that the market value of IPO shares will fluctuate considerably due to certain factors, such as the absence
of a prior public market, unseasoned trading, the small number of shares available for trading and limited information about the issuer.
The purchase of IPO shares may involve high transaction costs. IPO shares are subject to market risk and liquidity risk.

* *Large-Cap Securities Risk.* Stocks of large companies as a group can fall out of favor with the market, causing the Fund to underperform investments that
have a greater focus on mid-cap or small-cap stocks. Larger, more established companies may be slow to respond to challenges and may grow
more slowly than smaller companies.

* *Leverage Risk.* The Fund will use its derivative investments to increase long or short exposure to an underlying reference instrument, thereby
creating investment leverage. Investment leverage has the effect of magnifying losses from the Fund's investments.

* *Liquidity Risk.* Low trading volume, a lack of a market maker, or contractual or legal restrictions may limit or prevent the Fund from selling
securities or closing derivative positions at desirable times or prices.

* *Market Risk.* The net asset value ("NAV") of the Fund will change with changes in the market value of its portfolio positions.
Investors may lose money. Although the long portfolio of the Fund will invest in stocks the Adviser believes to be undervalued, there
is no guarantee that the prices of these stocks will not move even lower.

* *Management Risk.* Management risk is the risk that the investment process used by the Fund's
portfolio manager could fail to achieve the Fund's investment goal and cause an investment in the Fund to lose value. The Fund is
subject to the risk of poor stock selection. In other words, the Adviser may not be successful in its strategy of taking long positions
in stocks the manager believes to be undervalued and short positions in stocks the manager believes to be overvalued. 

* *Options Risk.* Options are subject to sudden price movements and are highly leveraged, in that
payment of a relatively small purchase price, called a premium, gives the buyer the right to acquire an underlying futures contract, forward
contract or commodity that has a face value substantially greater than the premium paid. The buyer of an option risks losing the entire
purchase price of the option. The writer, or seller, of an option risks losing the difference between the purchase price received for
the option and the price of the futures contract, forward contract or commodity underlying the option that the writer must purchase or
deliver upon exercise of the option. There is no limit on the potential loss.

&nbsp;&nbsp;&nbsp;&nbsp;· Other Investment Companies Risk . The main risk of investing in other investment companies, including ETFs, is the risk that the
value of the securities underlying an investment company might decrease. Because the Fund may invest in other investment companies, you
will pay a proportionate share of the expenses of that other investment company (including management fees, administration fees and custodial
fees) in addition to the expenses of the Fund.

* *Portfolio Turnover Risk.* The Fund may buy and sell investments frequently. Such a strategy often involves higher transaction costs, including brokerage
commissions, and may increase the amount of capital gains (in particular, short term gains) realized by the Fund. Shareholders may pay
tax on such capital gains.

* *REIT Risk.* The value of the Fund's REIT securities may be adversely affected by changes
in the value of the REIT's underlying property or the property secured by mortgages the REIT holds, or loss of REIT status. In addition,
the Fund may experience a decline in its income from REIT securities due to falling interest rates or decreasing dividend payments.

* *Segregated Account Risk.* A security held in a segregated account cannot be sold while the position it is covering is outstanding, unless it is replaced
with a similar security. As a result, there is a possibility that segregation of a large percentage of the Fund's assets could impede
portfolio management or the Fund's ability to meet redemption requests or other current obligations.

* *Short Position Risk.* Short sales of securities may result in gains if a security's price declines, but may result in losses if a security's
price rises. The Fund will incur a loss as a result of a short position if the price of the short position instrument increases in value
between the date of the short position sale and the date on which an offsetting position is purchased. Short positions may be considered
speculative transactions and involve special risks, including greater reliance on the Adviser's ability to accurately anticipate
the future value of a security or instrument The Fund's losses are potentially unlimited in a short position transaction. The Fund
may not always be able to close out a short position at a particular time or at an acceptable price. The Fund may not always be able to
borrow a security the Fund seeks to sell short at a particular time or at an acceptable price. Thus, there is a risk that the Fund may
be unable to fully implement its investment strategy that involves short selling due to a lack of available stocks or for some other reason.
The Fund also must segregate liquid assets equal to the difference between (a) the market value of the securities sold short at the time
they were sold short and (b) the value of the collateral deposited with the broker in connection with the short sale (not including the
proceeds from the short sale). While the short position is open, the Fund must maintain segregated assets at such a level that the amount
segregated plus the amount deposited with the broker as collateral equal the current market value of the securities sold short.

* *Smaller and Medium Size Issuer Risk.* Investments in small and medium capitalization companies may be more vulnerable to adverse business or economic developments
than investments in larger, more established organizations. The earnings and prospects of these companies are more volatile than larger
companies. Small and mid-sized companies may experience higher failure rates than do larger companies.

* *Tax Risk.* Certain of the Fund's investment strategies, including transactions in options and hedging transactions may be subject
to numerous tax rules governing derivatives in the US Internal Revenue Code of 1986, as amended, and the regulations thereunder (and supplemented
by various forms of published and unpublished guidance from the US tax authorities and by the case law), the effect of which may have
adverse tax consequences for the Fund.

* *Unseasoned Issuers Risk.* Unseasoned issuers may not have an established financial history and may have limited product lines, markets or financial resources.
Unseasoned issuers may depend on a few key personnel for management and may be susceptible to losses and risks of bankruptcy. As a result,
such securities may be more volatile and difficult to sell.

**Performance.** The bar chart and Average Annual Total Returns table gives some indication of the risks of investing in the Fund. The bar chart shows the performance of the Institutional Class shares of the Fund from calendar year to calendar year. The Average Annual Total Returns table shows how the Fund's average annual returns compare with those of a broad measure of market performance. Remember, the Fund's past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future. Updated performance information will be available at no cost by calling the Fund toll-free at 855-466-3406 on the Fund's website www.invenomic.com.

**Institutional Class Shares<sup>1</sup>**

**Calendar Year Returns as of December 31,**

![](image_001.gif)

During the period shown in the bar chart, the best performance for a quarter was 32.37% (for the quarter ended March 31, 2021). The worst performance was -14.36% (for the quarter ended March 31, 2020).

------

<sup>1</sup> The returns shown in the bar chart are for Institutional Class shares. The performance of Super Institutional Class shares and Investor Class shares will differ due to differences in expenses and sales load charges.

**Average Annual Total Returns for the periods ended December 31, 2022**

---

| | | | |
|:---|:---|:---|:---|
|  | &nbsp;&nbsp;**One<br> Year** | &nbsp;&nbsp;**Five<br> Years** | &nbsp;&nbsp;**Since<br> Inception<sup>\*</sup>** |
| &nbsp;&nbsp;**Institutional Class Shares** |  |  |  |
| &nbsp;&nbsp;Return Before Taxes | &nbsp;&nbsp;49.89% | &nbsp;&nbsp;25.54% | &nbsp;&nbsp;24.68% |
| &nbsp;&nbsp;Return After Taxes on Distributions | &nbsp;&nbsp;36.73% | &nbsp;&nbsp;21.28% | &nbsp;&nbsp;20.76% |
| &nbsp;&nbsp;Return After Taxes on Distributions and Sale of Fund Shares | &nbsp;&nbsp;29.75% | &nbsp;&nbsp;18.99% | &nbsp;&nbsp;18.55% |
| &nbsp;&nbsp;**Investor Class Shares** |  |  |  |
| &nbsp;&nbsp;Return Before Taxes | &nbsp;&nbsp;49.50% | &nbsp;&nbsp;25.28% | &nbsp;&nbsp;24.40% |
| &nbsp;&nbsp;**Super Institutional Shares** |  |  |  |
| &nbsp;&nbsp;Return Before Taxes | &nbsp;&nbsp;50.27% | &nbsp;&nbsp;N/A | &nbsp;&nbsp;32.90%<sup>\*\*</sup> |
| &nbsp;&nbsp;**S&P Composite 1500 Total Return Index** <br> (reflects no deduction for fees, expenses or taxes) | &nbsp;&nbsp;-17.77% | &nbsp;&nbsp;9.15% | &nbsp;&nbsp;10.11% |

---

\* The Invenomic Fund commenced operations on June 19, 2017.

\*\* Super Institutional Class shares commenced operations on May 10, 2019.

After-tax returns are based on the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes; actual after-tax returns depend on an individual investor's tax situation and may differ from those shown. If you own shares of the Fund in a tax-deferred account, such as an individual retirement account or a 401(k) plan, this information is not applicable to your investment. A higher after-tax return results when a capital loss occurs upon redemption and translates into an assumed tax deduction that benefits the shareholder.

The S&P Composite 1500 Total Return Index combines three leading indices, the S&P 500, the S&P MidCap 400, and the S&P SmallCap 600, to cover approximately 90% of U.S. market capitalization. It is designed for investors seeking to replicate the performance of the U.S. equity market or benchmark against a representative universe of tradable stocks. Index returns assume reinvestment of dividends. Investors may not invest in the Index directly; unlike the Fund's returns, the Index does not reflect any fees or expenses.

**Investment Adviser.** Invenomic Capital Management, LP serves as the Fund's investment adviser (the "Adviser").

**Portfolio Managers.** The following serve as the Fund's portfolio managers:

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Portfolio Manager** | &nbsp;&nbsp;**Primary Title** | &nbsp;&nbsp;**With the Fund Since:** |
| &nbsp;&nbsp;Ali Motamed | &nbsp;&nbsp;Lead Portfolio Manager | &nbsp;&nbsp;May 2017 |
| &nbsp;&nbsp;Benjamin R. Deschaine, CAIA | &nbsp;&nbsp;President | &nbsp;&nbsp;May 2017 |

---

**Purchase and Sale of Fund Shares.** You may conduct transactions by mail (Invenomic Fund, c/o Ultimus Fund Solutions, LLC, 4221 North 203rd Street, Suite 100, Elkhorn, NE 68022), or by telephone at 1-855-466-3406. Investors who wish to purchase or redeem Fund shares through a financial intermediary should contact the financial intermediary directly. The minimum initial investment in each share class of the Fund is $50 million, $50,000 and $5,000, for Super Institutional Class, Institutional Class and Investor Class shares, respectively, with a minimum subsequent investment of $500 for each Class. For Retirement Accounts and Automatic Investment Plans, the minimal initial investment in Investor Class shares is $1,000, with a minimum subsequent investment of $50. The Fund reserves the right to waive minimum initial investment or minimum subsequent investment requirements in its sole discretion.

**Tax Information.** The Fund's distributions are taxable, and will be taxed as ordinary income or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an individual retirement account.

**Payments to Broker-Dealers and Other Financial Intermediaries.** If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create conflicts of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

**Investment Strategies, Related Risks and Disclosure of Portfolio Holdings** 

**Investment Objective** 

The primary investment objective of the Fund is to seek long term capital appreciation.

The Fund's investment objective is not fundamental and may be changed without the approval of shareholders. Shareholders will be given 60 days' notice of any such change.

**Principal Investment Strategies** 

The Fund invests primarily in both long and short positions in equity securities principally traded in United States markets. Under normal market conditions, the Sub-Adviser seeks to be fully invested in the long portfolio (greater than 80%), while allowing the size of the short portfolio to fluctuate based on the market opportunity.

The long positions are identified by the Fund's adviser, Invenomic Capital Management, LP (the "Adviser") as securities that are both undervalued and timely, where the Adviser believes that the return potential compensates for the risk involved. The short positions are identified as securities that the Adviser believes are overvalued and that the price of the security will fall, delivering both a positive return for the Fund while simultaneously reducing the overall risk of the portfolio. The Adviser evaluates long and short positions on multiple characteristics to determine inclusion in the overall portfolio. These may include traditional valuation metrics such as Price/Free Cash Flow and Price/Earnings as well as evaluating business and industry trends, competitive positioning, capital deployment and timeliness. The Adviser establishes price targets for each position, which are updated frequently. The Adviser monitors these positions and will seek to sell or cover a position when it believes that the security no longer has an attractive risk/return profile. In choosing whether to sell or cover a position, the Adviser will also take into consideration tax efficiency and the availability of other investment opportunities. The Adviser will maintain a diversified orientation and seek to construct a portfolio that has less volatility than the U.S. equity markets in general. Further, under normal circumstances, it is expected that the Fund's long positions will not exceed approximately 125% of the Fund's net assets.

The Fund may invest in equity securities of any type and across all market capitalizations. Equity securities in which the Fund may invest may include exchange-traded and over-the-counter common and preferred stocks, warrants, rights, convertible securities, depositary receipts, limited partnership interests, shares of other investment companies, including exchange-traded funds, and real estate investment trusts ("REITs"). The Fund may invest, from time to time, a significant portion of its assets in smaller issuers which are more volatile and less liquid than investments in issuers with larger market capitalizations.

The Fund's long and short positions may involve (without limit) equity securities of foreign issuers that are traded in the markets of the United States, either directly or through American Depositary Receipts ("ADRs"), European Depository Receipts ("EDRs"), Global Depositary Receipts ("GDRs") or International Depositary Receipts ("IDRs"). Depositary receipts may be available through "sponsored" or "unsponsored" facilities. A sponsored facility is established jointly by the issuer of the security underlying the receipt and the depository, whereas an unsponsored facility is established by the depository without participation by the issuer of the underlying security. Holders of unsponsored depositary receipts generally bear all of the costs of the unsponsored facility. The depository of an unsponsored facility is frequently under no obligation to distribute shareholder communications received from the issuer of the deposited security or to pass through, to the holders of the receipts, voting rights with respect to the deposited securities. The depository of unsponsored depositary receipts may provide less information to receipt holders. The Fund may also invest up to 25% of its total assets directly in equity securities of foreign issuers that are traded outside the United States. In general, the Fund's investments are broadly diversified over a number of industries and, as a matter of policy, the Fund is limited to investing less than of 25% of its total assets in any one industry.

The Fund may invest up to 20% of its net assets in high yield debt obligations, such as bonds and debentures, used by corporations and other business organizations. High yield debt obligations are referred to as "junk bonds" and are not considered to be investment grade. The Fund may invest up to 15% of its net assets in illiquid securities, including securities that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions on resale.

The Fund may achieve certain investment exposures, including short positions, through derivative transactions, including options on securities and options on indices. The Fund may use derivatives, typically call options, to enhance total return or to hedge against fluctuations in securities prices and currency exchange rates. A call option gives the purchaser of the option the right to buy, and a writer has the obligation to sell, the underlying security at the exercise price at any time prior to the expiration of the contract, regardless of the market price of the underlying security during the option period. The Fund will typically sell a call option in lieu of shorting a stock. When the Fund enters into derivative transactions, it may be required to segregate assets, or enter into offsetting positions, in accordance with applicable regulations.

The Fund may invest in securities of companies operating less than three years ("unseasoned issuers"). The Fund may participate as a purchaser in initial public offerings of securities ("IPO"). An IPO is a company's first offering of stock to the public.

To meet margin requirements, redemptions or pending investments, the Fund may also temporarily hold a portion of its assets in full faith and credit obligations of the United States government and in short-term notes, commercial paper, or other money market instruments.

**Temporary Defensive Positions**

The Fund may, from time to time, take temporary defensive positions that are inconsistent with the Fund's principal investment strategies in attempting to respond to adverse market, economic, political or other conditions. The Adviser will determine when market conditions warrant temporary defensive measures. For example, during such periods, 100% of the Fund's assets may be invested in short-term, high-quality fixed income investments, eligible U.S. dollar-denominated money market instruments, cash or cash equivalents. Temporary defensive positions may be initiated by the Adviser when market conditions make pursuing its investment strategy used for the Fund inconsistent with the best interests of the Fund. When the Fund takes temporary defensive positions, it may not achieve its investment objective.

**Principal Risks of Investing in the Fund** 

Before investing in the Fund, you should carefully consider your own investment goals, the amount of time you are willing to leave your money invested and the amount of risk you are willing to take. **Remember that in addition to possibly not achieving your investment goals, you could lose money by investing in the Fund.** The value of your investment in the Fund will go up and down with the prices of the securities in which the Fund invests. The principal risks of investing in the Fund are:

*Active Management Risk.* The Fund is actively managed and its performance therefore will reflect in part the ability of the Sub Adviser to select securities and to make investment decisions that are suited to achieving the Fund's investment objective. Due to its active management, the Fund could underperform other mutual funds with similar investment objectives.

 

*ADR, EDR, GDR and IDR Risk.* ADRs, EDRs, GDRs or IDRs may be subject to some of the same risks as direct investment in foreign companies, which includes international trade, currency, political, regulatory and diplomatic risks. ADRs are receipts issued by US banks evidencing ownership in securities of foreign issuers. Securities of foreign issuers, and consequently ADRs, may decrease in value due to changes in currency exchange rates, the economic climate in the issuer's home country or for a variety of other reasons. An EDR is a European bank certificate issued in more than one country for shares in a foreign company. The shares are held by a foreign branch of an international bank. The shares trade as domestic shares but are offered for sale globally through the various bank branches. A GDR is a bank certificate issued in more than one country for shares in a foreign company. The shares are held by a foreign branch of an international bank. The shares trade as domestic shares but are offered for sale globally through the various bank branches. An IDR is a negotiable certificate issued by a bank representing ownership of stock of a foreign company held by the bank in trust. In a sponsored ADR arrangement, the foreign issuer assumes the obligation to pay some or all of the depositary's transaction fees. Unsponsored ADRs, EDRs, GDRs and IDRs are organized independently and without the cooperation of the foreign issuer of the underlying securities, and involve additional risks because U.S. reporting requirements do not apply and the issuing bank will recover shareholder distribution costs from changes in share prices and payment of dividends. EDRs, GDRs and IDRs can involve currency risk since, unlike ADRs, they may not be U.S. dollar-denominated.

 

*Cyber Security Risk.* As the use of technology has become more prevalent in the course of business, the Fund has become more susceptible to operational, financial and information security risks resulting from cyber-attacks and/or technological malfunctions. Cyber-attacks include, among other things, the attempted theft, loss, misuse, improper release, corruption or destruction of, or unauthorized access to, confidential or highly restricted data relating to the Fund and its shareholders; and attempted compromises or failures to systems, networks, devices and applications relating to the operations of the Fund and its service providers. Cyber security breaches may result from unauthorized access to digital systems (*e.g.*, through "hacking" or malicious software coding) or from outside attacks, such as denial-of-service attacks on websites (*i.e*., efforts to make network services unavailable to intended users).

 

*Derivatives Risk.* The Fund may invest in derivative instruments, including options. A derivative contract will obligate or entitle the Fund to deliver or receive an asset or cash payment that is based on the change in value of one or more securities or indices. Even a small investment in derivative contracts can have a big impact on the Fund's stock market exposure. Therefore, using derivatives can disproportionately increase losses and reduce opportunities for gains when stock prices are changing. The Fund may not fully benefit from or may lose money on derivatives if changes in their value do not correspond accurately to changes in the value of the Fund's holdings. The other parties to certain derivative contracts present the same types of default risk as issues of fixed income securities in that the counterparty may default on its payment obligations or become insolvent. Derivatives can also make the Fund less liquid and harder to value, especially in declining markets.

*Equity Risk.* Common and preferred stocks represent equity ownership in a company. The Fund's investments in equity securities may decline in value due to factors affecting the issuing companies, their industries, or the economy and equity markets, generally. The values of equity securities may decline for a number of reasons which directly relate to the issuing company, such as management performance, financial leverage and reduced demand for the issuer's goods or services. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. In addition, they may decline due to general market conditions which are not specifically related to a company or industry, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment, generally.

*Exchange Traded Funds ("ETF") Risk.* Investing in securities issued by investment companies (including unit investment trusts) and ETFs involves risks similar to those of investing directly in the securities and other assets held by the investment company or ETF. Unlike shares of typical mutual funds or unit investment trusts, shares of ETFs are traded on an exchange throughout a trading day and bought and sold based on market values and not at net asset value. For this reason, shares could trade at either a premium or discount to net asset value. The trading price of an ETF is expected to closely track the actual net asset value of the ETF, and the Fund will generally gain or lose value consistent with the performance of the ETF's portfolio securities. The Fund will pay brokerage commissions in connection with the purchase and sale of shares of ETFs. In addition, the Fund will indirectly bear its pro rata share of the fees and expenses incurred by a fund it invests in, including advisory fees. These expenses are in addition to the advisory and other expenses that the Fund bears directly in connection with its own operations.

*Fixed Income and Interest Rate Risk.* The value of the Fund's investments in fixed income securities and derivatives will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed income securities and derivatives owned by the Fund. On the other hand, if rates fall, the value of fixed income securities and derivatives generally increases. Securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. Any U.S. Federal Reserve System revisions to its current policy of maintaining the federal rates at a low level and purchasing large quantities of securities issued or guaranteed by the U.S. government, its agencies or instrumentalities on the open market to support U.S. economic recovery will likely have a negative effort on the value of most fixed income securities and result in an increase in price volatility of fixed income investments*.*

*Foreign Investment Risk.* Foreign investing involves risks not typically associated with U.S. investments, including adverse fluctuations in foreign currency values, adverse political, social and economic developments, less liquidity, greater volatility, less developed or less efficient trading markets, political instability and differing auditing and legal standards. A portion of the derivatives trades may take place on foreign markets. Neither existing SEC regulations nor regulations of any other U.S. governmental agency apply to transactions on foreign markets. The securities of foreign issuers may be less liquid and more volatile than securities of comparable U.S. issuers. The costs associated with portfolio transactions are often higher in foreign countries than the United States. Additionally, investments in securities of foreign issuers, even those publicly traded in the United States, may involve risks which are in addition to those inherent in domestic investments. Foreign companies may not be subject to the same regulatory requirements of U.S. companies, and as a consequence, there may be less publicly available information about such companies. Also, foreign companies may not be subject to uniform accounting, auditing, and financial reporting standards and requirements comparable to those applicable to U.S. companies. Foreign governments and foreign economies, particularly in emerging markets, may be less stable than the U.S. government and the U.S. economy.

*General Market Risk.* Domestic and foreign economic growth and market conditions, interest rate levels, political events, terrorism, war, natural disasters, disease/virus epidemics and other events are among the factors affecting the securities markets in which the Fund invests. There is risk that these and other factors may adversely affect the Fund's performance. These events could reduce consumer demand or economic output, result in market closure, travel restrictions or quarantines, and generally have a significant impact on the economy. These events could also impair the information technology and other operational systems upon which the Fund's service providers, including the Adviser, rely, and could otherwise disrupt the ability of employees of the Fund's service providers to perform essential tasks on behalf of the Fund. Governmental and quasi-governmental authorities and regulators throughout the world have in the past responded to major economic disruptions with a variety of significant fiscal and monetary policy changes, including but not limited to, direct capital infusions into companies, new monetary programs and dramatically lower interest rates. An unexpected or quick reversal of these policies, or the ineffectiveness of these policies, could increase volatility in securities markets, which could adversely affect the Fund's investments. Accordingly, you should consider your own investment goals, time horizon, and risk tolerance before investing in the Fund. An investment in the Fund may not be appropriate for all investors and is not intended to be a complete investment program. An investment in the Fund is not a deposit in the bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. You may lose money by investing in the Fund.

*High Yield Debt Obligations Risk.* The Fund may invest up to 20% of its net assets in high yield debt obligations, such as bonds and debentures, issued by corporations and other business organizations. An issuer of debt obligations may default on its obligation to pay interest and repay principal. Also, changes in the financial strength of an issuer or changes in the credit rating of a security may affect its value. Such high yield debt obligations are referred to as "junk bonds" and are not considered to be investment grade.

 

*Illiquid Securities Risk.* Investing in illiquid securities is subject to certain risks, such as limitations on resale and uncertainty in determining valuation. Limitations on resale may adversely affect the marketability of portfolio securities and the Fund might be unable to dispose of restricted or other illiquid securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemptions within seven days. The Fund might, in order to dispose of restricted securities, have to register securities resulting in additional expense and delay. Adverse market conditions could impede such a public offering of such securities.

 

*IPO Risk.* IPO risk is the risk that the market value of IPO shares will fluctuate considerably due to certain factors, such as the absence of a prior public market, unseasoned trading, the small number of shares available for trading and limited information about the issuer. The purchase of IPO shares may involve high transaction costs. IPO shares are subject to market risk and liquidity risk. When the Fund's asset base is small, a significant portion of the Fund's performance could be attributable to investments in IPOs, because such investments would have a magnified impact on the Fund. As the Fund's assets grow, the effect of the Fund's investments in IPOs on the Fund's performance probably will decline, which could reduce the Fund's performance. Because of the price volatility of IPO shares, the Fund may choose to hold IPO shares for a very short period of time. This may increase the turnover of the Fund's portfolio and may lead to increased expenses to the Fund, such as commissions and transaction costs. In addition, the Adviser cannot guarantee continued access to IPOs.

 

*Large-Cap Securities Risk.* Stocks of large companies as a group can fall out of favor with the market, causing the Fund to underperform investments that have a greater focus on mid-cap or small-cap stocks. Larger, more established companies may be slow to respond to challenges and may grow more slowly than smaller companies.

 

*Leverage Risk.* The Fund will use its derivative investments to increase long or short exposure to an underlying reference instrument, thereby creating investment leverage. Investment leverage has the effect of magnifying losses from the Fund's investments.

 

*Liquidity Risk.* Low trading volume, a lack of a market maker, or contractual or legal restrictions may limit or prevent the Fund from selling securities or closing derivative positions at desirable times or prices.

 

*Market Risk.* The net asset value ("NAV") of the Fund will change with changes in the market value of its portfolio positions. Investors may lose money. Although the long portfolio of the Fund will invest in stocks the Adviser believes to be undervalued, there is no guarantee that the prices of these stocks will not move even lower.

 

*Management Risk.* Management risk is the risk that the investment process used by the Fund's portfolio manager could fail to achieve the Fund's investment goal and cause an investment in the Fund to lose value. The Fund is subject to the risk of poor stock selection. In other words, the Adviser may not be successful in its strategy of taking long positions in stocks the manager believes to be undervalued and short positions in stocks the manager believes to be overvalued. Further, since the Adviser will manage both a long and a short portfolio, there is the risk that the Adviser or may make more poor investment decisions than an adviser of a typical stock mutual fund with only a long portfolio may make.

*Options Risk .* Options are subject to sudden price movements and are highly leveraged, in that payment of a relatively small purchase price, called a premium, gives the buyer the right to acquire an underlying futures contract, forward contract or commodity that has a face value substantially greater than the premium paid. The buyer of an option risks losing the entire purchase price of the option. The writer, or seller, of an option risks losing the difference between the purchase price received for the option and the price of the futures contract, forward contract or commodity underlying the option that the writer must purchase or deliver upon exercise of the option. There is no limit on the potential loss. In particular, the Fund may enter into options traded over-the-counter (or OTC options), which allows the Fund great flexibility to tailor the option to its needs. However, OTC options generally involve greater risk than exchange-traded options.

*Other Investment Companies Risk .* The main risk of investing in other investment companies, including ETFs, is the risk that the value of the securities underlying an investment company might decrease. Because the Fund may invest in other investment companies, you will pay a proportionate share of the expenses of that other investment company (including management fees, administration fees and custodial fees) in addition to the expenses of the Fund. As an investor in another investment company, the Fund would be subject to the risks of that investment company's portfolio. Investing in another investment company may also involve paying a premium above the value of that investment company's portfolio securities.

*Portfolio Turnover Risk.* The Fund may buy and sell investments frequently. Such a strategy often involves higher transaction costs, including brokerage commissions, and may increase the amount of capital gains (in particular, short term gains) realized by the Fund. Shareholders may pay tax on such capital gains.

 

*REIT Risk.* Investment in REITs is closely linked to the performance of the real estate markets. Property values or revenues from real estate investments may fall due to a number of factors, including but not limited to disruptions in real estate markets, increased vacancies or declining rents, increased property taxes and other operating costs, low demand or oversupply, the failure of borrowers to repay loans in a timely manner, changes in tax and regulatory requirements and changes in interest rates or rates of inflation. REITs are dependent upon the quality of their management and may not be diversified geographically or by property type. REITs whose underlying properties are concentrated in a particular industry or geographic region are subject to risks affecting such industries and regions. REITs generally tend to be small- to mid-cap stocks and are subject to risks of investing in those securities, including limited financial resources and dependency on heavy cash flow. REITs must satisfy certain requirements in order to qualify for favorable tax treatment under applicable tax laws, and a failure to qualify could adversely affect the value of the REIT. By investing in REITs through the Fund, a shareholder will bear expenses of the REITs in addition to expenses of the Fund.

*Segregated Account Risk.* A security held in a segregated account cannot be sold while the position it is covering is outstanding, unless it is replaced with a similar security. As a result, there is a possibility that segregation of a large percentage of the Fund's assets could impede portfolio management or the Fund's ability to meet redemption requests or other current obligations.

*Short Position Risk.* The Fund will engage in short sales, including those that are not "against the box," which means that the Fund may make short sales where the Fund does not currently own or have the right to acquire, at no added cost, securities identical to those sold short — in accordance with the provisions of the 1940 Act. In a typical short sale, the Fund borrows from a broker a security in order to sell the security to a third party. The Fund is then obligated to return a security of the same issuer and quantity at some future date. The Fund may realize a loss to the extent the security increases in value or a profit to the extent the security declines in value (after taking into account any associated costs). Short sales "against the box" may protect the Fund against the risk of losses in the value of a portfolio security because any decline in value of the security should be wholly or partially offset by a corresponding gain in the short position. Any potential gains in the security, however, would be wholly or partially offset by a corresponding loss in the short position. Short sales that are not "against the box" involve a form of investment leverage, and the amount of the Fund's loss on a short sale is potentially unlimited. The Fund may not always be able to close out a short position at a particular time or at an acceptable price. The Fund may not always be able to borrow a security the Fund seeks to sell short at a particular time or at an acceptable price. Thus, there is a risk that the Fund may be unable to fully implement its investment strategy that involves short selling due to a lack of available stocks or for some other reason. The Fund also must segregate liquid assets equal to the difference between (a) the market value of the securities sold short at the time they were sold short and<br> (b) the value of the collateral deposited with the broker in connection with the short sale (not including the proceeds from the short sale). While the short position is open, the Fund must maintain segregated assets at such a level that the amount segregated plus the amount deposited with the broker as collateral equal the current market value of the securities sold short.

 

*Smaller and Medium Size Issuer Risk.* Investments in small and medium capitalization companies may be more vulnerable than larger, more established organizations to adverse business or economic developments. In particular, small and medium-capitalization companies may have more price volatility, greater spreads between their bid and ask prices, significantly lower trading volumes, and cyclical or static growth prospects. Small-capitalization and medium-capitalization companies often have limited product lines, markets, and financial resources and may be dependent upon a relatively small management group. These securities may trade over-the-counter or on an exchange and may or may not pay dividends.

 

*Tax Risk.* Certain of the Fund's investment strategies, including transactions in options, futures contracts, swap contract and hedging transactions may be subject to numerous tax rules governing derivatives in the US Internal Revenue Code of 1986, as amended, and the regulations thereunder (and supplemented by various forms of published and unpublished guidance from the US tax authorities and by the case law), the effect of which may have adverse tax consequences for the Fund

 

*Unseasoned Issuers Risk.* Unseasoned issuers may not have an established financial history and may have limited product lines, markets or financial resources. Unseasoned issuers may depend on a few key personnel for management and may be susceptible to losses and risks of bankruptcy. As a result, such securities may be more volatile and difficult to sell.

 

**Portfolio Holdings Information** 

A description of the Fund's policies and procedures with respect to the disclosure of the Fund's portfolio holdings is available in the Fund's Statement of Additional Information ("SAI").

**Management of the Fund** 

**The Adviser** 

The Fund has entered into an Investment Advisory Agreement ("Advisory Agreement") with Invenomic Capital Management LP, located at 211 Congress Street, 8<sup>th</sup> Floor, Boston, MA 02110, under which the Adviser manages the Fund's investments subject to the supervision of the Board of Trustees. Under the Advisory Agreement, the Fund compensates the Adviser for its investment advisory services at the annual rate of 1.74% of the Fund's average daily net assets, payable on a monthly basis. The Adviser is registered as an investment adviser with the SEC.

*Fund Expenses.* The Fund is responsible for its own operating expenses. Pursuant to an operating expense limitation agreement between the Adviser and the Fund, the Adviser has agreed to reduce its management fees and/or pay expenses of the Fund to ensure that the total amount of Fund operating expenses (excluding any front-end or contingent deferred sales loads, brokerage fees and commissions, acquired fund fees and expenses, borrowing costs (such as interest and dividend expense on securities sold short), taxes and extraordinary or non-recurring expenses, including, but not limited to, litigation) do not exceed 2.23%, 2.48% and 1.98% of the Fund's average net assets, for Institutional Class , Investor Class and Super Institutional Class shares, respectively, through February 28, 2024, subject thereafter to annual re-approval of the agreement by the Board of Trustees. The Adviser is permitted to receive reimbursement from the Fund for fees it waived and Fund expenses it paid, subject to the limitation that: (1) the reimbursement for fees and expenses will be made only if payable within three years from the date the fees and expenses were initially waived or reimbursed; and (2) the reimbursement may not be made if it would cause the expense limitation in effect at the time of the waiver or currently in effect, whichever is lower, to be exceeded. The Fund must pay its current ordinary operating expenses before the Adviser is entitled to any reimbursement of management fees and/or expenses. This Operating Expense Limitation Agreement can be terminated only by, or with the consent, of the Board of Trustees. For the most recent fiscal year ended October 31, 2022, the current Adviser received an advisory fee net of fee waivers and expense reimbursements equal to 1.76% of the Fund's average daily net assets which includes 0.03% in recouped management fees previously waived in accordance with the operating expense limitation agreement.

A discussion regarding the basis for the Board of Trustees' approval of the Advisory Agreement will be available in the Fund's semi-annual report to shareholders dated April 30, 2023.

**Portfolio Managers** 

The following provides additional information about the portfolio managers who are responsible for the day-to-day management of the Fund's assets. Mr. Motamed serves as the lead portfolio manager of the Fund. The SAI provides additional information about the portfolio managers' compensation, other accounts managed by the portfolio managers and their ownership of investments in the Fund.

*Ali Motamed.* Mr. Motamed is the Managing Partner of the Adviser and the Portfolio Manager of the Fund. Prior to forming the Adviser, he was a Senior Analyst and a Portfolio Manager with Robeco Investment Management, Inc. ("RIM"), specializing in fundamental research of stocks held in the Boston Partners Long/Short Equity Fund and related strategy. He joined the RIM in 2003, having previously held positions at Deutsche Bank and BT Wolfensohn, where he was a member of the global mergers and acquisitions teams. Mr. Motamed holds a B.A. degree in economics with a minor in accounting from the University of California, Los Angeles, and an M.B.A. degree from Harvard Business School. He holds the Chartered Financial Analyst designation.

 

*Benjamin R. Deschaine, CAIA.* Mr. Deschaine is the President of the Adviser and is a co-portfolio manager of the Fund. Prior to joining the Adviser, he was a Partner and Chief Investment Officer of Balter Capital Management LLC and Balter Liquid Alternatives, LLC. Prior to 2012, Mr. Deschaine was a Managing Director at Sabretooth Capital Management, LLC, a global multi-strategy hedge fund affiliated with Tiger Management and a Portfolio Manager and Senior Analyst at Federal Street Advisors. He holds the Chartered Alternative Investment Analyst designation.

**Shareholder Information** 

 

**Choosing a Share Class** 

The Trust has adopted a multiple class plan that allows the Fund to offer one or more classes of shares. The Fund has registered three classes of shares – Super Institutional Class shares, Institutional Class shares and Investor Class shares. The different classes of shares represent investments in the same portfolio of securities, but the classes generally offered through different distribution channels and are subject to different expenses and may have different share prices as outlined below:

* Super Institutional Class shares are sold at NAV without
an initial sales charge. This means that 100% of your initial investment is place into shares of the Fund. Super Institutional Class shares
are offered to certain institutional investors, certain retirement plans clients of eligible financial intermediaries and other eligible
investors.

* Institutional Class shares are sold at NAV without
an initial sales charge. This means that 100% of your initial investment is placed into shares of the Fund.

* Investor Class shares are sold at NAV without an initial
sales charge, but are subject to a 0.25% Rule 12b-1 distribution and/or shareholder servicing fee.

Each class of shares are subject to a redemption fee equal to 1.00% (as a percentage of amount redeemed within 60 days of purchase).

**More About Super Institutional Class Shares** 

Super Institutional Class shares are sold at NAV without an initial sales charge, and are not subject to 12b-1 distribution fees or a non-Rule 12b-1 shareholder servicing fee. Super Institutional Class shares are offered to certain institutional investors, certain retirement plans, clients of eligible financial intermediaries and other eligible investors. Super Institutional Class shares may also be offered through certain financial intermediaries (including broker-dealers) and their agents in fee based and transaction fee based programs. In these programs financial intermediaries have made arrangements with the Fund and are authorized to buy and sell shares of the Fund that charge their customers transaction or other distribution or service fees with respect to their customers' investments in the Fund. The minimum initial investment in Super Institutional Class shares of the Fund is $50 million. The minimum subsequent investment in Institutional Class shares of the Fund is $500.

**More About Institutional Class Shares** 

Institutional Class shares are sold at NAV without an initial sales charge, and are not subject to 12b-1 distribution fees although they are subject to a 0.25% Non-Rule 12b-1 shareholder servicing fee. The Fund offers Institutional Class shares primarily for direct investment by investors such as pension and profit-sharing plans, employee benefit trusts, endowments, foundations, corporations and high net worth individuals. Institutional Class shares may also be offered through certain financial intermediaries (including broker-dealers) and their agents in fee based and transaction fee based programs. In these programs financial intermediaries have made arrangements with the Fund and are authorized to buy and sell shares of the Fund that charge their customers transaction or other distribution or service fees with respect to their customers' investments in the Fund. The minimum initial investment in Institutional Class shares of the Fund is $50,000. The minimum subsequent investment in Institutional Class shares of the Fund is $500.

**More About Investor Class Shares** 

Investor Class shares of the Funds are sold at NAV without an initial sales charge, but are subject to a 0.25% Rule 12b-1 distribution and/or shareholder servicing fee. This means that 100% of your initial investment is placed into shares of a Fund. Over time, fees paid under the Rule 12b-1 distribution and service plan will increase the cost of an Investor Class shareholder's investment and may cost more than other types of sales charges. Investor Class shares also include a 0.25% Non-Rule 12b-1 shareholder servicing fee. The minimum initial investment in Investor Class shares of the Fund is $5,000. The minimum subsequent investment in Investor Class shares of the Fund is $500. For Retirement Accounts and Automatic Investment Plans, the minimal initial investment in Investor Class shares is $1,000, with a minimum subsequent investment of $50.

**Share Price** 

Shares of the Fund are sold at net asset value ("NAV"). The NAV of the Fund is determined at the close of regular trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on each day the New York Stock Exchange ("NYSE") is open.. NAV is computed by determining, on a per class basis, the aggregate market value of all assets of the Fund, less its liabilities, divided by the total number of shares outstanding ((assets-liabilities)/number of shares = NAV). The NYSE is closed on weekends and New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Juneteenth, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The NAV takes into account, on a per class basis, the expenses and fees of the Fund, including management, administration, and distribution fees, which are accrued daily. The determination of NAV for a share class for a particular day is applicable to all applications for the purchase of shares, as well as all requests for the redemption of shares, received by the Fund (or an authorized broker or agent, or its authorized designee) before the close of trading on the NYSE on that day.

Generally, the Fund's securities listed on an exchange are valued each day at the last quoted sales price on each security's primary exchange. Securities traded or dealt in upon one or more securities exchanges (whether domestic or foreign) for which market quotations are readily available and not subject to restrictions against resale shall be valued at the last quoted sales price on the primary exchange or, in the absence of a sale on the primary exchange, at the mean between the current bid ask prices on such exchanges. Securities primarily traded in the National Association of Securities Dealers' Automated Quotation System ("NASDAQ") National Market System for which market quotations are readily available shall be valued using the NASDAQ Official Closing Price. Securities that are not traded or dealt in any securities exchange (whether domestic or foreign) and for which over-the-counter market quotations are readily available generally shall be valued at the last sale price or, in the absence of a sale, at the mean between the current bid and ask price on such over-the- counter market. Debt securities not traded on an exchange may be valued at prices supplied by a pricing agent(s) based on broker or dealer supplied valuations or matrix pricing, a method of valuing securities by reference to the value of other securities with similar characteristics, such as rating, interest rate and maturity.

If market quotations are not readily available, securities will be valued at their fair market value as determined using the "fair value" procedures approved by the Board. Fair value pricing involves subjective judgments and it is possible that the fair value determined for a security may be materially different from the value that could be realized upon the sale of that security. The fair value prices can differ from market prices when they become available or when a price becomes available. The Board appointed the Adviser as its designee (the "Valuation Designee") for all fair value determinations and responsibilities other than overseeing pricing service providers used by the Trust. This designation is subject to Board oversight and certain reporting and other requirements designed to facilitate the Board's ability to oversee the Valuation Designee's fair value determinations effectively. The Valuation Designee may also enlist third party consultants such as an audit firm or financial officer of a security issuer on an as-needed basis to assist in determining a security-specific fair value. The Board is responsible for reviewing and approving fair value methodologies utilized by the Valuation Designee, which approval shall be based upon whether the Valuation Designee followed the valuation procedures established by the Board..

The Fund may use independent pricing services to assist in calculating the value of the Fund's securities. In addition, market prices for foreign securities are not determined at the same time of day as the NAV for the Fund. Because the Fund may invest in underlying ETFs which hold portfolio securities primarily listed on foreign exchanges, and these exchanges may trade on weekends or other days when the underlying ETFs do not price their shares, the value of some of the Fund's portfolio securities may change on days when you may not be able to buy or sell Fund shares.

In computing the NAV, the Fund values foreign securities held by the Fund at the latest closing price on the exchange in which they are traded immediately prior to closing of the NYSE. Prices of foreign securities quoted in foreign currencies are translated into U.S. dollars at current rates. If events materially affecting the value of a security in the Fund's portfolio, particularly foreign securities, occur after the close of trading on a foreign market but before the Fund prices its shares, the security will be valued at fair value. For example, if trading in a portfolio security is halted and does not resume before the Fund calculates its NAV, the Advisor may need to price the security using the Fund's fair value pricing guidelines. The determination of fair value involves subjective judgments. As a result, using fair value to price a security may result in a price materially different from the prices used by other mutual funds to determine net asset value, or from the price that may be realized upon the actual sale of the security.

With respect to any portion of the Fund's assets that are invested in one or more open-end management investment companies registered under the 1940 Act, the Fund's net asset value is calculated based upon the net asset values of those open-end management investment companies, and the prospectuses for these companies explain the circumstances under which those companies will use fair value pricing and the effects of using fair value pricing.

**How to Purchase Shares** 

The Fund offers three classes of shares so that you can choose the class that best suits your investment needs: Super Institutional Class, Institutional Class and Investor Class shares. The main differences between the classes are the ongoing fees. In choosing which class of shares to purchase, you should consider which will be most beneficial to you given your investment goals, the amount of your purchase and the length of time you expect to hold the shares. Each class of shares in the Fund represents an interest in the same portfolio of investments in the Fund. Not all share classes may be available for purchase in all states.

*Purchase by Mail.* To purchase the Fund's shares, simply complete and sign the Account Application and mail it, along with a check made payable to "Invenomic Fund" to:

---

| | |
|:---|:---|
| &nbsp;&nbsp; **via Regular mail:**<br> Invenomic Fund<br> c/o Ultimus Fund Solutions, LLC<br> P.O. Box 541150<br> Omaha, NE 68154 | &nbsp;&nbsp; **via Overnight mail:**<br> Invenomic Fund<br> c/o Ultimus Fund Solutions, LLC<br> 4221 North 203rd Street, Suite 100<br> Elkhorn, NE 68022 |

---

*Purchase through Brokers.* You may invest in the Fund through brokers or agents who have entered into selling agreements with the Fund's distributor. The brokers and agents are authorized to receive purchase and redemption orders on behalf of the Fund. The Fund will be deemed to have received a purchase or redemption order when an authorized broker or its designee receives the order. The broker or agent may set their own initial and subsequent investment minimums. You may be charged a fee if you use a broker or agent to buy or redeem shares of the Fund. Finally, various servicing agents use procedures and impose restrictions that may be in addition to, or different from those applicable to investors purchasing shares directly from the Fund. You should carefully read the program materials provided to you by your servicing agent. Such brokers are authorized to designate other intermediaries to receive purchase and redemption orders on the Fund's behalf.

*Purchase by Wire.* If you wish to wire money to make an investment in the Fund, please call the Fund at 1-855-466-3406 for wiring instructions and to notify the Fund that a wire transfer is coming. Any commercial bank can transfer same-day funds via wire. The Fund will normally accept wired funds for investment on the day received if they are received by the Fund's designated bank before the close of regular trading on the NYSE. Your bank may charge you a fee for wiring same-day funds.

 

*Automated Clearing House (ACH) Purchase*

Current shareholders may purchase additional shares via the Automated Clearing House ("ACH"). To have this option added to your account, please send a letter to the Fund requesting this option and supply a voided check for the bank account. Only bank accounts held at domestic institutions that are ACH members may be used for these types of transactions.

You may not use ACH transactions for your initial purchase of Fund shares. ACH purchases will be effective at the closing price per share on the business day after the order is placed. The Fund may alter, modify or terminate this purchase option at any time.

Shares purchased by ACH will not be available for redemption until the transactions have cleared. Shares purchased via ACH transfer may take up to 15 days to clear.

 

*Automatic Investment Plan.* You may participate in the Fund's Automatic Investment Plan, an investment plan that automatically moves money from your bank account and invests it in the Fund through the use of electronic funds transfers or automatic bank drafts. You may elect to make subsequent investments by transfers of a minimum of $50 on specified days of each month into your established Fund account. Please contact the Fund at 1-855-466-3406 for more information about the Fund's Automatic Investment Plan. Minimum initial investment requirements may be waived for Automatic Investment Plan investors, at the Fund's discretion.

The Fund, however, reserves the right, in its sole discretion, to reject any application to purchase shares. Applications will not be accepted unless they are accompanied by a check drawn on a U.S. bank, thrift institutions, or credit union in U.S. funds for the full amount of the shares to be purchased. After you open an account, you may purchase additional shares by sending a check together with written instructions stating the name(s) on the account and the account number, to the above address. Make all checks payable to **"Invenomic Fund."** The Fund will not accept payment in cash, third party checks (except for properly endorsed IRA rollover checks), counter checks, starter checks, traveler's checks, money orders, credit card checks, and checks drawn on non-U.S. financial institutions will not be accepted. Cashier's checks, bank official checks, and bank money orders are reviewed on a case-by-case basis and may be accepted under certain circumstances. In such cases, a 15-business day hold will be applied to the funds (which means that you may not redeem your shares until the holding period has expired). To avoid such holding periods, shares may be purchased through a broker or by wire, as described in this section. Redemptions of shares of the Fund purchased by check may be subject to a hold period until the check has been cleared by the issuing bank.

*Note:* Ultimus Fund Solutions, LLC, the Fund's transfer agent, will charge a $25 fee against a shareholder's account, in addition to any loss sustained by the Fund, for any check or electronic payment returned to the transfer agent for insufficient funds.

 

*Anti-Money Laundering Program.* The USA PATRIOT Act requires financial institutions, including the Fund, to adopt certain policies and programs to prevent money-laundering activities, including procedures to verify the identity of customers opening new accounts. As requested on the application, you should supply your full name, date of birth, social security number and permanent street address. Mailing addresses containing a P.O. Box will not be accepted. This information will assist the Fund in verifying your identity. Until such verification is made, the Fund may temporarily limit additional share purchases. In addition, the Fund may limit additional share purchases or close an account if it is unable to verify a shareholder's identity. As required by law, the Fund may employ various procedures, such as comparing the information to fraud databases or requesting additional information or documentation from you, to ensure that the information supplied by you is correct.

In order to ensure compliance with these laws, the Account Application asks for, among other things, the following information for all "customers" seeking to open an "account" (as those terms are defined in rules adopted pursuant to the USA PATRIOT Act):

&nbsp;&nbsp;&nbsp;&nbsp;· full name;

&nbsp;&nbsp;&nbsp;&nbsp;· date of birth (individuals only);

&nbsp;&nbsp;&nbsp;&nbsp;· Social Security or taxpayer identification
number; and

&nbsp;&nbsp;&nbsp;&nbsp;· permanent street address (P.O. Box
only is not acceptable).

Accounts opened by entities, such as corporations, limited liability companies, partnerships or trusts, will require additional documentation.

Please note that if any information listed above is missing, your Account Application will be returned and your account will not be opened. In compliance with the USA PATRIOT Act and other applicable anti-money laundering laws and regulations, the Transfer Agent will verify the information on your application as part of the Program. The Fund reserves the right to request additional clarifying information and may close your account if such clarifying information is not received by the Fund within a reasonable time of the request or if the Fund cannot form a reasonable belief as to the true identity of a customer. If you require additional assistance when completing your Account Application, please contact the Transfer Agent at 1-855-466-3406.

**How to Redeem Shares** 

The Fund typically expects that it will take up to 7 days following the receipt of your redemption request to pay out redemptions from cash, cash equivalents, proceeds from the sale of the Fund shares, any line of credit, and then from the sale of portfolio securities. These redemption payment methods will be used in regular and stressed market conditions.

You may redeem all or any portion of the shares credited to your account by submitting a written request for redemption to:

---

| | |
|:---|:---|
| &nbsp;&nbsp; **via Regular mail:**<br> Invenomic Fund<br> c/o Ultimus Fund Solutions, LLC<br> P.O. Box 541150<br> Omaha, NE 68154 | &nbsp;&nbsp; **via Overnight mail:**<br> Invenomic Fund<br> c/o Ultimus Fund Solutions, LLC<br> 4221 North 203rd Street, Suite 100<br> Elkhorn, NE 68022 |

---

*Redemptions by Telephone:* The telephone redemption privilege is automatically available to all new accounts. If you do not want the telephone redemption privilege, you must indicate this in the appropriate area on your account application or you must write to the Fund and instruct it to remove this privilege from your account.

The proceeds will be sent by mail to the address designated on your account or wired directly to your existing account in a bank or brokerage firm in the United States as designated on your application. To redeem by telephone, call 1-855-466-3406. The redemption proceeds normally will be sent by mail or by wire within three business days after receipt of your telephone instructions. If you own an IRA, you will be asked whether or not the Fund should withhold federal income tax.

The Fund reserves the right to suspend the telephone redemption privileges with respect to your account if the name(s) or the address on the account has been changed within the previous 30 days. Neither the Fund, the transfer agent, nor their respective affiliates will be liable for complying with telephone instructions they reasonably believe to be genuine or for any loss, damage, cost or expenses in acting on such telephone instructions and you will be required to bear the risk of any such loss. The Fund or the transfer agent, or both, will employ reasonable procedures to determine that telephone instructions are genuine. If the Fund and/or the transfer agent do not employ these procedures, they may be liable to you for losses due to unauthorized or fraudulent instructions. These procedures may include, among others, requiring forms of personal identification prior to acting upon telephone instructions, providing written confirmation of the transactions and/or tape recording telephone instructions.

During periods of high market activity, you may encounter higher than usual wait times. Please allow sufficient time to ensure that you will be able to complete your telephone transaction prior to market close. Neither the Fund nor its transfer agent will be held liable if you are unable to place your trade due to high call volume.

*Redemptions through Broker:* If shares of the Fund are held by a broker-dealer, financial institution or other servicing agent, you must contact that servicing agent to redeem shares of the Fund. The servicing agent may charge a fee for this service.

*Redemptions by Wire:* You may request that your redemption proceeds be wired directly to your bank account. The Fund's transfer agent imposes a $15 fee for each wire redemption and deducts the fee directly from your account. Your bank may also impose a fee for the incoming wire.

 

*Systematic Withdrawal Plan (for Investor Class shares only):* If your individual accounts, IRA or other qualified plan account have a current account value of at least $5,000, you may participate in the Fund's Systematic Withdrawal Plan, an investment plan that automatically moves money to your bank account from the Fund through the use of electronic funds transfers. You may elect to make subsequent withdrawals by transfers of a minimum of $250 on specified days of each month into your established bank account. Please contact the Fund at 1-855-466-3406 for more information about the Fund's Systematic Withdrawal Plan.

**Redemptions in Kind:** The Fund reserves the right to honor requests for redemption or repurchase orders made by a shareholder during any 90-day period by making payment in whole or in part in portfolio securities ("redemption in kind") if the amount of such a request is large enough to affect operations (if the request is greater than the lesser of $250,000 or 1% of the Fund's net assets at the beginning of the 90-day period). The securities will be chosen by the Fund and valued using the same procedures as used in calculating the Fund's NAV. A shareholder may incur transaction expenses in converting these securities to cash and securities redeemed in-kind remain at the risk of the market until they are sold and the shareholder will bear market risk until the securities are converted to cash.

**When Redemptions are Sent:** Once the Fund receives your redemption request in "good order" as described below, it will issue a check based on the next determined NAV following your redemption request. The redemption proceeds normally will be sent by mail or by wire within three business days after receipt of a request in "good order." If you purchase shares using a check and soon after request a redemption, your redemption proceeds will not be sent until the check used for your purchase has cleared your bank.

**Good Order:** Your redemption request will be processed if it is in "good order." To be in good order, the following conditions must be satisfied:

&nbsp;&nbsp;&nbsp;&nbsp;· The request should be in writing, unless
redeeming by telephone, indicating the number of shares or dollar amount to be redeemed;

&nbsp;&nbsp;&nbsp;&nbsp;· The request must identify your account
number;

&nbsp;&nbsp;&nbsp;&nbsp;· The request
should be signed by you and any other person listed on the account, exactly as the shares are registered; and

&nbsp;&nbsp;&nbsp;&nbsp;· If you request that the redemption
proceeds be sent to a person, bank or an address other than that of record or paid to someone other than the record owner(s), or if the
address was changed within the last 30 days, or if the proceeds of a requested redemption exceed $50,000, the signature(s) on the request
must be medallion signature guaranteed by an eligible signature guarantor.

**When You Need Medallion Signature Guarantees:** If you wish to change the bank or brokerage account that you have designated on your account, you may do so at any time by writing to the Fund with your signature guaranteed. A medallion signature guarantee assures that a signature is genuine and protects you from unauthorized account transfers. You will need your signature guaranteed if:

&nbsp;&nbsp;&nbsp;&nbsp;· you request a redemption to be made
payable to a person not on record with the Fund;

&nbsp;&nbsp;&nbsp;&nbsp;· you request that a redemption be mailed
to an address other than that on record with the Fund;

&nbsp;&nbsp;&nbsp;&nbsp;· the proceeds of a requested redemption
exceed $50,000;

&nbsp;&nbsp;&nbsp;&nbsp;· any redemption is transmitted by federal
wire transfer to a bank other than the bank of record; or

&nbsp;&nbsp;&nbsp;&nbsp;· your address was changed within 30
days of your redemption request.

Signatures may be guaranteed by any eligible guarantor institution (including banks, brokers and dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations). Further documentation will be required to change the designated account if shares are held by a corporation, fiduciary or other organization. *A notary public cannot guarantee signatures.* 

**Retirement Plans:** If you own an IRA or other retirement plan, you must indicate on your redemption request whether the Fund should withhold federal income tax. Unless you elect in your redemption request that you do not want to have federal tax withheld, the redemption will be subject to withholding.

**Low Balances:** If at any time your account balance falls below $1,000 for Institutional and Investor Class accounts, the Fund may notify you that, unless the account is brought up to the minimum investment amount within 30 days of the notice, your account could be closed. After the notice period, the Fund may redeem all of your shares and close your account by sending you a check to the address of record. Your account will not be closed if the account balance drops below required minimum due to a decline in NAV.

**Redemption Fee** 

The Fund will deduct a 1.00% redemption fee on the redemption amount if you sell your shares less than 60 days after purchase or shares held less than 60 days are redeemed for failure to maintain the Fund's balance minimum. See Low Balances for further information on account closure policy. Shares held longest will be treated as being redeemed first and shares held shortest as being redeemed last. Shares held for 60 days or more are not subject to the 1% fee.

Redemption fees are paid to the Fund directly and are designed to offset costs associated with fluctuations in Fund asset levels and cash flow caused by short-term shareholder trading.

*Waivers of Redemption Fees:* The Fund has elected not to impose the redemption fee for:

* Redemptions and exchanges of Fund shares acquired
through the reinvestment of dividends and distributions;

* Certain types of redemptions and exchanges of Fund
shares owned through participant-directed retirement plans;

* Redemptions or exchanges in discretionary asset allocation,
fee based or wrap programs ("wrap programs") that are initiated by the sponsor/financial advisor as part of a periodic rebalancing;

* Redemptions or exchanges in a fee based or wrap program
that are made as a result of a full withdrawal from the wrap program or as part of a systematic withdrawal plan;

* Involuntary redemptions, such as those resulting from
a shareholder's failure to maintain a minimum investment in the Fund, or to pay shareholder fees; or

* Redemptions
or exchanges due to the death or disability of a shareholder, pursuant to a qualified domestic relations order or divorce decree, or similar
situations where the Fund, in its discretion, believes it is appropriate in the circumstances. 

The Fund reserves the right to modify or eliminate the redemption fees or waivers at any time and will give shareholders 30 days' prior written notice of any material changes, unless otherwise provided by law. The redemption fee policy may be modified or amended in the future to reflect, among other factors, regulatory requirements mandated by the SEC.

**Tools to Combat Frequent Transactions** 

The Fund discourages and does not accommodate market timing. Frequent trading into and out of the Fund can harm all Fund shareholders by disrupting the Fund's investment strategies, increasing Fund expenses, decreasing tax efficiency and diluting the value of shares held by long-term shareholders. The Fund is designed for long-term investors and is not intended for market timing or other disruptive trading activities. Accordingly, the Fund's Board has approved policies that seek to curb these disruptive activities while recognizing that shareholders may have a legitimate need to adjust their Fund investments as their financial needs or circumstances change. The Fund currently uses several methods to reduce the risk of market timing. These methods include:

* Committing staff to review, on a continuing basis,
recent trading activity in order to identify trading activity that may be contrary to the Fund's "Market Timing Trading Policy,"

* Rejecting or limiting specific purchase requests,
and

* Charging a 1.00% redemption charge if shares are held
less than 60 days.

Though these methods involve judgments that are inherently subjective and involve some selectivity in their application, the Fund seeks to make judgments and applications that are consistent with the interests of the Fund's shareholders.

The redemption fee, which is uniformly imposed, is intended to discourage short-term trading and is paid to the Fund to help offset any cost associated with such short-term trading. The Fund will monitor the assessment of redemption fees against your account. Based on the frequency of redemption fees assessed against your account, the Adviser or Transfer Agent may in its sole discretion determine that your trading activity is detrimental to the Fund as described in the Fund's Market Timing Trading Policy and elect to (i) reject or limit the amount, number, frequency or method for requesting future purchases into the Fund and/or (ii) reject or limit the amount, number, frequency or method for requesting future exchanges or redemptions out of the Fund.

The Fund reserves the right to reject or restrict purchase or exchange requests for any reason, particularly when the shareholder's trading activity suggests that the shareholder may be engaged in market timing or other disruptive trading activities. Neither the Fund nor the Adviser will be liable for any losses resulting from rejected purchase or exchange orders. The Adviser may also bar an investor who has violated these policies (and the investor's financial adviser) from opening new accounts with the Fund.

Although the Fund attempts to limit disruptive trading activities, some investors use a variety of strategies to hide their identities and their trading practices. There can be no guarantee that the Fund will be able to identify or limit these activities. Omnibus account arrangements are common forms of holding shares of the Fund. While the Fund will encourage financial intermediaries to apply the Fund's Market Timing Trading Policy to their customers who invest indirectly in the Fund, the Fund is limited in its ability to monitor the trading activity or enforce the Fund's Market Timing Trading Policy with respect to customers of financial intermediaries. For example, should it occur, the Fund may not be able to detect market timing that may be facilitated by financial intermediaries or made difficult to identify in the omnibus accounts used by those intermediaries for aggregated purchases, exchanges and redemptions on behalf of all their customers. More specifically, unless the financial intermediaries have the ability to apply the Fund's Market Timing Trading Policy to their customers through such methods as implementing short-term trading limitations or restrictions, assessing the Fund's redemption fee and monitoring trading activity for what might be market timing, the Fund may not be able to determine whether trading by customers of financial intermediaries is contrary to the Fund's Market Timing Trading Policy. Brokers maintaining omnibus accounts with the Fund have agreed to provide shareholder transaction information to the extent known to the broker to the Fund upon request. If the Fund or its transfer agent or shareholder servicing agent suspects there is market timing activity in the account, the Fund will seek full cooperation from the service provider maintaining the account to identify the underlying participant. At the request of the Adviser, the service providers may take immediate action to stop any further short-term trading by such participants.

*Householding:* To reduce expenses, the Fund mails only one copy of the Prospectus and each annual and semi-annual report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please call the Fund at 1-855-466-3406 on days the Fund is open for business or contact your financial institution. The Fund will begin sending you individual copies thirty days after receiving your request.

Shares of one Class of the Fund will not be exchangeable for shares of another Class.

**Distribution of Fund Shares** 

**The Distributor**

Northern Lights Distributors, LLC (the "Distributor") is located at 4221 North 203rd Street, Suite 100, Elkhorn, NE 68022, and serves as distributor and principal underwriter to the Fund. The Distributor is a registered broker-dealer and member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). Shares of the Fund are offered on a continuous basis.

**Distribution and/or Shareholder Servicing (12b-1) Plan**

The Fund has adopted a Distribution and Shareholder Servicing Plan pursuant to Rule 12b-1 (the "12b-1 Plan") under the 1940 Act applicable to the Investor Class shares. Under the 12b-1 Plans, the Fund is authorized to pay the Fund's distributor, or such other entities as approved by the Board of Trustees, a fee for the promotion and distribution of the Fund and the provision of personal services to shareholders. The maximum amount of the fee authorized is 0.25% of the Fund's average daily net assets annually for Investor Class shares. The distributor may pay any or all amounts received under the 12b-1 Plan to other persons, including the Adviser, for any distribution or service activity. Because these fees are paid out of the Fund's assets on an on-going basis, over time these fees will increase the cost of your investment in the Fund and may cost you more than paying other types of sales charges.

**Shareholder Servicing Plan**

The Trust has also adopted a Shareholder Servicing Plan under which the Fund may pay a fee of up to 0.25% of the average daily net assets of the Fund's Institutional Class and Investor Class for shareholder services provided to the Fund by financial institutions and other entities, including the Adviser.

Because the Fund pays shareholder service fees on an ongoing basis, your investment cost over time may be higher than paying other types of sales charges.

**Additional Compensation to Financial Intermediaries**

In addition to the fees paid under the 12b-1 Plan, the Fund may pay service fees to intermediaries such as banks, broker-dealers, financial advisors or other financial institutions, including the Adviser and affiliates of the Adviser, for sub-administration, sub-transfer agency and other shareholder services associated with shareholders whose shares are held of record in omnibus, other group accounts or accounts traded through registered securities clearing agents.

The distributor, its affiliates and the Adviser, out of its own resources, and without additional cost to the Fund or its shareholders, may provide additional cash payments or non-cash compensation to intermediaries who sell shares of the Fund. Such payments and compensation are in addition to service fees paid by the Fund, if any. These additional cash payments are generally made to intermediaries that provide shareholder servicing, marketing support and/or access to sales meetings, sales representatives and management representatives of the intermediary. Cash compensation may also be paid to intermediaries for inclusion of the Fund on a sales list, including a preferred or select sales list, in other sales programs or as an expense reimbursement in cases where the intermediary provides shareholder services to the Fund's shareholders. The Adviser may also pay cash compensation in the form of finder's fees that vary depending on the dollar amount of the shares sold.

**Distributions and Taxes**

**Tax Status, Dividends and Distributions** 

Any sale or exchange of a Fund's shares may generate tax liability (unless you are a tax-exempt investor or your investment is in a qualified retirement account). When you redeem your shares you may realize a taxable gain or loss. This is measured by the difference between the proceeds of the sale and the tax basis for the shares you sold. (To aid in computing your tax basis, you generally should retain your account statements for the period that you hold shares in the Fund.)

Dividends from net investment income are generally made at least annually. Capital gain distributions from net profits from the sale of investments are generally made at least annually. Both distributions will be reinvested in shares of the Fund unless you elect to receive cash. Dividends from net investment income (including any excess of net short-term capital gain over net long-term capital loss) are taxable to investors as ordinary income, while distributions of net capital gain (the excess of net long-term capital gain over net short-term capital loss) are generally taxable as long-term capital gain, regardless of your holding period for the shares. Any dividends or capital gain distributions you receive from the Fund will normally be taxable to you when made, regardless of whether you reinvest dividends or capital gain distributions or receive them in cash. Certain dividends or distributions declared in October, November or December will be taxed to shareholders as if received in December if they are paid during the following January. Each year the Fund will inform you of the amount and type of your distributions. IRAs and other qualified retirement plans are exempt from federal income taxation until retirement proceeds are paid out to the participant.

Your redemptions, including exchanges, may result in a capital gain or loss for federal income tax purposes. A capital gain or loss on your investment is the difference between the cost of your shares, including any sales charges, and the amount you receive when you sell them. The Fund must report to the IRS and furnish to shareholders the cost basis information for shares purchased and sold. The Fund has chosen average cost as its standing (default) tax lot identification method for all shareholders, which means this is the method the Fund will use to determine which specific shares are deemed to be sold when there are multiple purchases on different dates at differing NAVs, and the entire position is not sold at one time. Shareholders may, however, choose a method other than the Fund's standing method at the time of their purchase or upon sale of covered shares. Shareholders should consult their tax advisors to determine the best IRS-accepted cost basis method for their tax situation and to obtain more information about how cost basis reporting applies to them. Shareholders also should carefully review the cost basis information provided to them by the Fund and make any additional basis, holding period or other adjustments that are required when reporting these amounts on their federal income tax returns.

On the account application, you will be asked to certify that your social security number or taxpayer identification number is correct and that you are not subject to backup withholding for failing to report income to the IRS. If you are subject to backup withholding or you did not certify your taxpayer identification number, the IRS requires the Fund to withhold a percentage of any dividend, redemption or exchange proceeds. The Fund reserves the right to reject any application that does not include a certified social security or taxpayer identification number. If you do not have a social security number, you should indicate on the purchase form that your application to obtain a number is pending. The Fund is required to withhold taxes if a number is not delivered to the Fund within seven days.

This summary is not intended to be and should not be construed to be legal or tax advice. This summary is general in nature and should not be regarded as an exhaustive presentation of all possible tax ramifications. The tax considerations relevant to a specific shareholder depend upon its specific circumstances, and this summary does not attempt to discuss all potential tax considerations that could be relevant to a prospective shareholder with respect to the Fund or its investments. This general summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), the Federal Income Tax Regulations promulgated thereunder, and administrative and judicial interpretations thereof as of the date hereof, all of which are subject to change (potentially on a retroactive basis). You should consult your own independent tax advisors to determine the tax consequences of owning the Fund's shares.

*Other Reporting and Withholding Requirements:* Payments to a shareholder that is either a foreign financial institution ("FFI") or a non-financial foreign entity ("NFFE") within the meaning of the Foreign Account Tax Compliance Act ("FATCA") may be subject to a 30% withholding tax on: (a) income and dividends paid by a Fund and (b) certain capital gain distributions and the gross proceeds arising from the sale of Fund shares paid by the Fund after December 31, 2018. FATCA withholding tax generally can be avoided: (a) by an FFI, subject to any applicable intergovernmental agreement or other exemption, if it either enters into a valid agreement with the IRS or otherwise complies with the specific requirements and provisions of an applicable intergovernmental agreement, in each case to, among other requirements, to collect and report required information about certain direct and indirect ownership of foreign financial accounts held by U.S. persons with the FFI and (b) by an NFFE, if it: (i) certifies that it has no substantial U.S. persons as owners or (ii) if it does have such owners, reports information relating to them. A Fund may disclose the information that it receives from its shareholders to the IRS, non-U.S. taxing authorities or other parties as necessary to comply with FATCA. Withholding also may be required if a foreign entity that is a shareholder of a Fund fails to provide the Fund with appropriate certifications or other documentation concerning its status under FATCA.

**Financial Highlights** 

The financial highlights tables are intended to help you understand the Fund's financial performance for the period of the Fund's operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions). This information has been derived from the financial statements audited by Tait, Weller & Baker LLP, the Fund's Independent Registered Public Accounting Firm, whose report, along with the Fund's financial statements, are included in the October 31, 2022 annual report, which is available at no charge upon request.

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout the Period.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;**Institutional Class** | &nbsp;&nbsp;**Institutional Class** | &nbsp;&nbsp;**Institutional Class** | &nbsp;&nbsp;**Institutional Class** | &nbsp;&nbsp;**Institutional Class** |
|  | &nbsp;&nbsp;**For the**<br>&nbsp;&nbsp;**Year Ended**<br>&nbsp;&nbsp;**October 31, 2022** | &nbsp;&nbsp;**For the**<br>&nbsp;&nbsp;**Year Ended**<br>&nbsp;&nbsp;**October 31, 2021** | &nbsp;&nbsp;**For the**<br>&nbsp;&nbsp;**Year Ended**<br>&nbsp;&nbsp;**October 31, 2020** | &nbsp;&nbsp;**For the**<br>&nbsp;&nbsp;**Year Ended**<br>&nbsp;&nbsp;**October 31, 2019** | &nbsp;&nbsp;**For the**<br>&nbsp;&nbsp;**Year Ended**<br>&nbsp;&nbsp;**October 31, 2018** |
| &nbsp;&nbsp;Net asset value, beginning of year | &nbsp;&nbsp; $17.40 | &nbsp;&nbsp; $10.67 | &nbsp;&nbsp; $11.48 | &nbsp;&nbsp; $11.07 | &nbsp;&nbsp; $10.22 |
| &nbsp;&nbsp;Activity from investment operations: |  |  |  |  |  |
| &nbsp;&nbsp;Net investment loss <sup>(1)</sup> | &nbsp;&nbsp; (0.27) | &nbsp;&nbsp; (0.21) | &nbsp;&nbsp; (0.08) | &nbsp;&nbsp; (0.06) | &nbsp;&nbsp; (0.12) |
| &nbsp;&nbsp;Net realized and unrealized |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;gain (loss) on investments | &nbsp;&nbsp;9.35 | &nbsp;&nbsp;7.32 | &nbsp;&nbsp; (0.36) | &nbsp;&nbsp;0.98 | &nbsp;&nbsp;1.10 |
| &nbsp;&nbsp;Total from investment operations | &nbsp;&nbsp;9.08 | &nbsp;&nbsp;7.11 | &nbsp;&nbsp; (0.44) | &nbsp;&nbsp;0.92 | &nbsp;&nbsp;0.98 |
| &nbsp;&nbsp;Less distributions from: |  |  |  |  |  |
| &nbsp;&nbsp;Net investment income | &nbsp;&nbsp;- | &nbsp;&nbsp; (0.01) | &nbsp;&nbsp;- | &nbsp;&nbsp;- | &nbsp;&nbsp;- |
| &nbsp;&nbsp;Net realized gains | &nbsp;&nbsp; (2.50) | &nbsp;&nbsp; (0.38) | &nbsp;&nbsp; (0.37) | &nbsp;&nbsp; (0.51) | &nbsp;&nbsp; (0.13) |
| &nbsp;&nbsp;Total distributions | &nbsp;&nbsp; (2.50) | &nbsp;&nbsp; (0.39) | &nbsp;&nbsp; (0.37) | &nbsp;&nbsp; (0.51) | &nbsp;&nbsp; (0.13) |
| &nbsp;&nbsp;Paid-in-Capital From Redemption Fees | &nbsp;&nbsp;0.01 | &nbsp;&nbsp;0.01 | &nbsp;&nbsp;0.00 &nbsp;&nbsp;<sup>(2)</sup> | &nbsp;&nbsp;0.00 &nbsp;&nbsp;<sup>(2)</sup> | &nbsp;&nbsp;0.00 &nbsp;&nbsp;<sup>(2)</sup> |
| &nbsp;&nbsp;Net asset value, end of year | &nbsp;&nbsp; $23.99 | &nbsp;&nbsp; $17.40 | &nbsp;&nbsp; $10.67 | &nbsp;&nbsp; $11.48 | &nbsp;&nbsp; $11.07 |
| &nbsp;&nbsp;Total return <sup>(3</sup>) | &nbsp;&nbsp;58.24% | &nbsp;&nbsp;68.21% | &nbsp;&nbsp;(4.06)% | &nbsp;&nbsp;8.67% | &nbsp;&nbsp;9.63% |
| &nbsp;&nbsp;Net assets, at end of year (000's) | &nbsp;&nbsp;$620954 | &nbsp;&nbsp; $265308 | &nbsp;&nbsp; $122105 | &nbsp;&nbsp; $198929 | &nbsp;&nbsp; $69580 |
| &nbsp;&nbsp;Ratio of gross expenses to average |  |  |  |  |  |
| &nbsp;&nbsp;net assets <sup>(45)</sup> | &nbsp;&nbsp;2.89% | &nbsp;&nbsp;3.25% | &nbsp;&nbsp;2.97% | &nbsp;&nbsp;2.83% | &nbsp;&nbsp;2.91% |
| &nbsp;&nbsp;Ratio of net expenses to average |  |  |  |  |  |
| &nbsp;&nbsp;net assets <sup>(5)</sup> | &nbsp;&nbsp;2.92% | &nbsp;&nbsp;3.15% | &nbsp;&nbsp;2.83% | &nbsp;&nbsp;2.77% | &nbsp;&nbsp;2.72% |
| &nbsp;&nbsp;Ratio of net investment loss |  |  |  |  |  |
| &nbsp;&nbsp;to average net assets | &nbsp;&nbsp;(1.19)% | &nbsp;&nbsp;(1.31)% | &nbsp;&nbsp;(0.76)% | &nbsp;&nbsp;(0.57)% | &nbsp;&nbsp;(1.14)% |
| &nbsp;&nbsp;Portfolio Turnover Rate | &nbsp;&nbsp;149% | &nbsp;&nbsp;179% | &nbsp;&nbsp;153% | &nbsp;&nbsp;100% | &nbsp;&nbsp;106% |

---

(1) Per share amounts calculated using the average shares method, which
more appropriately presents the per share data for the period.

(2) Represents less than $0.01 per share.

(3) Total returns shown exclude the effect of applicable sales charges
and redemption fees and assumes the reinvestment of distributions.

(4) Represents the ratio of expenses to average net assets absent advisory
fees waived or recaptured by the Advisor.

(5) Excluding dividends from securities sold short and interest expense,
the ratio of expenses to average net assets would have been:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;Before fees waived/recaptured | &nbsp;&nbsp;2.20% | &nbsp;&nbsp;2.33% | &nbsp;&nbsp;2.37% | &nbsp;&nbsp;2.29% | &nbsp;&nbsp;2.43% |
| &nbsp;&nbsp;After fees waived/recaptured | &nbsp;&nbsp;2.23% | &nbsp;&nbsp;2.23% | &nbsp;&nbsp;2.23% | &nbsp;&nbsp;2.23% | &nbsp;&nbsp;2.24% |

---

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout the Period.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;**Investor Class** | &nbsp;&nbsp;**Investor Class** | &nbsp;&nbsp;**Investor Class** | &nbsp;&nbsp;**Investor Class** | &nbsp;&nbsp;**Investor Class** |
|  | &nbsp;&nbsp;**For the**<br>&nbsp;&nbsp;**Year Ended**<br>&nbsp;&nbsp;**October 31, 2022** | &nbsp;&nbsp;**For the**<br>&nbsp;&nbsp;**Year Ended**<br>&nbsp;&nbsp;**October 31, 2021** | &nbsp;&nbsp;**For the**<br>&nbsp;&nbsp;**Year Ended**<br>&nbsp;&nbsp;**October 31, 2020** | &nbsp;&nbsp;**For the**<br>&nbsp;&nbsp;**Year Ended**<br>&nbsp;&nbsp;**October 31, 2019** | &nbsp;&nbsp;**For the**<br>&nbsp;&nbsp;**Year Ended**<br>&nbsp;&nbsp;**October 31, 2018** |
| &nbsp;&nbsp;Net asset value, beginning of year | &nbsp;&nbsp; $17.23 | &nbsp;&nbsp; $10.57 | &nbsp;&nbsp; $11.40 | &nbsp;&nbsp; $11.02 | &nbsp;&nbsp; $10.21 |
| &nbsp;&nbsp;Activity from investment operations: |  |  |  |  |  |
| &nbsp;&nbsp;Net investment loss <sup>(1)</sup> | &nbsp;&nbsp; (0.32) | &nbsp;&nbsp; (0.26) | &nbsp;&nbsp; (0.11) | &nbsp;&nbsp; (0.09) | &nbsp;&nbsp; (0.16) |
| &nbsp;&nbsp;Net realized and unrealized |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;gain (loss) on investments | &nbsp;&nbsp;9.24 | &nbsp;&nbsp;7.24 | &nbsp;&nbsp; (0.36) | &nbsp;&nbsp;0.98 | &nbsp;&nbsp;1.10 |
| &nbsp;&nbsp;Total from investment operations | &nbsp;&nbsp;8.92 | &nbsp;&nbsp;6.98 | &nbsp;&nbsp; (0.47) | &nbsp;&nbsp;0.89 | &nbsp;&nbsp;0.94 |
| &nbsp;&nbsp;Less distributions from: |  |  |  |  |  |
| &nbsp;&nbsp;Net realized gains | &nbsp;&nbsp; (2.50) | &nbsp;&nbsp; (0.38) | &nbsp;&nbsp; (0.37) | &nbsp;&nbsp; (0.51) | &nbsp;&nbsp; (0.13) |
| &nbsp;&nbsp;Total distributions | &nbsp;&nbsp; (2.50) | &nbsp;&nbsp; (0.38) | &nbsp;&nbsp; (0.37) | &nbsp;&nbsp; (0.51) | &nbsp;&nbsp; (0.13) |
| &nbsp;&nbsp;Paid-in-Capital From Redemption Fees | &nbsp;&nbsp;0.01 | &nbsp;&nbsp;0.06 | &nbsp;&nbsp;0.01 | &nbsp;&nbsp;0.00 &nbsp;&nbsp;<sup>(2)</sup> | &nbsp;&nbsp;0.00 &nbsp;&nbsp;<sup>(2)</sup> |
| &nbsp;&nbsp;Net asset value, end of year | &nbsp;&nbsp; $23.66 | &nbsp;&nbsp; $17.23 | &nbsp;&nbsp; $10.57 | &nbsp;&nbsp; $11.40 | &nbsp;&nbsp; $11.02 |
| &nbsp;&nbsp;Total return <sup>(3)</sup> | &nbsp;&nbsp;57.85% | &nbsp;&nbsp;68.09% | &nbsp;&nbsp;(4.27)% | &nbsp;&nbsp;8.43% | &nbsp;&nbsp;9.25% |
| &nbsp;&nbsp;Net assets, at end of year (000's) | &nbsp;&nbsp; $112627 | &nbsp;&nbsp; $27457 | &nbsp;&nbsp; $5933 | &nbsp;&nbsp; $15113 | &nbsp;&nbsp; $8501 |
| &nbsp;&nbsp;Ratio of gross expenses to average |  |  |  |  |  |
| &nbsp;&nbsp;net assets <sup>(45)</sup> | &nbsp;&nbsp;3.14% | &nbsp;&nbsp;3.50% | &nbsp;&nbsp;3.22% | &nbsp;&nbsp;3.08% | &nbsp;&nbsp;3.21% |
| &nbsp;&nbsp;Ratio of net expenses to average |  |  |  |  |  |
| &nbsp;&nbsp;net assets <sup>(5)</sup> | &nbsp;&nbsp;3.17% | &nbsp;&nbsp;3.40% | &nbsp;&nbsp;3.08% | &nbsp;&nbsp;3.02% | &nbsp;&nbsp;3.02% |
| &nbsp;&nbsp;Ratio of net investment loss |  |  |  |  |  |
| &nbsp;&nbsp;to average net assets | &nbsp;&nbsp;(1.41)% | &nbsp;&nbsp;(1.56)% | &nbsp;&nbsp;(0.99)% | &nbsp;&nbsp;(0.84)% | &nbsp;&nbsp;(1.39)% |
| &nbsp;&nbsp;Portfolio Turnover Rate | &nbsp;&nbsp;149% | &nbsp;&nbsp;179% | &nbsp;&nbsp;153% | &nbsp;&nbsp;100% | &nbsp;&nbsp;106% |

---

(1) Per share amounts calculated using the average shares method, which
more appropriately presents the per share data for the period.

(2) Represents less than $0.01 per share.

(3) Total returns shown exclude the effect of applicable sales charges
and redemption fees and assumes the reinvestment of distributions.

(4) Represents the ratio of expenses to average net assets absent advisory
fees waived or recaptured by the Advisor.

(5) Excluding dividends from securities sold short and interest expense,
the ratio of expenses to average net assets would have been:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;Before fees waived/recaptured | &nbsp;&nbsp;2.45% | &nbsp;&nbsp;2.58% | &nbsp;&nbsp;2.62% | &nbsp;&nbsp;2.54% | &nbsp;&nbsp;2.73% |
| &nbsp;&nbsp;After fees waived/recaptured | &nbsp;&nbsp;2.48% | &nbsp;&nbsp;2.48% | &nbsp;&nbsp;2.48% | &nbsp;&nbsp;2.48% | &nbsp;&nbsp;2.54% |

---

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout the Period.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;**Super Institutional Class** | &nbsp;&nbsp;**Super Institutional Class** | &nbsp;&nbsp;**Super Institutional Class** | &nbsp;&nbsp;**Super Institutional Class** | &nbsp;&nbsp;**Super Institutional Class** |
|  | &nbsp;&nbsp;**For the** | &nbsp;&nbsp;**For the** | | | |
|  | &nbsp;&nbsp;**Year Ended** | &nbsp;&nbsp;**Year Ended** | | | |
|  | &nbsp;&nbsp;**October 31, 2022** | &nbsp;&nbsp;**October 31, 2022** | &nbsp;&nbsp;**For the**<br>&nbsp;&nbsp;**Year Ended**<br>&nbsp;&nbsp;**October 31, 2021** | &nbsp;&nbsp;**For the**<br>&nbsp;&nbsp;**Year Ended**<br>&nbsp;&nbsp;**October 31, 2020** | &nbsp;&nbsp;**For the**<br>&nbsp;&nbsp;**Period Ended**<br>&nbsp;&nbsp;**October 31, 2019 <sup>(1)</sup>** |
| &nbsp;&nbsp;Net asset value, beginning of period | &nbsp;&nbsp;Net asset value, beginning of period | &nbsp;&nbsp; $17.49 | &nbsp;&nbsp; $10.70 | &nbsp;&nbsp; $11.49 | &nbsp;&nbsp; $11.43 |
| &nbsp;&nbsp;Activity from investment operations: | &nbsp;&nbsp;Activity from investment operations: |  |  |  |  |
| &nbsp;&nbsp;Net investment loss <sup>(2)</sup> | &nbsp;&nbsp; (0.19) | &nbsp;&nbsp; (0.19) | &nbsp;&nbsp; (0.16) | &nbsp;&nbsp; (0.07) | &nbsp;&nbsp; (0.02) |
| &nbsp;&nbsp;Net realized and unrealized |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;gain (loss) on investments | &nbsp;&nbsp;9.38 | &nbsp;&nbsp;9.38 | &nbsp;&nbsp;7.33 | &nbsp;&nbsp; (0.35) | &nbsp;&nbsp;0.08 |
| &nbsp;&nbsp;Total from investment operations | &nbsp;&nbsp;Total from investment operations | &nbsp;&nbsp;9.19 | &nbsp;&nbsp;7.17 | &nbsp;&nbsp; (0.42) | &nbsp;&nbsp;0.06 |
| &nbsp;&nbsp;Less distributions from: | &nbsp;&nbsp;Less distributions from: |  |  |  |  |
| &nbsp;&nbsp;Net investment income | &nbsp;&nbsp;- | &nbsp;&nbsp;- | &nbsp;&nbsp; (0.01) | &nbsp;&nbsp;- | &nbsp;&nbsp;- |
| &nbsp;&nbsp;Net realized gains | &nbsp;&nbsp; (2.50) | &nbsp;&nbsp; (2.50) | &nbsp;&nbsp; (0.38) | &nbsp;&nbsp; (0.37) | &nbsp;&nbsp;- |
| &nbsp;&nbsp;Total distributions | &nbsp;&nbsp;Total distributions | &nbsp;&nbsp; (2.50) | &nbsp;&nbsp; (0.39) | &nbsp;&nbsp; (0.37) | &nbsp;&nbsp;- |
| &nbsp;&nbsp;Paid-in-Capital From Redemption Fees | &nbsp;&nbsp;Paid-in-Capital From Redemption Fees | &nbsp;&nbsp;0.01 | &nbsp;&nbsp;0.01 | &nbsp;&nbsp;0.00 &nbsp;&nbsp;<sup>(3)</sup> | &nbsp;&nbsp;- |
| &nbsp;&nbsp;Net asset value, end of period | &nbsp;&nbsp;Net asset value, end of period | &nbsp;&nbsp; $24.19 | &nbsp;&nbsp; $17.49 | &nbsp;&nbsp; $10.70 | &nbsp;&nbsp; $11.49 |
| &nbsp;&nbsp;Total return <sup>(4)</sup> | &nbsp;&nbsp;Total return <sup>(4)</sup> | &nbsp;&nbsp;58.62% | &nbsp;&nbsp;68.58% | &nbsp;&nbsp;(3.88)% | &nbsp;&nbsp;0.52%&nbsp;&nbsp;<sup>(5)</sup> |
| &nbsp;&nbsp;Net assets, at end of period (000's) | &nbsp;&nbsp;Net assets, at end of period (000's) | &nbsp;&nbsp; $256997 | &nbsp;&nbsp; $60 | &nbsp;&nbsp;$36 | &nbsp;&nbsp; $28024 |
| &nbsp;&nbsp;Ratio of gross expenses to average | &nbsp;&nbsp;Ratio of gross expenses to average |  |  |  |  |
| &nbsp;&nbsp;net assets <sup>(68)</sup> | &nbsp;&nbsp;2.64% | &nbsp;&nbsp;2.64% | &nbsp;&nbsp;3.00% | &nbsp;&nbsp;2.72% | &nbsp;&nbsp;2.58%&nbsp;&nbsp;<sup>(7)</sup> |
| &nbsp;&nbsp;Ratio of net expenses to average | &nbsp;&nbsp;Ratio of net expenses to average |  |  |  |  |
| &nbsp;&nbsp;net assets <sup>(8)</sup> | &nbsp;&nbsp;2.67% | &nbsp;&nbsp;2.67% | &nbsp;&nbsp;2.90% | &nbsp;&nbsp;2.58% | &nbsp;&nbsp;2.52%&nbsp;&nbsp;<sup>(7)</sup> |
| &nbsp;&nbsp;Ratio of net investment loss | &nbsp;&nbsp;Ratio of net investment loss |  |  |  |  |
| &nbsp;&nbsp;to average net assets | &nbsp;&nbsp;(0.77)% | &nbsp;&nbsp;(0.77)% | &nbsp;&nbsp;(1.04)% | &nbsp;&nbsp;(0.59)% | &nbsp;&nbsp;(0.30)%&nbsp;&nbsp;<sup>(7)</sup> |
| &nbsp;&nbsp;Portfolio Turnover Rate | &nbsp;&nbsp;Portfolio Turnover Rate | &nbsp;&nbsp;149% | &nbsp;&nbsp;179% | &nbsp;&nbsp;153% | &nbsp;&nbsp;100%&nbsp;&nbsp;<sup>(5)</sup> |

---

(1) The Super Institutional Class commenced operations on May 10, 2019.

(2) Per share amounts calculated using the average shares method, which
more appropriately presents the per share data for the period.

(3) Represents less than $0.01 per share.

(4) Total returns shown exclude the effect of applicable sales charges
and redemption fees and assumes the reinvestment of distributions.

(5) Not Annualized.

(6) Represents the ratio of expenses to average net assets absent advisory
fees waived or recaptured by the Advisor.

(7) Annualized.

(8) Excluding dividends from securities sold short and interest expense,
the ratio of expenses to average net assets would have been:

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;Before fees waived/recaptured | &nbsp;&nbsp;1.95% | &nbsp;&nbsp;2.08% | &nbsp;&nbsp;2.12% | &nbsp;&nbsp;2.04%&nbsp;&nbsp;<sup>(7)</sup> |
| &nbsp;&nbsp;After fees waived/recaptured | &nbsp;&nbsp;1.98% | &nbsp;&nbsp;1.98% | &nbsp;&nbsp;1.98% | &nbsp;&nbsp;1.98%&nbsp;&nbsp;<sup>(7)</sup> |

---

**PRIVACY NOTICE** 

**Rev. May 2019**

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;**FACTS** | &nbsp;&nbsp;WHAT DOES NORTHERN LIGHTS FUND TRUST II ("NLFT II") DO WITH YOUR PERSONAL INFORMATION? | &nbsp;&nbsp;WHAT DOES NORTHERN LIGHTS FUND TRUST II ("NLFT II") DO WITH YOUR PERSONAL INFORMATION? | &nbsp;&nbsp;WHAT DOES NORTHERN LIGHTS FUND TRUST II ("NLFT II") DO WITH YOUR PERSONAL INFORMATION? |
| &nbsp;&nbsp;**Why?** | &nbsp;&nbsp;Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. | &nbsp;&nbsp;Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. | &nbsp;&nbsp;Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| &nbsp;&nbsp;**What?** | &nbsp;&nbsp;The types of personal information we collect and share depend on the product or service you have with us. This information can include: | &nbsp;&nbsp;The types of personal information we collect and share depend on the product or service you have with us. This information can include: | &nbsp;&nbsp;The types of personal information we collect and share depend on the product or service you have with us. This information can include: |
| &nbsp;&nbsp;**What?** | &nbsp;&nbsp; · Account transactions<br> · Income<br> · Investment experience | &nbsp;&nbsp; · Account transactions<br> · Income<br> · Investment experience | &nbsp;&nbsp; · Account transactions<br> · Income<br> · Investment experience |
| &nbsp;&nbsp;**What?** | &nbsp;&nbsp;When you are no longer our customer, we continue to share your information as described in this notice. | &nbsp;&nbsp;When you are no longer our customer, we continue to share your information as described in this notice. | &nbsp;&nbsp;When you are no longer our customer, we continue to share your information as described in this notice. |
| &nbsp;&nbsp;**How?** | &nbsp;&nbsp;All financial companies need to share a customer's personal information to run their everyday business - to process transactions, maintain customer accounts, and report to credit bureaus. In the section below, we list the reasons financial companies can share their customer's personal information; the reasons NLFT II chooses to share; and whether you can limit this sharing. | &nbsp;&nbsp;All financial companies need to share a customer's personal information to run their everyday business - to process transactions, maintain customer accounts, and report to credit bureaus. In the section below, we list the reasons financial companies can share their customer's personal information; the reasons NLFT II chooses to share; and whether you can limit this sharing. | &nbsp;&nbsp;All financial companies need to share a customer's personal information to run their everyday business - to process transactions, maintain customer accounts, and report to credit bureaus. In the section below, we list the reasons financial companies can share their customer's personal information; the reasons NLFT II chooses to share; and whether you can limit this sharing. |
| &nbsp;&nbsp;Reasons we can share your personal information | &nbsp;&nbsp;Reasons we can share your personal information | &nbsp;&nbsp;**Does NLFT II share?** | &nbsp;&nbsp;**Can you limit this sharing?** |
| &nbsp;&nbsp;For our everyday business purposes --<br> such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | &nbsp;&nbsp;For our everyday business purposes --<br> such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | &nbsp;&nbsp;Yes | &nbsp;&nbsp;No |
| &nbsp;&nbsp;For our marketing purposes --<br> to offer our products and services to you | &nbsp;&nbsp;For our marketing purposes --<br> to offer our products and services to you | &nbsp;&nbsp;Yes | &nbsp;&nbsp;No |
| &nbsp;&nbsp;For joint marketing with other financial companies | &nbsp;&nbsp;For joint marketing with other financial companies | &nbsp;&nbsp;Yes | &nbsp;&nbsp;No |
| &nbsp;&nbsp;For our affiliates' everyday business purposes --<br> information about your transactions and experiences | &nbsp;&nbsp;For our affiliates' everyday business purposes --<br> information about your transactions and experiences | &nbsp;&nbsp;Yes | &nbsp;&nbsp;No |
| &nbsp;&nbsp;For our affiliates' everyday business purposes --<br> information about your creditworthiness | &nbsp;&nbsp;For our affiliates' everyday business purposes --<br> information about your creditworthiness | &nbsp;&nbsp;No | &nbsp;&nbsp;We don't share |
| &nbsp;&nbsp;For nonaffiliates to market to you | &nbsp;&nbsp;For nonaffiliates to market to you | &nbsp;&nbsp;No | &nbsp;&nbsp;We don't share |
| &nbsp;&nbsp;**Questions?** | &nbsp;&nbsp;Call 1-631-490-4300 | &nbsp;&nbsp;Call 1-631-490-4300 | &nbsp;&nbsp;Call 1-631-490-4300 |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;<br> Who we are | &nbsp;&nbsp;<br> Who we are |
| &nbsp;&nbsp;**Who is providing this notice?** | &nbsp;&nbsp;Northern Lights Fund Trust II |
| &nbsp;&nbsp;What we do | &nbsp;&nbsp;What we do |
| &nbsp;&nbsp;**How does NLFT II protect my personal information?** | &nbsp;&nbsp;To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. |
| &nbsp;&nbsp;**How does NLFT II collect my personal information?** | &nbsp;&nbsp;We collect your personal information, for example, when you |
| &nbsp;&nbsp;**How does NLFT II collect my personal information?** | &nbsp;&nbsp; · provide account information<br> · give us your contact information |
| &nbsp;&nbsp;**How does NLFT II collect my personal information?** | &nbsp;&nbsp;We also collect your personal information from others, such as credit bureaus, affiliates, or other companies. |
| &nbsp;&nbsp;**Why can't I limit all sharing?** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Federal law gives you the right to limit only<br> · sharing for affiliates' everyday business purposes—information about your creditworthiness<br> · affiliates from using your information to market to you<br> · sharing for nonaffiliates to market to you<br>State laws and individual companies may give you additional rights to limit sharing. |
| &nbsp;&nbsp;Definitions | &nbsp;&nbsp;Definitions |
| &nbsp;&nbsp;**Affiliates** | &nbsp;&nbsp; Companies related by common ownership or control. They can be financial and nonfinancial companies.<br>· *NLFT II has no affiliates.* |
| &nbsp;&nbsp;**Nonaffiliates** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Companies not related by common ownership or control. They can be financial and nonfinancial companies.<br>· *NLFT II does not share with nonaffiliates so they can market to you.* |
| &nbsp;&nbsp;**Joint marketing** | &nbsp;&nbsp; A formal agreement between nonaffiliated financial companies that together market financial products and services to you.<br>· *Our joint marketing partners include other financial service companies.* |

---

***Investment Adviser***

Invenomic Capital Management, LP

211 Congress Street, 8<sup>th</sup> Floor

Boston, MA 02110

***Independent Registered Public Accounting Firm***

Tait, Weller & Baker LLP

Two Liberty Place

50 South 16<sup>th</sup> Street, Suite 2900

Philadelphia, PA 19102

***Legal Counsel***

Alston & Bird, LLP

950 F Street NW

Washington, D.C. 20004

 ****

***Custodian***

U.S. Bank, National Association

1555 North River Center Drive

Milwaukee, WI 53212

 ****

***Transfer Agent, Fund Accountant and Fund Administrator***

Ultimus Fund Solutions, LLC

4221 North 203rd Street, Suite 100

Elkhorn, NE 68022

***Distributor***

Northern Lights Distributors, LLC

4221 North 203rd Street, Suite 100

Elkhorn, NE 68022

**Invenomic Fund**

**a series of the Northern Lights Fund Trust II**

&nbsp;&nbsp;**FOR MORE INFORMATION**

You can find more information about the Fund in the following documents:

**Statement of Additional Information**

The SAI provides additional details about the investments and techniques of the Fund and certain other additional information. A current SAI is on file with the SEC and is incorporated into this Prospectus by reference. This means that the SAI is legally considered a part of this Prospectus even though it is not physically within this Prospectus.

**Annual and Semi-Annual Reports**

Additional information about the Fund's investments will also be available in the Fund's Annual and Semi-Annual Reports to Shareholders. In the Fund's Annual Report, you will find a discussion of the market conditions and investment strategies that significantly affected the Fund's performance during its last fiscal year.

To obtain a free copy of the SAI and, when issued, the Annual and Semi-Annual Reports to Shareholders, or make general inquiries about the Fund by calling the Fund (toll-free) at 1-855-466-3406, or by writing to:

**Invenomic Fund**

c/o Ultimus Fund Solutions, LLC

4221 North 203rd Street, Suite 100

Elkhorn, NE 68022

Information is also available at www.invenomic.com.

You can review and copy information, including the Fund's reports and SAI, at the SEC's Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room by calling (202) 551-8090. Reports and other information about the Fund are also available:

* free of charge
from the SEC's EDGAR database on the SEC's Internet website at http://www.sec.gov;

* for a fee, by writing to the SEC's Public Reference
Room, 100 F Street, N.E., Washington, D.C. 20549-1520; or

* for a fee, by electronic request at the following
e-mail address: publicinfo@sec.gov.

![](image_002.gif)

(The Trust's SEC Investment Company Act file number is 811-22549)

**Statement of Additional Information**

Dated: March 1, 2023

**Invenomic Fund**

**Institutional Class (Symbol: BIVIX)**

**Investor Class (Symbol: BIVRX)**

**Super Institutional Class (Symbol: BIVSX)**

This Statement of Additional Information ("SAI") provides general information about the Invenomic Fund (the "Fund"), a series of Northern Lights Fund Trust II (the "Trust"). This SAI is not a prospectus and should be read in conjunction with the Fund's current prospectus for Super Institutional Class, Institutional Class and Investor Class shares dated March 1, 2023 (the "Prospectus"), as supplemented and amended from time to time, which is incorporated herein by reference. To obtain a copy of the Prospectus, free of charge, please write or call the Fund at the address or telephone number below:

**Invenomic Fund**

**c/o Ultimus Fund Solutions, LLC**

**4221 North 203rd Street, Suite 100**

**Elkhorn, NE 68022**

**1-855-466-3406**

---------------------------------

**TABLE OF CONTENTS**

---------------------------------

---

| | |
|:---|:---|
| **The Trust** | **3** |
| **Investment Policies, Strategies and Associated Risks** | **4** |
| **Fundamental Investment Limitations** | **22** |
| **Management of the Fund** | **26** |
| **Board of Trustees** | **26** |
| **Board Leadership Structure** | **26** |
| **Trustees and Officers** | **28** |
| **Board Committees** | **30** |
| **Trustee Compensation** | **31** |
| **Control Persons and Principal Shareholders** | **32** |
| **Investment Adviser** | **33** |
| **Portfolio Managers** | **35** |
| **Other Service Providers** | **37** |
| **Distribution of Fund Shares** | **39** |
| **12b-1 Distribution and Shareholder Servicing Plan** | **40** |
| **Portfolio Transactions and Brokerage Allocation** | **43** |
| **Portfolio Turnover** | **44** |
| **Code of Ethics** | **45** |
| **Proxy Voting Procedures** | **45** |
| **Anti-Money Laundering Compliance Program** | **45** |
| **Portfolio Holdings Information** | **46** |
| **Determination of Net Asset Value** | **47** |
| **Financial Statements** | **55** |
| **APPENDIX "A" RATINGS DEFINITIONS** | **56** |
| **APPENDIX "B"** | **72** |

---

**The Trust**

The Invenomic Fund (the "Fund"), formerly known as the Balter Invenomic Fund, is a series of Northern Lights Fund Trust II, (the "Trust") a Delaware statutory trust, organized on August 26, 2010.

The Trust is registered as an open-end management investment company. The Trust is governed by its Board of Trustees (the "Board" or "Trustees"). The Fund may issue an unlimited number of shares of beneficial interest. All shares of the Fund have equal rights and privileges. Each share of the Fund is entitled to one vote on all matters as to which shares are entitled to vote. In addition, each share of the Fund is entitled to participate equally with other shares (i) in dividends and distributions declared by the Fund and (ii) on liquidation to its proportionate share of the assets remaining after satisfaction of outstanding liabilities. Shares of the Fund are fully paid, non-assessable and fully transferable when issued and have no pre-emptive, conversion or exchange rights. Fractional shares have proportionately the same rights, including voting rights, as are provided for a full share.

The Fund is a diversified series of the Trust. The Fund's investment objective, restrictions and policies are more fully described here and in the Prospectus. The Board may add classes to and reclassify the shares of the Fund, start other series and offer shares of a new fund under the Trust at any time.

The Fund offers three class of shares: Super Institutional Class shares, Institutional Class shares and Investor Class shares. Each share class represents an interest in the same assets of the Fund, has the same rights and is identical in all material respects except that (i) each class of shares may be subject to different (or no) sales loads, (ii) each class of shares may bear different (or no) distribution fees; (iii) each class of shares may have different shareholder features, such as minimum investment amounts; (iv) certain other class-specific expenses will be borne solely by the class to which such expenses are attributable, including transfer agent fees attributable to a specific class of shares, printing and postage expenses related to preparing and distributing materials to current shareholders of a specific class, registration fees paid by a specific class of shares, the expenses of administrative personnel and services required to support the shareholders of a specific class, litigation or other legal expenses relating to a class of shares, Trustees' fees or expenses paid as a result of issues relating to a specific class of shares and accounting fees and expenses relating to a specific class of shares and (v) each class has exclusive voting rights with respect to matters relating to its own distribution arrangements. Each share of the Fund is entitled to one vote on all matters as to which shares are entitled to vote. In addition, each share of the Fund is entitled to participate equally with other shares on a class-specific basis (i) in dividends and distributions declared by the Fund and (ii) on liquidation to its proportionate share of the assets remaining after satisfaction of outstanding liabilities. Shares of the Funds are fully paid, non-assessable and fully transferable when issued and have no pre-emptive, conversion or exchange rights. Fractional shares have proportionately the same rights, including voting rights, as are provided for a full share.

**The Trust's Agreement and Declaration of Trust - General**

Under the Trust's Agreement and Declaration of Trust, each Trustee will continue in office until the termination of the Trust or his/her earlier death, incapacity, resignation or removal. Shareholders can remove a Trustee to the extent provided by the Investment Company Act of 1940, as amended (the "1940 Act") and the rules and regulations promulgated thereunder. Vacancies may be filled by a majority of the remaining Trustees, except insofar as the 1940 Act may require the election by shareholders. As a result, normally no annual or regular meetings of shareholders will be held unless matters arise requiring a vote of shareholders under the Agreement and Declaration of Trust or the 1940 Act.

The Trust is not required to and does not intend to hold annual meetings of shareholders.

**The Trust's Agreement and Declaration of Trust – Shareholder Derivative Actions**

A shareholder may bring derivative action on behalf of the Trust only if the shareholder or shareholders first make a pre-suit demand upon the Trustees to bring the subject action unless an effort to cause the Trustees to bring such action is excused. A demand on the Trustees shall only be excused if a majority of the Board of Trustees, or a majority of any committee established by the Board to consider the merits of such action, has a personal financial interest in the action at issue.

Invenomic Capital Management, LP (the "Adviser" or "Invenomic") serves as the investment adviser to the Fund.

**Investment Policies, Strategies and Associated Risks**

The investment objective of the Fund is to seek long term capital. The investment objective of the Fund and the descriptions of the Fund's principal investment strategies are set forth under "Investment Strategies, Related Risks and Disclosure of Portfolio Holdings" in the Prospectus. The Fund's investment objective is not fundamental and may be changed without the approval of a majority of the outstanding voting securities of the Trust, although the Fund will provide shareholders with notice of any change to the Fund's investment objectives at least 60 days prior to such change.

The following pages contain more detailed information about the types of instruments in which the Fund may invest, strategies the Adviser may employ in pursuit of the Fund's investment objective and a summary of related risks.

**Equity Securities**

The Fund may invest in equity securities consistent with its investment objective and strategies. Common stocks, preferred stocks and convertible securities are examples of equity securities in which the Fund may invest.

All investments in equity securities are subject to market risks that may cause their prices to fall. Historically, the equity markets have moved in cycles and the value of the securities in the Fund's portfolio may fluctuate substantially from day to day. Owning an equity security can also subject the Fund to the risk that the issuer may discontinue paying dividends. Other risks of investing globally in equity securities may include changes in currency exchange rates, exchange control regulations, expropriation of assets or nationalization, imposition of taxes including withholding taxes on dividend or interest payments, and difficulty in obtaining and enforcing judgments against entities. Equities investments may involve substantial risks and may be subject to wide and sudden fluctuations in market value, with a resulting fluctuation in the amount of profits and losses. There are no absolute restrictions in regard to the size or operating experience of the companies in which the Fund may invest directly or indirectly. In addition, relatively small companies in which the Fund may invest may lack management depth or the ability to generate internally, or obtain externally, the funds necessary for growth and companies with new products or services could sustain significant losses if projected markets do not materialize.

To the extent the Fund invests in the equity securities of small- and medium-sized companies, they will be exposed to the risks of small- and medium-sized companies. Such companies often have narrower markets for their goods and/or services and more limited managerial and financial resources than larger, more established companies. Furthermore, those companies often have limited product lines, or services, markets, or financial resources, or are dependent on a small management group. In addition, because these stocks are not well-known to the investing public, do not have significant institutional ownership, and are followed by relatively few security analysts, there will normally be less publicly available information concerning these securities compared to what is available for the securities of larger companies. Adverse publicity and investor perceptions, whether based on fundamental analysis, can decrease the value and

liquidity of securities held by the Fund. As a result, their performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio.

<u>Common Stock</u>

A common stock represents a proportionate share of the ownership of a company and its value is based on the success of the company's business, any income paid to stockholders, the value of its assets, and general market conditions. In addition to the general risks set forth above, investments in common stocks are subject to the risk that in the event a company in which the Fund invests is liquidated, the holders of preferred stock and creditors of that company will be paid in full before any payments are made to the Fund as a holder of common stock. It is possible that all assets of that company will be exhausted before any payments are made to the Fund.

<u>Preferred Stock</u>

Preferred stocks are equity securities that often pay dividends at a specific rate and have a preference over common stocks in dividend payments and liquidation of assets. A preferred stock has a blend of the characteristics of a bond and common stock. It can offer the higher yield of a bond and has priority over common stock in equity ownership, but does not have the seniority of a bond and, unlike common stock, its participation in the issuer's growth may be limited. Although the dividend is set at a fixed annual rate, in some circumstances it can be changed or omitted by the issuer.

<u>Rights and Warrants</u>

The Fund may invest in rights or warrants. Rights and warrants entitle the holder to buy equity securities at a specific price for a specific period of time. Rights and warrants may be considered more speculative than certain other types of investments in that they do not entitle a holder to dividends or voting rights with respect to the underlying securities that may be purchased nor do they represent any rights in the assets of the issuing company. Also, the value of a right or warrant does not necessarily change with the value of the underlying securities and a right or warrant ceases to have value if it is not exercised prior to the expiration date.

<u>Convertible Securities</u>

The Fund invests in convertible securities. Convertible securities (such as debt securities or preferred stock) may be converted into or exchanged for a prescribed amount of common stock of the same or different issuer within a particular period of time at a specified price or formula. A convertible security entitles the holder to receive interest paid or accrued on debt or dividends paid on preferred stock until the convertible stock matures or is redeemed, converted or exchanged. While no securities investment is without some risk, investments in convertible securities generally entail less risk than the issuer's common stock. However, the extent to which such risk is reduced depends in large measure upon the degree to which the convertible security sells above its value as a fixed income security. In addition to the general risk associated with equity securities discussed above, the market value of convertible securities is also affected by prevailing interest rates, the credit quality of the issuer and any call provisions. While convertible securities generally offer lower interest or dividend yields than nonconvertible debt securities of similar quality, they do enable the investor to benefit from any increases in the market price of the underlying common stock.

**Foreign Securities**

The Fund may invest in foreign securities American Depositary Receipts ("ADRs"), European Depository Receipts ("EDRs"), International Depositary Receipts ("IDRs"), Global Depositary Receipts

("GDRs") and foreign equity securities. The Fund may invest without limit in U.S. dollar denominated foreign securities and depositary receipts, and may invest up to 35% of its total assets in equity securities of foreign issuers that are not traded in the U.S. In determining whether a company is foreign, the Adviser will consider various factors including where the company is headquartered, where the company's principal operations are located, where the company's revenues are derived, where the principal trading market is located and the country in which the company is legally organized. The weight given to each of these factors will vary depending upon the circumstances. Investments in foreign securities may involve a greater degree of risk than those in domestic securities.

<u>American Depositary Receipts, European Depository Receipts, International Depositary Receipts and Global Depositary Receipts</u> 

 

The Fund may invest in securities of foreign issuers in the form of "ADRs, "EDRs", "IDRs" and "GDRs". These securities may not necessarily be denominated in the same currency as the securities for which they may be exchanged. These are certificates evidencing ownership of shares of a foreign-based issuer held in trust by a bank or similar financial institution. Designed for use in U.S. securities markets, ADRs are alternatives to the purchase of the underlying securities in their national market and currencies, while IDRs and GDRs are international and global receipts evidencing a similar arrangement. ADRs, EDRs, IDRs and GDRs may be purchased through "sponsored" or "unsponsored" facilities. A sponsored facility is established jointly by the issuer of the underlying security and a depositary, whereas a depositary may establish an unsponsored facility without participation by the issuer of the depositary security. Holders of unsponsored depositary receipts generally bear all the costs of such facilities and the depositary of an unsponsored facility frequently is under no obligation to distribute shareholder communications received from the issuer of the deposited security or to pass through voting rights to the holders of such receipts of the deposited securities.

Investing in foreign securities involves certain risks not ordinarily associated with investments in securities of domestic issuers. Foreign securities markets have, for the most part, substantially less volume than the U.S. markets and securities of many foreign companies are generally less liquid and their prices more volatile than securities of U.S. companies. There is generally less government supervision and regulation of foreign exchanges, brokers and issuers than in the United States. The rights of investors in certain foreign countries may be more limited than those of shareholders of U.S. issuers and the Fund may have greater difficulty taking appropriate legal action to enforce its rights in a foreign court than in a U.S. court. Investing in foreign securities also involves risks associated with government, economic, monetary, and fiscal policies (such as the adoption of protectionist trade measures), possible foreign withholding taxes on dividends and interest payable to the Fund, possible taxes on trading profits, inflation, and interest rates, economic expansion or contraction, and global or regional political, economic or banking crises. Furthermore, there is the risk of possible seizure, nationalization or expropriation of the foreign issuer or foreign deposits and the possible adoption of foreign government restrictions such as exchange controls. Also, foreign issuers are not necessarily subject to uniform accounting, auditing and financial reporting standards, practices and requirements comparable to those applicable to domestic issuers and as a result, there may be less publicly available information on such foreign issuers than is available from a domestic issuer.

In addition, the Fund may invest in foreign securities of companies that are located in developing or emerging markets. Investing in securities of issuers located in these markets may pose greater risks not typically associated with investing in more established markets such as increased risk of social, political and economic instability. Emerging market countries typically have smaller securities markets than developed countries and therefore less liquidity and greater price volatility than more developed markets. Securities traded in emerging markets may also be subject to risks associated with the lack of modern technology, poor infrastructures, the lack of capital base to expand business operations and the inexperience of financial intermediaries, custodians and transfer agents. Emerging market countries are also more likely to impose

restrictions on the repatriation of an investor's assets and even where there is no outright restriction on repatriation, the mechanics of repatriations may delay or impede the Fund's ability to obtain possession of its assets. As a result, there may be an increased risk or price volatility associated with the Fund's investments in emerging market countries, which may be magnified by currency fluctuations.

Dividends and interest payable on the Fund's foreign securities may be subject to foreign withholding tax. The Fund may also be subject to foreign taxes on its trading profits. Some countries may also impose a transfer or stamp duty on certain securities transactions. The imposition of these taxes will increase the cost to the Fund of investing in those countries that impose these taxes. To the extent that, as anticipated, such taxes are not offset by credits or deductions available to shareholders in the Fund under U.S. tax law, they will reduce the net return to the Fund's shareholders. It is not anticipated that the Fund will be eligible to pass through to shareholders a federal tax credit or federal tax deduction related to any foreign taxes borne by the Fund.

To the extent the Fund invests in securities denominated in foreign currencies, the Fund will be subject to the risk that a change in the value of any such currency against the U.S. dollar will result in a corresponding change in the U.S. dollar value of the Fund's assets denominated in that currency. Investing in foreign denominated securities may also result in transaction costs incurred in connection with conversions between various currencies. In addition, only a limited market currently exists for hedging transactions relating to currencies in certain emerging markets and securities transactions undertaken in foreign markets may not be settled promptly, subjecting the Fund to the risk of fluctuating currency exchange rates pending settlement.

**Other Investment Companies**

The Fund may invest in shares of other registered investment companies, including money market mutual funds, in accordance with the limitations established under the 1940 Act. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, the Fund becomes a shareholder of that investment company. As a result, Fund shareholders indirectly will bear the Fund's proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses Fund shareholders directly bear in connection with the Fund's own operations.

The Fund currently intends to limit its investments in securities issued by other investment companies so that not more than 3% of the outstanding voting stock of any one investment company (other than money market funds) will be owned by the Fund, or its affiliated persons, as a whole. In addition to the advisory and operational fees the Fund bears directly in connection with its own operation, the Fund would also bear its pro rata portions of each other investment company's advisory and operational expenses.

Section 12(d)(1) of the 1940 Act restricts investments by registered investment companies in securities of other registered investment companies. The acquisition of shares by the Fund in other registered investment companies is therefore subject to the restrictions of Section 12(d)(1) of the 1940 Act, except as may be permitted by Rule and/or an exemptive order obtained by the other registered investment companies that permits the Fund to invest in the other registered investment companies beyond the limits of Section 12(d)(1), subject to certain terms and conditions, including that the Fund enter into an agreement with the other registered investment companies regarding the terms of the investment.

In accordance with Section 12(d)(1)(F) and Rule 12d1-3 of the 1940 Act, the provisions of Section 12(d)(1) shall not apply to securities purchased or otherwise acquired by the Fund if (i) immediately after such purchase or acquisition not more than 3% of the total outstanding stock of such registered investment company is owned by the Fund and all affiliated persons of the Fund; and (ii) the Fund is not proposing

to offer or sell any security issued by it through a principal underwriter or otherwise at a public or offering price including a sales load that exceeds the limits set forth in Rule 2341 of the Conduct Rules of the Financial Industry Regulatory Authority ("FINRA") applicable to a fund of funds (*i.e.*, 8.5%).

<u>Exchange-Traded Funds</u>

The Fund may invest in Exchange-Traded Funds ("ETFs"). ETFs are typically open-end investment companies that are bought and sold on a national securities exchange. An ETF is similar to a traditional mutual fund, but trades at different prices during the day on a security exchange like a stock. Similar to investments in other investment companies discussed above, the Fund's investments in ETFs will involve duplication of advisory fees and other expenses since the Fund will be investing in another investment company. In addition, the Fund's investment in ETFs is also subject to its limitations on investments in investment companies discussed above, absent another applicable exemption. To the extent the Fund invests in ETFs which focus on a particular market segment or industry, the Fund will also be subject to the risks associated with investing in those sectors or industries. The shares of the ETFs in which the Fund will invest will be listed on a national securities exchange and the Fund will purchase or sell these shares on the secondary market at its current market price, which may be more or less than its net asset value per share ("NAV"). Investors in the Fund should be aware that ETFs are subject to "tracking risk," which is the risk that an ETF will not be able to replicate exactly the performance of the index it tracks.

As a purchaser of ETF shares on the secondary market, the Fund will be subject to the market risk associated with owning any security whose value is based on market price. ETF shares historically have tended to trade at or near their NAV, but there is no guarantee that they will continue to do so. Unlike traditional mutual funds, shares of an ETF may be purchased and redeemed directly from the ETFs only in large blocks (typically, 50,000 shares or more) and only through participating organizations that have entered into contractual agreements with the ETF. The Fund does not expect to enter into such agreements and therefore will not be able to purchase and redeem its ETF shares directly from the ETF.

The Fund may invest in "Short ETFs" which seek a return similar to the inverse, or a multiple of the inverse, of a reference index. Short ETFs carry additional risks because their underlying assets may include a variety of financial instruments, including futures and options on futures, options on securities and securities indices, swap agreements and forward contracts, and may engage in short sales. An ETF's losses on short sales are potentially unlimited; however, the Fund's risk would be limited to the amount it invested in the ETF.

<u>Money Market Mutual Funds</u>

The Fund may invest in money market mutual funds in connection with its management of daily cash positions or for temporary defensive purposes. Money market mutual funds are regulated investment companies under the 1940 Act and the Fund will invest in money market funds in accordance with applicable rules and regulations with respect to investments in other investment companies. Please note that in addition to the advisory and operational fees the Fund pays in connection with its own operations, to the extent the Fund invests in money market funds, the Fund will also bear its pro rata portion of each such money market fund's fees and expenses.

**Illiquid Securities** 

The Fund may not invest more than 15% of the value of its net assets in illiquid securities. The Adviser will monitor the amount of illiquid securities in the Fund's portfolio, under the supervision of the Board, to ensure compliance with this investment restriction.

Historically, illiquid securities have included securities subject to contractual or legal restrictions on resale because they have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), securities which are otherwise not readily marketable and repurchase agreements having a maturity of longer than seven days. Mutual funds do not typically hold a significant amount of these restricted or other illiquid securities because of the potential for delays on resale and uncertainty in valuation. Limitations on resale may have an adverse effect on the marketability of portfolio securities, and the Fund might be unable to sell illiquid securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemption requests within seven days.

**Restricted Securities**

The Fund may invest in securities that are subject to restrictions on resale because they have not been registered under the Securities Act. These securities are sometimes referred to as private placements. Although securities which may be resold only to "qualified institutional buyers" in accordance with the provisions of Rule 144A under the Securities Act are technically considered "restricted securities," the Fund may purchase Rule 144A securities without regard to the limitation on investments in illiquid securities described above in the "Illiquid Securities" section, provided that a determination is made that such securities have a readily available trading market. The Fund may also purchase certain commercial paper issued in reliance on the exemption from regulations in Section 4(2) of the Securities Act ("4(2) Paper"). The Adviser will determine the liquidity of Rule 144A securities and 4(2) Paper under the supervision of the Board. The liquidity of Rule 144A securities and 4(2) Paper will be monitored by the Adviser, and if as a result of changed conditions it is determined that a Rule 144A security or 4(2) Paper is no longer liquid, the Fund's holdings of illiquid securities will be reviewed to determine what, if any, action is required to assure that the Fund does not exceed its applicable percentage limitation for investments in illiquid securities.

Limitations on the resale of restricted securities may have an adverse effect on the marketability of portfolio securities and the Fund might be unable to dispose of restricted securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemption requirements. The Fund might also have to register such restricted securities in order to dispose of them, resulting in additional expense and delay. Adverse market conditions could impede such a public offering of securities.

**Short Sales**

The Fund may engage in short sales of securities, provided the securities are fully listed on a national securities exchange. In a short sale, the Fund sells a security it does not own, in anticipation of a decline in the market value of the security. To complete the transaction, the Fund must borrow the security to make delivery to the buyer. The Fund is then obligated to replace the security borrowed by purchasing it at the market price at the time of replacement. This price may be more or less than the price at which the security was sold by the Fund. The Fund will incur a loss on a short sale if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The amount of the Fund's loss on a short sale is potentially unlimited. The Fund will realize a gain if the security declines in price between those dates. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of the premium, dividends, interest or expenses the Fund may be required to pay in connection with the short sale.

Typically, the Fund will segregate liquid assets, which are marked-to-market daily, equal to the difference between (a) the market value of the securities sold short at the time they were sold short and (b) the value of the collateral deposited with the broker in connection with the short sale (not including the proceeds from the short sale). While the short position is open, the Fund must maintain segregated assets at such a level that the amount segregated plus the amount deposited with the broker as collateral equal the current market value of the securities sold short.

The dollar amount of short sales at any one time (not including short sales against the box) may not exceed 95% of the net assets of the Fund, and it is expected that normally the dollar amount of such sales will not exceed 85% of the net assets of the Fund.

**Fixed Income Securities** 

<u>General</u>

The Fund may invest in fixed income securities. Examples of such securities are described below.

<u>Corporate Debt Securities</u> 

The Fund may invest in fixed-income securities of any maturity, including fixed income securities rated below investment grade by one or more statistical ratings organizations such as Standard & Poor's Ratings Group ("S&P") or Moody's Investors Service, Inc. ("Moody's"). Bonds rated below BBB by S&P or Baa by Moody's, commonly referred to as "junk bonds," typically carry higher coupon rates than investment grade bonds, but also are described as speculative by both S&P and Moody's and may be subject to greater market price fluctuations, less liquidity and greater risk of income or principal including greater possibility of default and bankruptcy of the issuer of such securities than more highly rated bonds. Lower-rated bonds also are more likely to be sensitive to adverse economic or company developments and more subject to price fluctuations in response to changes in interest rates. The market for lower-rated debt issues generally is thinner and less active than that for higher quality securities, which may limit the Fund's ability to sell such securities at fair value in response to changes in the economy or financial markets. During periods of economic downturn or rising interest rates, highly leveraged issuers of lower-rated securities may experience financial stress which could adversely affect their ability to make payments of interest and principal and increase the possibility of default.

Ratings of debt securities represent the rating agencies' opinions regarding their quality, are not a guarantee of quality and may be reduced after the Fund has acquired the security. If a security's rating is reduced while it is held by the Fund, the Adviser will consider whether the Fund should continue to hold the security but is not required to dispose of it. Credit ratings attempt to evaluate the safety of principal and interest payments and do not evaluate the risks of fluctuations in market value. Also, rating agencies may fail to make timely changes in credit ratings in response to subsequent events, so that an issuer's current financial conditions may be better or worse than the rating indicates. The ratings for corporate debt securities are described in Appendix A.

<u>Lower-Rated Debt Securities</u>

The Fund may invest up to 20% of its net assets in lower-rated debt securities, commonly referred to as "junk bonds" (those rated below the fourth highest grade by a nationally recognized statistical ratings organization ("NRSRO") and non-rated securities judged by the Adviser to be of equivalent quality), that have poor protection with respect to the payment of interest and repayment of principal, or that may be in default. These securities are often considered to be speculative and involve greater risk of loss or price changes due to changes in the issuer's capacity to pay. The market prices of lower-rated debt securities may fluctuate more than those of higher-rated debt securities and may decline significantly in periods of general economic difficulty, which may follow periods of rising interest rates.

The market for lower-rated debt securities may be thinner and less active than that for higher-rated debt securities, which can adversely affect the prices at which the former are sold. If market quotations are not available, lower-rated debt securities will be valued in accordance with procedures established by the Board, including the use of outside pricing services. Judgment plays a greater role in valuing high-yield

corporate debt securities than is the case for securities for which more external sources for quotations and last-sale information are available. Adverse publicity and changing investor perceptions may affect the ability of outside pricing services to value lower-rated debt securities and the Fund's ability to sell these securities.

Since the risk of default is higher for lower-rated debt securities, the Adviser's research and credit analysis are an especially important part of managing securities of this type held by the Fund. In considering investments for the Fund, the Adviser will attempt to identify those issuers of high-yielding debt securities whose financial condition are adequate to meet future obligations, have improved, or is expected to improve in the future. The analysis focuses on relative values based on such factors as interest or dividend coverage, asset coverage, earnings prospects, and the experience and managerial strength of the issuer.

The Fund may choose, at its expense or in conjunction with others, to pursue litigation or otherwise exercise its right as security holder to seek to protect the interests of security holders if it determines this to be in the best interest of the Fund's shareholders.

<u>U.S. Government Obligations and Related Securities</u>

U.S. Government obligations include a variety of securities that are issued or guaranteed by the U.S. Treasury, by various agencies of the U.S. Government or by various instrumentalities that have been established or sponsored by the U.S. Government. U.S. Treasury securities and securities issued by the Government National Mortgage Association ("GNMA") and Small Business Administration are backed by the "full faith and credit" of the U.S. Government. Other U.S. Government obligations may or may not be backed by the "full faith and credit" of the U.S. Government. In the case of securities not backed by the "full faith and credit" of the U.S. Government, the investor must look principally to the agency issuing or guaranteeing the obligation (such as the Federal Farm Credit System, Fannie Mae and Freddie Mac) for ultimate repayment and may not be able to assert a claim against the U.S. Government itself if the agency or instrumentality does not meet its commitments.

<u>Asset-Backed Securities</u>

Asset-backed securities include pools of mortgages, loans, receivables or other assets. Payment of principal and interest may be largely dependent upon the cash flows generated by the assets backing the securities, and, in certain cases, supported by letters of credit, surety bonds, or other credit enhancements. The value of asset-backed securities may also be affected by the creditworthiness of the servicing agent for the pool, the originator of the loans or receivables, or the financial institution(s) providing the credit support.

<u>Variable or Floating Rate Securities</u>

Variable or floating rate securities provide for periodic adjustments of the interest rate paid. Variable rate securities provide for a specific periodic adjustment in the interest rate, while floating rate securities have interest rates that change whenever there is a change in a designated benchmark rate. Some variable or floating rate securities have put features.

<u>Indexed Securities</u>

The Fund may purchase securities whose prices are indexed to the prices of other securities, securities indices, currencies, precious metals or other commodities, or other financial indicators. Indexed securities typically, but not always, are debt securities or deposits whose value at maturity or coupon rate is determined by reference to a specific instrument or statistic. Gold-indexed securities, for example, typically provide for a maturity value that depends on the price of gold, resulting in a security whose price tends to

rise and fall together with gold prices. Currency-indexed securities typically are short-term to intermediate-term debt securities whose maturity values or interest rates are determined by reference to the values of one or more specified foreign currencies, and may offer higher yields than U.S. dollar-denominated securities of equivalent issuers. Currency-indexed securities may be positively or negatively indexed; that is, their maturity value may increase when the specified currency value increases, resulting in a security that performs similarly to a foreign-denominated instrument, or their maturity value may decline when foreign currencies increase, resulting in a security whose price characteristics are similar to a put on the underlying currency. Currency-indexed securities may also have prices that depend on the value of a number of different foreign currencies relative to each other.

The performance of indexed securities depends to a great extent on the performance of the security, currency, or other instrument to which they are indexed, and may also be influenced by interest rate changes in the United States and abroad. At the same time, indexed securities are subject to the credit risks associated with the issuer of the security, and their values may decline substantially if the issuer's creditworthiness deteriorates. Recent issuers of indexed securities have included banks, corporations, and certain U.S. government agencies. Indexed securities may be more volatile than the underlying instruments.

<u>Stripped Securities</u>

STRIPS, CUBES, TRs, TIGRs and CATS are sold as zero coupon securities, which mean that they are sold at a substantial discount and redeemed at face value at their maturity date without interim cash payments of interest or principal. This discount is amortized over the life of the security, and such amortization will constitute the income earned on the security for both accounting and tax purposes. Because of these features, these securities may be subject to greater interest rate volatility than interest-paying U.S. Treasury obligations. Bonds issued by the Resolution Funding Corporation ("REFCORP") can also be stripped in this fashion. REFCORP Strips are eligible investments for the Fund.

<u>Zero Coupon Bonds</u>

The Fund may purchase zero coupon bonds. Zero coupon bonds are purchased at a discount from the face amount because the buyer receives only the right to receive a fixed payment on a certain date in the future and does not receive any periodic interest payments. The effect of owning instruments which do not make current interest payments is that a fixed yield is earned not only on the original investment but also, in effect, on all discount accretion during the life of the obligations. This implicit reinvestment of earnings at the same rate eliminates the risk of being unable to reinvest distributions at a rate as high as the implicit yields on the zero coupon bond, but at the same time eliminates the holder's ability to reinvest at higher rates in the future. For this reason, zero coupon bonds are subject to substantially greater price fluctuations during periods of changing market interest rates than are comparable securities which pay interest currently, whose fluctuation increases the longer the period of maturity. Although zero coupon bonds do not pay interest to holders prior to maturity, U.S. federal income tax law requires the Fund to recognize as interest income a portion of the bond's discount each year and this income must then be distributed to shareholders along with other income earned by the Fund. To the extent that any shareholders in the Fund elect to receive their dividends in cash rather than reinvest such dividends in

additional shares, cash to make these distributions will have to be provided from the assets of the Fund or other sources such as proceeds of sales of Fund shares and/or sales of portfolio securities. In such cases, the Fund will not be able to purchase additional income producing securities with cash used to make such distributions and its current income may ultimately be reduced as a result.

<u>Real Estate-Related Investments</u>

Real estate-related instruments include real estate investment trusts, commercial and residential mortgage-backed securities, and real estate financings. Real estate-related instruments are sensitive to factors such as real estate values, property taxes, interest rates, cash flow of underlying real estate assets, overbuilding, and the management skill and creditworthiness of the issuer. Real estate-related instruments may also be affected by tax and regulatory requirements, such as those relating to the environment.

**Initial Public Offerings**

The Fund may purchase shares in initial public offerings ("IPOs"). Because IPO shares frequently are volatile in price, the Fund may hold IPO shares for a very short period of time. This may increase the turnover of the Fund's portfolio and may lead to increased expenses to the Fund, such as brokerage commissions and transaction costs. By selling shares, the Fund may realize taxable capital gains that it will subsequently distribute to shareholders. Investing in IPOs increases risk because IPO shares are frequently volatile in price. As a result, their performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio.

**Borrowing**

The Fund may borrow money for investment purposes. The Fund's Investment Restriction regarding borrowing will be interpreted to permit the Fund to engage in trading practices and investments that may be considered to be borrowing to the extent permitted by the 1940 Act.

The Fund may borrow money in amounts of up to one-third of its total assets (including the amount borrowed) from banks. In addition, the Fund is authorized to borrow money from time to time for temporary, extraordinary or emergency purposes or for clearance of transactions. The use of borrowing by the Fund involves special risk considerations that may not be associated with other funds having similar objectives and policies. Since substantially all of the Fund's assets fluctuate in value, while the interest obligation resulting from a borrowing will be fixed by the terms of the Fund's agreement with its lender, the NAV per share of the Fund will tend to increase more when its portfolio securities increase in value and to decrease more when its portfolio assets decrease in value than would otherwise be the case if the Fund did not borrow funds. In addition, interest costs on borrowings may fluctuate with changing market rates of interest and may partially offset or exceed the return earned on borrowed funds. Under adverse market conditions, the Fund might have to sell portfolio securities to meet interest or principal payments at a time when fundamental investment considerations would not favor such sales.

The 1940 Act permits a portfolio to borrow money in amounts of up to one-third of the Fund's total assets from banks for any purpose, and to borrow up to 5% of the Fund's total assets from banks or other lenders for temporary purposes. To limit the risks attendant to borrowing, the 1940 Act requires the Fund to maintain at all times an "asset coverage" of at least 300% of the amount of its borrowings. Asset coverage means the ratio that the value of the Fund's total assets, minus liabilities other than borrowings, bears to the aggregate amount of all borrowings. Borrowing money to increase the Fund's investment portfolio is known as "leveraging." Borrowing, especially when used for leverage, may cause the value of the Fund's shares to be more volatile than if the Fund did not borrow. This is because borrowing tends to magnify the effect of any increase or decrease in the value of the Fund's portfolio holdings. Borrowed money thus creates an opportunity for greater gains, but also greater losses. To repay borrowings, the Fund

may have to sell securities at a time and at a price that is unfavorable to the Fund. There also are costs associated with borrowing money, and these costs would offset and could eliminate the Fund's net investment income in any given period. Currently, the Fund's does not contemplate borrowing money for investment purposes. The Fund's Investment Restriction regarding borrowing will be interpreted to permit the Fund to engage in trading practices and investments that may be considered to be borrowing to the extent permitted by the 1940 Act. Reverse repurchase agreements may be considered to be a type of borrowing. Short-term credits necessary for the settlement of securities transactions and arrangements with respect to securities lending will not be considered to be borrowings under the policy. Practices and investments that may involve leverage but are not considered to be borrowings are not subject to the policy. Such trading practices may include futures, options on futures, forward contracts and other derivative investments.

**Issuance of Senior Securities**

Generally, issuing senior securities is prohibited under the 1940 Act; however, certain exceptions apply such as in the case of borrowing and certain other leveraging transactions. With respect to the Fund's fundamental investment restriction relating to issuing senior securities, "senior securities" are defined as fund obligations that have a priority over the Fund's shares with respect to the payment of dividends or the distribution of fund assets. The 1940 Act prohibits the Fund from issuing senior securities except that the Fund may borrow money in amounts of up to one-third of the Fund's total assets from banks for any purpose as discussed above. The Fund also may borrow up to 5% of the Fund's total assets from banks or other lenders for temporary purposes, and these borrowings are not considered senior securities. The issuance of senior securities by the Fund can increase the speculative character of the Fund's outstanding shares through leveraging. Leveraging of the Fund's portfolio through the issuance of senior securities magnifies the potential for gain or loss on monies, because even though the Fund's net assets remain the same, the total risk to investors is increased. Certain widely used investment practices that involve a commitment by the Fund to deliver money or securities in the future are not considered by the SEC to be senior securities, provided that the Fund segregates cash or liquid securities in an amount necessary to pay the obligation or the Fund holds an offsetting commitment from another party. These investment practices include repurchase and reverse repurchase agreements, swaps, dollar rolls, options, futures and forward contracts. The Fund's policy will be interpreted not to prevent collateral arrangements with respect to swaps, options, forward or futures contracts or other derivatives, or the posting of initial or variation margin.

**Options, Futures and Other Derivative Strategies**

<u>General</u>

The Fund may invest in futures, forwards, options, spot contracts and swaps on commodities, financial indices and instruments, currencies and interest rates (collectively, "Financial Instruments"). The use of such Financial Instruments is subject to applicable regulations of the SEC, the several exchanges upon which they are traded and the Commodity Futures Trading Commission ("CFTC"). In addition, the Fund's ability to use Financial Instruments will be limited by tax considerations.

In addition to the instruments, strategies and risks described below and in the Prospectus, the Adviser may discover additional opportunities in connection with Financial Instruments and other similar or related techniques. These new opportunities may become available as the Adviser develops new techniques, as regulatory authorities broaden the range of permitted transactions and as new Financial Instruments or other techniques are developed. The Adviser may utilize these opportunities to the extent that they are consistent with the Fund's investment objectives and permitted by the Fund's investment limitations and applicable regulatory authorities. The Prospectus or this SAI will be supplemented to the

extent that new products or techniques involve materially different risks than those described below or in the Prospectus.

The use of Financial Instruments involves special considerations and risks which include, but are not limited to, the following:

(1) Successful use of most Financial Instruments depends upon the Adviser's ability to predict movements
of the overall securities markets, which requires different skills than predicting changes in the prices of individual securities. The
ordinary spreads between prices in the cash and futures markets, due to the differences in the natures of those markets, are subject to
distortion. Due to the possibility of distortion, a correct forecast of stock market trends by the Adviser may still not result in a successful
transaction. The Adviser may be incorrect in its expectations as to the extent of market movements or the time span within which the movements
take place, which, thus, may result in the strategy being unsuccessful.

(2) The prices of Financial Instruments can diverge from the prices of their underlying instruments and may
be affected by such factors as current and anticipated short-term interest rates, changes in volatility of the underlying instrument and
the time remaining until expiration of the contract, which may not affect security prices the same way. Imperfect or no correlation also
may result from differing levels of demand in the options and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, and from imposition of daily price fluctuation limits or trading halts.

(3) As described below, the Fund might be required to maintain assets as "cover," maintain segregated
accounts or make margin payments when it takes positions in Financial Instruments involving obligations to third parties (*e.g.*,
Financial Instruments other than purchased options). If the Fund were unable to close out its positions in such Financial Instruments,
it might be required to continue to maintain such assets or accounts or make such payments until the position expired or matured. These
requirements might impair the Fund's ability to sell a portfolio security or make an investment when it would otherwise be favorable
to do so or require that the Fund sell a portfolio security at a disadvantageous time. The Fund's ability to close out a position
in a Financial Instrument prior to expiration or maturity depends on the existence of a liquid secondary market or, in the absence of
such a market, the ability and willingness of the other party to the transaction (the "counter-party") to enter into a transaction
closing out the position. Therefore, there is no assurance that any position can be closed out at a time and price that is favorable to
the Fund.

The Fund will not enter into any transactions using Financial Instruments (except for purchased options) unless it owns either (1) an offsetting ("covered") position in securities or other options or futures contracts or (2) cash and liquid assets with a value, marked-to-market daily, sufficient to cover its potential obligations to the extent not covered as provided in (1) above. The Fund will comply with SEC guidelines regarding cover for these instruments and will, if the guidelines so require, set aside cash or liquid assets in an account with its custodian in the prescribed amount as determined daily.

Assets used as cover or held in an account cannot be sold while the position in the corresponding Financial Instrument is open, unless they are replaced with other appropriate assets. As a result, the commitment of a large portion of the Fund's assets to cover or held in accounts could impede portfolio management or the Fund's ability to meet redemption requests or other current obligations. Losses may arise due to unanticipated market price movements, lack of a liquid secondary market for any particular instrument at a particular time or due to losses from premiums paid by the Fund on options transactions.

<u>Options</u> 

A call option gives the purchaser the right to buy, and obligates the writer to sell, the underlying investment at the agreed-upon price during the option period. A put option gives the purchaser the right to sell, and obligates the writer to buy, the underlying investment at the agreed-upon price during the option period. Purchasers of options pay an amount, known as a premium, to the option writer in exchange for the right under the option contract.

The purchase of call options can serve as a long hedge, and the purchase of put options can serve as a short hedge. Writing put or call options can enable the Fund to enhance income or yield by reason of the premiums paid by the purchasers of such options. However, the Fund may also suffer a loss as the result of writing options. For example, if the market price of the security underlying a put option declines to less than the exercise price of the option, minus the premium received, the Fund would suffer a loss.

Writing call options can serve as a limited short hedge, because declines in the value of the hedged investment would be offset to the extent of the premium received for writing the option. However, if the security appreciates to a price higher than the exercise price of the call option, it can be expected that the option will be exercised and the Fund will be obligated to sell the security at less than its market value. If the call option is an over-the-counter (OTC) option, the securities or other assets used as cover may be considered illiquid.

Writing put options can serve as a limited long hedge because increases in the value of the hedged investment would be offset to the extent of the premium received for writing the option. However, if the security depreciates to a price lower than the exercise price of the put option, it can be expected that the put option will be exercised and the Fund will be obligated to purchase the security or at more than its market value. If the put option is an OTC option, the securities or other assets used as cover may be considered illiquid.

The value of an option position will reflect, among other things, the current market value of the underlying investment, the time remaining until expiration, the relationship of the exercise price to the market price of the underlying investment, the historical price volatility of the underlying investment and general market conditions. The exercise price of the options may be below, equal to or above the current market value of the underlying security or other instrument. Options that expire unexercised have no value, and the Fund will realize a loss in the amount of the premium paid and any transaction costs.

The Fund may effectively terminate its right or obligation under an option by entering into a closing transaction. For example, the Fund may terminate its obligation under a call or put option that it had written by purchasing an identical call or put option; this is known as a closing purchase transaction. Conversely, the Fund may terminate a position in a put or call option it had purchased by writing an identical put or call option; this is known as a closing sale transaction. Closing transactions permit the Fund to realize profits or limit losses on an option position prior to its exercise or expiration.

Risks of Options on Securities. Options offer large amounts of leverage, which will result in the Fund's net asset value being more sensitive to changes in the value of the related instrument. The Fund may purchase or write both exchange-traded and OTC options. Exchange-traded options in the United States are issued by a clearing organization affiliated with the exchange on which the option is listed that, in effect, guarantees completion of every exchange-traded option transaction. In contrast, OTC options are contracts between the Fund and its counterparty (usually a securities dealer or a bank) with no clearing organization guarantee. Thus, when the Fund purchases an OTC option, it relies on the counterparty from whom it purchased the option to make or take delivery of the underlying investment upon exercise of the

option. Failure by the counterparty to do so would result in the loss of any premium paid by the Fund as well as the loss of any expected benefit of the transaction.

The Fund's ability to establish and close out positions in exchange-listed options depends on the existence of a liquid market. However, there can be no assurance that such a market will exist at any particular time. Closing transactions can be made for OTC options only by negotiating directly with the counterparty, or by a transaction in the secondary market if any such market exists. There can be no assurance that the Fund will in fact be able to close out an OTC option position at a favorable price prior to expiration. In the event of insolvency of the counterparty, the Fund might be unable to close out an OTC option position at any time prior to its expiration, if at all.

If the Fund is unable to effect a closing transaction for an option it had purchased, due to the absence of a secondary market, the imposition of price limits or otherwise, it would have to exercise the option to realize any profit. The inability to enter into a closing transaction for a covered call option written by the Fund could leave the Fund unable to prevent material losses because the Fund would be unable to sell the investment used as cover for the written option until the option expires or is exercised.

OTC Options. Unlike exchange-traded options, which are standardized with respect to the underlying instrument, expiration date, contract size and strike price, the terms of OTC options (options not traded on exchanges) generally are established through negotiation with the other party to the option contract. While this type of arrangement allows the Fund great flexibility to tailor the option to its needs, OTC options generally involve greater risk than exchange-traded options, which are guaranteed by the clearing organization of the exchanges where they are traded. Assets used as cover for OTC options may be considered illiquid.

Options on Indices. Puts and calls on indices are similar to puts and calls on securities except that all settlements are in cash and gain or loss depends on changes in the index in question rather than on price movements in individual securities. When the Fund writes a call on an index, it receives a premium and agrees that, prior to the expiration date, the purchaser of the call, upon exercise of the call, will receive from the Fund an amount of cash if the closing level of the index upon which the call is based is greater than the exercise price of the call. The amount of cash is equal to the difference between the closing price of the index and the exercise price of the call times a specified multiple ("multiplier"), which determines the total dollar value for each point of such difference. When the Fund buys a call on an index, it pays a premium and has the same rights as to such call as are indicated above. When the Fund buys a put on an index, it pays a premium and has the right, prior to the expiration date, to require the seller of the put, upon the Fund's exercise of the put, to deliver to the Fund an amount of cash if the closing level of the index upon which the put is based is less than the exercise price of the put, which amount of cash is determined by the multiplier, as described above for calls. When the Fund writes a put on an index, it receives a premium and the purchaser of the put has the right, prior to the expiration date, to require the Fund to deliver to it an amount of cash equal to the difference between the closing level of the index and exercise price times the multiplier if the closing level is less than the exercise price.

Risks of Options on Indices. The risks of investment in options on indices may be greater than options on securities. Because index options are settled in cash, when the Fund writes a call on an index it cannot provide in advance for its potential settlement obligations by acquiring and holding the underlying securities. The Fund can offset some of the risk of writing a call index option by holding a diversified portfolio of securities similar to those on which the underlying index is based. However, the Fund cannot, as a practical matter, acquire and hold a portfolio containing exactly the same securities as underlie the index and, as a result, bears a risk that the value of the securities held will vary from the value of the index.

Even if the Fund could assemble a portfolio that exactly reproduced the composition of the underlying index, it still would not be fully covered from a risk standpoint because of the "timing risk"

inherent in writing index options. When an index option is exercised, the amount of cash that the holder is entitled to receive is determined by the difference between the exercise price and the closing index level on the date when the option is exercised. As with other kinds of options, the Fund as the call writer will not learn that the Fund has been assigned until the next business day at the earliest. The time lag between exercise and notice of assignment poses no risk for the writer of a covered call on a specific underlying security, such as common stock, because there the writer's obligation is to deliver the underlying security, not to pay its value as of a fixed time in the past. So long as the writer already owns the underlying security, it can satisfy its settlement obligations by simply delivering it, and the risk that its value may have declined since the exercise date is borne by the exercising holder. In contrast, even if the writer of an index call holds securities that exactly match the composition of the underlying index, it will not be able to satisfy its assignment obligations by delivering those securities against payment of the exercise price. Instead, it will be required to pay cash in an amount based on the closing index value on the exercise date. By the time it learns that it has been assigned, the index may have declined, with a corresponding decline in the value of its portfolio. This "timing risk" is an inherent limitation on the ability of index call writers to cover their risk exposure by holding securities positions.

If the Fund has purchased an index option and exercises it before the closing index value for that day is available, it runs the risk that the level of the underlying index may subsequently change. If such a change causes the exercised option to fall out-of-the-money, the Fund will be required to pay the difference between the closing index value and the exercise price of the option (times the applicable multiplier) to the assigned writer.

<u>Futures and Options on Futures</u>

Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a specific underlying reference instrument at a specified future time at a specified price.

An option on a futures contract is the right, purchased for a certain price, to either buy or sell the underlying futures contract during a certain period of time for a fixed price. Options trading requires many of the same skills as does successful futures contract trading. However, since specific market movements of the underlying futures contract must be predicted accurately, the risks involved are somewhat different. For example, if the Fund buys an option (either to sell or buy a futures contract), the Fund will pay a "premium" representing the market value of the option. Unless the price of the futures contract underlying the option changes and it becomes profitable to exercise or offset the option before it expires, the Fund may lose the entire amount of the premium. Conversely, if the Fund sells an option (either to sell or buy a futures contract), the Fund will be credited with the premium but will have to deposit margin due to the Fund's contingent liability to take or make delivery of the underlying futures contract in the event the option is exercised. The writing of an option involves the risk of losing the entire investment or substantially more than the entire investment, thereby causing significant losses to the client in a relatively short period of time. The ability to trade in or exercise options may be restricted in the event that trading in the underlying futures contract becomes restricted.

An index futures contract is a bilateral agreement pursuant to which two parties agree to take or make delivery of an amount of cash equal to a specified dollar amount times the difference between the index value at the close of trading of the contract and the price at which the futures contract is originally struck. No physical delivery of the securities comprising the index is made; generally contracts are closed out prior to their expiration date.

There are risks associated with these activities, including the following: (1) the success of a hedging strategy may depend on an ability to predict movements in the prices of individual securities, fluctuations in markets and movements in interest rates; (2) there may be an imperfect or lack of correlation between

the changes in market value of the securities held and the prices of futures and options on futures; (3) there may not be a liquid secondary market for a futures contract or option; (4) trading restrictions or limitations may be imposed by an exchange; and (5) government regulations may restrict trading in futures contracts and options on futures.

<u>Swaps</u>

*Credit Default Swaps.* The Fund may enter into credit default swap agreements. The credit default swap agreement may have as a reference obligation one or more securities that are not currently held by the Fund. The buyer in a credit default swap agreement is obligated to pay the seller a periodic fee, typically expressed in basis points on the principal amount of the underlying obligation (the "notional" amount), over the term of the agreement in return for a contingent payment upon the occurrence of a credit event with respect to the underlying reference obligation. A credit event is typically a default, restructuring or bankruptcy.

The Fund may be either the buyer or seller in the transaction. As a seller, the Fund receives a fixed rate of income throughout the term of the agreement, which typically is between one month and five years, provided that no credit event occurs. If a credit event occurs, the Fund typically must pay the contingent payment to the buyer, which is typically the par value (full notional value) of the reference obligation. The contingent payment may be a cash settlement or by physical delivery of the reference obligation in return for payment of the face amount of the obligation. If the Fund is a buyer and no credit event occurs, the Fund may lose its investment and recover nothing. However, if a credit event occurs, the buyer typically receives full notional value for a reference obligation that may have little or no value.

Credit default swaps may involve greater risks than if the Fund had invested in the reference obligation directly. Credit default swaps are subject to general market risk, liquidity risk and credit risk. If the Fund is a buyer in a credit default swap agreement and no credit event occurs, then it will lose its investment. In addition, the value of the reference obligation received by the Fund as a seller if a credit event occurs, coupled with the periodic payments previously received, may be less than the full notional value it pays to the buyer, resulting in a loss of value to the Fund.

The Fund may also invest in credit default swap index products and in options on credit default swap index products. The individual credits underlying these credit default swap indices may be rated investment grade or non-investment grade. These instruments are designed to track representative segments of the credit default swap market and provide investors with exposure to specific "baskets" of issuers of bonds or loans. Such investments are subject to liquidity risks as well as other risks associated with investments in credit default swaps discussed above. The Fund reserves the right to invest in similar instruments that may become available in the future.

*Forward Trading.* The Fund may trade forward contracts. Forward contracts are not traded on exchanges and are not standardized; rather, banks and dealers act as principals in these markets negotiating each transaction on an individual basis. Neither the CFTC nor any banking authority regulates trading in forward contracts. In addition, there is no limitation on the daily price movements of forward contracts. Principals in the forward markets have no obligation to continue to make markets in the forward contracts traded. There have been periods during which certain banks or dealers have refused to quote prices for forward contracts or have quoted prices with an unusually wide spread between the price at which they are prepared to buy and that at which they are prepared to sell. Disruptions can occur in the forward markets because of unusually high trading volume, political intervention or other factors. For example, the imposition of credit controls by governmental authorities might limit forward trading, to the possible detriment of the Fund.

In its forward trading, the Fund is subject to the risk of the bankruptcy of, or the inability or refusal to perform with respect to its forward contracts by, the principals with which the Fund trades. Funds on deposit with such principals are generally not protected by the same segregation requirements imposed on CFTC regulated commodity brokers in respect of customer funds on deposit with them. However, the Fund intends to engage in forward trading only with large, well-capitalized banks and dealers. The Fund may place forward trades through agents, so that the insolvency or bankruptcy of such agents could also subject the Fund to the risk of loss.

**Exemption from Definition of Commodity Pool Operator**

Pursuant to amendments by the CFTC, a U.S. government agency, the Adviser has filed a notice of exemption from registration as a "commodity pool operator" with respect to the Fund as provided by Rule 4.5 under the Commodity Exchange Act ("CEA"). The Fund and the Adviser are therefore not subject to registration or regulation as a pool operator under the CEA. In order to claim the Rule 4.5 exemption, the Fund is significantly limited in its ability to invest in commodity futures, options and swaps (including securities futures, broad-based stock index futures and financial futures contracts).

**Short-Term Investments**

The Fund may invest in any of the following securities and instruments:

<u>Certificates of Deposit, Bankers' Acceptances and Time Deposits</u> 

 

The Fund may hold certificates of deposit, bankers' acceptances and time deposits. Certificates of deposit are negotiable certificates issued against funds deposited in a commercial bank for a definite period of time and earning a specified return. Bankers' acceptances are negotiable drafts or bills of exchange, normally drawn by an importer or exporter to pay for specific merchandise, which are "accepted" by a bank, meaning in effect that the bank unconditionally agrees to pay the face value of the instrument on maturity. Certificates of deposit and bankers' acceptances acquired by the Fund will be dollar-denominated obligations of domestic banks, savings and loan associations or financial institutions which, at the time of purchase, have capital, surplus and undivided profits in excess of $100 million (including assets of both domestic and foreign branches), based on latest published reports or less than $100 million if the principal amount of such bank obligations are fully insured by the U.S. government.

In addition to buying certificates of deposit and bankers' acceptances, the Fund also may make interest-bearing time or other interest-bearing deposits in commercial or savings banks. Time deposits are non-negotiable deposits maintained at a banking institution for a specified period of time at a specified interest rate.

<u>Commercial Paper and Short-Term Notes</u> 

 

The Fund may invest a portion of its assets in commercial paper and short-term notes. Commercial paper consists of unsecured promissory notes issued by corporations. Commercial paper and short-term notes will normally have maturities of less than nine months and fixed rates of return, although such instruments may have maturities of up to one year.

Commercial paper and short-term notes will consist of issues rated at the time of purchase "A-2" or higher by Standard & Poor's Ratings Group, "Prime-1" or "Prime-2" by Moody's Investors Service, Inc., or similarly rated by another nationally recognized statistical rating organization or, if unrated, will be determined by the Adviser to be of comparable quality.

<u>Repurchase Agreements</u>

When cash is temporarily available, or for temporary defensive purposes, the Fund may invest without limit in repurchase agreements. A repurchase agreement is an agreement under which either U.S. Government obligations or other high-quality liquid debt securities are acquired from a securities dealer or bank subject to resale at an agreed-upon price and date. The securities are held for the Fund by a custodian bank as collateral until resold and will be supplemented by additional collateral if necessary to maintain a total value equal to or in excess of the value of the repurchase agreement. The Fund bears a risk of loss if the other party to a repurchase agreement defaults on its obligations and the Fund is delayed or prevented from exercising its rights to dispose of the collateral securities, which may decline in value in the interim. The Fund will enter into repurchase agreements only with financial institutions determined by the Adviser to present minimal risk of default during the term of the agreement. Repurchase agreements are usually for a term of one week or less but may be for longer periods. Repurchase agreements maturing in more than seven days may be considered illiquid.

<u>Reverse Repurchase Agreements</u>

The Fund may enter into reverse repurchase agreements. A reverse repurchase agreement has the characteristics of a secured borrowing by the Fund and creates leverage in the Fund's portfolio. In a reverse repurchase transaction, the Fund sells a portfolio instrument to another person, such as a financial institution or broker/dealer, in return for cash. At the same time, the Fund agrees to repurchase the instrument at an agreed-upon time and at a price that is greater than the amount of cash that the Fund received when it sold the instrument, representing the equivalent of an interest payment by the Fund for the use of the cash. During the term of the transaction, the Fund will continue to receive any principal and interest payments (or the equivalent thereof) on the underlying instruments. The Fund may engage in reverse repurchase agreements as a means of raising cash to satisfy redemption requests or for other temporary or emergency purposes. Unless otherwise limited in the Prospectus or this SAI, the Fund may also engage in reverse repurchase agreements to the extent permitted by its fundamental investment policies in order to raise additional cash to be invested by the Fund's portfolio managers in other securities or instruments in an effort to increase the Fund's investment returns. During the term of the transaction, the Fund will remain at risk for any fluctuations in the market value of the instruments subject to the reverse repurchase agreement as if it had not entered into the transaction. When the Fund reinvests the proceeds of a reverse repurchase agreement in other securities, the Fund will also be at risk for any fluctuations in the market value of the securities in which the proceeds are invested. Like other leveraging risks, this makes the value of an investment in the Fund more volatile and increases the Fund's overall investment exposure. In addition, if the Fund's return on its investment of the proceeds of the reverse repurchase agreement does not equal or exceed the implied interest that it is obligated to pay under the reverse repurchase agreement, engaging in the transaction will lower the Fund's return. When the Fund enters into a reverse repurchase agreement, it is subject to the risk that the buyer under the agreement may file for bankruptcy, become insolvent or otherwise default on its obligations to the Fund. In the event of a default by the counterparty, there may be delays, costs and risks of loss involved in the Fund's exercising its rights under the agreement, or those rights may be limited by other contractual agreements or obligations or by applicable law. In addition, the Fund may be unable to sell the instruments subject to the reverse repurchase agreement at a time when it would be advantageous to do so, or may be required to liquidate portfolio securities at a time when it would be disadvantageous to do so in order to make payments with respect to its obligations under a reverse repurchase agreement. This could adversely affect the co-portfolio managers' strategy and result in lower Fund returns. At the time the Fund enters into a reverse repurchase agreement, the Fund is required to set aside cash or other appropriate liquid securities in the amount of the Fund's obligation under the reverse repurchase agreement or take certain other actions in accordance with SEC guidelines, which may affect the Fund's liquidity and ability to manage its assets. Although complying with SEC guidelines would have the effect of limiting the amount of Fund assets that may be committed to

reverse repurchase agreements and other similar transactions at any time, it does not otherwise mitigate the risks of entering into reverse repurchase agreements.

**Additional Risks** 

**Risk of Potential Government Regulation of Derivatives**

It is possible that government regulation of various types of derivative instruments, including futures and swap agreements, may limit or prevent the Fund from using such instruments as a part of its investment strategy or may increase the costs associated with using those instruments and could ultimately prevent the Fund from being able to fully achieve its investment objectives. It is impossible to fully predict the effects of past, present or future legislation and regulation in this area, but the effects could be substantial and adverse.

The futures markets are subject to comprehensive statutes, regulations, and margin requirements. In addition, the SEC, CFTC and the exchanges are authorized to take extraordinary actions in the event of a market emergency, including, for example, the implementation or reduction of speculative position limits, the implementation of higher margin requirements, the establishment of daily price limits and the suspension of trading.

The regulation of swaps and futures transactions in the U.S. is a rapidly changing area of law and is subject to modification by government and judicial action. There is a possibility of future regulatory changes altering, perhaps to a material extent, the nature of an investment in the Fund or the ability of the Fund to continue to implement its investment strategies. In particular, the Dodd-Frank Act sets forth a legislative framework for over-the-counter ("OTC") derivatives, such as swaps, in which the Fund may invest. Title VII of the Dodd-Frank Act makes broad changes to the OTC derivatives market, grants significant new authority to the SEC and the CFTC to regulate OTC derivatives and market participants, and, among other things, requires clearing of many OTC derivatives transactions and imposes minimum margin and capital requirements on uncleared OTC derivatives transactions.

In addition, on October 28, 2020, the Securities and Exchange Commission adopted new regulations governing the use of derivatives by registered investment companies ("Rule 18f-4"). The Fund will be required to implement and comply with Rule 18f-4 by August 19, 2022. Once implemented, Rule 18f-4 will impose limits on the amount of derivatives the Fund can enter into, eliminate the asset segregation framework currently used by Fund to comply with Section 18 of the 1940 Act, treat derivatives as senior securities so that a failure to comply with the limits would result in a statutory violation and require Fund whose use of derivatives is more than a limited specified exposure amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager..

**Risks Associated With Recent Market Events**

The Fund could lose money over short periods due to short-term market movements and over longer periods during more prolonged market downturns. The value of a security or other instrument may decline due to changes in general market conditions, economic trends or events that are not specifically related to the issuer of the security or other instrument, or factors that affect a particular issuer or issuers, country, group of countries, region, market, industry, group of industries, sector or asset class. During a general market downturn, multiple asset classes may be negatively affected. Changes in market conditions and interest rates generally do not have the same impact on all types of securities and instruments.

Stresses associated with the 2008 financial crisis in the United States and global economies peaked approximately a decade ago, but periods of unusually high volatility in the financial markets and restrictive credit conditions, sometimes limited to a particular sector or a geography, continue to recur. Some

countries, including the United States, have adopted and/or are considering the adoption of more protectionist trade policies, a move away from the tighter financial industry regulations that followed the financial crisis, and/or substantially reducing corporate taxes. The exact shape of these policies is still being considered, but the equity and debt markets may react strongly to expectations of change, which could increase volatility, especially if the market's expectations are not borne out. A rise in protectionist trade policies, and the possibility of changes to some international trade agreements, could affect the economies of many nations in ways that cannot necessarily be foreseen at the present time. In addition, geopolitical and other risks, including environmental and public health, may add to instability in world economies and markets generally. Economies and financial markets throughout the world are becoming increasingly interconnected. As a result, whether or not the Fund invests in securities of issuers located in or with significant exposure to countries experiencing economic, political and/or financial difficulties, the value and liquidity of the Fund's investments may be negatively affected by such events.

An outbreak of infectious respiratory illness caused by a novel coronavirus known as COVID-19 was first detected in China in December 2019 and has now been detected globally. On March 11, 2020, the World Health Organization announced that it had made the assessment that COVID-19 can be characterized as a pandemic. COVID-19 has resulted in travel restrictions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, prolonged quarantines, cancellations, business and school closings, supply chain disruptions, and lower consumer demand, as well as general concern and uncertainty. The impact of COVID-19, and other infectious illness outbreaks that may arise in the future, could adversely affect the economies of many nations or the entire global economy, individual issuers and capital markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illnesses in emerging market countries may be greater due to generally less established healthcare systems. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty. The value of the Fund and the securities in which the Fund invests may be adversely affected by impacts caused by COVID-19 and other epidemics and pandemics that may arise in the future.

**Europe Recent Events Risk.** 

A number of countries in Europe have experienced severe economic and financial difficulties. Many non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts; many other issuers have faced difficulties obtaining credit or refinancing existing obligations; financial institutions have in many cases required government or central bank support, have needed to raise capital, and/or have been impaired in their ability to extend credit; and financial markets in Europe and elsewhere have experienced extreme volatility and declines in asset values and liquidity. These difficulties may continue, worsen or spread within and beyond Europe. Responses to the financial problems by European governments, central banks and others, including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In addition, the United Kingdom ("UK") has formally withdrawn from the European Union ("EU") and one or more other countries may withdraw from the EU and/or abandon the Euro, the common currency of the EU. The UK and EU reached an agreement effective January 1, 2021 on the terms of their future trading relationship relating to the trading of goods, however, this does not cover financial services. Each Fund may face risks associated with the potential uncertainty and consequences of the new relationship between the UK and EU, including volatility in exchange and interest rates and politically divergent national laws and regulations. Ukraine has experienced ongoing military conflict; this conflict may expand and military attacks could occur elsewhere in Europe. Europe has also been struggling with mass migration from the Middle East and Africa. The impact of these actions, especially if they occur in a disorderly fashion, is not clear but could be significant and far-reaching. Whether or not each Fund invests in securities

of issuers located in Europe or with significant exposure to European issuers or countries, these events could negatively affect the value and relative liquidity of each Fund's investments. The occurrence of terrorist incidents throughout Europe could also impact financial markets.

Russia's invasion of Ukraine, and corresponding events in late February 2022, have had, and could continue to have, severe adverse effects on regional and global economic markets for securities and commodities. Following Russia's actions, various governments, including the United States, have issued broad-ranging economic sanctions against Russia, including, among other actions, a prohibition on doing business with certain Russian companies, large financial institutions, officials and oligarchs; the removal by certain countries and the European Union of selected Russian banks from the Society for Worldwide Interbank Financial Telecommunications ("SWIFT"), the electronic banking network that connects banks globally; and restrictive measures to prevent the Russian Central Bank from undermining the impact of the sanctions. The current events, including sanctions and the potential for future sanctions, including any impacting Russia's energy sector, and other actions, and Russia's retaliatory responses to those sanctions and actions, may continue to adversely impact the Russian economy and may result in the further decline of the value and liquidity of Russian securities, a continued weakening of the ruble and continued exchange closures, and may have other adverse consequences on the Russian economy that could impact the value of Russian investments and impair the ability of the Fund to buy, sell, receive or deliver those securities. Moreover, those events have, and could continue to have, an adverse effect on global markets performance and liquidity, thereby negatively affecting the value of the Fund's investments beyond any direct exposure to Russian issuers. The duration of ongoing hostilities and the vast array of sanctions and related events cannot be predicted. Those events present material uncertainty and risk with respect to markets globally and the performance of the Fund and its investments or operations could be negatively impacted.

**Government Intervention in Financial Markets Risk**

Instability in the financial markets may lead the U.S. government and foreign governments to take a number of unprecedented actions designed to support certain financial institutions and segments of the financial markets that may experience extreme volatility, and in some cases a lack of liquidity. U.S. federal and state governments and foreign governments, their regulatory agencies or self-regulatory organizations may take additional actions that affect the regulation of the securities in which the Fund invests, or the issuers of such securities, in ways that are unforeseeable. Issuers of corporate securities might seek protection under the bankruptcy laws. Legislation or regulation may also change the way in which the Fund itself is regulated. Such legislation or regulation could limit or preclude the Fund's ability to achieve its investment objective.

**Fundamental Investment Limitations**

The Trust (on behalf of the Fund) has adopted the following restrictions as fundamental policies, which may not be changed without the favorable vote of the holders of a "majority of the outstanding voting securities of the Fund," as defined in the 1940 Act. Under the 1940 Act, the "vote of the holders of a majority of the outstanding voting securities" means the vote of the holders of the lesser of (i) 67% of the shares of the Fund represented at a meeting at which the holders of more than 50% of its outstanding shares are represented or (ii) more than 50% of the outstanding shares of the Fund.

The Fund may not:

1. Issue senior securities. This limitation is not applicable to activities that may be deemed to involve
the issuance or sale of a senior security by the Fund, provided that the Fund's engagement in such activities is consistent with
or permitted by the 1940 Act, as amended, the rules and regulations promulgated thereunder or interpretations of the SEC or its staff;

2. Borrow money, except (a) from a bank, provided that immediately after such borrowing there is an asset
coverage of 300% for all borrowings of the Fund; or (b) from a bank or other persons for

temporary purposes only, provided that such temporary borrowings are in an amount not exceeding 5% of the Fund's total assets at the time when the borrowing is made. This limitation does not preclude the Fund from entering into reverse repurchase transactions, provided that the Fund has an asset coverage of 300% for all borrowings and repurchase commitments of the Fund pursuant to reverse repurchase transactions;

3. Purchase securities on margin, participate on a joint or joint and several basis in any securities trading
account, or underwrite securities. (Does not preclude the Fund from obtaining such short-term credit as may be necessary for the clearance
of purchases and sales of its portfolio securities, and except to the extent that the Fund may be deemed an underwriter under the Securities
Act of 1933, by virtue of disposing of portfolio securities);

4. Purchase or sell real estate or interests in real estate. This limitation is not applicable to investments
in marketable securities that are secured by or represent interests in real estate or real estate acquired as a result of such investments.
This limitation does not preclude the Fund from 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. Invest 25% or more of the market value of its assets in the securities of companies engaged in any one
industry. (Does not apply to investment in the securities of the U.S. Government, its agencies or instrumentalities.);

6. Purchase or sell commodities (unless acquired as a result of ownership of securities or other investments)
or commodity futures contracts, except that the Fund may purchase and sell futures contracts and options to the full extent permitted
under the 1940 Act, sell foreign currency contracts in accordance with any rules of the Commodity Futures Trading Commission, invest in
securities or other instruments backed by commodities, and invest in companies that are engaged in a commodities business or have a significant
portion of their assets in commodities;

7. Make loans to others, except (a) through the purchase of debt securities in accordance with its investment
objectives and policies, (b) to the extent the entry into a repurchase agreement is deemed to be a loan, and (c) by loaning portfolio
securities; or

8. Make an investment unless 75% of the value of that Fund's total assets is represented by cash, cash
items, U.S. government securities, securities of other investment companies and "other securities." For purposes of this restriction,
the term "other securities" means securities as to which the Fund invests no more than 5% of the value of its total assets
in any one issuer or purchases no more than 10% of the outstanding voting securities of any one issuer. As a matter of operating policy,
each Fund will not consider repurchase agreements to be subject to the above-stated 5% limitation if all of the collateral underlying
the repurchase agreements are U.S. government securities and such repurchase agreements are fully collateralized.

The following lists the non-fundamental investment restrictions applicable to the Fund. These restrictions can be changed by the Board of Trustees, but the change will only be effective after notice is given to shareholders of the Fund.

The Fund may not:

1. Invest in securities of other investment
companies except as permitted under the 1940 Act or the rules thereunder;

2. Invest 15% or more of the value of
its net assets, computed at the time of investment, in illiquid securities. Illiquid securities are those securities without readily available
market quotations, including repurchase agreements having a maturity of more than seven days. Illiquid securities may include restricted
securities not determined by the Board of Trustees to be liquid, non-negotiable time deposits, over-the-counter options and repurchase
agreements providing for settlement in more than seven days after notice; or

3. Invest in other investment companies
advised by the same investment adviser as the Fund or in investment companies advised by affiliates of such adviser.

Except with respect to borrowing and illiquid securities, if a percentage or rating restriction on investment or use of assets set forth herein or in the Prospectus is adhered to at the time a transaction is effected, later changes in percentage resulting from any cause other than actions by the Fund will not be considered a violation.

**Management of the Fund**

**Board of Trustees**

The management and affairs of the Fund are supervised by the Board of Trustees. The Board of Trustees consists of five individuals, four (4) of whom are not "interested persons" (as defined under the 1940 Act) of the Trust and the Adviser ("Independent Trustees"). The Trustees are fiduciaries for the Fund's shareholders and are governed by the laws of the State of Delaware in this regard. The Board of Trustees establishes policies for the operation of the Fund and appoints the officers who conduct the daily business of the Fund.

**Board Leadership Structure**

The Trust is led by Mr. Brian Nielsen, who has served as the Chairman of the Board since 2011. The Board of Trustees is comprised of Mr. Nielsen and four (4) other Independent Trustees. Under certain 1940 Act governance guidelines that apply to the Trust, the Independent Trustees will meet in executive session, at least quarterly. Under the Trust's Agreement and Declaration of Trust and By-Laws, the Chairman of the Board is responsible for (a) presiding at board meetings, (b) calling special meetings on an as-needed basis, (c) setting the agendas for board meetings and (d) ensuring board members are provided necessary materials in advance of each board meeting. The Trust believes that (i) its Chairman, Brian Nielsen (ii) Keith Rhoades, the independent chair of the Audit Committee, and, (iii) as an entity, the full Board of Trustees, provide effective leadership that is in the best interests of the Trust, its funds and each shareholder.

In accordance with the fund governance standards prescribed by the SEC under the 1940 Act, the Independent Trustees on the Nominating Committee select and nominate all candidates for Independent Trustee positions. Each Trustee was appointed to serve on the Board of Trustees because of his experience, qualifications, attributes and/or skills. The Board of Trustees reviews its leadership structure regularly, on at least an annual basis. The Board of Trustees believes that the structure described above facilitates the orderly and efficient flow of information to the Trustees from the officers of the Trust, the advisers of the funds that comprise the Trust and other service providers, and facilitates the effective evaluation of the risks and other issues, including conflicts of interest, that may impact the Trust as a whole as well as the funds individually. The Board of Trustees believes that the orderly and efficient flow of information and the ability of the Board of Trustees to bring each Trustee's experience and skills to bear in overseeing the Trust's operations is important given the characteristics and circumstances of the Trust, including: the unaffiliated nature of each investment adviser and the fund(s) managed by such adviser; the number of funds that comprise the Trust; the variety of asset classes that those funds reflect; the net assets of the Trust; the committee structure of the Trust; and the independent arrangements of each of the Trust's series. For these reasons, the Board of Trustees believes that its leadership structure is appropriate.

**Board Responsibilities**

The Board of Trustees' role is one of oversight rather than day-to-day management of any of the Trust's series. The Trust's Audit Committee assists with this oversight function. The Board of Trustees' oversight extends to the Trust's risk management processes. Those processes are overseen by Trust officers, including the President, the Treasurer, the Secretary and Chief Compliance Officer ("CCO"), who regularly report to the Board of Trustees on a variety of matters at Board meetings.

**Board Risk Oversight** 

The Board of Trustees is comprised of Mr. Nielsen, as Chairman, and four (4) other Independent Trustees with a standing independent Audit Committee with a separate chair. The Board is responsible for overseeing risk management, and the full Board regularly engages in discussions of risk management and receives compliance reports that inform its oversight of risk management from its CCO at quarterly meetings and on an ad hoc basis, when and if necessary. The Audit Committee also considers financial and reporting risk within its area of responsibilities. Generally, the Board believes that its oversight of material risks is adequately maintained through the compliance-reporting chain where the CCO is the primary recipient and communicator of such risk-related information and oversees the Trust's service providers adherence to the Trust's policies and procedures.

Investment advisers managing the Trust's series report to the Trust's CCO and the Board of Trustees, on a regular and as-needed basis, on actual and possible risks affecting the Trust's series. These investment advisers report to the CCO and the Board of Trustees on various elements of risk, including investment, credit, liquidity, valuation, operational and compliance risks, as well as any overall business risks that could impact the Trust's series.

The Board of Trustees has appointed the CCO, who reports directly to the Board of Trustees and who participates in its regular meetings. In addition, the CCO conducts on-going and continuous compliance testing and presents an annual report to the Board of Trustees in accordance with the Trust's compliance policies and procedures. The CCO, together with the Trust's President, Treasurer and Secretary, regularly discuss risk issues affecting the Trust and its series during Board of Trustee meetings. The CCO also provides updates to the Board of Trustees on the operation of the Trust's compliance policies and procedures and on how these procedures are designed to mitigate risk. Finally, the CCO and/or other officers of the Trust report to the Board of Trustees in the event that any material risk issues arise in between Board meetings.

**Trustee Qualifications**

**Generally, the Trust believes that each Trustee is competent to serve because of their individual overall merits including: (i) experience, (ii) qualifications, (iii) attributes and (iv) skills. Mr. Nielsen has over 22 years of experience in the investment management and brokerage business, including a focus in compliance, legal and regulatory oversight and possesses a strong understanding of the regulatory framework under which investment companies must operate. Since 2010, Mr. Sarkany has been the President of TTS Consultants, LLC, and since December 2022 has been the President of TTS Associates, Inc., each a financial services firm and from 1994 through 2010, held various roles at Value Line, Inc. (a publicly held company providing financial research, publications and money management services to retail and institutional investors), including Director of Marketing and Asset Management, Director of Index Licensing, and member of the Board of Directors. Anthony Lewis has been Chairman and CEO of The Lewis Group USA, an executive consulting firm, for the past ten years, and also serves as a Director, the Chairman of the Compensation Committee, and a Member of the Audit Committee of Torotel Inc. Keith Rhoades held various accounting roles at Union Pacific Railroad, including Senior Director of General Ledger/Financial Research. Randy Skalla has more than 20 years of investment management experience including serving as the President of L5 Enterprises, Inc. since 2001 and from 2001 through 2017, Mr. Skalla was a member of the Orizon Investment Counsel Board. The Trust does not believe any one factor is determinative in assessing a Trustee's qualifications, but that the collective experience of each Trustee makes them each highly qualified.**

The Board of Trustees has established three standing board committees – the Audit Committee, the Compensation Committee and the Nominating Committee. All Independent Trustees are members of the Audit Committee, Compensation Committee and the Nominating Committee. Inclusion of all Independent Trustees as members of all three of the standing board committees allows all such Trustees

to participate in the full range of the Board of Trustees' oversight duties, including oversight of the risk management processes.

**Trustees and Officers**

The Trustees and the officers of the Trust are listed below with their addresses, present positions with the Trust and principal occupations over at least the last five years. The business address of each Trustee and Officer is 225 Pictoria Drive, Suite 450, Cincinnati, OH 45246. All correspondence to the Trustees and Officers should be directed to c/o Ultimus Fund Solutions, LLC, P.O. Box 541150, Omaha, NE 68154.

**<u>Independent Trustees</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name, Address and Year of Birth** | **Position/Term of Office\*** | **Principal Occupation** <br> **During the Past Five Years**  | **Number of Portfolios in Fund Complex\*\* Overseen by Trustee** | **Other Directorships held by Trustee During the Past Five Years** |
| Brian Nielsen<br> 1972<br>| Trustee<br> since May 2011 | Trustee of Northern Lights Fund Trust II (since 2011); Special Projects Counsel of NorthStar Financial Services Group, LLC (from 2018 to 2019); Secretary of CLS Investments, LLC (from 2001 to 2018); Secretary of Orion Advisor Services, LLC (from 2001 to 2018); Manager (from 2012 to 2015), General Counsel and Secretary (from 2003 to 2018) of NorthStar Financial Services Group, LLC; CEO (from 2012 to 2018), Secretary (from 2003 to 2018) and Manager (from 2005 to 2018) of Northern Lights Distributors, LLC; Director, Secretary and General Counsel of Constellation Trust Company (from 2004 to 2018); CEO (from 2015 to 2018), Manager (from 2008 to 2015), General Counsel and Secretary (from 2011 to 2018) of Northern Lights Compliance Services, LLC; General Counsel and Secretary of Blu Giant, LLC (from 2011 to 2018); Secretary of Gemini Fund Services, LLC (from 2012 to 2018); Manager of Arbor Point Advisors, LLC (from 2012 to 2018); Secretary and General Counsel of NorthStar Holdings, LLC (from 2013 to 2015); Director, Secretary and General Counsel of NorthStar CTC Holdings, Inc. (from 2015 to 2018) and Secretary and Chief Legal Officer of AdvisorOne Funds (from 2003 to 2018). | 1 | Manager of Northern Lights Distributors, LLC (from 2005 to 2018); Manager of NorthStar Financial Services Group, LLC (from 2012 to 2015); Manager of Arbor Point Advisors, LLC (from 2012 to 2018); Director of Constellation Trust Company (from 2004 to 2018) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| Thomas T. Sarkany<br> 1946<br>| Trustee since October 2011 | President, TTS Consultants, LLC (financial services) (since 2010); President, TTS Associates, Inc. (financial services) (since December 2022).<br>| 1 | Director, Aquila Distributors; Trustee, Arrow ETF Trust; Trustee, Arrow Investments Trust; Trustee, Northern Lights Fund Trust IV |
| Anthony H. Lewis<br> 1946<br>| Trustee since May 2011<br>| Chairman and CEO of The Lewis Group USA (executive consulting firm) (since 2007). | 1 | Director, Member of the Compensation Committee and Member of the Risk Committee of Torotel Inc. (Magnetics, Aerospace and Defense), Trustee, Chairman of the Fair Valuation Committee and Member of the Audit Committee of the Wildermuth Endowment Strategy Fund |
| Keith Rhoades<br> 1948 | Trustee since May 2011 | Retired since 2008. | 1 |  |
| Randal D. Skalla<br> 1962<br>| Trustee since May 2011 | President, L5 Enterprises, Inc. (financial services company) (since 2001). <br>| 1 |  |

---

**<u>Officers</u>**

 ****

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name, Address and Year of Birth** | **Position/Term of Office\*** | **Principal Occupation** <br> **During the Past Five Years**  | **Number of Portfolios in Fund Complex\*\***<br> **Overseen by Trustee**  | **Other Directorships held by Trustee During the Past Five Years** |
| Kevin E. Wolf<br> 1969 | President<br> since January 2013 | Vice President of The Ultimus Group, LLC and Executive Vice President, Head of Fund Administration and Product of Ultimus Fund Solutions, LLC (formerly, Gemini Fund Services, LLC) (since 2019), President, Ultimus Fund Solutions, LLC (formerly, Gemini Fund Services, LLC) (2012 - 2019). | N/A | N/A |
| Erik Naviloff<br> 1968 | Treasurer<br> since January 2013 | Vice President of Ultimus Fund Solutions, LLC (formerly, Gemini Fund Services, LLC) (since 2011). | N/A | N/A |
| Emile R. Molineaux<br> 1962 | Chief Compliance Officer since May 2011 | Senior Compliance Officer and CCO of Various clients of Northern Lights Compliance Services, LLC (since 2011). | N/A | N/A |
| Jared Lahman<br> 1986 | Anti-Money Laundering Officer since<br> January 2022 | Compliance Analyst, Northern Lights Compliance Services, LLC (since January 2019); Manager, Fund Accounting, Ultimus Fund Solutions, LLC (formerly, Gemini Fund Services, LLC) (January 2014 to December 2018). | N/A | N/A |
| Eric Kane<br> 1981 | Secretary<br> since August 2022 | Vice President and Managing Counsel, Ultimus Fund Solutions, LLC (since 2020); Vice President and Counsel, Gemini Fund Services, LLC (2017-2020) | N/A | N/A |

---

\* The term of office for each Trustee and Officer listed above will continue indefinitely.

\*\*As of October 31, 2022, the Trust was comprised of 20 active portfolios managed by unaffiliated investment advisers. The term "Fund Complex" applies only to the Fund and no other series of the Trust. The Fund does not hold itself out as related to any other series within the Trust for investment purposes, nor do they share the same investment adviser with any other series.

**Board Committees**

<u>Audit Committee</u>. The Board has an Audit Committee, which is comprised of the Independent Trustees. The Audit Committee reviews financial statements and other audit-related matters for the Fund. The Audit Committee also holds discussions with management and with the Fund's independent auditor concerning the scope of the audit and the auditor's independence and will meet at least four times annually. During the fiscal year or period ended October 31, 2022 the Audit Committee met ten times.

<u>Nominating Committee</u>. The Board has a Nominating Committee, which is comprised of the Independent Trustees. The Nominating Committee is responsible for seeking and reviewing candidates for consideration as nominees for the position of trustee and meets only as necessary. The Nominating Committee generally will not consider shareholder nominees.

<u>Compensation Committee.</u> The Board has a Compensation Committee, which is comprised of the Independent Trustees. The role of the Compensation Committee is to oversee the evaluation of, and review and approve compensation for, the independent members of the Board of Trustees. The Compensation Committee will generally meet annually.

**Trustee Compensation**

Each Trustee will receive a quarterly fee of $21,250 (the "Trustee Fee") to be paid at the beginning of each calendar quarter, allocated among each of the various portfolios comprising the Trust. Each Trustee will also receive reimbursement for any reasonable expenses incurred attending the regular quarterly meetings of the Trust. In addition to the Trustee Fee, the Audit Committee Chairman will receive an additional quarterly fee of $4,000 and the Chairman of the Trust will receive an additional quarterly fee of $5,250. For special in-person meetings, each Trustee will receive a $2,500 special in-person meeting fee, as well as reimbursement for any reasonable expenses incurred attending the special in-person meeting, which fees will generally be paid by the Adviser requesting the special in-person meeting. None of the executive officers will receive compensation from the Trust.

The following table details the amount of compensation the Trustees received from the Fund during the fiscal year or period ended October 31, 2022.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Invenomic Fund** | **Pension or Retirement Benefits Accrued as Part of Fund Expenses** | **Estimated Annual Benefits Upon Retirement** | **Total Compensation From the Fund Complex Paid to Trustees\*\*\*** |
| **Thomas T. Sarkany** | $4103 |  |  | $4103 |
| **Anthony Lewis** | $4103 |  |  | $4103 |
| **Keith Rhoades\*** | $4875 |  |  | $4875 |
| **Randy Skalla** | $4103 |  |  | $4103 |
| **Brian Nielsen\*\*** | $5116 |  |  | $5116 |

---

\*Mr. Rhoades also serves as Chairman of the Audit Committee.

\*\* Mr. Nielsen also serves as Chairman of the Trust

\*\*\* There are currently multiple series comprising the Trust. The term "Fund Complex" refers only to the Fund, and not to any other series of the Trust. For the fiscal year ended October 31, 2022, aggregate Independent Trustees' fees were $462,000.

**Trustee Ownership**

The following table indicates the dollar range of equity securities that each Trustee beneficially owned in the Fund and other series of the Trust as of December 31, 2022.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**<u>Name of Trustee</u>** | &nbsp;&nbsp;**Dollar Range of Equity Securities in the Fund** | &nbsp;&nbsp;**Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Trustee in Family of Investment Companies** |
| &nbsp;&nbsp;Thomas T. Sarkany | &nbsp;&nbsp;None | &nbsp;&nbsp;None |
| &nbsp;&nbsp;Anthony H. Lewis | &nbsp;&nbsp;None | &nbsp;&nbsp;None |
| &nbsp;&nbsp;Keith Rhoades | &nbsp;&nbsp;None | &nbsp;&nbsp;None |
| &nbsp;&nbsp;Randal D. Skalla | &nbsp;&nbsp;None | &nbsp;&nbsp;None |
| &nbsp;&nbsp;Brian Nielsen\* | &nbsp;&nbsp;None | &nbsp;&nbsp;None |

---

**Control Persons and Principal Shareholders**

A principal shareholder is any person who owns of record or beneficially 5% or more of the outstanding shares of the Fund. A control person is one who owns beneficially or through controlled companies more than 25% of the voting securities of the Fund or acknowledges the existence of control. A controlling person possesses the ability to control the outcome of matters submitted for shareholder vote by the Fund.

As of February 1, 2023 the following persons owned, beneficially or of record, 5% or more of a Class of shares of the Fund:

---

| | |
|:---|:---|
| &nbsp;&nbsp; <br> **<u>Name of Shareholder</u>** | &nbsp;&nbsp;**% Of Share <u>Class Owned</u>** |
| &nbsp;&nbsp;**<u>Institutional Class Shares</u>** |  |
| &nbsp;&nbsp; Charles Schwab & Co. Inc.<br> Special Custody A/C<br> FBO Customers<br> ATTN Mutual Funds<br> 211 Main Street<br> San Francisco, CA 94105-1905 | &nbsp;&nbsp;33.67% |
| &nbsp;&nbsp; TD Ameritrade Inc.<br> FBO Our Customers<br> P.O. Box 2226<br> Omaha, NE 68103-2226 | &nbsp;&nbsp;14.79% |
| &nbsp;&nbsp; Vanguard Brokerage Services<br> Link to Bin 11111111<br> P.O. Box 1170<br> Valley Forge, PA 19482-1170 | &nbsp;&nbsp;7.68% |
| &nbsp;&nbsp;**<u>Investor Class Shares</u>** |  |
| &nbsp;&nbsp; TD Ameritrade Inc.<br> FBO Our Customers<br> P.O. Box 2226<br> Omaha, NE 68103-2226 | &nbsp;&nbsp;20.47% |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp; Charles Schwab & Co. Inc.<br> Special Custody A/C<br> FBO Customers<br> ATTN Mutual Funds<br> 211 Main Street<br> San Francisco, CA 94105-1905 | &nbsp;&nbsp;43.13% |
| &nbsp;&nbsp;**<u>Super Institutional Shares</u>** |  |
| &nbsp;&nbsp; Charles Schwab & Co. Inc.<br> Special Custody A/C<br> FBO Customers<br> ATTN Mutual Funds<br> 211 Main Street<br> San Francisco, CA 94105-1905 | &nbsp;&nbsp;65.56% |

---

**Investment Adviser**

As stated in the Prospectus, investment advisory services are provided to the Fund by Invenomic Capital Management, LP, located at 211 Congress Street, 8<sup>th</sup> Floor, Boston, MA 02110, pursuant to an Investment Advisory Agreement (the "Advisory Agreement"). Invenomic was founded in December 2015 as a limited partnership incorporated in Delaware and Ali Motamed is the principal owner and control person. Subject to such policies as the Board of Trustees may determine, the Adviser is ultimately responsible for investment decisions for the Fund. Pursuant to the terms of the Advisory Agreement, the Adviser provides the Fund with such investment advice and supervision as it deems necessary for the proper supervision of the Fund's investments. Prior to July 1, 2019, the Adviser served as the sub-adviser to the Fund.

After an initial period of two years, the Advisory Agreement will continue in effect from year to year only if such continuance is specifically approved at least annually by the Board of Trustees or by vote of a majority of the Fund's outstanding voting securities and by a majority of the trustees who are not parties to the Advisory Agreement or interested persons of any such party, at a meeting called for the purpose of voting on the Advisory Agreement. The Advisory Agreement is terminable without penalty by the Trust on behalf of the Fund upon 60 days' prior written notice when authorized either by a majority vote of the Fund's shareholders or by a vote of a majority of the Board of Trustees, or by the Adviser upon 60 days' prior written notice, and will automatically terminate in the event of its "assignment" (as defined in the 1940 Act). The Advisory Agreement provides that the Adviser, under such agreement, shall not be liable for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission in the execution of portfolio transactions for the Fund, except for willful misfeasance, bad faith or negligence in the performance of its duties, or by reason of reckless disregard of its obligations and duties thereunder.

Under the Advisory Agreement, the Adviser, under the supervision of the Board, agrees (directly or through a subadviser) to invest the assets of the Fund in accordance with applicable law and the investment objective, policies and restrictions set forth in the Fund's current Prospectus and Statement of Additional Information, and subject to such further limitations as the Trust may from time to time impose by written notice to the Adviser. The Adviser shall act as the investment adviser to the Fund and, as such shall (directly or through a subadviser) (i) obtain and evaluate such information relating to the economy, industries, business, securities markets and securities as it may deem necessary or useful in discharging its responsibilities here under, (ii) formulate a continuing program for the investment of the assets of the Fund in a manner consistent with its investment objective, policies and restrictions, and (iii) determine from time to time securities to be purchased, sold or retained by the Fund, and implement those decisions, including the selection of entities with or through which such purchases or sales are to be effected; provided, that the Adviser (directly or through a subadviser) will place orders pursuant to its investment determinations either directly with the issuer or with a broker or dealer, and if with a broker or dealer, (a) will attempt to obtain the best price and execution of its orders, and (b) may nevertheless in its discretion purchase and

sell portfolio securities from and to brokers who provide the Adviser with research, analysis, advice and similar services and pay such brokers in return a higher commission or spread than may be charged by other brokers. The Adviser also provides the Fund with all necessary office facilities and personnel for servicing the Fund's investments, compensates all officers, Trustees and employees of the Trust who are officers, directors or employees of the Adviser, and all personnel of the Fund or the Adviser performing services relating to research, statistical and investment activities. The Advisory Agreement was approved by the Board of the Trust, including by a majority of the Independent Trustees, at a meeting held on April 16-17, 2019 and thereafter most recently renewed by the board of the Trust, including a majority of the Independent Trustees, at a meeting held on January 25 and 26, 2023.

In addition, the Adviser, directly subject to the supervision of the Board of Trustees, provides the management services necessary for the operation of the Fund and such additional administrative services as reasonably requested by the Board of Trustees. These services include providing such office space, office equipment and office facilities as are adequate to fulfill the Adviser's obligations under the Advisory Agreement; assisting the Trust in supervising relations with custodians, transfer and pricing agents, accountants, underwriters and other persons dealing with the Fund; assisting in preparing all general shareholder communications and conducting shareholder relations; assuring the Fund's records and the registration of the Fund's shares under federal securities laws and making necessary filings under state securities laws; developing management and shareholder services for the Fund; and furnishing reports, evaluations and analyses on a variety of subjects to the Trustees.

Pursuant to the Advisory Agreement, the Fund pays the Adviser a management fee at the annual rate of 1.74% of the Fund's average daily net assets. Prior to April 5, 2019, the Fund paid a management fee at the annual rate of 2.00% of the Fund's average daily net assets.

The fee is computed daily and payable monthly. The Adviser has agreed contractually to waive its management fee and to reimburse operating expenses (excluding any front-end or contingent deferred sales loads, brokerage fees and commissions, acquired fund fees and expenses, borrowing costs (such as interest and dividend expense on securities sold short), taxes and extraordinary or non-recurring expenses, including, but not limited to, litigation) at least until February 28, 2024, such that net annual fund operating expenses of the Fund do not exceed the percentages in the table below. This operating expense limitation agreement can be terminated only by, or with the consent of, the Board of Trustees. The Adviser is permitted to receive reimbursement from the Fund for fees it waived and Fund expenses it paid, subject to the limitation that: (1) the reimbursement for fees and expenses will be made only if payable within three years from the date the fees and expenses were initially waived or reimbursed; and (2) the reimbursement may not be made if it would cause the expense limitation in effect at the time of the waiver or currently in effect, whichever is lower, to be exceeded. Fee waiver and reimbursement arrangements can decrease the Fund's expenses and increase its performance.

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Share Class** | &nbsp;&nbsp;**Expense Cap** |
| &nbsp;&nbsp;**Super Institutional Class** | &nbsp;&nbsp;1.98% |
| &nbsp;&nbsp;**Institutional Class** | &nbsp;&nbsp;2.23% |
| &nbsp;&nbsp;**Investor Class** | &nbsp;&nbsp;2.48% |

---

Expenses not expressly assumed by the Adviser under the Advisory Agreement are paid by the Fund. Under the terms of the Advisory Agreement, the Fund is responsible for the payment of the following expenses among others: (a) the fees payable to the Adviser, (b) the fees and expenses of Trustees who are not affiliated persons of the Adviser or Distributor (as defined under the section entitled ("The Distributor") (c) the fees and certain expenses of the Custodian (as defined under the section entitled "Custodian") and Transfer and Dividend Disbursing Agent (as defined under the section entitled "Transfer Agent"), including the cost of maintaining certain required records of the Fund and of pricing the Fund's

shares, (d) the charges and expenses of legal counsel and independent accountants for the Fund, (e) brokerage commissions and any issue or transfer taxes chargeable to the Fund in connection with its securities transactions, (f) all taxes and corporate fees payable by the Fund to governmental agencies, (g) the fees of any trade association of which the Fund may be a member, (h) the cost of share certificates representing shares of the Fund, (i) the cost of fidelity and liability insurance, (j) the fees and expenses involved in registering and maintaining registration of the Fund and of its shares with the SEC, qualifying its shares under state securities laws, including the preparation and printing of the Fund's registration statements and prospectuses for such purposes, (k) all expenses of shareholders and Trustees' meetings (including travel expenses of trustees and officers of the Trust who are directors, officers or employees of the Adviser) and of preparing, printing and mailing reports, proxy statements and prospectuses to shareholders in the amount necessary for distribution to the shareholders, and (l) litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Trust's business.

For the fiscal years or period ended October 31 the Fund paid the following advisory fees to the Adviser (or the Fund's prior adviser), of which the Adviser waived or recouped the amount set forth in the following table.

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;**Fiscal Year Ended** | &nbsp;&nbsp;**Advisory Fee** | &nbsp;&nbsp;**Recoupment (Waiver)** | &nbsp;&nbsp;**Advisory Fee after Recoupment (Waiver)** |
| &nbsp;&nbsp;**October 31, 2022** | &nbsp;&nbsp;$13460431 | &nbsp;&nbsp;$196442 | &nbsp;&nbsp;$13656873 |
| &nbsp;&nbsp;**October 31, 2021** | &nbsp;&nbsp;$4063887 | &nbsp;&nbsp;($226230) | &nbsp;&nbsp;$3837657 |
| &nbsp;&nbsp;**October 31, 2020** | &nbsp;&nbsp;$2900232 | &nbsp;&nbsp;($223856) | &nbsp;&nbsp;$2676376 |

---

**Portfolio Managers**

The following section provides information regarding the Portfolio Managers, other accounts managed by the Portfolio Managers, compensation, material conflicts of interests, and any ownership of securities in the Fund. Mr. Motamed serves as the lead portfolio manager for the Fund.

*Ali Motamed.* Mr. Motamed is the Managing Partner of the Adviser and Lead Portfolio Manager of the Fund. Prior to forming the Adviser, he was a Senior Analyst and a Portfolio Manager with Robeco Investment Management, Inc. ("RIM"), specializing in fundamental research of stocks held in the Boston Partners Long/Short Equity Fund and related strategy. He joined the RIM in 2003, having previously held positions at Deutsche Bank and BT Wolfensohn, where he was a member of the global mergers and acquisitions teams. Mr. Motamed holds a B.A. degree in economics with a minor in accounting from the University of California, Los Angeles, and an M.B.A. degree from Harvard Business School. He holds the Chartered Financial Analyst designation.

 

*Benjamin R. Deschaine. CAIA.* Mr. Deschaine is the President of the Adviser and Co-Portfolio Manager of the Fund. Prior to joining the Adviser, he was a Partner and the Chief Investment Officer of Balter Capital Management LLC and Balter Liquid Alternatives, LLC. Prior to 2012, Mr. Deschaine was a Managing Director at Sabretooth Capital Management, LLC, a global multi-strategy hedge fund affiliated with Tiger Management and a Portfolio Manager and Senior Analyst at Federal Street Advisors. He holds the Chartered Alternative Investment Analyst designation.

**Other Accounts Managed by the Portfolio Managers**

The table below identifies, for the Portfolio Manager of the Fund, the number of accounts managed (excluding the Fund) and the total assets in such accounts, within each of the following categories: registered investment companies, other pooled investment vehicles, and other accounts. To the extent that

the advisory fees for any of these accounts are based on account performance, this information is reflected in separate tables below. Asset amounts are approximate as of the date of this SAI, and have been rounded. The following table lists the number and types of accounts managed by the portfolio manager and assets under management in those accounts as of October 31, 2022.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;**Portfolio Managers** | &nbsp;&nbsp; **Registered**<br> **Investment Companies (excluding the Fund)** | &nbsp;&nbsp; **Registered**<br> **Investment Companies (excluding the Fund)** | &nbsp;&nbsp; **Other Pooled**<br> **Investment Vehicles** | &nbsp;&nbsp; **Other Pooled**<br> **Investment Vehicles** | &nbsp;&nbsp;**Other Accounts** | &nbsp;&nbsp;**Other Accounts** |
| &nbsp;&nbsp;**Portfolio Managers** | &nbsp;&nbsp;**Number of Accounts** | &nbsp;&nbsp;**Total Assets in the Accounts** | &nbsp;&nbsp;**Number of Accounts** | &nbsp;&nbsp;**Total Assets in the Accounts** | &nbsp;&nbsp;**Number of Accounts** | &nbsp;&nbsp;**Total Assets in the Accounts** |
| &nbsp;&nbsp;Ben R. Deschaine | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;3 | &nbsp;&nbsp;$298.9 million | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |
| &nbsp;&nbsp;Ali Motamed | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;3 | &nbsp;&nbsp;$298.9 million | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |

---

**Material Conflicts of Interest**

Actual or apparent material conflicts of interest may arise when a Portfolio Manager has day-to-day management responsibilities with respect to more than one investment account or in other circumstances. Portfolio Managers who manage other investment accounts in addition to the Fund may be presented with the potential conflicts described below.

Potential conflicts of interest may arise when the Fund's Portfolio Manager also has day-to-day management responsibilities with respect to one or more other funds or other accounts, as is the case for the Fund's Portfolio Manager.

**Portfolio Manager's Compensation**

The following section describes the structure of, and the methods used to determine the different types of compensation (*e.g.*, salary, bonus, deferred compensation, retirement plans and arrangements) for each of the Fund's portfolio managers as of the most recent practicable date.

The Portfolio Manager has an ownership interest in the Adviser, and therefore receives a portion of its profits. The Portfolio Manager also receives a fixed base salary and a bonus. Bonus compensation is reviewed annually and is determined by a number of factors, including the annual performance of the strategy, the performance over various other time periods, the total value of the assets in the strategy, the profitability of the Adviser, and trends in industry compensation levels and practices. The Portfolio Manager is also eligible to receive employee benefits, including, but not limited to, health care and other insurance benefits and participation in a retirement plan program.

**Portfolio Managers' Ownership of the Fund**

As of October 31, 2022, the following portfolio managers beneficially owned shares of the Fund:

---

| | |
|:---|:---|
| **Portfolio Manager** | **Dollar Range of Shares Owned** |
| Ben R. Deschaine | Over $1 million |
| Ali Motamed | Over $1 million |

---

**Other Service Providers**

**Administrator**

Pursuant to a Fund Services Agreement (the "Administration Service Agreement"), Ultimus Fund Solutions, LLC ("UFS"), 4221 North 203rd Street, Suite 100, Elkhorn, NE 68022 (the "Administrator"), acts as administrator for the Fund, subject to the supervision of the Board. UFS is primarily in the business of providing administrative, fund accounting and transfer agent services to retail and institutional mutual funds. UFS is an affiliate of the Distributor. UFS may provide persons to serve as officers of the Fund. Such officers may be directors, officers or employees of UFS or its affiliates.

The Administration Service Agreement was initially approved by the Board with respect to the Fund at a meeting held April 18-19, 2017. The Agreement shall remain in effect for 2 years from the date of the Fund's commencement of operations, and subject to annual approval of the Board for one-year periods thereafter. The Administration Service Agreement is terminable by the Board or UFS on 60 days' prior written notice and may be assigned provided the non-assigning party provides prior written consent. This Agreement provides that in the absence of willful misfeasance, bad faith or gross negligence on the part of UFS or reckless disregard of its obligations thereunder, UFS shall not be liable for any action or failure to act in accordance with its duties thereunder.

Under the Administration Service Agreement, UFS provides facilitating administrative services, including: (i) providing services of persons competent to perform such administrative and clerical functions as are necessary to provide effective administration of the Fund; (ii) facilitating the performance of administrative and professional services to the Fund by others, including the Fund's Custodian; (iii) preparing, but not paying for, the periodic updating of the Fund's Registration Statement, Prospectuses and Statement of Additional Information in conjunction with Fund counsel, including the printing of such documents for the purpose of filings with the SEC and state securities administrators, and preparing reports to the Fund's shareholders and the SEC; (iv) preparing in conjunction with Fund counsel, but not paying for, all filings under the securities or "Blue Sky" laws of such states or countries as are designated by the Distributor, which may be required to register or qualify, or continue the registration or qualification, of the Fund and/or its shares under such laws; (v) preparing notices and agendas for meetings of the Board and minutes of such meetings in all matters required by the 1940 Act to be acted upon by the Board; and (vi) monitoring daily and periodic compliance with respect to all requirements and restrictions of the 1940 Act, the Internal Revenue Code and the Prospectus.

For the services rendered to the Fund by the Administrator, the Fund pays the Administrator the greater of an annual minimum fee or an asset based fee, which scales downward based upon net assets for fund administration, fund accounting and transfer agency services.

For the fiscal years ended October 31 the Fund paid the following fees for fund administration, fund accounting and transfer agent services:

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Fiscal Year Ended** | &nbsp;&nbsp;**Administration Fees** |
| &nbsp;&nbsp;**October 31, 2022** | &nbsp;&nbsp;$698587 |
| &nbsp;&nbsp;**October 31, 2021** | &nbsp;&nbsp;$259933 |
| &nbsp;&nbsp;**October 31, 2020** | &nbsp;&nbsp;$196672 |

---

**Fund Accounting** 

UFS, pursuant to the Administration Service Agreement, provides the Fund with accounting services, including: (i) daily computation of net asset value; (ii) maintenance of security ledgers and books and records as required by the 1940 Act; (iii) production of the Fund's listing of portfolio securities and general ledger reports; (iv) reconciliation of accounting records; (v) calculation of yield and total return for the Fund; (vi) maintaining certain books and records described in Rule 31a-1 under the 1940 Act, and reconciling account information and balances among the Fund's custodian or Adviser; and (vii) monitoring and evaluating daily income and expense accruals, and sales and redemptions of shares of the Fund. The Fund also pays the Administrator for any out-of-pocket expenses.

**Transfer Agent**

UFS, 4221 North 203rd Street, Suite 100, Elkhorn, NE 68022, acts as transfer, dividend disbursing, and shareholder servicing agent for the Fund pursuant to a written agreement with the Fund. Under the agreement, UFS is responsible for administering and performing transfer agent functions, dividend distribution, shareholder administration, and maintaining necessary records in accordance with applicable rules and regulations.

**Custodian** 

U.S. Bank, National Association ("U.S. Bank"), 1555 North River Center Drive, Milwaukee, WI 53212, serves as the custodian of the Fund's assets pursuant to a Custody Agreement by and between the Custodian and the Trust on behalf of the Fund. 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. Pursuant to the Custody Agreement, the Custodian also maintains original entry documents and books of record and general ledgers; posts cash receipts and disbursements; and records purchases and sales based upon communications from the Adviser. The Fund may employ foreign sub-custodians that are approved by the Board to hold foreign assets.

**Securities Lending Activities**

U.S. Bank, National Association ("U.S. Bank') serves as the Funds' securities lending agent pursuant to a Securities Lending Authorization Agreement between U.S. Bank and the Trust on behalf of the Fund. The dollar amounts of income and fees and compensation paid to the Fund and U.S. Bank related to the Fund's respective securities lending activities during fiscal year ended October 31, 2022 were as follows:

---

| | |
|:---|:---|
| | **Invenomic Fund** |
| Gross income from securities lending activities<br> (including income from cash collateral reinvestment) | $1468837 |
| Fees and/or compensation for securities lending activities and related services | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees paid to securities lending agent from a revenue split | $(101543) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle) that are not included in the revenue split\* | (24348) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Administrative fees not included in revenue split | - |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indemnification fees not included in revenue split | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rebate (paid to borrower) | $(980770) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other fees not included in revenue split | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aggregate fees/compensation for securities lending activities | $(1106661) |
| Net income from securities lending activities | $362176 |

---

\* The Funds' cash collateral was invested in the Mount Vernon Liquid Assets Portfolio, LLC during the fiscal year ended October 31, 2022.

The services provided by U.S. Bank as securities lending agent are as follows: selection of securities available to be loaned; locating borrowers previously approved by the Fund's board; negotiation of loan terms; monitoring daily the value of the loaned securities and collateral; requiring additional collateral as necessary; investing cash collateral in accordance with the Fund's instructions; marking to market non-cash collateral; maintaining custody of non-cash collateral; recordkeeping and account servicing; monitoring dividend activity and material proxy votes relating to loaned securities; transferring loaned securities; recalling loaned securities in accordance with the fund's instructions; and arranging for return of loaned securities to the fund at loan termination.

**Compliance Services**

Northern Lights Compliance Services, LLC ("NLCS"), 4221 North 203rd Street, Suite 100, Elkhorn, NE 68022, an affiliate of UFS and the Distributor, provides a Chief Compliance Officer to the Trust as well as related compliance services pursuant to a consulting agreement between NLCS and the Trust. The Fund pays a compliance service fee to NLCS.

For the fiscal years ended October 31 the Fund paid the following fees for compliance services:

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Fiscal Year Ended** | &nbsp;&nbsp;**Compliance Service Fees** |
| &nbsp;&nbsp;**October 31, 2022** | &nbsp;&nbsp;$37999 |
| &nbsp;&nbsp;**October 31, 2021** | &nbsp;&nbsp;$24032 |
| &nbsp;&nbsp;**October 31, 2020** | &nbsp;&nbsp;$23327 |

---

**Legal Counsel**

Alston & Bird, LLP, 950 F Street NW, Washington, D.C. 20004, serves as counsel to the Trust.

Blank Rome LLP, 405 Lexington Avenue, New York, NY 10174, serves as counsel to the Independent Trustees.

**Independent Registered Public Accounting Firm**

Tait, Weller & Baker LLP, Two Liberty Place, 50 South 16<sup>th</sup> Street, Suite 2900, Philadelphia, PA 19102, serves as the independent registered public accounting firm of the Fund.

**Distribution of Fund Shares**

Northern Lights Distributors, LLC, located at 4221 North 203rd Street, Suite 100, Elkhorn, NE 68022 (the "Distributor") serves as the principal underwriter and national distributor for the shares of the Fund pursuant to an underwriting agreement with the Trust (the "Underwriting Agreement"). The Distributor is registered as a broker-dealer under the Securities Exchange Act of 1934 and each state's securities laws and is a member of FINRA. The offering of the Fund's shares are continuous. The Underwriting Agreement

provides that the Distributor, as agent in connection with the distribution of Fund shares, will use reasonable efforts to facilitate the sale of the Fund's shares.

The Underwriting Agreement has an initial term of two years and will continue in effect only if such continuance is specifically approved at least annually by the Board of Trustees or by vote of a majority of the Fund's outstanding voting securities and, in either case, by a majority of the trustees who are not parties to the Underwriting Agreement or "interested persons" (as defined in the 1940 Act) of any such party. The Underwriting Agreement is terminable without penalty by the Trust on behalf of the Fund on 60 days' notice when authorized either by a majority vote of the Fund's outstanding voting securities or by vote of a majority of the Board of Trustees, including a majority of the trustees who are not "interested persons" (as defined in the 1940 Act) of the Trust, or by the Distributor on 60 days' notice, and will automatically terminate in the event of its "assignment" (as defined in the 1940 Act).

The following table sets forth the total compensation received by the Distributor from the Fund during the fiscal year ended October 31, 2022.

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;***Fund*** | &nbsp;&nbsp;***Net Underwriting Discounts and Commissions*** | &nbsp;&nbsp;***Compensation on Redemptions and Repurchases*** | &nbsp;&nbsp;***Brokerage Commissions*** |
| &nbsp;&nbsp;Institutional Class Shares | &nbsp;&nbsp;$0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;$0 &nbsp;&nbsp;\* |
| &nbsp;&nbsp;\* The Distributor received $6,047 from the Adviser as compensation for its distribution services to the Fund. | &nbsp;&nbsp;\* The Distributor received $6,047 from the Adviser as compensation for its distribution services to the Fund. | &nbsp;&nbsp;\* The Distributor received $6,047 from the Adviser as compensation for its distribution services to the Fund. | &nbsp;&nbsp;\* The Distributor received $6,047 from the Adviser as compensation for its distribution services to the Fund. |
| &nbsp;&nbsp;The Distributor also receives 12b-1 fees from the Fund as described under the following section entitled "12b-1 Distribution Plan". | &nbsp;&nbsp;The Distributor also receives 12b-1 fees from the Fund as described under the following section entitled "12b-1 Distribution Plan". | &nbsp;&nbsp;The Distributor also receives 12b-1 fees from the Fund as described under the following section entitled "12b-1 Distribution Plan". | &nbsp;&nbsp;The Distributor also receives 12b-1 fees from the Fund as described under the following section entitled "12b-1 Distribution Plan". |

---

The Distributor may enter into selling agreements with broker-dealers that solicit orders for the sale of shares of the Fund and may allow concessions to dealers that sell shares of the Fund.

**12b-1 Distribution and Shareholder Servicing Plan**

As noted in the Prospectus, the Trust has adopted a Distribution and Shareholder Servicing Plan pursuant to Rule 12b-1 under the 1940 Act for the Fund's Investor Class shares (the "Plan") pursuant to which Investor Class shares of the Fund are authorized to pay fees to the Distributor for providing distribution and/or shareholder services to the Fund. Under the Plan, Investor Class shares of the Fund may pay a combined distribution or shareholder servicing fee at an annual rate of up to 0.25% of the average net assets of Investor Class shares as compensation for the Distributor providing account maintenance and/or distribution services to shareholders. Such fees are to be paid by the Fund monthly, or at such other intervals, as the Board shall determine. Such fees shall be based upon each share class's average daily net assets during the preceding month, and shall be calculated and accrued daily. The Fund may pay fees to the Distributor at a lesser rate, as agreed upon by the Board of the Trust and the Distributor. Each Plan authorizes payments to the Distributor as compensation for providing account maintenance services to Fund shareholders, including arranging for certain securities dealers or brokers, administrators and others ("Recipients") to provide these services and paying compensation for these services.

The services to be provided by Recipients may include, but are not limited to, the following: assistance in the offering and sale of Fund shares and in other aspects of the marketing of the shares to clients or prospective clients of the respective recipients; answering routine inquiries concerning the Fund; assisting in the establishment and maintenance of accounts or sub-accounts in the Fund and in processing purchase and redemption transactions; making the Fund's investment plan and shareholder services available; and providing such other information and services to investors in shares of the Fund as the Distributor or the Trust, on behalf of the Fund, may reasonably request. The distribution services shall also include any advertising and marketing services provided by or arranged by the Distributor with respect to the Fund. The Adviser may be compensated by the Distributor for its distribution and marketing efforts.

The Distributor is required to provide a written report, at least quarterly to the Board of the Trust, specifying in reasonable detail the amounts expended pursuant to the Rule 12b-1 Plan and the purposes for which such expenditures were made. Further, the Distributor will inform the Board of any Rule 12b-1 fees to be paid by the Distributor to Recipients.

The initial term of the Rule 12b-1 Plan is one year and will continue in effect from year to year thereafter, provided such continuance is specifically approved at least annually by a majority of the Board of the Trust and a majority of the Trustees who are not "interested persons" of the Trust and do not have a direct or indirect financial interest in the Rule 12b-1 Plan ("Rule 12b-1 Trustees") by votes cast in person at a meeting called for the purpose of voting on the Rule 12b-1 Plan. The Rule 12b-1 Plan may be terminated at any time by the Trust or the Fund by vote of a majority of the Rule 12b-1 Trustees or by vote of a majority of the outstanding voting shares of the Fund.

The Rule 12b-1 Plan may not be amended to increase materially the amount of the Distributor's compensation to be paid by the Fund, unless such amendment is approved by the vote of a majority of the outstanding voting securities of the affected class of the Fund (as defined in the 1940 Act). All material amendments must be approved by a majority of the Board of the Trust and a majority of the Rule 12b-1 Trustees by votes cast in person at a meeting called for the purpose of voting on a Rule 12b-1 Plan. During the term of a Rule 12b-1 Plan, the selection and nomination of non-interested Trustees of the Trust will be committed to the discretion of current non-interested Trustees. The Distributor will preserve copies of the Rule 12b-1 Plan, any related agreements, and all reports, for a period of not less than six years from the date of such document and for at least the first two years in an easily accessible place.

Any agreement related to the Rule 12b-1 Plan will be in writing and provide that: (a) it may be terminated by the Trust or the applicable Fund at any time upon sixty days' written notice, without the payment of any penalty, by vote of a majority of the Rule 12b-1 Trustees, or by vote of a majority of the outstanding voting securities of the Trust or Fund; (b) it will automatically terminate in the event of its assignment (as defined in the 1940 Act); and (c) it will continue in effect for a period of more than one year from the date of its execution or adoption only so long as such continuance is specifically approved at least annually by a majority of the Board and a majority of the Rule 12b-1 Trustees by votes cast in person at a meeting called for the purpose of voting on such agreement.

To the extent these asset-based fees and other payments made under the Distribution Plan to these financial intermediaries for the distribution services they provide to the Fund's shareholders exceed the Distribution Fees available, these payments are made by the Adviser from its own resources, which may include its profits from the advisory fee it receives from the Fund. In addition, the Fund may participate in various "fund supermarkets" in which a mutual fund supermarket sponsor (usually a broker-dealer) offers many mutual funds to the sponsor's customers without charging the customers a sales charge. In connection with its participation in such platforms, the Adviser may use all or a portion of the Distribution Fee to pay one or more supermarket sponsors a negotiated fee for distributing the Fund's shares. In addition, in its discretion, the Adviser may pay additional fees to such intermediaries from its own assets.

For the fiscal year ended October 31, 2022, the Fund paid the following allocated distribution fees:

---

| | | |
|:---|:---|:---|
|  | &nbsp;&nbsp;**Rule 12b-1 Expenditures Paid by the Fund During the Year Ended October 31, 2022** | &nbsp;&nbsp;**Rule 12b-1 Expenditures Paid by the Fund During the Year Ended October 31, 2022** |
|  |  | &nbsp;&nbsp; **Total Dollars Allocated** |
|  |  | **<u>Investor Class</u>** |
| &nbsp;&nbsp;Advertising/Marketing | &nbsp;&nbsp;Advertising/Marketing |  |
| &nbsp;&nbsp;Printing/Postage | &nbsp;&nbsp;Printing/Postage |  |
| &nbsp;&nbsp;Payment to Distributor | &nbsp;&nbsp;Payment to Distributor | $79414 |
| &nbsp;&nbsp;Payment to dealers | &nbsp;&nbsp;Payment to dealers | $62438 |
| &nbsp;&nbsp;Compensation to sales personnel | &nbsp;&nbsp;Compensation to sales personnel |  |
| &nbsp;&nbsp;Other | &nbsp;&nbsp;Other | $68394 |
| &nbsp;&nbsp;**Total** | &nbsp;&nbsp;**Total** | **$210246** |

---

**Shareholder Servicing Plan**

Pursuant to a Shareholder Service Plan (the "Plan") adopted by the Trust with respect to the Institutional and Investor class shares of the Fund, the Adviser is authorized to provide, or arrange for others to provide certain administrative support services to the beneficial owners of the Fund's shares ("Shareholder Services"). Under the Plan, the Trust may enter into shareholder service agreements with certain financial institutions, broker-dealers, and other financial intermediaries, including the Adviser ("Authorized Service Providers") who provide Shareholder Services for in the beneficial owners of the Fund's shares. Shareholder servicing fees are accrued daily and paid quarterly, at an annual rate of up to 0.25% of the average daily net assets of the Fund.

Shareholder Services include but are not limited to, the following: (1) answering customer inquiries of a general nature regarding the Fund; (2) responding to customer inquiries and requests regarding statements of additional information, reports, notices, proxies and proxy statements, and other Fund documents; (3) delivering prospectuses and annual and semi-annual reports to beneficial owners of the Fund's shares; (4) assisting the Fund in establishing and maintaining shareholder accounts and records; (5) assisting customers in changing account options, account designations, and account addresses; (6) processing dividend payments and providing sub-accounting for all Fund share transactions at the shareholder level; (7) arranging for bank wire transfer of funds to or from a customer's account; (8) crediting distributions from the Fund to shareholder accounts; (9) determining amounts to be reinvested in the Fund; and (10) providing such other similar administrative services as may be reasonably requested and which are deemed necessary and beneficial to the holders of the Fund's shares, to the extent permitted by applicable statute, rule or regulation.

As compensation for the Shareholder Services, each class pays the Adviser a fee of up to 0.25% of the class's average daily net assets of the shares owned by investors for which the Authorized Service Provider has a servicing and/or other relationship.

Any material amendment to the Plan must be approved by the Board, including a majority of the Independent Trustees, or by a vote of a "majority" (as defined in the 1940 Act) of the outstanding voting securities of the applicable class or classes. The Plan may be terminated, with respect to a class or classes of the Fund, without penalty at any time: (1) by vote of a majority of the Board, including a majority of the Independent Trustees; or (2) by a vote of a "majority" (as defined in the 1940 Act) of the outstanding voting securities of the applicable class or classes.

For the fiscal year ended October 31, 2022, the Fund incurred $1,633,497 in shareholder servicing related fees.

**Portfolio Transactions and Brokerage Allocation**

Pursuant to the Advisory Agreement, the Adviser determines which securities are to be purchased and sold by the Fund and which broker-dealers are eligible to execute the Fund's portfolio transactions. Purchases and sales of securities in the OTC market will generally be executed directly with a "market-maker" unless, in the opinion of the Adviser, a better price and execution can otherwise be obtained by using a broker for the transaction.

Purchases of portfolio securities for the Fund will be effected through broker-dealers (including banks) that specialize in the types of securities that the Fund will be holding, unless better executions are available elsewhere. Dealers usually act as principal for their own accounts. Purchases from dealers will include a spread between the bid and the asked price. If the execution and price offered by more than one dealer are comparable, the order may be allocated to a dealer that has provided research or other services as discussed below.

In placing portfolio transactions, the Adviser, as applicable, will use reasonable efforts to choose broker-dealers capable of providing the services necessary to obtain the most favorable price and execution available. The full range and quality of services available will be considered in making these determinations, such as the size of the order, the difficulty of execution, the operational facilities of the firm involved, the firm's risk in positioning a block of securities and other factors. In those instances where it is reasonably determined that more than one broker-dealer can offer the services needed to obtain the most favorable price and execution available, consideration may be given to those broker-dealers that furnish or supply research and statistical information to the Adviser that they may lawfully and appropriately use in their investment advisory capacities, as well as provide other brokerage services in addition to execution services. The Adviser considers such information, which is in addition to and not in lieu of the services required to be performed by it under its Advisory Agreement with the Fund, to be useful in varying degrees, but of indeterminable value.

It is the Fund's general policy to first seek to obtain the most favorable price and execution available in selecting a broker-dealer to execute portfolio transactions for the Fund. Weight is currently not given to the ability of a broker-dealer to furnish brokerage and research services to the Fund or to the Adviser, even if the specific services are not directly useful to the Fund and may be useful to the Adviser in advising other clients. The Adviser retain the right to update this policy. In negotiating commissions with a broker or evaluating the spread to be paid to a dealer, the Fund may therefore pay a higher commission or spread than would be the case if no weight were given to the furnishing of these supplemental services, provided that the amount of such commission or spread has been determined in good faith by the Adviser to be reasonable in relation to the value of the brokerage and/or research services provided by such broker-dealer. The standard of reasonableness is to be measured in light of the Adviser's overall responsibilities to the Fund.

Investment decisions for the Fund may or may not be made independently from those of other client accounts of the Adviser. In certain instances, investment decisions will be made similar to other accounts managed. In the case where the Fund uses similar strategies, applicable procedures will be taken to ensure trading allocations will be handled fairly and abide by all appropriate rules and regulations. Nevertheless, it is possible that at times identical securities will be acceptable for both the Fund and one or more of such client accounts. In such event, the position of the Fund and such client account(s) in the same issuer may vary and the length of time that each may choose to hold its investment in the same issuer may likewise vary. However, to the extent any of these client accounts seek to acquire the same security as the Fund at the same time, the Fund may not be able to acquire as large a portion of such security as it desires, or it may have to pay a higher price or obtain a lower yield for such security. Similarly, the Fund may not be able to obtain as high a price for, or as large an execution of, an order to sell any particular security at the same time. If one or more of such client accounts simultaneously purchases or sells the same security that the Fund is purchasing or selling, each day's transactions in such security will be allocated between the

Fund and all such client accounts in a manner deemed equitable by the Adviser, taking into account the respective sizes of the accounts and the amount being purchased or sold. It is recognized that in some cases this system could have a detrimental effect on the price or value of the security insofar as the Fund is concerned. In other cases, however, it is believed that the ability of the Fund to participate in volume transactions may produce better executions for the Fund. Notwithstanding the above, the Adviser may execute buy and sell orders for accounts and take action in performance of their duties with respect to any of their accounts that may differ from actions taken with respect to another account, so long as the Adviser shall, to the extent practical, allocate investment opportunities to accounts, including the Fund, over a period of time on a fair and equitable basis and in accordance with applicable law. Whenever possible, all trades are done in a block with allocations made on a pro-rata basis. Each client will participate in the transaction at an average price, allocated in a pro-rata amount based on the asset size of the account.

The Fund is required to identify any securities of its "regular brokers or dealers" that the Fund has acquired during its most recent fiscal year. The Fund is also required to identify any brokerage transactions during its most recent fiscal year that were directed to a broker because of research services provided, along with the amount of any such transaction and any related commissions paid by the Fund.

Brokers or dealers executing a portfolio transaction on behalf of the Fund may receive a commission in excess of the amount of commission another broker or dealer would have charged for executing the transaction if the Adviser determines in good faith that such commission is reasonable in relation to the value of brokerage, research and other services provided to the Fund. In allocating portfolio brokerage, the Adviser may select brokers or dealers who also provide brokerage, research and other services to other accounts over which the Adviser exercises investment discretion. Some of the services received as the result of Fund transactions may primarily benefit accounts other than the Fund, while services received as the result of portfolio transactions effected on behalf of those other accounts may primarily benefit the Fund.

For the fiscal years ended October 31, the Fund incurred the following in brokerage commissions:

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Fiscal Year Ended** | &nbsp;&nbsp;**Brokerage Commissions** |
| &nbsp;&nbsp;**October 31, 2022** | &nbsp;&nbsp;$5077855 |
| &nbsp;&nbsp;**October 31, 2021** | &nbsp;&nbsp;$1729836 |
| &nbsp;&nbsp;**October 31, 2020** | &nbsp;&nbsp;$1032575 |

---

**Portfolio Turnover**

Although the Fund generally will not invest for short-term trading purposes, portfolio securities may be sold without regard to the length of time they have been held when, in the opinion of the Adviser, investment considerations warrant such action. Portfolio turnover rate is calculated by dividing (i) the lesser of purchases or sales of portfolio securities for the fiscal year by (ii) the monthly average of the value of portfolio securities owned during the fiscal year. A 100% turnover rate would occur if all the securities in the Fund's portfolio, with the exception of securities whose maturities at the time of acquisition were one year or less, were sold and either repurchased or replaced within one year. A high rate of portfolio turnover (100% or more) generally leads to above-average transaction costs, could generate capital gains that must be distributed to shareholders as short-term capital gains taxed at ordinary income tax rates (currently as high as 37%) and could increase brokerage commission costs. To the extent that the Fund experiences an increase in brokerage commissions due to a higher portfolio turnover rate, the performance of the Fund could be negatively impacted by the increased expenses incurred by the Fund and may result in a greater number of taxable transactions.

The table below shows the Fund's portfolio turnover rate as a percentage of the average value of the portfolio during the fiscal years ended October 31:

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Fiscal Year Ended** | &nbsp;&nbsp;**Portfolio Turnover** |
| &nbsp;&nbsp;**October 31, 2022** | &nbsp;&nbsp;149% |
| &nbsp;&nbsp;**October 31, 2021** | &nbsp;&nbsp;179% |

---

**Code of Ethics**

The Fund, the Adviser, and the Distributor have each adopted Codes of Ethics under Rule 17j-1 of the 1940 Act. These Codes permit, subject to certain conditions, personnel of the Adviser, and Distributor to invest in securities that may be purchased or held by the Fund.

**Proxy Voting Procedures**

The Board has adopted Proxy Voting Policies and Procedures ("Policies") on behalf of the Trust, which delegate the responsibility for voting proxies of securities held by the Fund to the Adviser and responsibility for voting proxies of securities held by the Fund to the Adviser, subject to the Board's continuing oversight. The Policies require that the Adviser vote proxies received in a manner consistent with the best interests of the Fund and its shareholders. The Policies also require the Adviser to present to the Board, at least annually, the Adviser's Proxy Policies and a record of each proxy voted by the Adviser on behalf of the Fund, including a report on the resolution of all proxies identified by the Adviser as involving a conflict of interest. Notwithstanding this delegation of responsibilities, however, the Fund retains the right to vote proxies relating to its portfolio securities. A copy of the Adviser's Proxy Voting Policies is attached hereto as Appendix B.

<u>More Information</u>. The actual voting records relating to portfolio securities during the 12-month period ended June 30 will be available without charge, upon request, by calling toll-free, 1-800-SEC-0330 or by accessing the SEC's website at www.sec.gov.

**Anti-Money Laundering Compliance Program**

The Trust has established an Anti-Money Laundering Compliance Program (the "Program") as required by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 ("USA PATRIOT Act"). To ensure compliance with this law, the Trust's Program provides for the development of internal practices, procedures and controls, designation of anti-money laundering compliance officers, an ongoing training program and an independent audit function to determine the effectiveness of the Program. The Trust's CCO serves as its Anti-Money Laundering Compliance Officer.

Procedures to implement the Program include, but are not limited to, determining that the Fund's Distributor and Transfer Agent have established proper anti-money laundering procedures, reporting suspicious and/or fraudulent activity and a providing a complete and thorough review of all new opening account applications. The Trust will not transact business with any person or entity whose identity cannot be adequately verified under the provisions of the USA PATRIOT Act.

As a result of the Program, the Trust may be required to "freeze" the account of a shareholder if the shareholder appears to be involved in suspicious activity or if certain account information matches information on government lists of known terrorists or other suspicious persons, or the Trust may be required to transfer the account or proceeds of the account to a governmental agency.

**Portfolio Holdings Information**

The Trust has adopted policies and procedures that govern the disclosure of the Fund's portfolio holdings. These policies and procedures are designed to ensure that such disclosure is in the best interests of Fund shareholders.

It is the Trust's policy to: (1) ensure that any disclosure of portfolio holdings information is in the best interest of Trust shareholders; (2) protect the confidentiality of portfolio holdings information; (3) have procedures in place to guard against personal trading based on the information; and (4) ensure that the disclosure of portfolio holdings information does not create conflicts between the interests of the Trust's shareholders and those of the Trust's affiliates.

The Fund discloses its portfolio holdings by mailing the annual and semi-annual reports to shareholders approximately two months after the end of the fiscal year and semi-annual period. In addition, the Fund discloses its portfolio holdings reports on Forms N-CSR and Form N-PORT two months after the end of each quarter/semi-annual period.

The Funds may choose to make portfolio holdings information available to rating agencies such as Lipper, Morningstar or Bloomberg earlier and more frequently on a confidential basis.

Under limited circumstances, as described below, the Fund's portfolio holdings may be disclosed to, or known by, certain third parties in advance of their filing with the Securities and Exchange Commission on Form N-CSR or Form N-PORT. In each case, a determination has been made that such advance disclosure is supported by a legitimate business purpose and that the recipient is subject to a duty to keep the information confidential.

The Adviser makes the Fund's top five long positions and top five short positions publicly on its website www.invenomic.com as disclosed in the following table:

---

| | | |
|:---|:---|:---|
| **Information Posting** | **Frequency of Disclosure** | **Date of Web Posting** |
| **Top Five Long Positions and Top Five Short Positions** | Monthly | 45 days after the end of each calendar month |

---

**The Adviser**. Personnel of the Adviser, including personnel responsible for managing the Fund's portfolio, may have full daily access to Fund portfolio holdings since that information is necessary in order for the Adviser to provide their management, administrative, and investment services to the Fund. As required for purposes of analyzing the impact of existing and future market changes on the prices, availability, demand and liquidity of such securities, as well as for the assistance of portfolio managers in the trading of such securities, Adviser personnel may also release and discuss certain portfolio holdings with various broker-dealers.

**Ultimus Fund Solutions, LLC.** Ultimus Fund Solutions, LLC is the transfer agent, fund accountant and administrator for the Fund; therefore, its personnel have full daily access to the Fund's portfolio holdings since that information is necessary in order for them to provide the agreed-upon services for the Trust.

**Northern Lights Compliance Services, LLC.** Northern Lights Compliance Services, LLC provides consulting services to the Funds as well as related compliance services; therefore, its personnel have full daily access to the Funds' portfolio holdings since that information is necessary in order for them to provide the agreed-upon services for the Trust.

**U.S. Bank, National Association.** U.S. Bank, National Association is custodian for the Fund; therefore, its personnel have full daily access to the Fund's portfolio holdings since that information is necessary in order for them to provide the agreed-upon services for the Trust.

**Tait, Weller & Baker LLP.** Tait, Weller & Baker LLP is the Fund's independent registered public accounting firm; therefore, its personnel have access to the Fund's portfolio holdings in connection with auditing of the Fund's annual financial statements and providing assistance and consultation in connection with SEC filings.

**Alston & Bird, LLP.** Alston & Bird, LLP is counsel to the Trust; therefore, its personnel have access to the Fund's portfolio holdings in connection with review of the Fund's annual and semi-annual shareholder reports and SEC filings.

**Blank Rome, LLP**. Blank Rome, LLP is counsel to the Independent Trustees.

**Additions to List of Approved Recipients** 

The Trust's Chief Compliance Officer is the person responsible, and whose prior approval is required, for any disclosure of the Fund's portfolio securities at any time or to any persons other than those described above. In such cases, the recipient must have a legitimate business need for the information and must be subject to a duty to keep the information confidential. There are no ongoing arrangements in place with respect to the disclosure of portfolio holdings. In no event shall the Fund, the Adviser, or any other party receive any direct or indirect compensation in connection with the disclosure of information about the Fund's portfolio holdings.

**Compliance With Portfolio Holdings Disclosure Procedures** 

The Trust's Chief Compliance Officer will report periodically to the Board with respect to compliance with the Fund's portfolio holdings disclosure procedures, and from time to time will provide the Board any updates to the portfolio holdings disclosure policies and procedures.

There is no assurance that the Trust's policies on disclosure of portfolio holdings will protect the Fund from the potential misuse of holdings information by individuals or firms in possession of that information.

**Determination of Net Asset Value**

As indicated in the Prospectus under the heading "Share Price," the net asset value ("NAV") of the Fund's shares, by class, is determined by dividing the total value of the Fund's portfolio investments and other assets, less any liabilities, by the total number of shares outstanding of the Fund, by class.

Generally, the Fund's domestic securities (including underlying ETFs which hold portfolio securities primarily listed on foreign (non-U.S.) exchanges) are valued each day at the last quoted sales price on each security's primary exchange. Securities traded or dealt in upon one or more securities exchanges for which market quotations are readily available and not subject to restrictions against resale shall be valued at the last quoted sales price on the primary exchange or, in the absence of a sale on the primary exchange, at the mean between the current bid and ask prices on such exchange. Securities primarily traded in the National Association of Securities Dealers' Automated Quotation System ("NASDAQ") National Market System for which market quotations are readily available shall be valued using the NASDAQ Official Closing Price. The Board has appointed the Adviser as its designee (the "Valuation Designee") for all fair value determinations and responsibilities, other than overseeing pricing service providers used by the Trust. If

market quotations are not readily available, securities will be valued at their fair market value as determined in good faith by the Fund's Valuation Designee in accordance with procedures approved by the Board and as further described below. Securities that are not traded or dealt in any securities exchange (whether domestic or foreign) and for which over-the-counter market quotations are readily available generally shall be valued at the last sale price or, in the absence of a sale, at the mean between the current bid and ask price on such over-the- counter market.

Certain securities or investments for which daily market quotes are not readily available may be fair valued by the Valuation Designee, pursuant to guidelines established by the Board, with reference to other securities or indices. Debt securities not traded on an exchange may be valued at prices supplied by a pricing agent(s) based on broker or dealer supplied valuations or matrix pricing, a method of valuing securities by reference to the value of other securities with similar characteristics, such as rating, interest rate and maturity. Short-term investments having a maturity of 60 days or less may be generally valued at amortized cost when it approximated fair value.

Exchange traded options are valued at the last quoted sales price or, in the absence of a sale, at the mean between the current bid and ask prices on the exchange on which such options are traded. Futures and options on futures are valued at the settlement price determined by the exchange. Other securities for which market quotes are not readily available are valued at fair value as determined in good faith by the Valuation Designee. Swap agreements and other derivatives are generally valued daily based upon quotations from market makers or by a pricing service in accordance with the valuation procedures approved by the Board.

Under certain circumstances, the Fund may use an independent pricing service to calculate the fair market value of foreign equity securities on a daily basis by applying valuation factors to the last sale price or the mean price as noted above. The fair market values supplied by the independent pricing service will generally reflect market trading that occurs after the close of the applicable foreign markets of comparable securities or the value of other instruments that have a strong correlation to the fair-valued securities. The independent pricing service will also take into account the current relevant currency exchange rate. A security that is fair valued may be valued at a price higher or lower than actual market quotations or the value determined by other funds using their own fair valuation procedures. Because foreign securities may trade on days when Fund shares are not priced, the value of securities held by the Fund can change on days when Fund shares cannot be redeemed or purchased. In the event that a foreign security's market quotations are not readily available or are deemed unreliable (for reasons other than because the foreign exchange on which it trades closed before the Fund's calculation of NAV), the security will be valued at its fair market value as determined in good faith by the Fund's Valuation Designee in accordance with procedures approved by the Board as discussed below. Without fair valuation, it is possible that short-term traders could take advantage of the arbitrage opportunity and dilute the NAV of long-term investors. Fair valuation of the Fund's portfolio securities can serve to reduce arbitrage opportunities available to short-term traders, but there is no assurance that it will prevent dilution of the Fund's NAV by short-term traders. In addition, because the Fund may invest in underlying ETFs which hold portfolio securities primarily listed on foreign (non-U.S.) exchanges, and these exchanges may trade on weekends or other days when the underlying ETFs do not price their shares, the value of these portfolio securities may change on days when you may not be able to buy or sell Fund shares.

Investments initially valued in currencies other than the U.S. dollar are converted to U.S. dollars using exchange rates obtained from pricing services. As a result, the NAV of the Fund's shares may be affected by changes in the value of currencies in relation to the U.S. dollar. The value of securities traded in markets outside the United States or denominated in currencies other than the U.S. dollar may be affected significantly on a day that the New York Stock Exchange is closed and an investor is not able to purchase, redeem or exchange shares.

Fund shares are valued at the close of regular trading on the New York Stock Exchange (normally 4:00 p.m., Eastern time) (the "NYSE Close") on each day that the New York Stock Exchange is open. For purposes of calculating the NAV, the Fund normally use pricing data for domestic equity securities received shortly after the NYSE Close and does not normally take into account trading, clearances or settlements that take place after the NYSE Close. Domestic fixed income and foreign securities are normally priced using data reflecting the earlier closing of the principal markets for those securities. Information that becomes known to the Fund or its agents after the NAV has been calculated on a particular day will not generally be used to retroactively adjust the price of the security or the NAV determined earlier that day.

When market quotations are not readily available o deemed unreliable, the Fund may value securities at fair value as determined in good faith by the Valuation Designee, pursuant to procedures approved by the Board. Fair valuation may also be used by the Valuation Designee if extraordinary events occur after the close of the relevant market but prior to the NYSE Close.

**Purchase of Shares** 

Orders for shares received by the Fund in good order prior to the close of business on the NYSE on each day during such periods that the NYSE is open for trading are priced at NAV per share computed as of the close of the regular session of trading on the NYSE. Orders received in good order after the close of the NYSE, or on a day it is not open for trading, are priced at the close of such NYSE on the next day on which it is open for trading at the next determined NAV or offering price per share.

**Redemption of Shares** 

The Fund will redeem all or any portion of a shareholder's shares in the Fund when requested in accordance with the procedures set forth in the "Redemptions" section of the Prospectus. Under the 1940 Act, a shareholder's right to redeem shares and to receive payment therefore may be suspended at times:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) when the NYSE is closed, other than customary weekend and holiday closings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) when trading on that exchange is restricted for any reason; I) when an emergency exists as a result of which disposal by the Fund of securities owned by it is not reasonably practicable or it is not reasonably practicable for the Fund to fairly determine the value of its net assets, provided that applicable rules and regulations of the SEC (or any succeeding governmental authority) will govern as to whether the conditions prescribed in (b) or (c) exist; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) when the SEC by order permits a suspension of the right to redemption or a postponement of the date of payment on redemption.

In case of suspension of the right of redemption, payment of a redemption request will be made based on the NAV next determined after the termination of the suspension.

The Fund may purchase shares of certain series which charge a redemption fee to shareholders (such as the Fund) that redeem shares of the underlying fund within a certain period of time (such as one year). The fee is payable to the underlying fund. Accordingly, if the Fund were to invest in an underlying fund and incur a redemption fee as a result of redeeming shares in such underlying fund, the Fund would bear such redemption fee. The Fund will not, however, invest in shares of an underlying fund that is sold with a contingent deferred sales load.

Supporting documents in addition to those listed under "Redemptions" in the Prospectus will be required from executors, administrators, Trustees, or if redemption is requested by someone other than the shareholder of record. Such documents include, but are not restricted to, stock powers, Trust instruments, certificates of death, appointments as executor, certificates of corporate authority and waiver of tax required in some states when settling estates.

Under section 72.1021(a) of the Texas Property Code, initial investors in the Fund who are Texas residents may designate a representative to receive notices of abandoned property in connection with Fund shares. Texas shareholders who wish to appoint a representative should notify the Trust's Transfer Agent by writing to the address below to obtain a form for providing written notice to the Trust:

Invenomic Fund

c/o Ultimus Fund Solutions, LLC

4221 North 203rd Street, Suite 100

Elkhorn, NE 68022

**Tax Status** 

The following discussion is general in nature and should not be regarded as an exhaustive presentation of all possible tax ramifications. The tax considerations relevant to a specific shareholder depend upon its specific circumstances, and the following general summary does not attempt to discuss all potential tax considerations that could be relevant to a prospective shareholder with respect to the Fund or its investments. This general summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), the Federal Income Tax Regulations promulgated thereunder, and administrative and judicial interpretations thereof as of the date hereof, all of which are subject to change (potentially on a retroactive basis).

The following discussion of tax consequences is for the general information of shareholders that are subject to tax. Shareholders that are IRAs or other qualified retirement plans are exempt from income taxation under the Code. All shareholders should consult a qualified tax advisor regarding their investment in the Fund.

The Fund has qualified and intends to continue to qualify and has elected to be treated as a regulated investment company under Subchapter M of the Code, which requires compliance with certain requirements concerning the sources of its income, diversification of its assets, and the amount and timing of its distributions to shareholders. Such qualification does not involve supervision of management or investment practices or policies by any government agency or bureau. By so qualifying, the Fund should not be subject to federal income or excise tax on its net investment income or net capital gain, which are distributed to shareholders in accordance with the applicable timing requirements. Net investment income and net capital gain of the Fund will be computed in accordance with Section 852 of the Code. The Internal Revenue Service ("IRS") issued a number of private letter rulings to other mutual funds (unrelated to the Fund), indicating that certain income from a fund's investment in a wholly-owned foreign subsidiary constituted "qualifying income" for purposes of Subchapter M. However, the IRS suspended issuance of these letter rulings in 2011 pending a review of its position, and in 2016 declared that it would no longer issue private letter rulings on this issue. If the IRS were to change its position in published public guidance with respect to the conclusions reached in these private letter rulings (which change in position might be applied to the Fund retroactively), the income from the Fund's investment in the Subsidiary might not be qualifying income, and the Fund might not therefore qualify as a regulated investment company for one or more years.

Net investment income is made up of dividends and interest less expenses. Net capital gain for a fiscal year is computed by taking into account any capital loss carryforward of the Fund. Under the Regulated Investment Company Act of 2010, the Fund will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, losses incurred during those future years will be required to be utilized prior to the losses incurred in pre-enactment tax years. Thus, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

The Fund intends to distribute all of its net investment income, any excess of net short-term capital gains over net long-term capital losses, and any excess of net long-term capital gains over net short-term capital losses in accordance with the timing requirements imposed by the Code and therefore should not be required to pay any federal income or excise taxes. Distributions of net investment income and net capital gain will be made after the end of each fiscal year, and no later than December 31 of each year. Both types of distributions will be in shares of the Fund unless a shareholder elects to receive cash.

To be treated as a regulated investment company under Subchapter M of the Code, the Fund must also (a) derive at least 90% of its gross income from dividends, interest, payments with respect to securities loans, net income from certain publicly traded partnerships and gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including, but not limited to, gains from options, futures or forward contracts) derived with respect to the business of investing in such stock, securities or currencies, and (b) diversify its holdings so that, at the end of each fiscal quarter, (i) at least 50% of the market value of the Fund's assets is represented by cash, U.S. government securities and securities of other regulated investment companies, and other securities (for purposes of this calculation, generally limited in respect of any one issuer, to an amount not greater than 5% of the market value of the Fund's assets and 10% of the outstanding voting securities of such issuer) and (ii) not more than 25% of the value of its assets is invested in the securities of (other than U.S. government securities or the securities of other regulated investment companies) any one issuer, two or more issuers which the Fund controls and which are determined to be engaged in the same or similar trades or businesses, or the securities of certain publicly traded partnerships.

If the Fund fails to qualify as a regulated investment company under Subchapter M of the Code in any fiscal year, it will be treated as a corporation for federal income tax purposes. As such the Fund would be required to pay income taxes on its net investment income and net realized capital gains, if any, at the rates generally applicable to corporations. Shareholders of the Fund generally would not be liable for income tax on the Fund's net investment income or net realized capital gains in their individual capacities. Distributions to shareholders, whether from the Fund's net investment income or net realized capital gains, would be treated as taxable dividends to the extent of current or accumulated earnings and profits of the Fund.

The fund is subject to a 4% nondeductible excise tax on certain undistributed amounts of ordinary income and capital gain under a prescribed formula contained in Section 4982 of the Code. The formula requires payment to shareholders during a calendar year of distributions representing at least 98% of the Fund's ordinary income for the calendar year and at least 98.2% of its capital gain net income (i.e., the excess of its capital gains over capital losses) realized during the one-year period ending October 31 during such year plus 100% of any income that was neither distributed nor taxed to the Fund during the preceding calendar year. Under ordinary circumstances, the Fund expects to time its distributions so as to avoid liability for this excise tax.

Distributions of taxable net investment income and the excess of net short-term capital gain over net long-term capital loss are taxable to shareholders as ordinary income. In most cases the Fund will hold shares in Underlying Pools for less than 12 months, such that its sales of such shares from time to time will not qualify as long-term capital gains for those investors who hold shares of the Fund in taxable accounts.

Distributions of net capital gain ("capital gain dividends") generally are taxable to shareholders as short-term capital gain; regardless of the length of time the shares of the Trust have been held by such shareholders.

A redemption of Fund shares by a shareholder will result in the recognition of taxable gain or loss in an amount equal to the difference between the amount realized and the shareholder's tax basis in his or her

Fund shares. Such gain or loss is treated as a capital gain or loss if the shares are held as capital assets. However, any loss realized upon the redemption of shares within six months from the date of their purchase will be treated as a long-term capital loss to the extent of any amounts treated as capital gain dividends during such six-month period. All or a portion of any loss realized upon the redemption of shares may be disallowed to the extent shares are purchased (including shares acquired by means of reinvested dividends) within 30 days before or after such redemption.

Distributions of taxable net investment income and net capital gain will be taxable as described above, whether received in additional cash or shares. Shareholders electing to reinvest distributions in the form of additional shares will have a cost basis for federal income tax purposes in each share so received equal to the net asset value of a share on the reinvestment date.

All distributions of taxable net investment income and net capital gain, whether received in shares or in cash, must be reported by each taxable shareholder on his or her federal income tax return. Dividends or distributions declared in October, November or December as of a record date in such a month, if any, will be deemed to have been received by shareholders on December 31, if paid during January of the following year. Redemptions of shares may result in tax consequences (gain or loss) to the shareholder and are also subject to these reporting requirements.

Under the Code, the Fund will be required to report to the Internal Revenue Service all distributions of taxable income and capital gains as well as gross proceeds from the redemption or exchange of Fund shares, except in the case of certain exempt shareholders. Under the backup withholding provisions of Section 3406 of the Code, distributions of taxable net investment income and net capital gain and proceeds from the redemption or exchange of the shares of a regulated investment company may be subject to withholding of federal income tax (currently at a rate of 24%) in the case of non-exempt shareholders who fail to furnish the investment company with their taxpayer identification numbers and with required certifications regarding their status under the federal income tax law, or if the Fund is notified by the IRS or a broker that withholding is required due to an incorrect TIN or a previous failure to report taxable interest or dividends. If the withholding provisions are applicable, any such distributions and proceeds, whether taken in cash or reinvested in additional shares, will be reduced by the amounts required to be withheld.

<u>Options, Futures, Forward Contracts and Swap Agreements</u>

To the extent such investments are permissible for the Fund, the Fund's transactions in options, futures contracts, hedging transactions, forward contracts, straddles and foreign currencies will be subject to special tax rules (including mark-to-market, constructive sale, straddle, wash sale and short sale rules), the effect of which may be to accelerate income to the Fund, defer losses to the Fund, cause adjustments in the holding periods of the Fund's securities, convert long-term capital gains into short-term capital gains and convert short-term capital losses into long-term capital losses. These rules could therefore affect the amount, timing and character of distributions to shareholders.

To the extent such investments are permissible, certain of the Fund's hedging activities (including its transactions, if any, in foreign currencies or foreign currency-denominated instruments) are likely to produce a difference between its book income and its taxable income. If the Fund's book income exceeds its taxable income, the distribution (if any) of such excess book income will be treated as (i) a dividend to the extent of the Fund's remaining earnings and profits (including earnings and profits arising from tax-exempt income), (ii) thereafter, as a return of capital to the extent of the recipient's basis in the shares, and (iii) thereafter, as gain from the sale or exchange of a capital asset. If the Fund's book income is less than taxable income, the Fund could be required to make distributions exceeding book income to qualify as a regulated investment company that is accorded special tax treatment.

<u>Passive Foreign Investment Companies</u>

Investment by the Fund in certain "passive foreign investment companies" ("PFICs") could subject the Fund to a U.S. federal income tax (including interest charges) on distributions received from the company or on proceeds received from the disposition of shares in the company, which tax cannot be eliminated by making distributions to Fund shareholders. However, the Fund may elect to treat a PFIC as a "qualified electing fund" ("QEF"), in which case the Fund will be required to include its share of the company's income and net capital gains annually, regardless of whether it receives any distribution from the company.

The Fund also may make an election to mark the gains (and to a limited extent losses) in such holdings "to the market" as though it had sold and repurchased its holdings in those PFICs on the last day of the Fund's taxable year. Such gains and losses are treated as ordinary income and loss. The QEF and mark-to-market elections may accelerate the recognition of income (without the receipt of cash) and increase the amount required to be distributed for the Fund to avoid taxation. Making either of these elections therefore may require the Fund to liquidate other investments (including when it is not advantageous to do so) to meet its distribution requirement, which also may accelerate the recognition of gain and affect the Fund's total return.

<u>Foreign Currency Transactions</u>

The Fund's transactions in foreign currencies, foreign currency-denominated debt securities and certain foreign currency options, futures contracts and forward contracts (and similar instruments) may give rise to ordinary income or loss to the extent such income or loss results from fluctuations in the value of the foreign currency concerned.

<u>Foreign Taxation</u>

Income received by the Fund from sources within foreign countries may be subject to withholding and other taxes imposed by such countries. Tax treaties and conventions between certain countries and the U.S. may reduce or eliminate such taxes. If more than 50% of the value of the Fund's total assets at the close of its taxable year consists of securities of foreign corporations, the Fund may be able to elect to "pass through" to its shareholders the amount of eligible foreign income and similar taxes paid by the Fund. If this election is made, a shareholder generally subject to tax will be required to include in gross income (in addition to taxable dividends actually received) his or her pro rata share of the foreign taxes paid by the Fund, and may be entitled either to deduct (as an itemized deduction) his or her pro rata share of foreign taxes in computing his or her taxable income or to use it as a foreign tax credit against his or her U.S. federal income tax liability, subject to certain limitations. In particular, a shareholder must hold his or her shares (without protection from risk of loss) on the ex-dividend date and for at least 15 more days during the 30-day period surrounding the ex-dividend date to be eligible to claim a foreign tax credit with respect to a gain dividend. No deduction for foreign taxes may be claimed by a shareholder who does not itemize deductions. Each shareholder will be notified within 60 days after the close of the Fund's taxable year whether the foreign taxes paid by the Fund will "pass through" for that year.

Generally, a credit for foreign taxes is subject to the limitation that it may not exceed the shareholder's U.S. tax attributable to his or her total foreign source taxable income. For this purpose, if the pass-through election is made, the source of the Fund's income will flow through to shareholders of the Fund. With respect to the Fund, gains from the sale of securities will be treated as derived from U.S. sources and certain currency fluctuation gains, including fluctuation gains from foreign currency-denominated debt securities, receivables and payables will be treated as ordinary income derived from U.S. sources. The limitation on the foreign tax credit is applied separately to foreign source passive income, and to certain other types of

income. A shareholder may be unable to claim a credit for the full amount of his or her proportionate share of the foreign taxes paid by the Fund. The foreign tax credit can be used to offset only 90% of the revised alternative minimum tax imposed on corporations and individuals and foreign taxes generally are not deductible in computing alternative minimum taxable income.

<u>Original Issue Discount and Pay-In-Kind Securities</u>

Current federal tax law requires the holder of a U.S. Treasury or other fixed income zero coupon security to accrue as income each year a portion of the discount at which the security was purchased, even though the holder receives no interest payment in cash on the security during the year. In addition, pay-in-kind securities will give rise to income, which is required to be distributed and is taxable even though the Fund holding the security receives no interest payment in cash on the security during the year.

Some of the debt securities (with a fixed maturity date of more than one year from the date of issuance) that may be acquired by the Fund may be treated as debt securities that are issued originally at a discount. Generally, the amount of the original issue discount ("OID") is treated as interest income and is included in income over the term of the debt security, even though payment of that amount is not received until a later time, usually when the debt security matures. A portion of the OID includable in income with respect to certain high-yield corporate debt securities (including certain pay-in-kind securities) may be treated as a dividend for U.S. federal income tax purposes.

Some of the debt securities (with a fixed maturity date of more than one year from the date of issuance) that may be acquired by the Fund in the secondary market may be treated as having market discount. Generally, any gain recognized on the disposition of, and any partial payment of principal on, a debt security having market discount is treated as ordinary income to the extent the gain, or principal payment, does not exceed the "accrued market discount" on such debt security. Market discount generally accrues in equal daily installments. The Fund may make one or more of the elections applicable to debt securities having market discount, which could affect the character and timing of recognition of income.

In addition, the 2017 Tax Cuts and Jobs Act requires that taxpayers, such as the Fund, that use an accrual method of accounting for U.S. federal income tax purposes are generally required to include certain amounts in income no later than the time such amounts are reflected on such taxpayer's applicable financial statements. Certain fees treated as OID may be included as income for financial statement purposes when received (as opposed to being accrued into income over the term of the debt instrument), which may thus require such amounts be treated as taxable income of the Fund upon their receipt.

Some debt securities (with a fixed maturity date of one year or less from the date of issuance) that may be acquired by the Fund may be treated as having acquisition discount, or OID in the case of certain types of debt securities. Generally, the Fund will be required to include the acquisition discount, or OID, in income over the term of the debt security, even though payment of that amount is not received until a later time, usually when the debt security matures. The Fund may make one or more of the elections applicable to debt securities having acquisition discount, or OID, which could affect the character and timing of recognition of income.

If the Fund holds the foregoing kinds of securities, it may be required to pay out as an income distribution each year an amount that is greater than the total amount of cash interest the Fund actually received. Such distributions may be made from the cash assets of the Fund or by liquidation of portfolio securities, if necessary (including when it is not advantageous to do so). The Fund may realize gains or losses from such liquidations. In the event the Fund realizes net capital gains from such transactions, its shareholders may receive a larger capital gain distribution, if any, than they would in the absence of such transactions.

Shareholders of the Fund may be subject to state and local taxes on distributions received from the Fund and on redemptions of the Fund's shares.

A brief explanation of the form and character of the distribution accompany each distribution. In January of each year the Fund issues to each shareholder a statement of the federal income tax status of all distributions.

Shareholders should consult their tax advisors about the application of federal, state and local and foreign tax law in light of their particular situation.

**Financial Statements**

The financial statements of the Fund for the fiscal year or period ended October 31, 2022 and the independent registered public accounting firm's report are incorporated herein by reference to the Fund's Annual Report. These financial statements include the schedule of investments, statement of assets and liabilities, statement of operations, statements of changes in net assets, financial highlights and notes to the financial statements. The Fund will provide the Fund's Annual Report without charge upon request in writing or by calling the Fund at 1-855-466-3406.

**APPENDIX "A" RATINGS DEFINITIONS**

**<u>Standard & Poor's Issue Credit Rating Definitions</u>**

A Standard & Poor's issue credit rating is a forward-looking opinion about the creditworthiness of an obligor with respect to a specific financial obligation, a specific class of financial obligations, or a specific financial program (including ratings on medium-term note programs and commercial paper programs). It takes into consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement on the obligation and takes into account the currency in which the obligation is denominated. The opinion reflects Standard & Poor's view of the obligor's capacity and willingness to meet its financial commitments as they come due, and may assess terms, such as collateral security and subordination, which could affect ultimate payment in the event of default.

Issue credit ratings can be either long term or short term. Short-term ratings are generally assigned to those obligations considered short-term in the relevant market. In the U.S., for example, that means obligations with an original maturity of no more than 365 days—including commercial paper. Short-term ratings are also used to indicate the creditworthiness of an obligor with respect to put features on long-term obligations. The result is a dual rating, in which the short-term rating addresses the put feature, in addition to the usual long-term rating. Medium-term notes are assigned long-term ratings.

**<u>Short-Term Issue Credit Ratings</u>**

**A-1**

A short-term obligation rated 'A-1' is rated in the highest category by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.

**A-2**

A short-term obligation rated 'A-2' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory.

**A-3**

A short-term obligation rated 'A-3' exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

**B**

A short-term obligation rated 'B' is regarded as having significant speculative characteristics. Ratings of 'B-1', 'B-2', and 'B-3' may be assigned to indicate finer distinctions within the 'B' category. The obligor currently has the capacity to meet its financial commitment on the obligation; however, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.

**B-1**

A short-term obligation rated 'B-1' is regarded as having significant speculative characteristics, but the obligor has a relatively stronger capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors.

**B-2**

A short-term obligation rated 'B-2' is regarded as having significant speculative characteristics, and the obligor has an average speculative-grade capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors.

**B-3**

A short-term obligation rated 'B-3' is regarded as having significant speculative characteristics, and the obligor has a relatively weaker capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors.

**C**

A short-term obligation rated 'C' is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.

**D**

A short-term obligation rated 'D' is in payment default. The 'D' rating category is used when payments on an obligation, including a regulatory capital instrument, are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.

**SPUR (Standard & Poor's Underlying Rating)**

This is a rating of a stand-alone capacity of an issue to pay debt service on a credit-enhanced debt issue, without giving effect to the enhancement that applies to it. These ratings are published only at the request of the debt issuer/obligor with the designation SPUR to distinguish them from the credit-enhanced rating that applies to the debt issue. Standard & Poor's maintains surveillance of an issue with a published SPUR.

**Dual Ratings**

Standard & Poor's assigns "dual" ratings to all debt issues that have a put option or demand feature as part of their structure. The first rating addresses the likelihood of repayment of principal and interest as due, and the second rating addresses only the demand feature. The long-term rating symbols are used for bonds to denote the long-term maturity and the short-term rating symbols for the put option (for example, 'AAA/A-1+'). With U.S. municipal short-term demand debt, note rating symbols are used with the short-term issue credit rating symbols (for example, 'SP-1+/A-1+').

The ratings and other credit related opinions of Standard & Poor's and its affiliates are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or make any investment decisions. Standard & Poor's assumes no obligation to update any information following publication. Users of ratings and credit related opinions should not rely on them in making any investment decision. Standard &Poor's opinions and analyses do not address the suitability of any security. Standard & Poor's Financial Services LLC does not act as a fiduciary or an investment advisor. While Standard & Poor's has obtained information from sources it believes to be reliable, Standard & Poor's does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Ratings and credit related opinions may be changed, suspended, or withdrawn at any time.

**Active Qualifiers (Currently applied and/or outstanding)**

**i**

This subscript is used for issues in which the credit factors, terms, or both, that determine the likelihood of receipt of payment of interest are different from the credit factors, terms or both that determine the likelihood of receipt of principal on the obligation. The 'i' subscript indicates that the rating addresses the interest portion of the obligation only. The 'i' subscript will always be used in conjunction with the 'p' subscript, which addresses likelihood of receipt of principal. For example, a rated obligation could be assigned ratings of "AAAp NRi" indicating that the principal portion is rated "AAA" and the interest portion of the obligation is not rated.

**L**

Ratings qualified with 'L' apply only to amounts invested up to federal deposit insurance limits.

**p**

This subscript is used for issues in which the credit factors, the terms, or both, that determine the likelihood of receipt of payment of principal are different from the credit factors, terms or both that determine the likelihood of receipt of interest on the obligation. The 'p' subscript indicates that the rating addresses the principal portion of the obligation only. The 'p' subscript will always be used in conjunction with the 'i' subscript, which addresses likelihood of receipt of interest. For example, a rated obligation could be assigned ratings of "AAAp NRi" indicating that the principal portion is rated "AAA" and the interest portion of the obligation is not rated.

**pi**

Ratings with a 'pi' subscript are based on an analysis of an issuer's published financial information, as well as additional information in the public domain. They do not, however, reflect in-depth meetings with an issuer's management and therefore may be based on less comprehensive information than ratings without a 'pi' subscript. Ratings with a 'pi' subscript are reviewed annually based on a new year's financial statements, but may be reviewed on an interim basis if a major event occurs that may affect the issuer's credit quality.

**pr**

The letters 'pr' indicate that the rating is provisional. A provisional rating assumes the successful completion of the project financed by the debt being rated and indicates that payment of debt service requirements is largely or entirely dependent upon the successful, timely completion of the project. This rating, however, while addressing credit quality subsequent to completion of the project, makes no comment on the likelihood of or the risk of default upon failure of such completion. The investor should exercise his own judgment with respect to such likelihood and risk.

**preliminary**

Preliminary ratings are assigned to issues, including financial programs, in the following circumstances.

---

| | |
|:---|:---|
| &nbsp;&nbsp;⚫ | &nbsp;&nbsp;Preliminary ratings may be assigned to obligations, most commonly structured and project finance issues, pending receipt of final documentation and legal opinions. Assignment of a final rating is conditional on the receipt and approval by Standard & Poor's of appropriate documentation. Changes in the information provided to Standard & Poor's could result in the assignment of a different rating. In addition, Standard & Poor's reserves the right not to issue a final rating. |
| &nbsp;&nbsp;⚫ | &nbsp;&nbsp;Preliminary ratings are assigned to Rule 415 Shelf Registrations. As specific issues, with defined terms, are offered from the master registration, a final rating may be assigned to them in accordance with Standard & Poor's policies. The final rating may differ from the preliminary rating. |

---

**t**

This symbol indicates termination structures that are designed to honor their contracts to full maturity or, should certain events occur, to terminate and cash settle all their contracts before their final maturity date.

**unsolicited**

Unsolicited ratings are those credit ratings assigned at the initiative of Standard & Poor's and not at the request of the issuer or its agents.

**Inactive Qualifiers (No longer applied or outstanding)**

\*

This symbol indicated continuance of the ratings is contingent upon Standard & Poor's receipt of an executed copy of the escrow agreement or closing documentation confirming investments and cash flows. Discontinued use in August 1998.

**c**

This qualifier was used to provide additional information to investors that the bank may terminate its obligation to purchase tendered bonds if the long-term credit rating of the issuer is below an investment-grade level and/or the issuer's bonds are deemed taxable. Discontinued use in January 2001.

**q**

A 'q' subscript indicates that the rating is based solely on quantitative analysis of publicly available information. Discontinued use in April 2001.

**r**

The 'r' modifier was assigned to securities containing extraordinary risks, particularly market risks, that are not covered in the credit rating. The absence of an 'r' modifier should not be taken as an indication that an obligation will not exhibit extraordinary non-credit related risks. Standard & Poor's discontinued the use of the 'r' modifier for most obligations in June 2000 and for the balance of obligations (mainly structured finance transactions) in November 2002.

**Local Currency and Foreign Currency Risks**

Country risk considerations are a standard part of Standard & Poor's analysis for credit ratings on any issuer or issue. Currency of repayment is a key factor in this analysis. An obligor's capacity to repay foreign currency obligations may be lower than its capacity to repay obligations in its local currency due to the sovereign government's own relatively lower capacity to repay external versus domestic debt. These sovereign risk considerations are incorporated in the debt ratings assigned to specific issues. Foreign currency issuer ratings are also distinguished from local currency issuer ratings to identify those instances where sovereign risks make them different for the same issuer.

**<u>Moody's Credit Rating Definitions</u>**

**Purpose** 

The system of rating securities was originated by John Moody in 1909. The purpose of Moody's ratings is to provide investors with a simple system of gradation by which relative creditworthiness of securities may be noted.

**Rating Symbols** 

Gradations of creditworthiness are indicated by rating symbols, with each symbol representing a group in which the credit characteristics are broadly the same. There are nine symbols as shown below, from that used to designate least credit risk to that denoting greatest credit risk:

**Aaa Aa A Baa Ba B Caa Ca C** 

Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa.

**Absence of a Rating** 

Where no rating has been assigned or where a rating has been withdrawn, it may be for reasons unrelated to the creditworthiness of the issue.

Should no rating be assigned, the reason may be one of the following:

1. An application was not received or accepted.

2. The issue or issuer belongs to a group of securities or entities that are not rated as a matter of policy.

3. There is a lack of essential data pertaining to the issue or issuer.

4. The issue was privately placed, in which case the rating is not published in Moody's publications.

Withdrawal may occur if new and material circumstances arise, the effects of which preclude satisfactory analysis; if there is no longer available reasonable up-to-date data to permit a judgment to be formed; if a bond is called for redemption; or for other reasons.

**Changes in Rating** 

The credit quality of most issuers and their obligations is not fixed and steady over a period of time, but tends to undergo change. For this reason changes in ratings occur so as to reflect variations in the intrinsic relative position of issuers and their obligations.

A change in rating may thus occur at any time in the case of an individual issue. Such rating change should serve notice that Moody's observes some alteration in creditworthiness, or that the previous rating did not fully reflect the quality of the bond as now seen. While because of their very nature, changes are to be expected more frequently among bonds of lower ratings than among bonds of higher ratings. Nevertheless, the user of bond ratings should keep close and constant check on all ratings — both high and low — to be able to note promptly any signs of change in status that may occur.

**Limitations to Uses of Ratings\*** 

Obligations carrying the same rating are not claimed to be of absolutely equal credit quality. In a broad sense, they are alike in position, but since there are a limited number of rating classes used in grading thousands of bonds, the symbols cannot reflect the same shadings of risk which actually exist.

As ratings are designed exclusively for the purpose of grading obligations according to their credit quality, they should not be used alone as a basis for investment operations. For example, they have no value in forecasting the direction of future trends of market price. Market price movements in bonds are influenced not only by the credit quality of individual issues but also by changes in money rates and general economic trends, as well as by the length of maturity, etc. During its life even the highest rated bond may have wide price movements, while its high rating status remains unchanged.

The matter of market price has no bearing whatsoever on the determination of ratings, which are not to be construed as recommendations with respect to "attractiveness". The attractiveness of a given bond may depend on its yield, its maturity date or other factors for which the investor may search, as well as on its credit quality, the only characteristic to which the rating refers.

Since ratings involve judgments about the future, on the one hand, and since they are used by investors as a means of protection, on the other, the effort is made when assigning ratings to look at "worst" possibilities in the "visible" future, rather than solely at the past record and the status of the present. Therefore, investors using the rating should not expect to find in them a reflection of statistical factors alone, since they are an appraisal of long-term risks, including the recognition of many non-statistical factors.

Though ratings may be used by the banking authorities to classify bonds in their bank examination procedure, Moody's ratings are not made with these bank regulations in mind. Moody's Investors Service's own judgment as to the desirability or non-desirability of a bond for bank investment purposes is not indicated by Moody's ratings.

Moody's ratings represent the opinion of Moody's Investors Service as to the relative creditworthiness of securities. As such, they should be used in conjunction with the descriptions and statistics appearing in Moody's publications. Reference should be made to these statements for information regarding the issuer. Moody's ratings are not commercial credit ratings. In no case is default or receivership to be imputed unless expressly stated.

\*As set forth more fully on the copyright, credit ratings are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf of any user of the information, and each such user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of, and each provider of credit support for, each security that it may consider purchasing, selling or holding.

**<u>Short-Term Ratings</u>**

Moody's short-term ratings are opinions of the ability of issuers to honor short-term financial obligations. Ratings may be assigned to issuers, short-term programs or to individual short-term debt instruments. Such obligations generally have an original maturity not exceeding thirteen months, unless explicitly noted.

Moody's employs the following designations to indicate the relative repayment ability of rated issuers:

**P-1**

Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.

**P-2**

Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations.

**P-3**

Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations.

**NP**

Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.

**Note:** Canadian issuers rated P-1 or P-2 have their short-term ratings enhanced by the senior-most long-term rating of the issuer, its guarantor or support-provider.

![](image_003.gif)

**Fitch's National Credit Ratings**

For those countries in which foreign and local currency sovereign ratings are below 'AAA', and where there is demand for such ratings, Fitch Ratings will provide National Ratings. It is important to note that each National Rating scale is unique and is defined to serve the needs of the local market in question.

The National Rating scale provides a relative measure of creditworthiness for rated entities only within the country concerned. Under this rating scale, a 'AAA' Long-Term National Rating will be assigned to the lowest relative risk within that country, which, in most but not all cases, will be the sovereign state.

The National Rating scale merely ranks the degree of perceived risk relative to the lowest default risk in that same country. Like local currency ratings, National Ratings exclude the effects of sovereign and transfer risk and exclude the possibility that investors may be unable to repatriate any due interest and principal repayments. It is not related to the rating scale of any other national market. Comparisons between different national scales or between an individual national scale and the international rating scale are therefore inappropriate and potentially misleading. Consequently, they are identified by the addition of a special identifier for the country concerned, such as 'AAA (arg)' for National Ratings in Argentina.

In certain countries, regulators have established credit rating scales, to be used within their domestic markets, using specific nomenclature. In these countries, the agency's National Short-Term Rating definitions for 'F1+(xxx)', 'F1(xxx)', 'F2(xxx)' and 'F3(xxx)' may be substituted by the regulatory scales, e.g. 'A1+', 'A1', 'A2' and 'A3'. The below definitions thus serve as a template, but users should consult the individual scales for each country listed on the agency's web-site to determine if any additional or alternative category definitions apply.

**<u>National Short-Term Credit Ratings</u>**

**F1(xxx)**<br> Indicates the strongest capacity for timely payment of financial commitments relative to other issuers or obligations in the same country. Under the agency's National Rating scale, this rating is assigned to the lowest default risk relative to others in the same country. Where the liquidity profile is particularly strong, a "+" is added to the assigned rating.

**F2(xxx)**<br> Indicates a good capacity for timely payment of financial commitments relative to other issuers or obligations in the same country. However, the margin of safety is not as great as in the case of the higher ratings.

**F3(xxx)**<br> Indicates an adequate capacity for timely payment of financial commitments relative to other issuers or obligations in the same country. However, such capacity is more susceptible to near-term adverse changes than for financial commitments in higher rated categories.

**B(xxx)**<br> Indicates an uncertain capacity for timely payment of financial commitments relative to other issuers or obligations in the same country. Such capacity is highly susceptible to near-term adverse changes in financial and economic conditions.

**C(xxx)**<br> Indicates a highly uncertain capacity for timely payment of financial commitments relative to other issuers or obligations in the same country. Capacity for meeting financial commitments is solely reliant upon a sustained, favorable business and economic environment.

**D(xxx)**<br> Indicates actual or imminent payment default.

**Notes to Long-Term and Short-Term National Ratings:**

The ISO country code suffix is placed in parentheses immediately following the rating letters to indicate the identity of the National market within which the rating applies. For illustrative purposes, (xxx) has been used.

"+" or "-" may be appended to a National Rating to denote relative status within a major rating category. Such suffixes are not added to the 'AAA(xxx)' Long-Term National Rating category, to categories below 'CCC(xxx)', or to Short-Term National Ratings other than 'F1(xxx)'.

**LONG-TERM RATINGS**

**<u>Standard & Poor's Long-Term Issue Credit Ratings</u>**

Issue credit ratings are based, in varying degrees, on Standard & Poor's analysis of the following considerations:

---

| | |
|:---|:---|
| &nbsp;&nbsp;⚫ | &nbsp;&nbsp;Likelihood of payment—capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation; |
| &nbsp;&nbsp;⚫ | &nbsp;&nbsp;Nature of and provisions of the obligation; |
| &nbsp;&nbsp;⚫ | &nbsp;&nbsp;Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights. |

---

Issue ratings are an assessment of default risk, but may incorporate an assessment of relative seniority or ultimate recovery in the event of default. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in bankruptcy, as noted above. (Such differentiation may apply when an entity has both senior and subordinated obligations, secured and unsecured obligations, or operating company and holding company obligations.)

**AAA**

An obligation rated 'AAA' has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong.

**AA**

An obligation rated 'AA' differs from the highest-rated obligations only to a small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong.

**A**

An obligation rated 'A' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong.

**BBB**

An obligation rated 'BBB' exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

**BB, B, CCC, CC, and C**

Obligations rated 'BB', 'B', 'CCC', 'CC', and 'C' are regarded as having significant speculative characteristics. 'BB' indicates the least degree of speculation and 'C' the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.

**BB**

An obligation rated 'BB' is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.

**B**

An obligation rated 'B' is more vulnerable to nonpayment than obligations rated 'BB', but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.

**CCC**

An obligation rated 'CCC' is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.

**CC**

An obligation rated 'CC' is currently highly vulnerable to nonpayment.

**C**

A 'C' rating is assigned to obligations that are currently highly vulnerable to nonpayment, obligations that have payment arrearages allowed by the terms of the documents, or obligations of an issuer that is the subject of a bankruptcy petition or similar action which have not experienced a payment default. Among others, the 'C' rating may be assigned to subordinated debt, preferred stock or other obligations on which cash payments have been suspended in accordance with the instrument's terms or when preferred stock is the subject of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par.

**D**

An obligation rated 'D' is in payment default. The 'D' rating category is used when payments on an obligation, including a regulatory capital instrument, are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of similar action if payments on an obligation are jeopardized. An obligation's rating is lowered to 'D' upon completion of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par.

**Plus (+) or minus (-)**

The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

**NR**

This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that Standard & Poor's does not rate a particular obligation as a matter of policy.

*See active and inactive qualifiers following Standard & Poors Short-Term Issue Credit Ratings beginning on page A-3.*

**<u>Moody's Long-Term Debt Ratings</u>**

**Long-Term Obligation Ratings**

Moody's long-term obligation ratings are opinions of the relative credit risk of fixed-income obligations with an original maturity of one year or more. They address the possibility that a financial obligation will not be honored as promised. Such ratings reflect both the likelihood of default and any financial loss suffered in the event of default.

**Moody's Long-Term Rating Definitions:**

**Aaa**

Obligations rated Aaa are judged to be of the highest quality, with minimal credit risk.

**Aa**

Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.

**A**

Obligations rated A are considered upper-medium grade and are subject to low credit risk.

**Baa**

Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics.

Ba

Obligations rated Ba are judged to have speculative elements and are subject to substantial credit risk.

**B**

Obligations rated B are considered speculative and are subject to high credit risk.

**Caa**

Obligations rated Caa are judged to be of poor standing and are subject to very high credit risk.

**Ca**

Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.

**C**

Obligations rated C are the lowest rated class of bonds and are typically in default, with little prospect for recovery of principal or interest.

**Note:** Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.

**<u>Fitch's National Long-Term Credit Ratings</u>**

**AAA(xxx)**<br> 'AAA' National Ratings denote the highest rating assigned by the agency in its National Rating scale for that country. This rating is assigned to issuers or obligations with the lowest expectation of default risk relative to all other issuers or obligations in the same country.

**AA(xxx)**<br> 'AA' National Ratings denote expectations of very low default risk relative to other issuers or obligations in the same country. The default risk inherent differs only slightly from that of the country's highest rated issuers or obligations.

**A(xxx)**<br> 'A' National Ratings denote expectations of low default risk relative to other issuers or obligations in the same country. However, changes in circumstances or economic conditions may affect the capacity for timely repayment to a greater degree than is the case for financial commitments denoted by a higher rated category.

**BBB(xxx)**<br> 'BBB' National Ratings denote a moderate default risk relative to other issuers or obligations in the same country. However, changes in circumstances or economic conditions are more likely to affect the capacity for timely repayment than is the case for financial commitments denoted by a higher rated category.

**BB(xxx)**<br> 'BB' National Ratings denote an elevated default risk relative to other issuers or obligations in the same country. Within the context of the country, payment is uncertain to some degree and capacity for timely repayment remains more vulnerable to adverse economic change over time.

**B(xxx)**<br> 'B' National Ratings denote a significantly elevated default risk relative to other issuers or obligations in the same country. Financial commitments are currently being met but a limited margin of safety remains and capacity for continued timely payments is contingent upon a sustained, favorable business and economic environment. For individual obligations, may indicate distressed or defaulted obligations with potential for extremely high recoveries.

**CCC(xxx)**<br> 'CCC' National Ratings denote that default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic conditions.

**CC(xxx)**<br> 'CC' National Ratings denote that default of some kind appears probable.

**C(xxx)**<br> 'C' National Ratings denote that default is imminent.

**D(xxx)**<br> 'D' National Ratings denote an issuer or instrument that is currently in default.

**Notes to Long-Term and Short-Term National Ratings:**

The ISO country code suffix is placed in parentheses immediately following the rating letters to indicate the identity of the National market within which the rating applies. For illustrative purposes, (xxx) has been used.

"+" or "-" may be appended to a National Rating to denote relative status within a major rating category. Such suffixes are not added to the 'AAA(xxx)' Long-Term National Rating category, to categories below 'CCC(xxx)', or to Short-Term National Ratings other than 'F1(xxx)'.

**MUNICIPAL NOTE RATINGS**

**<u>Standard & Poor's</u>** **<u>Municipal Short-Term Note Ratings Definitions</u>**

A Standard & Poor's U.S. municipal note rating reflects Standard & Poor's opinion about the liquidity factors and market access risks unique to the notes. Notes due in three years or less will likely receive a note rating. Notes with an original maturity of more than three years will most likely receive a long-term debt rating. In determining which type of rating, if any, to assign, Standard & Poor's analysis will review the following considerations:

⚫ Amortization schedule—the larger the final maturity relative to other maturities, the more likely it will be treated as a note; and <br>⚫ Source of payment—the more dependent the issue is on the market for its refinancing, the more likely it will be treated as a note.

Note rating symbols are as follows:

**SP-1**

Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation.

**SP-2**

Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.

**SP-3**

Speculative capacity to pay principal and interest.

*See active and inactive qualifiers following Standard & Poors Short-Term Issue Credit Ratings beginning on page A-3.*

 

**<u>Moody's US Municipal Short-Term Debt And Demand Obligation Ratings</u>**

**<u>Short-Term Debt Ratings</u>**

There are three rating categories for short-term municipal obligations that are considered investment grade. These ratings are designated as Municipal Investment Grade (MIG) and are divided into three levels -- MIG 1 through MIG 3. In addition, those short-term obligations that are of speculative quality are designated SG, or speculative grade. MIG ratings expire at the maturity of the obligation.

**MIG 1**

This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support, or demonstrated broad-based access to the market for refinancing.

**MIG 2**

This designation denotes strong credit quality. Margins of protection are ample, although not as large as in the preceding group.

**MIG 3**

This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established.

**SG**

This designation denotes speculative-grade credit quality. Debt instruments in this category may lack sufficient margins of protection.

**<u>Demand Obligation Ratings</u>**

In the case of variable rate demand obligations (VRDOs), a two-component rating is assigned; a long or short-term debt rating and a demand obligation rating. The first element represents Moody's evaluation of the degree of risk associated with scheduled principal and interest payments. The second element represents Moody's evaluation of the degree of risk associated with the ability to receive purchase price upon demand ("demand feature"), using a variation of the MIG rating scale, the Variable Municipal Investment Grade or VMIG rating.

When either the long- or short-term aspect of a VRDO is not rated, that piece is designated NR, e.g., Aaa/NR or NR/VMIG 1.

VMIG rating expirations are a function of each issue's specific structural or credit features.

**VMIG 1**

This designation denotes superior credit quality. Excellent protection is afforded by the superior short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.

**VMIG 2**

This designation denotes strong credit quality. Good protection is afforded by the strong short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.

**VMIG 3**

This designation denotes acceptable credit quality. Adequate protection is afforded by the satisfactory short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand.

**SG**

This designation denotes speculative-grade credit quality. Demand features rated in this category may be supported by a liquidity provider that does not have an investment grade short-term rating or may lack the structural and/or legal protections necessary to ensure the timely payment of purchase price upon demand.

**APPENDIX "B"**

**<u>Proxy Voting Policy</u>**

Invenomic has retained a third-party proxy advisory firm to provide proxy voting recommendations and to assist it in coordinating and voting proxies with respect to client securities. On an annual basis, the Chief Compliance Officer will review the services of the proxy advisory firm to ensure that:

• proxies are being properly voted;

• appropriate records are being retained;

• the proxy advisory firm's conflict policies and procedures are robust; and

• there have been no business changes at the proxy advisory firm that would endanger the capacity or competency of the proxy advisory firm to provider the advisor with recommendations.

If there are any securities for which the third-party proxy advisory firm is unable to provide a voting recommendation or assist in voting proxies, the portfolio managers, with the assistance of the Chief Compliance Officer, will:

• keep a record of each proxy received and how voted;

• determine which accounts managed by the Company hold the security to which the proxy relates; and

• absent conflicts of interest, determine how the Company should vote the proxy and in a timely manner vote the proxy by mail or electronic means.

The Chief Compliance Officer will have the responsibility of ensuring that the Company complies with the Proxy Voting Policies and Procedures