# EDGAR Filing Document

**Accession Number:** 0000918942
**File Stem:** 0000894189-26-013571
**Filing Date:** 2026-4
**Character Count:** 1203197
**Document Hash:** de3602da30112f08728f78f4093623a9
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000894189-26-013571.hdr.sgml**: 20260429

**ACCESSION NUMBER**: 0000894189-26-013571

**CONFORMED SUBMISSION TYPE**: 485BPOS

**PUBLIC DOCUMENT COUNT**: 38

**FILED AS OF DATE**: 20260429

**DATE AS OF CHANGE**: 20260429

**EFFECTIVENESS DATE**: 20260501

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** LKCM Funds
- **CENTRAL INDEX KEY:** 0000918942

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-08352
- **FILM NUMBER:** 26911891

**BUSINESS ADDRESS:**
- **STREET 1:** 301 COMMERCE
- **STREET 2:** SUITE 1600
- **CITY:** FORT WORTH
- **STATE:** TX
- **ZIP:** 76102
- **BUSINESS PHONE:** 817-332-3235

**MAIL ADDRESS:**
- **STREET 1:** 301 COMMERCE
- **STREET 2:** SUITE 1600
- **CITY:** FORT WORTH
- **STATE:** TX
- **ZIP:** 76102

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** U.S. Bancorp Fund Services, LLC
- **DATE OF NAME CHANGE:** 20040819

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** LKCM FUND
- **DATE OF NAME CHANGE:** 19940211
**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** LKCM Funds
- **CENTRAL INDEX KEY:** 0000918942

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 033-75116
- **FILM NUMBER:** 26911890

**BUSINESS ADDRESS:**
- **STREET 1:** 301 COMMERCE
- **STREET 2:** SUITE 1600
- **CITY:** FORT WORTH
- **STATE:** TX
- **ZIP:** 76102
- **BUSINESS PHONE:** 817-332-3235

**MAIL ADDRESS:**
- **STREET 1:** 301 COMMERCE
- **STREET 2:** SUITE 1600
- **CITY:** FORT WORTH
- **STATE:** TX
- **ZIP:** 76102

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** U.S. Bancorp Fund Services, LLC
- **DATE OF NAME CHANGE:** 20040819

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** LKCM FUND
- **DATE OF NAME CHANGE:** 19940211

## Series and Classes Contracts Data

### LKCM Small Cap Equity Fund (Series ID: S000004604)

| Class ID   | Class Name                 | Ticker Symbol   |
|:---|:---|:---|
| C000012571 | LKCM Small Cap Equity Fund | LKSCX           |

### LKCM Balanced Fund (Series ID: S000004605)

| Class ID   | Class Name         | Ticker Symbol   |
|:---|:---|:---|
| C000012573 | LKCM Balanced Fund | LKBAX           |

### LKCM Fixed Income Fund (Series ID: S000004606)

| Class ID   | Class Name             | Ticker Symbol   |
|:---|:---|:---|
| C000012574 | LKCM Fixed Income Fund | LKFIX           |

### LKCM Equity Fund (Series ID: S000004608)

| Class ID   | Class Name       | Ticker Symbol   |
|:---|:---|:---|
| C000012576 | LKCM Equity Fund | LKEQX           |

### LKCM Aquinas Catholic Equity Fund (Series ID: S000004610)

| Class ID   | Class Name                        | Ticker Symbol   |
|:---|:---|:---|
| C000012579 | LKCM Aquinas Catholic Equity Fund | AQEIX           |

### LKCM Small-Mid Cap Equity Fund (Series ID: S000032022)

| Class ID   | Class Name                     | Ticker Symbol   |
|:---|:---|:---|
| C000099701 | LKCM Small-Mid Cap Equity Fund | LKSMX           |

### LKCM INTERNATIONAL EQUITY FUND (Series ID: S000065295)

| Class ID   | Class Name                     | Ticker Symbol   |
|:---|:---|:---|
| C000211353 | LKCM International Equity Fund | LKINX           |

?xml version='1.0' encoding='ASCII'? ck0000918942-20260429

**As filed with the Securities and Exchange Commission on April 29, 2026** 

**33 Act File No. 033-75116** 

**40 Act File No. 811-08352** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

**FORM N-1A** 

**REGISTRATION STATEMENT** 

***UNDER***

---

| | |
|:---|:---|
| ***THE SECURITIES ACT OF 1933*** | &nbsp;&nbsp;&nbsp;&nbsp;☒&nbsp;&nbsp;&nbsp;&nbsp; |
| **Pre-Effective Amendment No.** | &nbsp;&nbsp;&nbsp;&nbsp;☐&nbsp;&nbsp;&nbsp;&nbsp; |
| **Post-Effective Amendment No. 60** | &nbsp;&nbsp;&nbsp;&nbsp;☒&nbsp;&nbsp;&nbsp;&nbsp; |

---

**and/or** 

---

| | |
|:---|:---|
| **REGISTRATION STATEMENT**<br>***UNDER***<br>***THE INVESTMENT COMPANY ACT OF 1940*** | &nbsp;&nbsp;&nbsp;&nbsp;☒&nbsp;&nbsp;&nbsp;&nbsp; |
| **Amendment No. 60** | &nbsp;&nbsp;&nbsp;&nbsp;☒&nbsp;&nbsp;&nbsp;&nbsp; |

---

**(Check appropriate box or boxes.)** 

**LKCM FUNDS** 

**(Exact Name of Registrant)** 

**c/o Luther King Capital Management Corporation** 

**301 Commerce Street, Suite 1600** 

**Fort Worth, Texas 76102** 

**(Address of Principal Executive Office)** 

**Registrant's Telephone Number (817) 332-3235** 

**c/o U.S. Bank Global Fund Services** 

**615 E. Michigan Street, Milwaukee, Wisconsin 53202** 

**(Name and Address of Agent for Service)** 

***Copy to:***

**Kathy Kresch Ingber, Esq.** 

**K&L Gates LLP** 

**1601 K. Street, N.W.** 

**Washington, D.C. 20006** 

It is proposed that this filing will become effective (check appropriate box)

☐&nbsp;&nbsp;&nbsp;&nbsp;immediately upon filing pursuant to paragraph (b)

☒&nbsp;&nbsp;&nbsp;&nbsp;On May 1, 2026 pursuant to paragraph (b)

☐&nbsp;&nbsp;&nbsp;&nbsp;60 days after filing pursuant to paragraph (a)(1)

☐&nbsp;&nbsp;&nbsp;&nbsp;on (date) pursuant to paragraph (a)(1)

☐&nbsp;&nbsp;&nbsp;&nbsp;75 days after filing pursuant to paragraph (a)(2)

☐&nbsp;&nbsp;&nbsp;&nbsp;on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

☐&nbsp;&nbsp;&nbsp;&nbsp;This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

------

![LKCM main pro Cover Logo- 2026-1.jpg](ck0000918942-20260429_g1.jpg)

LKCM SMALL CAP EQUITY FUND (LKSCX)

LKCM SMALL-MID CAP EQUITY FUND (LKSMX)

LKCM EQUITY FUND (LKEQX)

LKCM BALANCED FUND (LKBAX)

LKCM FIXED INCOME FUND (LKFIX)

LKCM INTERNATIONAL EQUITY FUND (LKINX)

www.lkcmfunds.com

This Prospectus contains information you should consider before you invest in the LKCM Funds. Please read it carefully and keep it for future reference.

**Neither the Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved of the securities offered by this Prospectus, nor has the SEC or any state securities commission passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.** 

------

**TABLE OF CONTENTS** 

---

| | |
|:---|:---|
| **[SUMMARY SECTION](#i27032f36384c4e2c8544b7ce2b8b6176_1)**  | [1](#i27032f36384c4e2c8544b7ce2b8b6176_96) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[LKCM SMALL CAP EQUITY FUND](#i27032f36384c4e2c8544b7ce2b8b6176_68) | [1](#i27032f36384c4e2c8544b7ce2b8b6176_68) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[LKCM SMALL-MID CAP EQUITY FUND](#i27032f36384c4e2c8544b7ce2b8b6176_238) | [6](#i27032f36384c4e2c8544b7ce2b8b6176_238) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[LKCM EQUITY FUND](#i27032f36384c4e2c8544b7ce2b8b6176_63) | [11](#i27032f36384c4e2c8544b7ce2b8b6176_63) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[LKCM BALANCED FUND](#i27032f36384c4e2c8544b7ce2b8b6176_83) | [16](#i27032f36384c4e2c8544b7ce2b8b6176_83) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[LKCM FIXED INCOME FUND](#i27032f36384c4e2c8544b7ce2b8b6176_78) | [22](#i27032f36384c4e2c8544b7ce2b8b6176_78) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[LKCM INTERNATIONAL EQUITY FUND](#i27032f36384c4e2c8544b7ce2b8b6176_73) | [28](#i27032f36384c4e2c8544b7ce2b8b6176_73) |
| **[ADDITIONAL INFORMATION REGARDING THE INVESTMENT](#i27032f36384c4e2c8544b7ce2b8b6176_185)[](#i27032f36384c4e2c8544b7ce2b8b6176_185)[OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES OF THE FUNDS](#i27032f36384c4e2c8544b7ce2b8b6176_185)**  | [35](#i27032f36384c4e2c8544b7ce2b8b6176_185) |
| **[DISCUSSION OF INVESTMENT APPROACH](#i27032f36384c4e2c8544b7ce2b8b6176_194)**  | [37](#i27032f36384c4e2c8544b7ce2b8b6176_194) |
| **[ADDITIONAL INFORMATION REGARDING THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS](#i27032f36384c4e2c8544b7ce2b8b6176_180)** | [39](#i27032f36384c4e2c8544b7ce2b8b6176_180) |
| **[PORTFOLIO HOLDINGS INFORMATION](#i27032f36384c4e2c8544b7ce2b8b6176_175)**  | [54](#i27032f36384c4e2c8544b7ce2b8b6176_175) |
| **[MANAGEMENT](#i27032f36384c4e2c8544b7ce2b8b6176_170)**  | [54](#i27032f36384c4e2c8544b7ce2b8b6176_170) |
| **[DISTRIBUTION OF FUND SHARES](#i27032f36384c4e2c8544b7ce2b8b6176_165)**  | [56](#i27032f36384c4e2c8544b7ce2b8b6176_165) |
| **[PURCHASE OF SHARES](#i27032f36384c4e2c8544b7ce2b8b6176_160)**  | [56](#i27032f36384c4e2c8544b7ce2b8b6176_160) |
| **[MARKET TIMING POLICY](#i27032f36384c4e2c8544b7ce2b8b6176_155)**  | [58](#i27032f36384c4e2c8544b7ce2b8b6176_155) |
| **[EXCHANGING SHARES](#i27032f36384c4e2c8544b7ce2b8b6176_150)**  | [59](#i27032f36384c4e2c8544b7ce2b8b6176_150) |
| **[REDEMPTION OF SHARES](#i27032f36384c4e2c8544b7ce2b8b6176_145)**  | [59](#i27032f36384c4e2c8544b7ce2b8b6176_145) |
| **[VALUATION OF SHARES](#i27032f36384c4e2c8544b7ce2b8b6176_140)**  | [61](#i27032f36384c4e2c8544b7ce2b8b6176_140) |
| **[DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES](#i27032f36384c4e2c8544b7ce2b8b6176_135)** | [62](#i27032f36384c4e2c8544b7ce2b8b6176_135) |
| **[INDEX DESCRIPTIONS](#i27032f36384c4e2c8544b7ce2b8b6176_130)**  | [63](#i27032f36384c4e2c8544b7ce2b8b6176_130) |
| **[ADDITIONAL INFORMATION](#i27032f36384c4e2c8544b7ce2b8b6176_125)**  | [64](#i27032f36384c4e2c8544b7ce2b8b6176_125) |
| **[FINANCIAL HIGHLIGHTS](#i27032f36384c4e2c8544b7ce2b8b6176_120)**  | [65](#i27032f36384c4e2c8544b7ce2b8b6176_120) |

---

------

**SUMMARY SECTIONS**

**LKCM SMALL CAP EQUITY FUND**

**Investment Objective:** The Fund seeks to maximize long-term capital appreciation.

**Fees and Expenses of the Fund:** The following table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below**. The Fund does not impose any sales charges in connection with purchases and sales of Fund shares.

---

| | |
|:---|:---|
| **Shareholder Fees** |  |
| (fees paid directly from your investment) |  |
| Redemption Fee (as a percentage of the amount redeemed on shares held for less than 30 days) | 1.00% |
| **Annual Fund Operating Expenses** |  |
| (expenses that you pay each year as a percentage of the value of your investment) |  |
| Management Fees | 0.75% |
| Distribution and Service (12b-1) Fees | 0.00% |
| Other Expenses | 0.30% |
| Acquired Fund Fees and Expenses<sup>(1)</sup> | 0.01% |
| Total Annual Fund Operating Expenses | 1.06% |
| Fee Waiver and/or Expense Reimbursement<sup>(2)</sup> | -0.05% |
| Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement<sup>(2)</sup> | 1.01% |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Acquired Fund Fees and Expenses are indirect fees and expenses that funds incur from investing in the shares of other investment companies, including money market funds. The Total Annual Fund Operating Expenses and Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement for the Fund differ from the Ratio of Expenses to Average Net Assets before and after expense waiver and/or reimbursement found within the "Financial Highlights" section of the Prospectus because the audited information in the "Financial Highlights" reflects the operating expenses of the Fund and does not include indirect expenses such as Acquired Fund Fees and Expenses.

&nbsp;&nbsp;&nbsp;&nbsp;<sup>(2)</sup>&nbsp;&nbsp;&nbsp;&nbsp;Luther King Capital Management Corporation ("Adviser"), the Fund's investment adviser, has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund through May 1, 2027 in order to limit the Fund's Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement to 1.00% per annum (excluding any interest, taxes, brokerage commissions, indirect fees and expenses relating to investments in other investment companies, including money market funds ("Acquired Fund Fees and Expenses"), and extraordinary expenses). The fee waiver and expense reimbursement agreement may be terminated or changed only with the consent of the Board of Trustees.

**Example** 

The following example is intended to help you compare the costs 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 (except that the example reflects the fee waiver/expense reimbursement arrangement through May 1, 2027). Although your actual costs may be higher or lower, based on these assumptions, whether or not you redeem your shares, your costs would be as follows:

---

| | | | |
|:---|:---|:---|:---|
| **<u>1 Year</u>** | **<u>3 Years</u>** | **<u>5 Years</u>** | **<u>10 Years</u>** |
| $103 | $332 | $580 | $1290 |

---

**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 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 40% of the average value of its portfolio.

**Principal Investment Strategies:** The Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of smaller companies. The Fund primarily chooses investments that the Adviser believes are likely to have above-average growth in revenue and/or earnings and potential for above-average capital appreciation. Smaller companies are those with market capitalizations at the time of investment between $0.8 billion and $7 billion. The Fund is not required to sell equity securities whose market values appreciate or depreciate outside this market capitalization range. From time to time, in pursuing its investment strategies, the Fund may hold a significant percentage of its investments in specific sectors of the economy.

The Fund seeks to invest in the equity securities of high quality companies, as determined by the Adviser, that typically exhibit certain characteristics, including high profitability levels, strong balance sheet quality, competitive advantages, ability to generate excess cash flows, meaningful management ownership stakes, attractive reinvestment opportunities, strong market share positions, and/or attractive relative valuation. These equity securities primarily consist of common stocks, American Depositary Receipts ("ADRs"), and real estate investment trusts ("REITs").

**Principal Risks:** The greatest risk of investing in the Fund is that you could lose money. There is no assurance that the Fund will achieve its investment objective. The principal risks of investing in the Fund listed below are presented in alphabetical order and not in order of importance or potential exposure. Among other matters, this presentation is intended to facilitate your ability to find particular

------

risks and make comparisons with those of other funds. Each risk summarized below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Cybersecurity Risk* – The Fund, its service providers, third-party fund distribution platforms and other market participants increasingly depend on complex information technology and communications systems, including artificial intelligence, which are subject to a number of different threats and risks that could adversely affect the Fund and its shareholders. Operational risks arising from, among other things, human or processing errors, systems and technology disruptions or failures, or cybersecurity incidents may negatively impact the Fund, its service providers, and third-party fund distribution platforms, as well as the ability of shareholders to transact with the Fund, and result in financial losses. Cybersecurity incidents may allow unauthorized parties to gain access to or misappropriate Fund assets, shareholder data, or confidential or proprietary information, or cause the Fund or its service providers, as well as securities trading venues and their service providers, to suffer data corruption or lose operational functionality. In addition, authorized persons could inadvertently release Fund shareholder data or confidential or proprietary information stored on the Fund's systems. Cybersecurity incidents can result from deliberate attacks or unintentional events. It is not possible for the Fund or its service providers to identify all of the operational risks that may affect the Fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects. Portfolio companies in which the Fund invests are also exposed to various risks related to cybersecurity incidents, and the value of the Fund's investments in such portfolio companies could be adversely impacted in the event any such cybersecurity incidents occur. The Fund cannot control the cybersecurity and operational plans and systems of its service providers, its counterparties or the issuers of securities in which the Fund invests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Equity Securities Risk* – The Fund invests in equity securities and therefore is subject to investment risk, issuer risk, market risks and significant fluctuations in value in response to changes in a company's financial condition as well as general market, economic and political conditions, and other factors. The Fund may experience a significant or complete loss on its investment in an equity security. In addition, stock prices may be sensitive to rising interest rates, which increase borrowing costs and the costs of capital for the issuer. Equity securities are generally subordinate to an issuer's debt in the event of liquidation or bankruptcy. The Fund's investments in equity securities primarily consist of ADRs, common stocks, and REITs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *ADRs* – Investments in ADRs are subject to certain of the risks associated with investing directly in foreign securities, such as currency fluctuations, political and economic instability, capital restrictions, less government regulation, less publicly available information, less liquidity, increased price volatility, and differences in financial reporting standards. ADRs may not accurately track the prices of the underlying foreign securities and their value may change materially at times when the U.S. markets are not open for trading. Investing in such securities may expose the Fund to additional risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Common Stock* – The value of an issuing company's common stock may rise or fall as a result of factors affecting the issuing company, other companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *REITs* – Investments in REITs are subject to the risks associated with investing in the real estate industry, adverse governmental actions, regulatory limitations on rents and operating expenses, declines in property and real estate values, risks related to general and local economic conditions, increases in property taxes and operating expenses, overbuilding, changes in interest rates, liabilities resulting from environmental problems, and the potential failure of a REIT to qualify for federal income-tax-free "pass-through" of net income and net realized gains that are distributed to shareholders and exemption from registration as an investment company. REITs are dependent upon specialized management skills and may invest in relatively few properties, and may not be diversified geographically or by property or tenant type. As a result, investments in REITs may be volatile. REITs are pooled investment vehicles with their own fees and expenses and the Fund will indirectly bear a proportionate share of those fees and expenses when investing in REITs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Inflation Risk* – Higher actual or anticipated inflation may have an adverse effect on corporate profits or consumer spending or the financial markets overall and result in lower values for securities held by the Fund. If Fund investments do not keep pace with inflation, the present value of Fund assets and the value of Fund distributions could decline.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Investment Ris*k – An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of the Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Market Risk* – The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund's performance. Factors that affect markets in general, including geopolitical, regulatory, market and economic developments and other developments that impact specific economic sectors, industries, companies and segments of the market, could adversely impact the Fund's investments and lead to a decline in the value of your investment in the Fund. Geopolitical and other events, including tensions, war, or open conflict between nations, such as among the United States, Israel and Iran, between Russia and Ukraine, otherwise in the Middle East and in eastern Asia, could affect the economies of many countries including the United States and may contribute to increased volatility and uncertainty in the financial markets. The extent and duration of ongoing hostilities and any sanctions and the repercussions of such events cannot be predicted. Those events have presented and could continue to present material uncertainty and risk with respect to markets globally, including in the oil and gas markets and potentially other industries and sectors. Trade disputes, pandemics, public health crises, natural disasters, cybersecurity incidents, and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed income markets, which may disrupt economies and markets and adversely affect the value of your investment. The imposition by the U.S. of tariffs on goods imported from foreign countries and reciprocal tariffs levied on U.S. goods by those countries also may lead to volatility and instability in domestic and foreign markets. In addition, policy changes by the U.S. government, the U.S. Federal Reserve and/or foreign governments and political and economic changes within the U.S. and abroad, such as inflation, changes in interest rates, recessions, changes in the U.S. presidential administration and Congress, the U.S. government's inability at times to agree on a long-term budget and deficit reduction plan, the threat or occurrence of a federal government shutdown, threats not to

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increase the federal government's debt limit which could result in a default on the government's obligations, and the shutdown of certain financial institutions, may cause increased volatility in financial markets, affect investor and consumer confidence and adversely impact the broader financial markets and economy, perhaps suddenly and to a significant degree. Slowing global economic growth, the rise in protectionist trade policies, inflationary pressures, changes to some major international trade and security agreements, the imposition of tariffs, risks associated with trade and security agreements between countries and regions, including the U.S. and other foreign nations, political or economic dysfunction within some countries or regions, including the U.S., and dramatic changes in consumer sentiment, commodity prices and currency values could affect the economies and markets of many nations, including the U.S., in ways that cannot necessarily be foreseen at the present time and may create significant market volatility. The Federal Reserve and certain foreign central banks have started to lower interest rates, though economic or other factors, such as inflation, could reverse or stop such changes. It is difficult to accurately predict the pace at which interest rates might change, the timing, frequency or magnitude of any such changes in interest rates, or when such changes might stop or again reverse course. Unexpected changes in interest rates could lead to significant market volatility or reduce liquidity in certain sectors of the market. Market disruptions have caused, and may continue to cause, broad changes in market value, negative public perceptions concerning these developments, and adverse investor sentiment or publicity. Advancements in technology, including advanced development and increased regulation of artificial intelligence, may adversely impact market movements and liquidity. As artificial intelligence is used more widely, which can occur rapidly, the profitability and growth of certain issuers and industries may be negatively impacted in ways that cannot be foreseen and could adversely impact its performance. Changes in value may be temporary or may last for extended periods. Regulators in the U.S. have adopted a number of changes to regulations affecting markets and issuers, some of which apply to the Fund. Due to the broad scope of the regulations being adopted, certain of these changes, which may be revised or rescinded, could limit the Fund's ability to pursue its investment strategies or make certain investments, may make it more costly for it to operate, or adversely impact performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Redemption Risk* – The Fund may experience periods of significant redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is heightened during periods of declining or illiquid markets. Significant redemptions could hurt the Fund's performance. The sale of assets to meet redemption requests may require the Fund to realize net capital gains, which could require the Fund to make substantial capital gains distributions to shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Sector Weighting Risk* – The Fund may focus its investments in particular sectors of the economy. To the extent the Fund emphasizes investments in particular sectors of the economy, the Fund will be subject to a greater degree of risks particular to those sectors. Market conditions, interest rates, and economic, regulatory, financial or geopolitical developments could significantly affect securities in particular sectors. Depending on the weightings of the Fund's investments in particular sectors, the Fund may have increased exposure to price movements of securities in those sectors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Security Selection Risk* – Securities selected by the Fund may not perform as anticipated due to a number of factors impacting the company that issued the securities or its particular industry or sector, such as poor operating or management performance, weak demand for the company's products or services, the company's failure to meet earnings or other operating performance expectations, financial leverage or credit deterioration, litigation or regulatory issues, or a decline in the value of the issuer's business and assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Small Cap Companies Risk* – The Fund invests in small capitalization companies that may not have the size, resources and other assets of mid or large capitalization companies. Small capitalization companies may also have narrower commercial markets and more limited operating histories, product lines, and managerial and financial resources than larger, more established companies. Small capitalization companies may be more sensitive to changes in interest rates, borrowing costs and earnings. Stocks of these companies may trade less frequently and in more limited volume than stocks of mid or large capitalization companies. As a result, the securities of small capitalization companies held by the Fund may be less liquid and subject to greater market risks and fluctuations in value than mid or large capitalization companies or may not correspond to changes in the stock market in general.

**Performance:** The bar chart and table that follow illustrate annual Fund returns for periods ended December 31. This information is intended to give you some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and how the Fund's average annual returns over time compare with those of a broad-based securities market index, an additional market index with characteristics that are similar to those of the Fund, and an index of funds with similar investment objectives. 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 is available on the Fund's website at www.lkcmfunds.com or by calling the Fund toll-free at 1-800-688-LKCM.

------

**Calendar Year Returns as of 12/31**![549755842049](ck0000918942-20260429_g2.jpg)

During the period shown on the bar chart, the Fund's best and worst quarters are shown below:

---

| | |
|:---|:---|
| **Best and Worst Quarterly Returns** | **Best and Worst Quarterly Returns** |
| 37.01% | 2<sup>nd</sup> quarter, 2020 |
| -30.75% | 1<sup>st</sup> quarter, 2020 |

---

**Average Annual Total Returns for Periods Ended December 31, 2025** 

---

| | | | |
|:---|:---|:---|:---|
|  | **<u>1 Year</u>** | **<u>5 Years</u>** | **<u>10 Years</u>** |
| Return Before Taxes | 13.29% | 7.41% | 11.05% |
| Return After Taxes on Distributions | 11.09% | 5.69% | 8.68% |
| Return After Taxes on Distributions and Sale of Fund Shares | 9.47% | 5.63% | 8.39% |
| Russell 3000<sup>®</sup> Index (reflects no deduction for fees, expenses or taxes) | 17.15% | 13.15% | 14.29% |
| Russell 2000<sup>®</sup> Index (reflects no deduction for fees, expenses or taxes) | 12.81% | 6.09% | 9.62% |
| Lipper Small-Cap Core Funds Index (reflects no deduction for taxes) | 7.14% | 7.93% | 9.63% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. The return after taxes on distributions and sale of Fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. Actual after-tax returns depend on your tax situation and may differ from those shown. In addition, the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements such as 401(k) plans and individual retirement accounts.

**Investment Adviser:** Luther King Capital Management Corporation.

**Portfolio Managers:** 

---

| | | |
|:---|:---|:---|
| **<u>Name</u>** | **<u>Title</u>** | **<u>Experience with the Fund</u>** |
| Mason D. King, CFA | Principal, Vice President, Portfolio Manager and Analyst | Since 2017 |
| J. Luther King, Jr., CFA | Principal, President and Portfolio Manager | Since Inception in 1994 |
| Mark L. Johnson, CFA | Principal, Vice President and Portfolio Manager | Since 2021 |

---

**Purchase and Sale of Fund Shares:** Investors may purchase, exchange or redeem Fund shares by mail (LKCM Funds, c/o U.S. Bank Global Fund Services, 801 Pennsylvania Ave, Suite 219252, Kansas City, MO 64105-1307), or by telephone at 1-800-688-LKCM. Redemptions by telephone are only permitted upon previously receiving appropriate authorization. Transactions normally will only occur on days the New York Stock Exchange is scheduled to be open. Investors who wish to purchase or redeem Fund shares through a financial intermediary should contact the financial intermediary directly for information relative to the purchase or sale of Fund shares. The minimum initial amount of investment in the Fund and exchanges into the Fund from another fund in the LKCM Funds is $2,000. Subsequent investments in the Fund for all types of accounts may be made with a minimum investment of $500.

------

**Tax Information:** The Fund's distributions are taxable to you 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, in which case the withdrawal of your investment from the tax-deferred arrangement may be taxable.

**Payments to Broker-Dealers and Other Financial Intermediaries:** If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a financial adviser), the Fund and its related companies may pay the intermediary for the sale of Fund shares and/or other services. If made, these payments may create a conflict 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.

------

**LKCM SMALL-MID CAP EQUITY FUND**

**Investment Objective:** The Fund seeks to maximize long-term capital appreciation.

**Fees and Expenses of the Fund:** The following table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below**. The Fund does not impose any sales charges in connection with purchases and sales of Fund shares.

---

| | |
|:---|:---|
| **Shareholder Fees** | |
| (fees paid directly from your investment) |  |
| Redemption Fee (as a percentage of the amount redeemed on shares held for less than 30 days) | 1.00% |
| **Annual Fund Operating Expenses** |  |
| (expenses that you pay each year as a percentage of the value of your investment) |  |
| Management Fees | 0.75% |
| Distribution and Service (12b-1) Fees | 0.00% |
| Other Expenses | 0.56% |
| Acquired Fund Fees and Expenses<sup>(1)</sup> | 0.01% |
| Total Annual Fund Operating Expenses | 1.32% |
| Fee Waiver and/or Expense Reimbursement<sup>(2)</sup> | -0.31% |
| Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement<sup>(2)</sup> | 1.01% |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Acquired Fund Fees and Expenses are indirect fees and expenses that funds incur from investing in the shares of other investment companies, including money market funds. The Total Annual Fund Operating Expenses and Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement for the Fund differ from the Ratio of Expenses to Average Net Assets before and after expense waiver and/or reimbursement found within the "Financial Highlights" section of the Prospectus because the audited information in the "Financial Highlights" reflects the operating expenses of the Fund and does not include indirect expenses such as Acquired Fund Fees and Expenses.

&nbsp;&nbsp;&nbsp;&nbsp;<sup>(2)</sup>&nbsp;&nbsp;&nbsp;&nbsp;Luther King Capital Management Corporation ("Adviser"), the Fund's investment adviser, has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund through May 1, 2027 in order to limit the Fund's Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement to 1.00% per annum (excluding any interest, taxes, brokerage commissions, indirect fees and expenses relating to investments in other investment companies, including money market funds ("Acquired Fund Fees and Expenses"), and extraordinary expenses). The fee waiver and expense reimbursement agreement may be terminated or changed only with the consent of the Board of Trustees.

**Example** 

The following example is intended to help you compare the costs 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 (except that the example reflects the fee waiver/expense reimbursement arrangement through May 1, 2027). Although your actual costs may be higher or lower, based on these assumptions, whether or not you redeem your shares, your costs would be as follows:

---

| | | | |
|:---|:---|:---|:---|
| **<u>1 Year</u>** | **<u>3 Years</u>** | **<u>5 Years</u>** | **<u>10 Years</u>** |
| $103 | $388 | $694 | $1563 |

---

**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 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 44% of the average value of its portfolio.

**Principal Investment Strategies:** The Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of small-mid capitalization companies. The Fund primarily chooses investments that the Adviser believes are likely to have above-average growth in revenue and/or earnings and potential for above-average capital appreciation. Small-mid capitalization companies are those with market capitalizations at the time of investment between $2 billion and $20 billion. The Fund is not required to sell equity securities whose market values appreciate or depreciate outside this market capitalization range. From time to time, in pursuing its investment strategies, the Fund may hold a significant percentage of its investments in specific sectors of the economy.

The Fund seeks to invest in the equity securities of high quality companies, as determined by the Adviser, that typically exhibit certain characteristics, including high profitability levels, strong balance sheet quality, competitive advantages, ability to generate excess cash flows, meaningful management ownership stakes, attractive reinvestment opportunities, strong market share positions, and/or attractive relative valuation. These equity securities primarily consist of common stocks, American Depositary Receipts ("ADRs"), and real estate investment trusts ("REITs").

**Principal Risks:** The greatest risk of investing in the Fund is that you could lose money. There is no assurance that the Fund will achieve its investment objective. The principal risks of investing in the Fund listed below are presented in alphabetical order and not in order of importance or potential exposure. Among other matters, this presentation is intended to facilitate your ability to find particular risks and make comparisons with those of other funds. Each risk summarized below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Cybersecurity Risk* – The Fund, its service providers, third-party fund distribution platforms and other market participants increasingly depend on complex information technology and communications systems, including artificial intelligence, which are subject to a number of different threats and risks that could adversely affect the Fund and its shareholders.Operational risks arising from, among other things, human or processing errors, systems and technology disruptions or failures, or cybersecurity incidents may negatively impact the Fund, its service providers, and third-party fund distribution platforms, as well as the ability of shareholders to transact with the Fund, and result in financial losses. Cybersecurity incidents may allow unauthorized parties to gain access to or misappropriate Fund assets, shareholder data, or confidential or proprietary information, or cause the Fund or its service providers, as well as securities trading venues and their service providers, to suffer data corruption or lose operational functionality. In addition, authorized persons could inadvertently release Fund shareholder data or confidential or proprietary information stored on the Fund's systems. Cybersecurity incidents can result from deliberate attacks or unintentional events. It is not possible for the Fund or its service providers to identify all of the operational risks that may affect the Fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects. Portfolio companies in which the Fund invests are also exposed to various risks related to cybersecurity incidents, and the value of the Fund's investments in such portfolio companies could be adversely impacted in the event any such cybersecurity incidents occur. The Fund cannot control the cybersecurity and operational plans and systems of its service providers, its counterparties or the issuers of securities in which the Fund invests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Equity Securities Risk* – The Fund invests in equity securities and therefore is subject to investment risk, issuer risk, market risks and significant fluctuations in value in response to changes in a company's financial condition as well as general market, economic and political conditions, and other factors. The Fund may experience a significant or complete loss on its investment in an equity security. In addition, stock prices may be sensitive to rising interest rates, which increase borrowing costs and the costs of capital for the issuer. Equity securities are generally subordinate to an issuer's debt in the event of liquidation or bankruptcy. The Fund's investments in equity securities primarily consist of ADRs, common stocks, and REITs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *ADRs* – Investments in ADRs are subject to certain of the risks associated with investing directly in foreign securities, such as currency fluctuations, political and economic instability, capital restrictions, less government regulation, less publicly available information, less liquidity, increased price volatility, and differences in financial reporting standards. ADRs may not accurately track the prices of the underlying foreign securities and their value may change materially at times when the U.S. markets are not open for trading. Investing in such securities may expose the Fund to additional risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Common Stock* – The value of an issuing company's common stock may rise or fall as a result of factors affecting the issuing company, other companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *REITs* – Investments in REITs are subject to the risks associated with investing in the real estate industry, adverse governmental actions, regulatory limitations on rents and operating expenses, declines in property and real estate values, risks related to general and local economic conditions, increases in property taxes and operating expenses, overbuilding, changes in interest rates, liabilities resulting from environmental problems, and the potential failure of a REIT to qualify for federal income-tax-free "pass-through" of net income and net realized gains that are distributed to shareholders and exemption from registration as an investment company. REITs are dependent upon specialized management skills and may invest in relatively few properties, and may not be diversified geographically or by property or tenant type. As a result, investments in REITs may be volatile. REITs are pooled investment vehicles with their own fees and expenses and the Fund will indirectly bear a proportionate share of those fees and expenses when investing in REITs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Inflation Risk* – Higher actual or anticipated inflation may have an adverse effect on corporate profits or consumer spending or the financial markets overall and result in lower values for securities held by the Fund. If Fund investments do not keep pace with inflation, the present value of Fund assets and the value of Fund distributions could decline.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Investment Risk* – An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of the Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Market Risk* – The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund's performance. Factors that affect markets in general, including geopolitical, regulatory, market and economic developments and other developments that impact specific economic sectors, industries, companies and segments of the market, could adversely impact the Fund's investments and lead to a decline in the value of your investment in the Fund. Geopolitical and other events, including tensions, war, or open conflict between nations, such as among the United States, Israel and Iran, between Russia and Ukraine, otherwise in the Middle East and in eastern Asia, could affect the economies of many countries including the United States and may contribute to increased volatility and uncertainty in the financial markets. The extent and duration of ongoing hostilities and any sanctions and the repercussions of such events cannot be predicted. Those events have presented and could continue to present material uncertainty and risk with respect to markets globally, including in the oil and gas markets and potentially other industries and sectors. Trade disputes, pandemics, public health crises, natural disasters, cybersecurity incidents, and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed income markets, which may disrupt economies and markets and adversely affect the value of your investment. The imposition by the U.S. of tariffs on goods imported from foreign countries and reciprocal tariffs levied on U.S. goods by those countries also may lead to volatility and instability in domestic and foreign markets. In addition, policy changes by the U.S. government, the U.S. Federal Reserve and/or foreign governments and political and economic changes within the U.S. and abroad, such as inflation, changes in interest rates, recessions, changes in the U.S. presidential administration and Congress, the U.S. government's inability at times to agree on a long-term budget and deficit reduction plan, the threat or occurrence of a federal government shutdown, threats not to increase the federal government's debt limit which could result in a default on the government's obligations, and the shutdown of certain financial institutions, may cause increased volatility in financial markets, affect investor and consumer confidence and adversely impact the broader financial markets and economy, perhaps suddenly and to a significant degree.

------

Slowing global economic growth, the rise in protectionist trade policies, inflationary pressures, changes to some major international trade and security agreements, the imposition of tariffs, risks associated with trade and security agreements between countries and regions, including the U.S. and other foreign nations, political or economic dysfunction within some countries or regions, including the U.S., and dramatic changes in consumer sentiment, commodity prices and currency values could affect the economies and markets of many nations, including the U.S., in ways that cannot necessarily be foreseen at the present time and may create significant market volatility. The Federal Reserve and certain foreign central banks have started to lower interest rates, though economic or other factors, such as inflation, could reverse or stop such changes. It is difficult to accurately predict the pace at which interest rates might change, the timing, frequency or magnitude of any such changes in interest rates, or when such changes might stop or again reverse course. Unexpected changes in interest rates could lead to significant market volatility or reduce liquidity in certain sectors of the market. Market disruptions have caused, and may continue to cause, broad changes in market value, negative public perceptions concerning these developments, and adverse investor sentiment or publicity. Advancements in technology, including advanced development and increased regulation of artificial intelligence, may adversely impact market movements and liquidity. As artificial intelligence is used more widely, which can occur rapidly, the profitability and growth of certain issuers and industries may be negatively impacted in ways that cannot be foreseen and could adversely impact its performance. Changes in value may be temporary or may last for extended periods. Regulators in the U.S. have adopted a number of changes to regulations affecting markets and issuers, some of which apply to the Fund. Due to the broad scope of the regulations being adopted, certain of these changes, which may be revised or rescinded, could limit the Fund's ability to pursue its investment strategies or make certain investments, may make it more costly for it to operate, or adversely impact performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Redemption Risk* – The Fund may experience periods of significant redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is heightened during periods of declining or illiquid markets. Significant redemptions could hurt the Fund's performance. The sale of assets to meet redemption requests may require the Fund to realize net capital gains, which could require the Fund to make substantial capital gains distributions to shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Sector Weighting Risk* – The Fund may focus its investments in particular sectors of the economy. To the extent the Fund emphasizes investments in particular sectors of the economy, the Fund will be subject to a greater degree of risks particular to those sectors. Market conditions, interest rates, and economic, regulatory, financial or geopolitical developments could significantly affect securities in particular sectors. Depending on the weightings of the Fund's investments in particular sectors, the Fund may have increased exposure to price movements of securities in those sectors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Security Selection Risk* – Securities selected by the Fund may not perform as anticipated due to a number of factors impacting the company that issued the securities or its particular industry or sector, such as poor operating or management performance, weak demand for the company's products or services, the company's failure to meet earnings or other operating performance expectations, financial leverage or credit deterioration, litigation or regulatory issues, or a decline in the value of the issuer's business and assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Small and Mid Cap Companies Risk* – The Fund invests in small and mid capitalization companies that may not have the size, resources and other assets of large capitalization companies. Small and mid capitalization companies may also have narrower commercial markets and more limited operating histories, product lines, and managerial and financial resources than larger, more established companies. Small and mid capitalization companies may be more sensitive to changes in interest rates, borrowing costs and earnings. Stocks of these companies may trade less frequently and in more limited volume than stocks of large capitalization companies. As a result, the securities of small and mid capitalization companies held by the Fund may be less liquid and subject to greater market risks and fluctuations in value than large capitalization companies or may not correspond to changes in the stock market in general. In general, these risks are greater for small capitalization companies than for mid capitalization companies.

**Performance:** The bar chart and table that follow illustrate annual Fund returns for periods ended December 31. This information is intended to give you some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and how the Fund's average annual returns over time compare with those of a broad-based securities market index, an additional market index with characteristics that are similar to those of the Fund, and an index of funds with similar investment objectives. 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 is available on the Fund's website at www.lkcmfunds.com or by calling the Fund toll-free at 1-800-688-LKCM.

------

**Calendar Year Returns as of 12/31**![549755840720](ck0000918942-20260429_g3.jpg)

During the period shown on the bar chart, the Fund's best and worst quarters are shown below:

---

| | |
|:---|:---|
| **Best and Worst Quarterly Returns** | **Best and Worst Quarterly Returns** |
| 34.18% | &nbsp;&nbsp;&nbsp;&nbsp;2<sup>nd</sup> quarter, 2020 |
| -26.29% | &nbsp;&nbsp;&nbsp;&nbsp;1<sup>st</sup> quarter, 2020 |

---

**Average Annual Total Returns for Periods Ended December 31, 2025** 

---

| | | | |
|:---|:---|:---|:---|
|  | **<u>1 Year</u>** | **<u>5 Years</u>** | **<u>10 Years</u>** |
| Return Before Taxes | 5.28% | 6.59% | 10.42% |
| Return After Taxes on Distributions | 3.79% | 5.14% | 8.02% |
| Return After Taxes on Distributions and Sale of Fund Shares | 4.21% | 4.96% | 7.79% |
| Russell 3000<sup>®</sup> Index (reflects no deduction for fees, expenses or taxes) | 17.15% | 13.15% | 14.29% |
| Russell 2500<sup>®</sup> Index (reflects no deduction for fees, expenses or taxes) | 11.91% | 7.26% | 10.40% |
| Lipper Small-Cap Core Funds Index (reflects no deduction for taxes) | 7.14% | 7.93% | 9.63% |

---

After-tax returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. The return after taxes on distributions and sale of Fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. Actual after-tax returns depend on your tax situation and may differ from those shown. In addition, the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements such as 401(k) plans and individual retirement accounts.

**Investment Adviser:** Luther King Capital Management Corporation.

**Portfolio Managers:** 

---

| | | |
|:---|:---|:---|
| **<u>Name</u>** | **<u>Title</u>** | **<u>Experience with the Fund</u>**  |
| Daniel C. Downes, CFA, CPA | Principal, Vice President, Portfolio Manager and Analyst | Since 2021 |
| J. Luther King, Jr., CFA | Principal, President and Portfolio Manager | Since Inception in 2011 |
| Mason D. King, CFA | Principal, Vice President, Portfolio Manager and Analyst | Since 2017 |

---

**Purchase and Sale of Fund Shares:** Investors may purchase, exchange or redeem Fund shares by mail (LKCM Funds, c/o U.S. Bank Global Fund Services, 801 Pennsylvania Ave, Suite 219252, Kansas City, MO 64105-1307), or by telephone at 1-800-688-LKCM. Redemptions by telephone are only permitted upon previously receiving appropriate authorization. Transactions normally will only occur on days the New York Stock Exchange is scheduled to be open. Investors who wish to purchase or redeem Fund shares through a financial intermediary should contact the financial intermediary directly for information relative to the purchase or sale of Fund shares. The minimum initial amount of investment in the Fund and exchanges into the Fund from another fund in the LKCM Funds is $2,000. Subsequent investments in the Fund for all types of accounts may be made with a minimum investment of $500.

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**Tax Information:** The Fund's distributions are taxable to you 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, in which case the withdrawal of your investment from the tax-deferred arrangement may be taxable.

**Payments to Broker-Dealers and Other Financial Intermediaries:** If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a financial adviser), the Fund and its related companies may pay the intermediary for the sale of Fund shares and/or other services. If made, these payments may create a conflict 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.

------

**LKCM EQUITY FUND**

**Investment Objective:** The Fund seeks to maximize long-term capital appreciation.

**Fees and Expenses of the Fund:** The following table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.** The Fund does not impose any sales charges in connection with purchases and sales of Fund shares.

---

| | |
|:---|:---|
| **Shareholder Fees** |  |
| **(fees paid directly from your investment)** |  |
| Redemption Fee (as a percentage of the amount redeemed on shares held for less than 30 days) | 1.00% |
| **Annual Fund Operating Expenses** |  |
| (expenses that you pay each year as a percentage of the value of your investment) |  |
| Management Fees | 0.70% |
| Distribution and Service (12b-1) Fees | 0.00% |
| Other Expenses | 0.29% |
| Acquired Fund Fees and Expenses<sup>(1)</sup> | 0.01% |
| Total Annual Fund Operating Expenses | 1.00% |
| Fee Waiver and/or Expense Reimbursement<sup>(2)</sup> | -0.19% |
| Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement<sup>(2)</sup> | 0.81% |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Acquired Fund Fees and Expenses are indirect fees and expenses that funds incur from investing in the shares of other investment companies, including money market funds. The Total Annual Fund Operating Expenses and Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement for the Fund differ from the Ratio of Expenses to Average Net Assets before and after expense waiver and/or reimbursement found within the "Financial Highlights" section of the Prospectus because the audited information in the "Financial Highlights" reflects the operating expenses of the Fund and does not include indirect expenses such as Acquired Fund Fees and Expenses.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Luther King Capital Management Corporation ("Adviser"), the Fund's investment adviser, has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund through May 1, 2027 in order to limit the Fund's Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement to 0.80% per annum (excluding any interest, taxes, brokerage commissions, indirect fees and expenses relating to investments in other investment companies, including money market funds ("Acquired Fund Fees and Expenses"), and extraordinary expenses). The fee waiver and expense reimbursement agreement may be terminated or changed only with the consent of the Board of Trustees.

**Example** 

The following example is intended to help you compare the costs 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 (except that the example reflects the fee waiver/expense reimbursement arrangement through May 1, 2027). Although your actual costs may be higher or lower, based on these assumptions, whether or not you redeem your shares, your costs would be as follows:

---

| | | | |
|:---|:---|:---|:---|
| **<u>1 Year</u>** | **<u>3 Years</u>** | **<u>5 Years</u>** | **<u>10 Years</u>** |
| $83 | $299 | $534 | $1207 |

---

**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 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 9% of the average value of its portfolio.

**Principal Investment Strategies:** The Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities. The Fund primarily invests in companies that the Adviser believes are likely to have above-average growth in revenue and/or earnings, above-average returns on shareholders' equity, potential for above-average capital appreciation, and/or companies that the Adviser believes have attractive relative valuations. The Fund may invest in equity securities of small, mid and large capitalization companies, including dividend paying securities. From time to time, in pursuing its investment strategies, the Fund may hold a significant percentage of its investments in specific sectors of the economy, such as the information technology sector.

The Fund seeks to invest in the equity securities of high quality companies, as determined by the Adviser, that typically exhibit certain characteristics, including high profitability levels, strong balance sheet quality, competitive advantages, ability to generate excess cash flows, meaningful management ownership stakes, attractive reinvestment opportunities and/or strong market share positions. These equity securities primarily consist of common stocks, American Depositary Receipts ("ADRs"), and real estate investment trusts ("REITs").

**Principal Risks:** The greatest risk of investing in the Fund is that you could lose money. There is no assurance that the Fund will achieve its investment objective. The principal risks of investing in the Fund listed below are presented in alphabetical order and not in order of importance or potential exposure. Among other matters, this presentation is intended to facilitate your ability to find particular risks and make comparisons with those of other funds. Each risk summarized below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Cybersecurity Risk* – The Fund, its service providers, third-party fund distribution platforms and other market participants increasingly depend on complex information technology and communications systems, including artificial intelligence, which are subject to a number of different threats and risks that could adversely affect the fund and its shareholders. Operational risks arising from, among other things, human or processing errors, systems and technology disruptions or failures, or cybersecurity incidents may negatively impact the Fund, its service providers, and third-party fund distribution platforms, as well as the ability of shareholders to transact with the Fund, and result in financial losses. Cybersecurity incidents may allow unauthorized parties to gain access to or misappropriate Fund assets, shareholder data, or confidential or proprietary information, or cause the Fund or its service providers, as well as securities trading venues and their service providers, to suffer data corruption or lose operational functionality. In addition, authorized persons could inadvertently release Fund shareholder data or confidential or proprietary information stored on the Fund's systems. Cybersecurity incidents can result from deliberate attacks or unintentional events. It is not possible for the Fund or its service providers to identify all of the operational risks that may affect the Fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects. Portfolio companies in which the Fund invests are also exposed to various risks related to cybersecurity incidents, and the value of the Fund's investments in such portfolio companies could be adversely impacted in the event any such cybersecurity incidents occur. The Fund cannot control the cybersecurity and operational plans and systems of its service providers, its counterparties or the issuers of securities in which the Fund invests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Dividend Paying Securities Risk* – Securities that pay higher dividends as a group can fall out of favor with the market, causing these companies to underperform companies that do not pay high or any dividends. Also, changes in the dividend policies of companies owned by the Fund and the capital resources available for these companies' dividend payments may reduce the level of dividend payments and adversely affect the Fund. Dividend paying securities might not experience the same level of earnings growth or capital appreciation as non-dividend paying securities. Securities that pay dividends may be sensitive to changes in interest rates, and as interest rates rise or fall, the prices of such securities may fluctuate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Equity Securities Risk* – The Fund invests in equity securities and therefore is subject to investment risk, issuer risk, market risks and significant fluctuations in value in response to changes in a company's financial condition as well as general market, economic and political conditions, and other factors. The Fund may experience a significant or complete loss on its investment in an equity security. In addition, stock prices may be sensitive to rising interest rates, which increase borrowing costs and the costs of capital for the issuer. Equity securities are generally subordinate to an issuer's debt in the event of liquidation or bankruptcy. The Fund's investments in equity securities primarily consist of ADRs, common stocks, and REITs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *ADRs* – Investments in ADRs are subject to certain of the risks associated with investing directly in foreign securities, such as currency fluctuations, political and economic instability, capital restrictions, less government regulation, less publicly available information, less liquidity, increased price volatility, and differences in financial reporting standards. ADRs may not accurately track the prices of the underlying foreign securities and their value may change materially at times when the U.S. markets are not open for trading. Investing in such securities may expose the Fund to additional risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Common Stock* – The value of an issuing company's common stock may rise or fall as a result of factors affecting the issuing company, other companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *REITs* – Investments in REITs are subject to the risks associated with investing in the real estate industry, adverse governmental actions, regulatory limitations on rents and operating expenses, declines in property and real estate values, risks related to general and local economic conditions, increases in property taxes and operating expenses, overbuilding, changes in interest rates, liabilities resulting from environmental problems, and the potential failure of a REIT to qualify for federal income-tax-free "pass-through" of net income and net realized gains that are distributed to shareholders and exemption from registration as an investment company. REITs are dependent upon specialized management skills and may invest in relatively few properties, and may not be diversified geographically or by property or tenant type. As a result, investments in REITs may be volatile. REITs are pooled investment vehicles with their own fees and expenses and the Fund will indirectly bear a proportionate share of those fees and expenses when investing in REITs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Foreign Securities Risk* – Non-U.S. investments carry potential risks not associated with domestic investments. Such risks may include, but are not limited to: currency exchange rate fluctuations, political and financial instability, less liquidity and greater volatility of foreign investments, lack of uniform accounting, auditing, recordkeeping and financing reporting standards, different government regulation and supervision of foreign banks, stock exchanges, brokers and listed companies, significant limitations in transaction settlements in some foreign markets, and any regulatory, political, currency, security, economic and other risks associated with a particular country in which the Fund invests, including tariffs, trade disputes and sanctions. Additionally, trading in foreign markets generally involves higher transaction costs than trading in U.S. markets. The unavailability and/or unreliability of public information may impede the Fund's ability to accurately evaluate foreign securities. It also may be difficult to enforce contractual obligations or invoke judicial or arbitration processes against non-U.S. companies and non-U.S. persons in foreign jurisdictions. There may be very limited oversight of certain foreign banks or securities depositories that hold foreign securities and currencies and the laws of certain countries may limit the ability to recover such assets if a foreign bank or depositary or their agents goes bankrupt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Inflation Risk* – Higher actual or anticipated inflation may have an adverse effect on corporate profits or consumer spending or the financial markets overall and result in lower values for securities held by the Fund. If Fund investments do not keep pace with inflation, the present value of Fund assets and the value of Fund distributions could decline.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Investment Risk* – An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of the Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Large Cap Companies Risk* – The securities of large market capitalization companies may underperform other segments of the market because such companies may be less responsive to competitive challenges and opportunities and may be unable to attain or maintain high growth rates during periods of economic expansion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Market Risk* – The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund's performance. Factors that affect markets in general, including geopolitical, regulatory, market and economic developments and other developments that impact specific economic sectors, industries, companies and segments of the market, could adversely impact the Fund's investments and lead to a decline in the value of your investment in the Fund. Geopolitical and other events, including tensions, war, or open conflict between nations, such as among the United States, Israel and Iran, between Russia and Ukraine, otherwise in the Middle East and in eastern Asia, could affect the economies of many countries including the United States and may contribute to increased volatility and uncertainty in the financial markets. The extent and duration of ongoing hostilities and any sanctions and the repercussions of such events cannot be predicted. Those events have presented and could continue to present material uncertainty and risk with respect to markets globally, including in the oil and gas markets and potentially other industries and sectors. Trade disputes, pandemics, public health crises, natural disasters, cybersecurity incidents, and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed income markets, which may disrupt economies and markets and adversely affect the value of your investment. The imposition by the U.S. of tariffs on goods imported from foreign countries and reciprocal tariffs levied on U.S. goods by those countries also may lead to volatility and instability in domestic and foreign markets. In addition, policy changes by the U.S. government, the U.S. Federal Reserve and/or foreign governments and political and economic changes within the U.S. and abroad, such as inflation, changes in interest rates, recessions, changes in the U.S. presidential administration and Congress, the U.S. government's inability at times to agree on a long-term budget and deficit reduction plan, the threat or occurrence of a federal government shutdown, threats not to increase the federal government's debt limit which could result in a default on the government's obligations, and the shutdown of certain financial institutions, may cause increased volatility in financial markets, affect investor and consumer confidence and adversely impact the broader financial markets and economy, perhaps suddenly and to a significant degree. Slowing global economic growth, the rise in protectionist trade policies, inflationary pressures, changes to some major international trade and security agreements, the imposition of tariffs, risks associated with trade and security agreements between countries and regions, including the U.S. and other foreign nations, political or economic dysfunction within some countries or regions, including the U.S., and dramatic changes in consumer sentiment, commodity prices and currency values could affect the economies and markets of many nations, including the U.S., in ways that cannot necessarily be foreseen at the present time and may create significant market volatility. The Federal Reserve and certain foreign central banks have started to lower interest rates, though economic or other factors, such as inflation, could reverse or stop such changes. It is difficult to accurately predict the pace at which interest rates might change, the timing, frequency or magnitude of any such changes in interest rates, or when such changes might stop or again reverse course. Unexpected changes in interest rates could lead to significant market volatility or reduce liquidity in certain sectors of the market. Market disruptions have caused, and may continue to cause, broad changes in market value, negative public perceptions concerning these developments, and adverse investor sentiment or publicity. Advancements in technology, including advanced development and increased regulation of artificial intelligence, may adversely impact market movements and liquidity. As artificial intelligence is used more widely, which can occur rapidly, the profitability and growth of certain issuers and industries may be negatively impacted in ways that cannot be foreseen and could adversely impact its performance. Changes in value may be temporary or may last for extended periods. Regulators in the U.S. have adopted a number of changes to regulations affecting markets and issuers, some of which apply to the Fund. Due to the broad scope of the regulations being adopted, certain of these changes, which may be revised or rescinded, could limit the Fund's ability to pursue its investment strategies or make certain investments, may make it more costly for it to operate, or adversely impact performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Redemption Risk* – The Fund may experience periods of significant redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is heightened during periods of declining or illiquid markets. Significant redemptions could hurt the Fund's performance. The sale of assets to meet redemption requests may require the Fund to realize net capital gains, which could require the Fund to make substantial capital gains distributions to shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Sector Weighting Risk* – The Fund may focus its investments in particular sectors of the economy. To the extent the Fund emphasizes investments in particular sectors of the economy, the Fund will be subject to a greater degree of risks particular to those sectors. Market conditions, interest rates, and economic, regulatory, financial or geopolitical developments could significantly affect securities in particular sectors. Depending on the weightings of the Fund's investments in particular sectors, the Fund may have increased exposure to price movements of securities in those sectors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Information Technology Sector Risk* – The information technology sector includes companies engaged in internet software and services, technology hardware and storage peripherals, electronic equipment and components, and semiconductors and semiconductor equipment. The market prices of information technology-related securities tend to exhibit a greater degree of market risk and sharp price fluctuations than other types of securities. These securities may fall out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices. Information technology companies face intense competition, both domestically and internationally, which may have an adverse effect on profit margins. Information technology companies may have limited product lines, markets, financial resources or personnel. The products of information technology companies may face rapid product obsolescence due to technological developments and frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Security Selection Risk* – Securities selected by the Fund may not perform as anticipated due to a number of factors impacting the company that issued the securities or its particular industry or sector, such as poor operating or management performance, weak demand for the company's products or services, the company's failure to meet earnings or other operating performance expectations, financial leverage or credit deterioration, litigation or regulatory issues, or a decline in the value of the issuer's business and assets.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Small and Mid Cap Companies Risk* – The Fund invests in small and mid capitalization companies that may not have the size, resources and other assets of large capitalization companies. Small and mid capitalization companies may also have narrower commercial markets and more limited operating histories, product lines, and managerial and financial resources than larger, more established companies. Small and mid capitalization companies may be more sensitive to changes in interest rates, borrowing costs and earnings. Stocks of these companies may trade less frequently and in more limited volume than stocks of large capitalization companies. As a result, the securities of small and mid capitalization companies held by the Fund may be less liquid and subject to greater market risks and fluctuations in value than large capitalization companies or may not correspond to changes in the stock market in general. In general, these risks are greater for small capitalization companies than for mid capitalization companies.

**Performance:** The bar chart and table that follow illustrate annual Fund returns for periods ended December 31. This information is intended to give you some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and how the Fund's average annual returns over time compare with those of a broad-based securities market index and an index of funds with similar investment objectives. 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 is available on the Fund's website at www.lkcmfunds.com or by calling the Fund toll-free at 1-800-688-LKCM.

**Calendar Year Returns as of 12/31**![549755852370](ck0000918942-20260429_g4.jpg)

During the period shown on the bar chart, the Fund's best and worst quarters are shown below:

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| | |
|:---|:---|
| **Best and Worst Quarterly Returns** | **Best and Worst Quarterly Returns** |
| 21.66% | &nbsp;&nbsp;&nbsp;&nbsp;2<sup>nd</sup> quarter, 2020 |
| -17.75% | &nbsp;&nbsp;&nbsp;&nbsp;1<sup>st</sup> quarter, 2020 |

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**Average Annual Total Returns for Periods Ended December 31, 2025**

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| | | | |
|:---|:---|:---|:---|
|  | **<u>1 Year</u>** | **<u>5 Years</u>** | **<u>10 Years</u>** |
| Return Before Taxes | 10.36% | 8.06% | 11.94% |
| Return After Taxes on Distributions | 8.37% | 6.67% | 10.48% |
| Return After Taxes on Distributions and Sale of Fund Shares | 7.58% | 6.21% | 9.57% |
| S&P 500<sup>®</sup> Index (reflects no deduction for fees, expenses or taxes) | 17.88% | 14.42% | 14.82% |
| Lipper Large-Cap Core Funds Index (reflects no deduction for taxes) | 17.72% | 13.65% | 13.84% |

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After-tax returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. The return after taxes on distributions and sale of Fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. Actual after-tax returns depend on your tax situation and may differ from those shown. In addition, the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements such as 401(k) plans and individual retirement accounts.

**Investment Adviser:** Luther King Capital Management Corporation.

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**Portfolio Managers:** 

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| | | |
|:---|:---|:---|
| **<u>Name</u>** | **<u>Title</u>** | **<u>Experience with the Fund</u>** |
| J. Luther King, Jr., CFA | Principal, President and Portfolio Manager | Since Inception in 1996 |
| Scot C. Hollmann, CFA | Principal, Vice President and Portfolio Manager | Since 2010 |
| Mason D. King, CFA | Principal, Vice President, Portfolio Manager and Analyst | Since 2010 |

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**Purchase and Sale of Fund Shares:** Investors may purchase, exchange or redeem Fund shares by mail (LKCM Funds, c/o U.S. Bank Global Fund Services, 801 Pennsylvania Ave, Suite 219252, Kansas City, MO 64105-1307), or by telephone at 1-800-688-LKCM. Redemptions by telephone are only permitted upon previously receiving appropriate authorization. Transactions normally will only occur on days the New York Stock Exchange is scheduled to be open. Investors who wish to purchase or redeem Fund shares through a financial intermediary should contact the financial intermediary directly for information relative to the purchase or sale of Fund shares. The minimum initial amount of investment in the Fund and exchanges into the Fund from another fund in the LKCM Funds is $2,000. Subsequent investments in the Fund for all types of accounts may be made with a minimum investment of $500.

**Tax Information:** The Fund's distributions are taxable to you 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, in which case the withdrawal of your investment from the tax-deferred arrangement may be taxable.

**Payments to Broker-Dealers and Other Financial Intermediaries:** If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a financial adviser), the Fund and its related companies may pay the intermediary for the sale of Fund shares and/or other services. If made, these payments may create a conflict 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.

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**LKCM BALANCED FUND**

**Investment Objective:** The Fund seeks current income and long-term capital appreciation.

**Fees and Expenses of the Fund:** The following table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.** The Fund does not impose any sales charges in connection with purchases and sales of Fund shares.

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| | |
|:---|:---|
| **Shareholder Fees** | |
| (fees paid directly from your investment) |  |
| Redemption Fee (as a percentage of the amount redeemed on shares held for less than 30 days) | 1.00% |
| **Annual Fund Operating Expenses** |  |
| (expenses that you pay each year as a percentage of the value of your investment) |  |
| Management Fees | 0.65% |
| Distribution and Service (12b-1) Fees | 0.00% |
| Other Expenses | 0.37% |
| Total Annual Fund Operating Expenses | 1.02% |
| Fee Waiver and/or Expense Reimbursement<sup>(1)</sup> | -0.22% |
| Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement<sup>(1)</sup> | 0.80% |

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<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Luther King Capital Management Corporation ("Adviser"), the Fund's investment adviser, has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund through May 1, 2027 in order to limit the Fund's Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement to 0.80% per annum (excluding any interest, taxes, brokerage commissions, indirect fees and expenses relating to investments in other investment companies, including money market funds ("Acquired Fund Fees and Expenses"), and extraordinary expenses). The fee waiver and expense reimbursement agreement may be terminated or changed only with the consent of the Board of Trustees.

**Example** 

The following example is intended to help you compare the costs 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 (except that the example reflects the fee waiver/expense reimbursement arrangement through May 1, 2027). Although your actual costs may be higher or lower, based on these assumptions, whether or not you redeem your shares, your costs would be as follows:

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| | | | |
|:---|:---|:---|:---|
| **<u>1 Year</u>** | **<u>3 Years</u>** | **<u>5 Years</u>** | **<u>10 Years</u>** |
| $82 | $303 | $542 | $1228 |

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**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 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 6% of the average value of its portfolio.

**Principal Investment Strategies:** The Fund seeks to achieve its investment objective by investing primarily in a portfolio of equity and fixed income securities. The Fund may invest in securities of small, mid and large capitalization companies, including dividend paying securities. The Fund seeks to invest in the equity securities of high quality companies, as determined by the Adviser, that typically exhibit certain characteristics, including high profitability levels, strong balance sheet quality, competitive advantages, ability to generate excess cash flows, meaningful management ownership stakes, attractive reinvestment opportunities, strong market share positions, and/or attractive relative valuation. These equity securities primarily consist of common stocks, American Depositary Receipts ("ADRs"), and real estate investment trusts ("REITs"). The Fund does not presently intend to invest more than 20% of its total assets in equity securities that do not pay dividends.

The Fund's investments in fixed income securities consist primarily of investment grade corporate fixed income securities and fixed income securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities. The Fund may also invest in variable and floating rate bonds. The Fund typically invests in fixed income securities with short- to intermediate-term maturities from one to ten years. Under normal circumstances, 25% or more of the Fund's total assets consist of fixed income securities. Investment grade debt securities are considered to be those rated within the four highest rating categories by a nationally recognized statistical ratings organization, such as Moody's Investors Service, Inc., Fitch Ratings, Inc. or S&P Global Ratings, or of equivalent quality as determined by the Adviser. The Fund may invest in fixed income securities with call features.

In determining whether or not to invest in a particular debt security, the Adviser considers factors such as the price, coupon, yield to maturity, the credit quality of the issuer, the issuer's cash flow and related coverage ratios, the property, if any, securing the obligation and the terms of the security, including subordination, default, sinking fund and early redemption provisions. If securities held by the Fund are downgraded below investment grade, the Adviser will consider whether to continue to hold the securities. From time to time, in pursuing its investment strategies, the Fund may hold a significant percentage of its investments in specific sectors of the economy.

**Principal Risks:** The greatest risk of investing in the Fund is that you could lose money. There is no assurance that the Fund will achieve its investment objective. The principal risks of investing in the Fund listed below are presented in alphabetical order and not in order of importance or potential exposure. Among other matters, this presentation is intended to facilitate your ability to find particular risks and make comparisons with those of other funds. Each risk summarized below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Call Risk* – During periods of falling interest rates, an issuer of a callable bond held by the Fund may "call" or repay the security before its stated maturity, and the Fund would lose the income that would have been earned to maturity on that security. In the event of a call, the Fund may have to reinvest the proceeds in securities paying lower coupon rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Credit Risk* – The Fund is subject to the risk that the issuer or guarantor of a fixed income security becomes unable or unwilling, or is perceived as unable or unwilling, to make timely interest or principal payments or otherwise honor its obligations, which may cause the Fund's holdings to lose value. A decline in the credit rating of an individual security held by the Fund may have an adverse impact on its price. The credit quality of a security can deteriorate suddenly and rapidly. Lower credit quality also may lead to greater volatility in the price of a security and may negatively affect a security's liquidity. Credit risk is typically greater for securities with ratings that are downgraded below investment grade. Generally, the longer the maturity of a security, the more sensitive it is to credit risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Cybersecurity Risk* – The Fund, its service providers, third-party fund distribution platforms and other market participants increasingly depend on complex information technology and communications systems, including artificial intelligence, which are subject to a number of different threats and risks that could adversely affect the fund and its shareholders. Operational risks arising from, among other things, human or processing errors, systems and technology disruptions or failures, or cybersecurity incidents may negatively impact the Fund, its service providers, and third-party fund distribution platforms, as well as the ability of shareholders to transact with the Fund, and result in financial losses. Cybersecurity incidents may allow unauthorized parties to gain access to or misappropriate Fund assets, shareholder data, or confidential or proprietary information, or cause the Fund or its service providers, as well as securities trading venues and their service providers, to suffer data corruption or lose operational functionality. In addition, authorized persons could inadvertently release Fund shareholder data or confidential or proprietary information stored on the Fund's systems. Cybersecurity incidents can result from deliberate attacks or unintentional events. It is not possible for the Fund or its service providers to identify all of the operational risks that may affect the Fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects. Portfolio companies in which the Fund invests are also exposed to various risks related to cybersecurity incidents, and the value of the Fund's investments in such portfolio companies could be adversely impacted in the event any such cybersecurity incidents occur. The Fund cannot control the cybersecurity and operational plans and systems of its service providers, its counterparties or the issuers of securities in which the Fund invests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Dividend Paying Securities Risk* – Securities that pay higher dividends as a group can fall out of favor with the market, causing these companies to underperform companies that do not pay high or any dividends. Also, changes in the dividend policies of companies owned by the Fund and the capital resources available for these companies' dividend payments may reduce the level of dividend payments and adversely affect the Fund. Dividend paying securities might not experience the same level of earnings growth or capital appreciation as non-dividend paying securities. Securities that pay dividends may be sensitive to changes in interest rates, and as interest rates rise or fall, the prices of such securities may fluctuate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Equity Securities Risk* – The Fund invests in equity securities and therefore is subject to investment risk, issuer risk, market risks and significant fluctuations in value in response to changes in a company's financial condition as well as general market, economic and political conditions, and other factors. The Fund may experience a significant or complete loss on its investment in an equity security. In addition, stock prices may be sensitive to rising interest rates, which increase borrowing costs and the costs of capital for the issuer. Equity securities are generally subordinate to an issuer's debt in the event of liquidation or bankruptcy. The Fund's investments in equity securities primarily consist of ADRs, common stocks, and REITs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *ADRs* – Investments in ADRs are subject to certain of the risks associated with investing directly in foreign securities, such as currency fluctuations, political and economic instability, capital restrictions, less government regulation, less publicly available information, less liquidity, increased price volatility, and differences in financial reporting standards. ADRs may not accurately track the prices of the underlying foreign securities and their value may change materially at times when the U.S. markets are not open for trading. Investing in such securities may expose the Fund to additional risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Common Stock* – The value of an issuing company's common stock may rise or fall as a result of factors affecting the issuing company, other companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *REITs* – Investments in REITs are subject to the risks associated with investing in the real estate industry, adverse governmental actions, regulatory limitations on rents and operating expenses, declines in property and real estate values, risks related to general and local economic conditions, increases in property taxes and operating expenses, overbuilding, changes in interest rates, liabilities resulting from environmental problems, and the potential failure of a REIT to qualify for federal income-tax-free "pass-through" of net income and net realized gains that are distributed to shareholders and exemption from registration as an investment company. REITs are dependent upon specialized management skills and may invest in relatively few properties, and may not be diversified geographically or by property or tenant type. As a result, investments in REITs may be volatile. REITs are pooled investment vehicles with their own fees and expenses and the Fund will indirectly bear a proportionate share of those fees and expenses when investing in REITs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Fixed Income Securities Risk* – The Fund invests in fixed income securities and is therefore subject to the risk that the prices of, and the income generated by, fixed income securities held by the Fund may decline significantly and/or rapidly in response to adverse issuer, geopolitical, regulatory, general economic and market conditions, or other developments, such as regional or global economic instability (including war, terrorism, pandemic and related geopolitical risks), interest rate fluctuations, and those events directly involving the issuers that may cause broad changes in market value, public perceptions concerning these developments, and adverse investor sentiment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Foreign Securities Risk* – Non-U.S. investments carry potential risks not associated with domestic investments. Such risks may include, but are not limited to: currency exchange rate fluctuations, political and financial instability, less liquidity and greater volatility of foreign investments, lack of uniform accounting, auditing, recordkeeping and financing reporting standards, different government regulation and supervision of foreign banks, stock exchanges, brokers and listed companies,

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significant limitations in transaction settlements in some foreign markets, and any regulatory, political, currency, security, economic and other risks associated with a particular country in which the Fund invests, including tariffs, trade disputes and sanctions. Additionally, trading in foreign markets generally involves higher transaction costs than trading in U.S. markets. The unavailability and/or unreliability of public information may impede the Fund's ability to accurately evaluate foreign securities. It also may be difficult to enforce contractual obligations or invoke judicial or arbitration processes against non-U.S. companies and non-U.S. persons in foreign jurisdictions. There may be very limited oversight of certain foreign banks or securities depositories that hold foreign securities and currencies and the laws of certain countries may limit the ability to recover such assets if a foreign bank or depositary or their agents goes bankrupt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Inflation Risk* – Higher actual or anticipated inflation may have an adverse effect on corporate profits or consumer spending or the financial markets overall and result in lower values for securities held by the Fund. If Fund investments do not keep pace with inflation, the present value of Fund assets and the value of Fund distributions could decline.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Interest Rate Risk* – Changes in interest rates may affect the yield, liquidity and value of investments in income producing or debt securities. Market values of fixed income securities generally are inversely related to actual changes in interest rates – generally, when interest rates rise, the value of the Fund's debt securities declines and when interest rates decline, the value of the Fund's debt securities rises. Factors including central bank monetary policy, rising inflation rates, and changes in general economic conditions may cause interest rates to rise, which could cause the value of the Fund's investments to decline. Interest rates may rise, perhaps significantly and/or rapidly, potentially resulting in heightened volatility in the fixed income markets and adversely affecting the liquidity of certain fixed income investments, any of which may result in substantial losses to the Fund. Interest rate changes may have a more pronounced effect on the market value of fixed-rate instruments than on floating-rate instruments. The value of floating rate and variable rate securities may decline if their interest rates do not rise as quickly, or as much, as general interest rates. The prices of fixed income securities are also affected by their durations. Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security's price. Generally, a bond with a longer maturity or duration will entail greater interest rate risk. For example, if a bond has a duration of ten years, a 1% increase in interest rates could be expected to result in a 10% decrease in the value of the bond. Conversely, a bond with a shorter maturity or duration will generally entail less interest rate risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Investment Risk* – An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of the Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Large Cap Companies Risk* – The securities of large market capitalization companies may underperform other segments of the market because such companies may be less responsive to competitive challenges and opportunities and may be unable to attain or maintain high growth rates during periods of economic expansion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Liquidity Risk* – The Fund is susceptible to the risk that certain investments held by the Fund may be difficult or impossible to purchase or sell at favorable times or prices or become less liquid in response to market developments or adverse credit events that may affect issuers or guarantors of a security. When there is little or no active trading market for specific types of securities, it can become more difficult for the Fund to sell securities at favorable times or prices. As a result, the Fund may have to lower the price on certain securities that it is trying to sell, sell other securities instead or forego an investment opportunity, any of which could have a negative effect on the Fund. Market developments , financial distress or geopolitical events such as sanctions, trading halts or wars may cause the Fund's investments to become less liquid or illiquid and subject to erratic price movements. Certain investments that were liquid when purchased may become illiquid, sometimes abruptly, particularly in times of overall economic distress or adverse investor perception.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Market Risk* – The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund's performance. Factors that affect markets in general, including geopolitical, regulatory, market and economic developments and other developments that impact specific economic sectors, industries, companies and segments of the market, could adversely impact the Fund's investments and lead to a decline in the value of your investment in the Fund. Geopolitical and other events, including tensions, war, or open conflict between nations, such as among the United States, Israel and Iran, between Russia and Ukraine, otherwise in the Middle East and in eastern Asia, could affect the economies of many countries including the United States and may contribute to increased volatility and uncertainty in the financial markets. The extent and duration of ongoing hostilities and any sanctions and the repercussions of such events cannot be predicted. Those events have presented and could continue to present material uncertainty and risk with respect to markets globally, including in the oil and gas markets and potentially other industries and sectors. Trade disputes, pandemics, public health crises, natural disasters, cybersecurity incidents, and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed income markets, which may disrupt economies and markets and adversely affect the value of your investment. The imposition by the U.S. of tariffs on goods imported from foreign countries and reciprocal tariffs levied on U.S. goods by those countries also may lead to volatility and instability in domestic and foreign markets. In addition, policy changes by the U.S. government, the U.S. Federal Reserve and/or foreign governments and political and economic changes within the U.S. and abroad, such as inflation, changes in interest rates, recessions, changes in the U.S. presidential administration and Congress, the U.S. government's inability at times to agree on a long-term budget and deficit reduction plan, the threat or occurrence of a federal government shutdown, threats not to increase the federal government's debt limit which could result in a default on the government's obligations, and the shutdown of certain financial institutions, may cause increased volatility in financial markets, affect investor and consumer confidence and adversely impact the broader financial markets and economy, perhaps suddenly and to a significant degree. Slowing global economic growth, the rise in protectionist trade policies, inflationary pressures, changes to some major international trade and security agreements, the imposition of tariffs, risks associated with trade and security agreements between countries and regions, including the U.S. and other foreign nations, political or economic dysfunction within some countries or regions, including the U.S., and dramatic changes in consumer sentiment, commodity prices and currency values could affect the economies and markets of many nations, including the U.S., in ways that cannot necessarily be foreseen at

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the present time and may create significant market volatility. The Federal Reserve and certain foreign central banks have started to lower interest rates, though economic or other factors, such as inflation, could reverse or stop such changes. It is difficult to accurately predict the pace at which interest rates might change, the timing, frequency or magnitude of any such changes in interest rates, or when such changes might stop or again reverse course. Unexpected changes in interest rates could lead to significant market volatility or reduce liquidity in certain sectors of the market. Market disruptions have caused, and may continue to cause, broad changes in market value, negative public perceptions concerning these developments, and adverse investor sentiment or publicity. Advancements in technology, including advanced development and increased regulation of artificial intelligence, may adversely impact market movements and liquidity. As artificial intelligence is used more widely, which can occur rapidly, the profitability and growth of certain issuers and industries may be negatively impacted in ways that cannot be foreseen and could adversely impact its performance. Changes in value may be temporary or may last for extended periods. Regulators in the U.S. have adopted a number of changes to regulations affecting markets and issuers, some of which apply to the Fund. Due to the broad scope of the regulations being adopted, certain of these changes, which may be revised or rescinded, could limit the Fund's ability to pursue its investment strategies or make certain investments, may make it more costly for it to operate, or adversely impact performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Redemption Risk* – The Fund may experience periods of significant redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is heightened during periods of declining or illiquid markets. Significant redemptions could hurt the Fund's performance. The sale of assets to meet redemption requests may require the Fund to realize net capital gains, which could require the Fund to make substantial capital gains distributions to shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Sector Weighting Risk* – The Fund may focus its investments in particular sectors of the economy. To the extent the Fund emphasizes investments in particular sectors of the economy, the Fund will be subject to a greater degree of risks particular to those sectors. Market conditions, interest rates, and economic, regulatory, financial or geopolitical developments could significantly affect securities in particular sectors. Depending on the weightings of the Fund's investments in particular sectors, the Fund may have increased exposure to price movements of securities in those sectors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Security Selection Risk* – Securities selected by the Fund may not perform as anticipated due to a number of factors impacting the company that issued the securities or its particular industry or sector, such as poor operating or management performance, weak demand for the company's products or services, the company's failure to meet earnings or other operating performance expectations, financial leverage or credit deterioration, litigation or regulatory issues, or a decline in the value of the issuer's business and assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Small and Mid Cap Companies Risk* – The Fund invests in small and mid capitalization companies that may not have the size, resources and other assets of large capitalization companies. Small and mid capitalization companies may also have narrower commercial markets and more limited operating histories, product lines, and managerial and financial resources than larger, more established companies. Small and mid capitalization companies may be more sensitive to changes in interest rates, borrowing costs and earnings. Stocks of these companies may trade less frequently and in more limited volume than stocks of large capitalization companies. As a result, the securities of small and mid capitalization companies held by the Fund may be less liquid and subject to greater market risks and fluctuations in value than large capitalization companies or may not correspond to changes in the stock market in general. In general, these risks are greater for small capitalization companies than for mid capitalization companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *U.S. Government Securities Risk* – A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only by the applicable entity as to the stated interest rate and face value at maturity, not its current market price. Notwithstanding that a security may be backed by the full faith and credit of the U.S. Government, circumstances could arise that would prevent the payment of interest or principal. Any guarantee by the U.S. government or its agencies or instrumentalities of a security the Fund holds does not apply to the market value of the security or the shares of the Fund. Like all fixed income securities, U.S. Government fixed income securities are also subject to market risk, credit risk and interest rate risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Variable and Floating Rate Securities Risk* – The interest rates payable on variable and floating rate bonds are not fixed and may fluctuate based upon changes in market rates. A variable rate obligation has an interest rate which is adjusted at predesignated periods in response to changes in the market rate of interest on which the interest rate is based. The interest rate on a floating rate bond is a variable rate which is tied to another interest rate, such as a money-market index or Treasury bill rate. Variable and floating rate bonds are subject to market risk, interest rate risk and credit risk.

**Performance:** The bar chart and table that follow illustrate annual Fund returns for periods ended December 31. This information is intended to give you some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and how the Fund's average annual returns over time compare with those of a broad-based securities market index, an additional index with characteristics that are similar to those of the Fund, and an index of funds with similar investment objectives. 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 is available on the Fund's website at www.lkcmfunds.com or by calling the Fund toll-free at 1-800-688-LKCM.

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**Calendar Year Returns as of 12/31**![549755857720](ck0000918942-20260429_g5.jpg)

During the period shown on the bar chart, the Fund's best and worst quarters are shown below:

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| | |
|:---|:---|
| **Best and Worst Quarterly Returns** | **Best and Worst Quarterly Returns** |
| 16.20% | &nbsp;&nbsp;&nbsp;&nbsp;2<sup>nd</sup> quarter, 2020 |
| -14.86% | &nbsp;&nbsp;&nbsp;&nbsp;1<sup>st</sup> quarter, 2020 |

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**Average Annual Total Returns for Periods Ended December 31, 2025** 

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| | | | |
|:---|:---|:---|:---|
|  | **<u>1 Year</u>** | **<u>5 Years</u>** | **<u>10 Years</u>** |
| Return Before Taxes | 8.44% | 5.56% | 8.35% |
| Return After Taxes on Distributions | 6.88% | 4.46% | 7.23% |
| Return After Taxes on Distributions and Sale of Fund Shares | 5.96% | 4.21% | 6.58% |
| S&P 500<sup>®</sup> Index (reflects no deduction for fees, expenses or taxes) | 17.88% | 14.42% | 14.82% |
| Bloomberg U.S. Intermediate Government/Credit Bond Index (reflects no deduction for fees, expenses or taxes) | 6.97% | 0.96% | 2.29% |
| Lipper Mixed-Asset Target Allocation Growth Funds Index (reflects no deduction for taxes) | 15.28% | 7.98% | 9.33% |

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After-tax returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. The return after taxes on distributions and sale of Fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. Actual after-tax returns depend on your tax situation and may differ from those shown. In addition, the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements such as 401(k) plans and individual retirement accounts.

**Investment Adviser:** Luther King Capital Management Corporation.

**Portfolio Managers:** 

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| | | |
|:---|:---|:---|
| **<u>Name</u>**  | **<u>Title</u>** | **<u>Experience with the Fund</u>** |
| Scot C. Hollmann, CFA | Principal, Vice President and Portfolio Manager | Since Inception in 1997 |
| J. Luther King, Jr., CFA | Principal, President and Portfolio Manager | Since Inception in 1997 |
| Mark L. Johnson, CFA | Principal, Vice President and Portfolio Manager | Since 2010 |

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**Purchase and Sale of Fund Shares:** Investors may purchase, exchange or redeem Fund shares by mail (LKCM Funds, c/o U.S. Bank Global Fund Services, 801 Pennsylvania Ave, Suite 219252, Kansas City, MO 64105-1307), or by telephone at 1-800-688-LKCM. Redemptions by telephone are only permitted upon previously receiving appropriate authorization. Transactions normally will only occur on days the New York Stock Exchange is scheduled to be open. Investors who wish to purchase or redeem Fund shares through a financial intermediary should contact the financial intermediary directly for information relative to the purchase or sale of Fund shares. The minimum initial amount of investment in the Fund and exchanges into the Fund from another fund in the LKCM Funds is $2,000. Subsequent investments in the Fund for all types of accounts may be made with a minimum investment of $500.

**Tax Information:** The Fund's distributions are taxable to you 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, in which case the withdrawal of your investment from the tax-deferred arrangement may be taxable.

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**Payments to Broker-Dealers and Other Financial Intermediaries:** If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a financial adviser), the Fund and its related companies may pay the intermediary for the sale of Fund shares and/or other services. If made, these payments may create a conflict 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.

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**LKCM FIXED INCOME FUND**

**Investment Objective:** The Fund seeks current income.

**Fees and Expenses of the Fund:** The following table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.** The Fund does not impose any sales charges in connection with purchases and sales of Fund shares.

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| | |
|:---|:---|
| **Shareholder Fees**<br>(fees paid directly from your investment) | |
| Redemption Fee (as a percentage of the amount redeemed on shares held for less than 30 days) | 1.00% |
| **Annual Fund Operating Expenses**<br>(expenses that you pay each year as a percentage of the value of your investment) |  |
| Management Fees | 0.50% |
| Distribution and Service (12b-1) Fees | 0.00% |
| Other Expenses | 0.31% |
| Total Annual Fund Operating Expenses | 0.81% |
| Fee Waiver and/or Expense Reimbursement<sup>(1)</sup> | -0.31% |
| Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement<sup>(1)</sup> | 0.50% |

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<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Luther King Capital Management Corporation ("Adviser"), the Fund's investment adviser, has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund through May 1, 2027 in order to limit the Fund's Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement to 0.50% per annum (excluding any interest, taxes, brokerage commissions, indirect fees and expenses relating to investments in other investment companies, including money market funds ("Acquired Fund Fees and Expenses"), and extraordinary expenses). The fee waiver and expense reimbursement agreement may be terminated or changed only with the consent of the Board of Trustees.

**Example** 

The following example is intended to help you compare the costs 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 (except that the example reflects the fee waiver/expense reimbursement arrangement through May 1, 2027). Although your actual costs may be higher or lower, based on these assumptions, whether or not you redeem your shares, your costs would be as follows:

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| | | | |
|:---|:---|:---|:---|
| **<u>1 Year</u>** | **<u>3 Years</u>** | **<u>5 Years</u>** | **<u>10 Years</u>** |
| $51 | $228 | $419 | $973 |

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**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 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 34% of the average value of its portfolio.

**Principal Investment Strategies:** The Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of investment grade corporate and U.S. Government fixed income securities. The Fund's investments in fixed income securities consist primarily of investment grade corporate fixed income securities and fixed income securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities. The Fund typically invests in fixed income securities with short- to intermediate-term maturities from one to ten years. Investment grade debt securities are considered to be those rated within the four highest rating categories assigned by a nationally recognized statistical ratings organization, such as Moody's Investors Service, Inc., Fitch Ratings, Inc., or S&P Global Ratings, or of equivalent quality as determined by the Adviser.

The Fund seeks to maintain an average effective maturity of its portfolio between three and ten years under normal market and economic conditions. The effective maturity of securities with sinking fund or other early redemption features will be estimated by the Adviser, based upon prevailing interest rate trends and the issuer's financial position. The average effective maturity of the Fund's portfolio may be less than three years if the Adviser believes a defensive posture is appropriate.

The Fund may invest in all types of domestic or U.S. dollar-denominated foreign fixed income securities in any proportion, including bonds, notes, convertible bonds, mortgage pass-through securities, government and government agency securities, variable and floating rate bonds, preferred stock and short-term obligations such as commercial paper and notes, and other financial obligations. The Fund may invest in fixed income securities with call features. In determining whether or not to invest in a particular debt security, the Adviser considers factors such as the price, coupon, yield to maturity, the credit quality of the issuer, the issuer's cash flow and related coverage ratios, the property, if any, securing the obligation and the terms of the security, including subordination, default, sinking fund and early redemption provisions. If securities held by the Fund are downgraded below investment grade, the Adviser will consider whether to continue to hold the securities. From time to time, in pursuing its investment strategies, the Fund may hold a significant percentage of its investments in specific sectors of the economy.

**Principal Risks:** The greatest risk of investing in the Fund is that you could lose money. There is no assurance that the Fund will achieve its investment objective. The principal risks of investing in the Fund listed below are presented in alphabetical order and not in

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order of importance or potential exposure. Among other matters, this presentation is intended to facilitate your ability to find particular risks and make comparisons with those of other funds. Each risk summarized below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears.

&nbsp;&nbsp;&nbsp;&nbsp;• *Call Risk* – During periods of falling interest rates, an issuer of a callable bond held by the Fund may "call" or repay the security before its stated maturity, and the Fund would lose the income that would have been earned to maturity on that security. In the event of a call, the Fund may have to reinvest the proceeds in securities paying lower coupon rates.

&nbsp;&nbsp;&nbsp;&nbsp;• *Convertible Debt Securities Risk* – A convertible security is a form of hybrid security; that is, a security with both debt and equity characteristics. The value of a convertible security is based on its yield and fluctuates in relation to changes in interest rates and the credit quality of the issuer and in relation to changes in the price of the underlying common stock. A convertible security may be subject to redemption at the option of the issuer at a price established in the convertible security's governing instrument, which may be less than the current market price of the security. Convertible securities are subject to market risk, credit risk and interest rate risk as well as the same types of market and issuer-specific risks that apply to the underlying common stock.

&nbsp;&nbsp;&nbsp;&nbsp;• *Credit Risk* – The Fund is subject to the risk that the issuer or guarantor of a fixed income security becomes unable or unwilling, or is perceived as unable or unwilling, to make timely interest or principal payments or otherwise honor its obligations, which may cause the Fund's holdings to lose value. A decline in the credit rating of an individual security held by the Fund may have an adverse impact on its price. The credit quality of a security can deteriorate suddenly and rapidly. Lower credit quality also may lead to greater volatility in the price of a security and may negatively affect a security's liquidity. Credit risk is typically greater for securities with ratings that are downgraded below investment grade. Generally, the longer the maturity of a security, the more sensitive it is to credit risk.

&nbsp;&nbsp;&nbsp;&nbsp;• *Cybersecurity Risk* – The Fund, its service providers, third-party fund distribution platforms and other market participants increasingly depend on complex information technology and communications systems, including artificial intelligence, which are subject to a number of different threats and risks that could adversely affect the fund and its shareholders. Operational risks arising from, among other things, human or processing errors, systems and technology disruptions or failures, or cybersecurity incidents may negatively impact the Fund, its service providers, and third-party fund distribution platforms, as well as the ability of shareholders to transact with the Fund, and result in financial losses. Cybersecurity incidents may allow unauthorized parties to gain access to or misappropriate Fund assets, shareholder data, or confidential or proprietary information, or cause the Fund or its service providers, as well as securities trading venues and their service providers, to suffer data corruption or lose operational functionality. In addition, authorized persons could inadvertently release Fund shareholder data or confidential or proprietary information stored on the Fund's systems. Cybersecurity incidents can result from deliberate attacks or unintentional events. It is not possible for the Fund or its service providers to identify all of the operational risks that may affect the Fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects. Portfolio companies in which the Fund invests are also exposed to various risks related to cybersecurity incidents, and the value of the Fund's investments in such portfolio companies could be adversely impacted in the event any such cybersecurity incidents occur. The Fund cannot control the cybersecurity and operational plans and systems of its service providers, its counterparties or the issuers of securities in which the Fund invests.

&nbsp;&nbsp;&nbsp;&nbsp;• *Fixed Income Securities Risk* – The Fund invests in fixed income securities and is therefore subject to the risk that the prices of, and the income generated by, fixed income securities held by the Fund may decline significantly and/or rapidly in response to adverse issuer, geopolitical, regulatory, general economic and market conditions, or other developments, such as regional or global economic instability (including war, terrorism, pandemic and related geopolitical risks), interest rate fluctuations, and those events directly involving the issuers that may cause broad changes in market value, public perceptions concerning these developments, and adverse investor sentiment.

&nbsp;&nbsp;&nbsp;&nbsp;• *Foreign Securities Risk* – Non-U.S. investments carry potential risks not associated with domestic investments. Such risks may include, but are not limited to: currency exchange rate fluctuations, political and financial instability, less liquidity and greater volatility of foreign investments, lack of uniform accounting, auditing, recordkeeping and financing reporting standards, different government regulation and supervision of foreign banks, stock exchanges, brokers and listed companies, significant limitations in transaction settlements in some foreign markets, and any regulatory, political, currency, security, economic and other risks associated with a particular country in which the Fund invests, including tariffs, trade disputes and sanctions. Additionally, trading in foreign markets generally involves higher transaction costs than trading in U.S. markets. The unavailability and/or unreliability of public information may impede the Fund's ability to accurately evaluate foreign securities. It also may be difficult to enforce contractual obligations or invoke judicial or arbitration processes against non-U.S. companies and non-U.S. persons in foreign jurisdictions. There may be very limited oversight of certain foreign banks or securities depositories that hold foreign securities and currencies and the laws of certain countries may limit the ability to recover such assets if a foreign bank or depositary or their agents goes bankrupt.

&nbsp;&nbsp;&nbsp;&nbsp;• *Government-Sponsored Enterprises Risk* – Securities held by the Fund that are issued by government-sponsored enterprises, such as the Federal Home Loan Bank, Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, Federal Farm Credit Banks, and the Tennessee Valley Authority are not guaranteed by the U.S. Treasury and are not backed by the full faith and credit of the U.S. Government. There is no assurance that the U.S. Government will provide financial support if these organizations do not have the funds to meet future payment obligations. They are also subject to market risk, credit risk and interest rate risk. In addition, mortgage pass-through securities issued by government-sponsored enterprises are subject to prepayment risk and extension risk, discussed below. It is possible that the U.S. Government and government-sponsored enterprises will not have the funds to meet their payment obligations in the future.

&nbsp;&nbsp;&nbsp;&nbsp;• *Inflation Risk* – Higher actual or anticipated inflation may have an adverse effect on corporate profits or consumer spending or the financial markets overall and result in lower values for securities held by the Fund. If Fund investments do not keep pace with inflation, the present value of Fund assets and the value of Fund distributions could decline.

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&nbsp;&nbsp;&nbsp;&nbsp;• *Interest Rate Risk* – Changes in interest rates may affect the yield, liquidity and value of investments in income producing or debt securities. Market values of fixed income securities generally are inversely related to actual changes in interest rates – generally, when interest rates rise, the value of the Fund's debt securities declines and when interest rates decline, the value of the Fund's debt securities rises. Factors including central bank monetary policy, rising inflation rates, and changes in general economic conditions may cause interest rates to rise, which could cause the value of the Fund's investments to decline. Interest rates may rise, perhaps significantly and/or rapidly, potentially resulting in heightened volatility in the fixed income markets and adversely affecting the liquidity of certain fixed income investments, any of which may result in substantial losses to the Fund. Interest rate changes may have a more pronounced effect on the market value of fixed-rate instruments than on floating-rate instruments. The value of floating rate and variable rate securities may decline if their interest rates do not rise as quickly, or as much, as general interest rates. The prices of fixed income securities are also affected by their durations. Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security's price. Generally, a bond with a longer maturity or duration will entail greater interest rate risk. For example, if a bond has a duration of ten years, a 1% increase in interest rates could be expected to result in a 10% decrease in the value of the bond. Conversely, a bond with a shorter maturity or duration will generally entail less interest rate risk.

&nbsp;&nbsp;&nbsp;&nbsp;• *Investment Risk* – An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of the Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;• *Liquidity Risk* – The Fund is susceptible to the risk that certain investments held by the Fund may be difficult or impossible to purchase or sell at favorable times or prices or become less liquid in response to market developments or adverse credit events that may affect issuers or guarantors of a security. When there is little or no active trading market for specific types of securities, it can become more difficult for the Fund to sell securities at favorable times or prices. As a result, the Fund may have to lower the price on certain securities that it is trying to sell, sell other securities instead or forego an investment opportunity, any of which could have a negative effect on the Fund. Market developments, financial distress or geopolitical events such as sanctions, trading halts or wars may cause the Fund's investments to become less liquid or illiquid and subject to erratic price movements. Certain investments that were liquid when purchased may become illiquid, sometimes abruptly, particularly in times of overall economic distress or adverse investor perception.

&nbsp;&nbsp;&nbsp;&nbsp;• *Market Risk* – The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund's performance. Factors that affect markets in general, including geopolitical, regulatory, market and economic developments and other developments that impact specific economic sectors, industries, companies and segments of the market, could adversely impact the Fund's investments and lead to a decline in the value of your investment in the Fund. Geopolitical and other events, including tensions, war, or open conflict between nations, such as among the United States, Israel and Iran, between Russia and Ukraine, otherwise in the Middle East and in eastern Asia, could affect the economies of many countries including the United States and may contribute to increased volatility and uncertainty in the financial markets. The extent and duration of ongoing hostilities and any sanctions and the repercussions of such events cannot be predicted. Those events have presented and could continue to present material uncertainty and risk with respect to markets globally, including in the oil and gas markets and potentially other industries and sectors. Trade disputes, pandemics, public health crises, natural disasters, cybersecurity incidents, and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed income markets, which may disrupt economies and markets and adversely affect the value of your investment. The imposition by the U.S. of tariffs on goods imported from foreign countries and reciprocal tariffs levied on U.S. goods by those countries also may lead to volatility and instability in domestic and foreign markets. In addition, policy changes by the U.S. government, the U.S. Federal Reserve and/or foreign governments and political and economic changes within the U.S. and abroad, such as inflation, changes in interest rates, recessions, changes in the U.S. presidential administration and Congress, the U.S. government's inability at times to agree on a long-term budget and deficit reduction plan, the threat or occurrence of a federal government shutdown, threats not to increase the federal government's debt limit which could result in a default on the government's obligations, and the shutdown of certain financial institutions, may cause increased volatility in financial markets, affect investor and consumer confidence and adversely impact the broader financial markets and economy, perhaps suddenly and to a significant degree. Slowing global economic growth, the rise in protectionist trade policies, inflationary pressures, changes to some major international trade and security agreements, the imposition of tariffs, risks associated with trade and security agreements between countries and regions, including the U.S. and other foreign nations, political or economic dysfunction within some countries or regions, including the U.S., and dramatic changes in consumer sentiment, commodity prices and currency values could affect the economies and markets of many nations, including the U.S., in ways that cannot necessarily be foreseen at the present time and may create significant market volatility. The Federal Reserve and certain foreign central banks have started to lower interest rates, though economic or other factors, such as inflation, could reverse or stop such changes. It is difficult to accurately predict the pace at which interest rates might change, the timing, frequency or magnitude of any such changes in interest rates, or when such changes might stop or again reverse course. Unexpected changes in interest rates could lead to significant market volatility or reduce liquidity in certain sectors of the market. Market disruptions have caused, and may continue to cause, broad changes in market value, negative public perceptions concerning these developments, and adverse investor sentiment or publicity. Advancements in technology, including advanced development and increased regulation of artificial intelligence, may adversely impact market movements and liquidity. As artificial intelligence is used more widely, which can occur rapidly, the profitability and growth of certain issuers and industries may be negatively impacted in ways that cannot be foreseen and could adversely impact its performance. Changes in value may be temporary or may last for extended periods. Regulators in the U.S. have adopted a number of changes to regulations affecting markets and issuers, some of which apply to the Fund. Due to the broad scope of the regulations being adopted, certain of these changes, which may be revised or rescinded, could limit the Fund's ability to pursue its investment strategies or make certain investments, may make it more costly for it to operate, or adversely impact performance.

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&nbsp;&nbsp;&nbsp;&nbsp;• *Mortgage Pass-Through Securities Risk* – Investments in mortgage pass-through securities, including pass-through securities issued by a U.S. Government sponsored enterprise, are subject to fixed income securities risks which include, but are not limited to, interest rate risk and credit risk. Mortgage pass-through securities are sensitive to interest rate changes, and small movements in interest rates, both increases and decreases, may quickly and significantly affect the value of certain mortgage pass-through securities. Although the value of a mortgage pass-through security may decline when interest rates rise, the converse is not necessarily true, since in periods of declining interest rates the mortgages underlying the security are more likely to be prepaid, therefore causing the Fund to purchase new securities at prevailing market rates, which usually will be lower. Mortgage pass-through securities are also subject to prepayment risk and extension risk. Prepayment risk is the risk that borrowers will prepay their mortgages and cause a decline in the Fund's income and share price. Extension risk is the risk that mortgage payments will decline during times of rising interest rates and extend the duration of these securities, making them more sensitive to interest rate changes.

&nbsp;&nbsp;&nbsp;&nbsp;• *Preferred Stocks Risk* – Preferred stocks are sensitive to movement in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders. In certain situations, an issuer may call or redeem its preferred stock or convert it to common stock. The market prices of preferred stocks are generally more sensitive to actual or perceived changes in the issuer's financial condition or prospects than are the prices of debt securities.

&nbsp;&nbsp;&nbsp;&nbsp;• *Redemption Risk* – The Fund may experience periods of significant redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is heightened during periods of declining or illiquid markets. Significant redemptions could hurt the Fund's performance. The sale of assets to meet redemption requests may require the Fund to realize net capital gains, which could require the Fund to make substantial capital gains distributions to shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;• *Sector Weighting Risk* – The Fund may focus its investments in particular sectors of the economy. To the extent the Fund emphasizes investments in particular sectors of the economy, the Fund will be subject to a greater degree of risks particular to those sectors. Market conditions, interest rates, and economic, regulatory, financial or geopolitical developments could significantly affect securities in particular sectors. Depending on the weightings of the Fund's investments in particular sectors, the Fund may have increased exposure to price movements of securities in those sectors.

&nbsp;&nbsp;&nbsp;&nbsp;• *Security Selection Risk* – Securities selected by the Fund may not perform as anticipated due to a number of factors impacting the company that issued the securities or its particular industry or sector, such as poor operating or management performance, weak demand for the company's products or services, the company's failure to meet earnings or other operating performance expectations, financial leverage or credit deterioration, litigation or regulatory issues, or a decline in the value of the issuer's business and assets.

&nbsp;&nbsp;&nbsp;&nbsp;• *U.S. Government Securities Risk* – A security backed by the U.S. Treasury or the full faith and credit of the United States is guaranteed only by the applicable entity as to the stated interest rate and face value at maturity, not its current market price. Notwithstanding that a security may be backed by the full faith and credit of the U.S. Government, circumstances could arise that would prevent the payment of interest or principal. Any guarantee by the U.S. government or its agencies or instrumentalities of a security the Fund holds does not apply to the market value of the security or the shares of the Fund. Like all fixed income securities, U.S. Government fixed income securities are also subject to market risk, credit risk and interest rate risk.

&nbsp;&nbsp;&nbsp;&nbsp;• *Variable and Floating Rate Securities Risk* – The interest rates payable on variable and floating rate bonds are not fixed and may fluctuate based upon changes in market rates. A variable rate obligation has an interest rate which is adjusted at predesignated periods in response to changes in the market rate of interest on which the interest rate is based. The interest rate on a floating rate bond is a variable rate which is tied to another interest rate, such as a money-market index or Treasury bill rate. Variable and floating rate bonds are subject to market risk, interest rate risk and credit risk.

**Performance:** The bar chart and table that follow illustrate annual Fund returns for periods ended December 31. This information is intended to give you some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and how the Fund's average annual returns over time compare with those of a broad-based securities market index, an additional market index with characteristics that are similar to those of the Fund, and an index of funds with similar investment objectives. 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 is available on the Fund's website at www.lkcmfunds.com or by calling the Fund toll-free at 1-800-688-LKCM.

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**Calendar Year Returns as of 12/31**![549755857408](ck0000918942-20260429_g6.jpg)

During the period shown on the bar chart, the Fund's best and worst quarters are shown below:

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| | |
|:---|:---|
| **Best and Worst Quarterly Returns** | **Best and Worst Quarterly Returns** |
| 4.05% | 4<sup>th</sup> quarter, 2023 |
| -3.27% | 1<sup>st</sup> quarter, 2022 |

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**Average Annual Total Returns for Periods Ended December 31, 2025** 

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| | | | |
|:---|:---|:---|:---|
|  | **<u>1 Year</u>** | **<u>5 Years</u>** | **<u>10 Years</u>** |
| Return Before Taxes | 6.66% | 1.40% | 2.41% |
| Return After Taxes on Distributions | 5.11% | 0.48% | 1.50% |
| Return After Taxes on Distributions and Sale of Fund Shares | 3.92% | 0.70% | 1.47% |
| Bloomberg U.S. Aggregate Bond Index (reflects no deduction for fees, expenses or taxes) | 7.30% | -0.36% | 2.01% |
| Bloomberg U.S. Intermediate Government/Credit Bond Index (reflects no deduction for fees, expenses or taxes) | 6.97% | 0.96% | 2.29% |
| Lipper Short Intermediate Investment-Grade Debt Funds Index (reflects no deduction for taxes) | 6.55% | 1.91% | 2.67% |

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After-tax returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. The return after taxes on distributions and sale of Fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. Actual after-tax returns depend on your tax situation and may differ from those shown. In addition, the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements such as 401(k) plans and individual retirement accounts.

**Investment Adviser:** Luther King Capital Management Corporation.

**Portfolio Managers:**

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| | | |
|:---|:---|:---|
| **<u>Name</u>** | **<u>Title</u>** | **<u>Experience with the Fund</u>** |
| Joan M. Maynard | Principal, Vice President and Portfolio Manager | Since Inception in 1997 |
| Scot C. Hollmann, CFA | Principal, Vice President and Portfolio Manager | Since 2010 |
| Mark L. Johnson, CFA | Principal, Vice President and Portfolio Manager | Since 2010 |

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**Purchase and Sale of Fund Shares:** Investors may purchase, exchange or redeem Fund shares by mail (LKCM Funds, c/o U.S. Bank Global Fund Services, 801 Pennsylvania Ave, Suite 219252, Kansas City, MO 64105-1307), or by telephone at 1-800-688-LKCM. Redemptions by telephone are only permitted upon previously receiving appropriate authorization. Transactions normally will only occur on days the New York Stock Exchange is scheduled to be open. Investors who wish to purchase or redeem Fund shares through a financial intermediary should contact the financial intermediary directly for information relative to the purchase or sale of Fund shares. The minimum initial amount of investment in the Fund and exchanges into the Fund from another fund in the LKCM Funds is $2,000. Subsequent investments in the Fund for all types of accounts may be made with a minimum investment of $500.

**Tax Information:** The Fund's distributions are taxable to you 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, in which case the withdrawal of your investment from the tax-deferred arrangement may be taxable.

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**Payments to Broker-Dealers and Other Financial Intermediaries:** If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a financial adviser), the Fund and its related companies may pay the intermediary for the sale of Fund shares and/or other services. If made, these payments may create a conflict 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.

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**LKCM INTERNATIONAL EQUITY FUND**

**Investment Objective:** The Fund seeks to maximize long-term capital appreciation.

**Fees and Expenses of the Fund:** The following table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.** The Fund does not impose any sales charges in connection with purchases and sales of Fund shares.

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| | |
|:---|:---|
| **Shareholder Fees**<br>(fees paid directly from your investment) |  |
| Redemption Fee (as a percentage of the amount redeemed on shares held for less than 30 days) | 1.00% |
| **Annual Fund Operating Expenses**<br>(expenses that you pay each year as a percentage of the value of your investment) |  |
| Management Fees | 0.90% |
| Distribution and Service (12b-1) Fees | 0.00% |
| Other Expenses | 0.46% |
| Acquired Fund Fees and Expenses<sup>(1)</sup> | 0.01% |
| Total Annual Fund Operating Expenses | 1.37% |
| Fee Waiver and/or Expense Reimbursement<sup>(2)</sup> | -0.36% |
| Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement<sup>(2)</sup> | 1.01% |

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<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Acquired Fund Fees and Expenses are indirect fees and expenses that funds incur from investing in the shares of other investment companies, including money market funds. The Total Annual Fund Operating Expenses and Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement for the Fund differ from the Ratio of Expenses to Average Net Assets before and after expense waiver and/or reimbursement found within the "Financial Highlights" section of the Prospectus because the audited information in the "Financial Highlights" reflects the operating expenses of the Fund and does not include indirect expenses such as Acquired Fund Fees and Expenses.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Luther King Capital Management Corporation ("Adviser"), the Fund's investment adviser, has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund through May 1, 2027 in order to limit the Fund's Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement to 1.00% per annum (excluding any interest, taxes, brokerage commissions, indirect fees and expenses relating to investments in other investment companies, including money market funds ("Acquired Fund Fees and Expenses"), and extraordinary expenses). The fee waiver and expense reimbursement agreement may be terminated or changed only with the consent of the Board of Trustees.

**Example** 

The following example is intended to help you compare the costs 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 (except that the example reflects the fee waiver/expense reimbursement arrangement through May 1, 2027). Although your actual costs may be higher or lower, based on these assumptions, whether or not you redeem your shares, your costs would be as follows:

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| | | | |
|:---|:---|:---|:---|
| **<u>1 Year</u>** | **<u>3 Years</u>**  | **<u>5 Years</u>**  | **<u>10 Years</u>**  |
| $103 | $398 | $716 | $1615 |

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**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 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 21% of the average value of its portfolio.

**Principal Investment Strategies:** The Fund seeks to achieve its investment objective by investing primarily in equity securities of non-U.S. companies. The Fund invests under normal circumstances at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities. These equity securities primarily consist of common stocks, preferred stocks, American Depositary Receipts ("ADRs"), and real estate investment trusts ("REITs"). In determining the origin of a company, the Fund primarily relies on the country where the company is incorporated, headquartered or has its principal place of business. The Fund may consider a company to be from a particular country even if it is not incorporated or headquartered in, or does not have its principal place of business in, that country if a majority of its assets are located in, or it derives a majority of its total revenues or profits from, goods or services produced or sales made in that country. The Fund generally invests in companies from developed markets, though it may invest to a lesser extent in companies from emerging markets. The Fund may focus its investments in companies located in or economically tied to particular countries or geographic regions. The Fund focuses its investments in issuers that are incorporated in, headquartered in, or have their principal place of business in, European countries, including the United Kingdom.

To a limited degree, the Fund may also invest in companies based in the U.S. The Fund may also purchase or sell futures contracts and options on futures contracts for foreign or U.S. equity securities, indices or currencies, may purchase foreign currency forward contracts, including non-deliverable forwards, for hedging purposes, and may hold foreign currencies. From time to time, in pursuing its investment strategies, the Fund may hold a significant percentage of its investments in specific sectors of the economy.

The Fund seeks to invest in the equity securities of high quality companies, as determined by the Adviser, that typically exhibit certain characteristics, including high profitability levels, strong balance sheet quality, competitive advantages, ability to generate excess cash flows, meaningful management ownership stakes, attractive reinvestment opportunities, strong market share positions, and/or

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attractive relative valuation. The Fund may invest in equity securities of small, mid and large capitalization companies, including dividend paying securities.

**Principal Risks:** The greatest risk of investing in the Fund is that you could lose money. There is no assurance that the Fund will achieve its investment objective. The principal risks of investing in the Fund listed below are presented in alphabetical order and not in order of importance or potential exposure. Among other matters, this presentation is intended to facilitate your ability to find particular risks and make comparisons with those of other funds. Each risk summarized below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Currency Risk* – The Fund may have exposure to foreign currencies by making direct investments in securities denominated in non-U.S. currencies, purchasing or selling futures contracts and options on futures contracts for foreign or U.S. equity securities, indices or currencies, purchasing foreign currency forward contracts, and/or holding foreign currencies. Foreign currencies will fluctuate, and may decline, in value relative to the U.S. dollar and other currencies and thereby negatively affect the Fund's holdings of foreign (non-U.S.) currencies or securities that trade in, and receive revenues in, or in derivatives that provide exposure to, foreign (non-U.S.) currencies. Foreign currencies may be affected unpredictably by intervention, or by the failure to intervene, by the U.S. or foreign governments or central banks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Cybersecurity Risk* – The Fund, its service providers, third-party fund distribution platforms and other market participants increasingly depend on complex information technology and communications systems, including artificial intelligence, which are subject to a number of different threats and risks that could adversely affect the fund and its shareholders. Operational risks arising from, among other things, human or processing errors, systems and technology disruptions or failures, or cybersecurity incidents may negatively impact the Fund, its service providers, and third-party fund distribution platforms, as well as the ability of shareholders to transact with the Fund, and result in financial losses. Cybersecurity incidents may allow unauthorized parties to gain access to or misappropriate Fund assets, shareholder data, or confidential or proprietary information, or cause the Fund or its service providers, as well as securities trading venues and their service providers, to suffer data corruption or lose operational functionality. In addition, authorized persons could inadvertently release Fund shareholder data or confidential or proprietary information stored on the Fund's systems. Cybersecurity incidents can result from deliberate attacks or unintentional events. It is not possible for the Fund or its service providers to identify all of the operational risks that may affect the Fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects. Portfolio companies in which the Fund invests are also exposed to various risks related to cybersecurity incidents, and the value of the Fund's investments in such portfolio companies could be adversely impacted in the event any such cybersecurity incidents occur. The Fund cannot control the cybersecurity and operational plans and systems of its service providers, its counterparties or the issuers of securities in which the Fund invests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Derivatives Risk* – Derivatives are instruments, such as futures, foreign currency forward contracts and options, whose value is derived from that of other assets, rates, indices, or currencies. The use of derivatives may be considered to carry more risk than other types of investments and may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities or other instruments underlying those derivatives. If the Fund uses derivatives, the Fund will be directly exposed to the risks of those derivatives. Derivative instruments are subject to a number of additional risks including counterparty, liquidity, interest rate, market, credit and management risks, and the risk of improper valuation. As a result, the Fund may obtain no recovery of its investment or may only obtain a limited recovery, and any recovery may be delayed. Not all derivative transactions require a counterparty to post collateral, which may expose the Fund to greater losses in the event that a counterparty is or becomes unwilling or unable to satisfy its obligation to make timely principal, interest or settlement payments or to otherwise honor its obligations to the Fund. The Fund's use of derivatives also may create financial leverage, which may result in losses that exceed the amount originally invested and accelerate the rate of losses. When the Fund uses derivatives, it may be required to provide margin or collateral. These practices are intended to satisfy contractual undertakings and regulatory requirements and will not prevent the Fund from incurring losses on derivatives. However, the need to provide margin or collateral could limit the Fund's ability to pursue other opportunities as they arise. Ongoing changes to regulation of the derivatives markets and potential changes in the regulation of funds using derivative instruments could limit the Fund's ability to pursue its investment strategies. Changes in the value of a derivative may not correlate perfectly with the underlying instrument, and the Fund could lose more than the principal amount invested. In addition, the Fund's investments in derivatives are subject to the following risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Foreign Currency Forward Contracts* – Foreign currency forward contracts, including non-deliverable forwards, are derivative instruments pursuant to a contract with a counterparty to buy or sell an agreed amount of a specific currency at a fixed price at a future date. The use of foreign currency forward contracts may expose the Fund to the risks associated with fluctuations in currency and additional risks, including credit risk, liquidity risk and counterparty risk, that it would not be subject to if it invested directly in the securities or currencies underlying the foreign currency forward contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Futures Contracts* – Futures contracts are derivative instruments where the parties agree to a fixed price for an agreed amount of securities or other underlying assets at an agreed date or to buy or sell a specific currency at a future date at a price set at the time of the contract. Futures contracts may increase the volatility of the Fund and may involve a small investment of cash relative to the magnitude of the risk assumed. In addition: (i) there may not be a liquid secondary market for futures contracts, and the Fund may be unable to close a futures contract when desired; (ii) the Adviser may not be able to predict correctly the direction of securities prices, currency exchange rates and other economic factors; and (iii) transaction costs associated with investments in futures contracts may be significant. Equity index futures contracts expose the Fund to volatility in an underlying securities index. Foreign currency futures contracts expose the Fund to risks associated with fluctuations in the value of foreign currencies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Options* – For the purchase of a call option to be profitable to the purchaser, the market price of the underlying instrument must rise sufficiently above the call option exercise price to cover the premium and transaction costs, which will reduce any profit that might otherwise have been realized if the purchaser bought the underlying instrument instead of the call option. The Fund will receive a premium from writing call options, but it may not offset any losses sustained from exercised options if the underlying asset has increased in value when the call option is exercised. For the purchase

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of a put option to be profitable to the purchaser, the market price of the underlying security or instrument must decline sufficiently below the put option's exercise price to cover the premium and transaction costs, which will reduce any profit the purchaser might have realized. The Fund will receive a premium from writing put options, but it may not offset any losses sustained from exercised options if the Fund is required to buy the underlying asset at a disadvantageous price. Options on futures contracts may be subject to additional risks, including risks associated with the underlying futures contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Dividend Paying Securities Risk* – Securities that pay higher dividends as a group can fall out of favor with the market, causing these companies to underperform companies that do not pay high or any dividends. Also, changes in the dividend policies of companies owned by the Fund and the capital resources available for these companies' dividend payments may reduce the level of dividend payments and adversely affect the Fund. Dividend paying securities might not experience the same level of earnings growth or capital appreciation as non-dividend paying securities. Securities that pay dividends may be sensitive to changes in interest rates, and as interest rates rise or fall, the prices of such securities may fluctuate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Emerging Markets Risk* – When investing in emerging markets, the risks of investing in foreign securities discussed below generally are heightened. Stock markets in many emerging market countries are relatively small, less developed, less liquid, more volatile, more expensive to trade in, and generally have higher risks than those in developed markets. Securities in emerging markets also may be less liquid than those in developed markets and foreigners are often limited in their ability to invest in, and withdraw assets from, these markets. Additional restrictions may be imposed under other conditions. The governments of emerging market countries may also be more unstable and more likely to impose capital controls, nationalize a company or industry, place restrictions on securities ownership, or intervene in the financial markets. Numerous emerging market countries have a history of, and continue to experience serious, and potentially continuing, economic and political challenges. There are also risks of: greater political uncertainties; an economy's dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities resulting in increased volatility and limited liquidity for emerging market securities; trading suspensions; delays and disruptions in securities settlement procedures; and significant limitations on investor rights and recourse. In addition, there may be less information publicly available, or less reliable information available, to make investment decisions and accurately evaluate securities of issuers in emerging markets than would be available about issuers in more developed capital markets, and such issuers may not be subject to accounting, auditing, financial reporting and recordkeeping standards and requirements comparable to those to which U.S. companies are subject. It may be difficult to obtain or enforce legal judgments against non-U.S. companies and non-U.S. persons in foreign jurisdictions, either through the foreign judicial system or through a private arbitration process. These matters have the potential to impact the Fund's investment objectives and performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Equity Securities Risk* – The Fund invests in equity securities and therefore is subject to investment risk, issuer risk, market risks and significant fluctuations in value in response to changes in a company's financial condition as well as general market, economic and political conditions, and other factors. The Fund may experience a significant or complete loss on its investment in an equity security. In addition, stock prices may be sensitive to rising interest rates, which increase borrowing costs and the costs of capital for the issuer. Equity securities are generally subordinate to an issuer's debt in the event of liquidation or bankruptcy. The Fund's investments in equity securities primarily consist of ADRs, common stocks, preferred stocks and REITs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *ADRs* – Investments in ADRs are subject to certain of the risks associated with investing directly in foreign securities, such as currency fluctuations, political and economic instability, capital restrictions, less government regulation, less publicly available information, less liquidity, increased price volatility, and differences in financial reporting standards. ADRs may not accurately track the prices of the underlying foreign securities and their value may change materially at times when the U.S. markets are not open for trading. Investing in such securities may expose the Fund to additional risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Common Stock* – The value of an issuing company's common stock may rise or fall as a result of factors affecting the issuing company, other companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Preferred Stock* – Preferred stocks are sensitive to movement in interest rates. Preferred stocks may be less liquid than common stocks and, unlike common stocks, participation in the growth of an issuer may be limited. Distributions on preferred stocks generally are payable at the discretion of an issuer and after required payments to bond holders. In certain situations, an issuer may call or redeem its preferred stock or convert it to common stock. The market prices of preferred stocks are generally more sensitive to actual or perceived changes in the issuer's financial condition or prospects than are the prices of debt securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *REITs* – Investments in REITs are subject to the risks associated with investing in the real estate industry, adverse governmental actions, regulatory limitations on rents and operating expenses, declines in property and real estate values, risks related to general and local economic conditions, increases in property taxes and operating expenses, overbuilding, changes in interest rates, liabilities resulting from environmental problems, and the potential failure of a REIT to qualify for federal income-tax-free "pass-through" of net income and net realized gains that are distributed to shareholders and exemption from registration as an investment company. REITs are dependent upon specialized management skills and may invest in relatively few properties, and may not be diversified geographically or by property or tenant type. As a result, investments in REITs may be volatile. REITs are pooled investment vehicles with their own fees and expenses and the Fund will indirectly bear a proportionate share of those fees and expenses when investing in REITs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Foreign Securities Risk* – Non-U.S. investments carry potential risks not associated with domestic investments. Such risks may include, but are not limited to: currency exchange rate fluctuations, political and financial instability, less liquidity and greater volatility of foreign investments, lack of uniform accounting, auditing, recordkeeping and financing reporting standards, different government regulation and supervision of foreign banks, stock exchanges, brokers and listed companies, significant limitations in transaction settlements in some foreign markets, and any regulatory, political, currency, security, economic and other risks associated with a particular country in which the Fund invests, including tariffs, trade disputes and

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sanctions. Additionally, trading in foreign markets generally involves higher transaction costs than trading in U.S. markets. The unavailability and/or unreliability of public information may impede the Fund's ability to accurately evaluate foreign securities. It also may be difficult to enforce contractual obligations or invoke judicial or arbitration processes against non-U.S. companies and non-U.S. persons in foreign jurisdictions. There may be very limited oversight of certain foreign banks or securities depositories that hold foreign securities and currencies and the laws of certain countries may limit the ability to recover such assets if a foreign bank or depositary or their agents goes bankrupt. To the extent the Fund invests a significant portion of its assets in securities of a single country or geographic region at any one time, it is more likely to be affected by events or conditions in that country or region. As a result, it may be more volatile than a more geographically diversified fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Geographic Concentration Risk* – The Fund may focus its investments in companies located in or economically tied to particular countries or geographic regions. This could increase the risk that economic, market, political, business, regulatory, diplomatic, social and environmental conditions in that particular country or geographic region may have a significant impact on the Fund's performance. Investing in such a manner could cause the Fund's performance to be more volatile than the performance of more geographically diverse funds. A decline in the economies or financial markets of one country or region may adversely affect the economies or financial markets of another. In addition, the risks associated with investing in a narrowly defined geographic area are generally more pronounced with respect to investments in emerging market countries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *European Securities Risk* – To the extent the Fund invests significantly in the securities of European companies, the Fund's performance may be influenced by social, political and economic conditions in Europe. The economies of European Union ("EU") member countries and their trading partners, as well as the broader global economy, may be adversely affected by changes in the euro's exchange rate, changes in EU or governmental relations on trade, and the threat of default or an actual default by an EU member country on its sovereign debt, which could negatively impact the Fund's investments and cause it to lose money. Responses to financial problems in European governments, central banks, and others, including austerity measures and other reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. The economies and markets of European countries are often closely connected and interdependent, and events in one country in Europe can have an adverse impact on other European countries. The United Kingdom's withdrawal from the EU could be an indication that one or more other countries may withdraw from the EU and/or abandon the euro. If one or more other countries were to exit the EU, or if any eurozone country abandoned the use of the euro as its currency, the value of investments tied to those countries could decline significantly and unexpectedly. The impact of these actions, especially if they occur in a disorderly fashion, could be significant and far reaching. Russia's war with Ukraine has negatively impacted European economic activity. The effects on the economies of European countries of the Russia/Ukraine war and Russia's response to sanctions imposed by the U.S. and other countries have been and could continue to be significant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *United Kingdom Securities Risk* – The Fund's exposure to issuers located in, or with economic ties to, the United Kingdom could expose the Fund to risks associated with investments in the United Kingdom to a greater extent than more geographically diverse funds. Investments in United Kingdom issuers may subject the Fund to regulatory, political, currency, security, and economic risks specific to the United Kingdom. The United Kingdom has one of the largest economies in Europe, and the United States and other European countries are substantial trading partners of the United Kingdom. As a result, the United Kingdom economy may be impacted by changes to the economic condition of the United States and other European countries. Increasing commodity prices and rising inflation levels caused or exacerbated by the war between Russia and Ukraine prompted the United Kingdom government and other relevant authorities to implement significant policy changes. The effect of these policy changes may have a material, potentially negative, impact on the United Kingdom economy that could affect the performance of the Fund's investments. Additionally, the transitional period following the United Kingdom's departure from the European Union, commonly known as "Brexit," ended on December 31, 2020 and European Union law ceased to have effect in the United Kingdom except to the extent retained by the United Kingdom by unilateral act. The United Kingdom and the European Union then reached a trade agreement that was ratified by all applicable United Kingdom and European Union governmental bodies. The economic effects of Brexit, including certain negative impacts on the ability of the United Kingdom to trade seamlessly with the European Union, are becoming clearer but some political, regulatory and commercial uncertainty in relation to the longer term impacts nevertheless remains to be resolved. Accordingly, there remains a risk that the aftermath of Brexit, including its ongoing effect on the United Kingdom's relationships with other countries, including the United States, and the European Union, may negatively impact the value of investments held by the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Hedging Risk* – If the Fund uses a hedging instrument at the wrong time or judges the market conditions incorrectly, or the hedged instrument does not correlate to the risk sought to be hedged, the hedge might be unsuccessful, reduce the Fund's return, or create a loss. In addition, hedges, even when successful in mitigating risk, may not prevent the Fund from experiencing losses on its investments, and therefore the use of hedging strategies may reduce the Fund's return, or create a loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Inflation Risk* – Higher actual or anticipated inflation may have an adverse effect on corporate profits or consumer spending or the financial markets overall and result in lower values for securities held by the Fund. If Fund investments do not keep pace with inflation, the present value of Fund assets and the value of Fund distributions could decline.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Investment Risk* – An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of the Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Large Cap Companies Risk* – The securities of large market capitalization companies may underperform other segments of the market because such companies may be less responsive to competitive challenges and opportunities and may be unable to attain or maintain high growth rates during periods of economic expansion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Liquidity Risk* – When there is little or no active trading market for specific types of securities, it can become more difficult for the Fund to sell securities at favorable times or prices. As a result, the Fund may have to lower the price on certain

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securities that it is trying to sell, sell other securities instead or forego an investment opportunity, any of which could have a negative effect on the Fund. Market developments, financial distress or geopolitical events such as sanctions, trading halts or wars may cause the Fund's investments to become less liquid or illiquid and subject to erratic price movements. Liquidity risk is particularly acute in the case of foreign investments that are traded in smaller, less-developed or emerging markets and securities issued by issuers with smaller market capitalizations. Certain investments that were liquid when purchased may become illiquid, sometimes abruptly, particularly in times of overall economic distress or adverse investor perception.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Market Risk* – The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund's performance. Factors that affect markets in general, including geopolitical, regulatory, market and economic developments and other developments that impact specific economic sectors, industries, companies and segments of the market, could adversely impact the Fund's investments and lead to a decline in the value of your investment in the Fund. Geopolitical and other events, including tensions, war, or open conflict between nations, such as among the United States, Israel and Iran, between Russia and Ukraine, otherwise in the Middle East and in eastern Asia, could affect the economies of many countries including the United States and may contribute to increased volatility and uncertainty in the financial markets. The extent and duration of ongoing hostilities and any sanctions and the repercussions of such events cannot be predicted. Those events have presented and could continue to present material uncertainty and risk with respect to markets globally, including in the oil and gas markets and potentially other industries and sectors. Trade disputes, pandemics, public health crises, natural disasters, cybersecurity incidents, and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed income markets, which may disrupt economies and markets and adversely affect the value of your investment. The imposition by the U.S. of tariffs on goods imported from foreign countries and reciprocal tariffs levied on U.S. goods by those countries also may lead to volatility and instability in domestic and foreign markets. In addition, policy changes by the U.S. government, the U.S. Federal Reserve and/or foreign governments and political and economic changes within the U.S. and abroad, such as inflation, changes in interest rates, recessions, changes in the U.S. presidential administration and Congress, the U.S. government's inability at times to agree on a long-term budget and deficit reduction plan, the threat or occurrence of a federal government shutdown, threats not to increase the federal government's debt limit which could result in a default on the government's obligations, and the shutdown of certain financial institutions, may cause increased volatility in financial markets, affect investor and consumer confidence and adversely impact the broader financial markets and economy, perhaps suddenly and to a significant degree. Slowing global economic growth, the rise in protectionist trade policies, inflationary pressures, changes to some major international trade and security agreements, the imposition of tariffs, risks associated with trade and security agreements between countries and regions, including the U.S. and other foreign nations, political or economic dysfunction within some countries or regions, including the U.S., and dramatic changes in consumer sentiment, commodity prices and currency values could affect the economies and markets of many nations, including the U.S., in ways that cannot necessarily be foreseen at the present time and may create significant market volatility. The Federal Reserve and certain foreign central banks have started to lower interest rates, though economic or other factors, such as inflation, could reverse or stop such changes. It is difficult to accurately predict the pace at which interest rates might change, the timing, frequency or magnitude of any such changes in interest rates, or when such changes might stop or again reverse course. Unexpected changes in interest rates could lead to significant market volatility or reduce liquidity in certain sectors of the market. Market disruptions have caused, and may continue to cause, broad changes in market value, negative public perceptions concerning these developments, and adverse investor sentiment or publicity. Advancements in technology, including advanced development and increased regulation of artificial intelligence, may adversely impact market movements and liquidity. As artificial intelligence is used more widely, which can occur rapidly, the profitability and growth of certain issuers and industries may be negatively impacted in ways that cannot be foreseen and could adversely impact its performance. Changes in value may be temporary or may last for extended periods. Regulators in the U.S. have adopted a number of changes to regulations affecting markets and issuers, some of which apply to the Fund. Due to the broad scope of the regulations being adopted, certain of these changes, which may be revised or rescinded, could limit the Fund's ability to pursue its investment strategies or make certain investments, may make it more costly for it to operate, or adversely impact performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Redemption Risk* – The Fund may experience periods of significant redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is heightened during periods of declining or illiquid markets. Significant redemptions could hurt the Fund's performance. The sale of assets to meet redemption requests may require the Fund to realize net capital gains, which could require the Fund to make substantial capital gains distributions to shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Sector Weighting Risk* – The Fund may focus its investments in particular sectors of the economy. To the extent the Fund emphasizes investments in particular sectors of the economy, the Fund will be subject to a greater degree of risks particular to those sectors. Market conditions, interest rates, and economic, regulatory, financial or geopolitical developments could significantly affect securities in particular sectors. Depending on the weightings of the Fund's investments in particular sectors, the Fund may have increased exposure to price movements of securities in those sectors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Security Selection Risk* – Securities selected by the Fund may not perform as anticipated due to a number of factors impacting the company that issued the securities or its particular industry or sector, such as poor operating or management performance, weak demand for the company's products or services, the company's failure to meet earnings or other operating performance expectations, financial leverage or credit deterioration, litigation or regulatory issues, or a decline in the value of the issuer's business and assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Small and Mid Cap Companies Risk* – The Fund invests in small and mid capitalization companies that may not have the size, resources and other assets of large capitalization companies. Small and mid capitalization companies may also have narrower commercial markets and more limited operating histories, product lines, and managerial and financial resources than larger, more established companies. Small and mid capitalization companies may be more sensitive to changes in interest rates, borrowing costs and earnings. Stocks of these companies may trade less frequently and in more limited volume than stocks of large capitalization companies. As a result, the securities of small and mid capitalization companies held by the Fund may be less liquid and subject to greater market risks and fluctuations in value than large capitalization companies or may not

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correspond to changes in the stock market in general. In general, these risks are greater for small capitalization companies than for mid capitalization companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Valuation Risk* – The Fund may value certain securities at a price different from the price at which they can be sold. This risk may be especially pronounced for investments, such as certain derivatives and foreign investments, which may be illiquid or which may become illiquid.

**Performance:** The bar chart and table that follow illustrate annual Fund returns for periods ended December 31. This information is intended to give you some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and how the Fund's average annual returns over time compare with those of a broad-based securities market index and an index of funds with similar investment objectives. 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 is available on the Fund's website at www.lkcmfunds.com or by calling the Fund toll-free at 1-800-688-LKCM.

**Calendar Year Returns as of 12/31**![549755866227](ck0000918942-20260429_g7.jpg)

During the period shown on the bar chart, the Fund's best and worst quarters are shown below:

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| | |
|:---|:---|
| **Best and Worst Quarterly Returns** | **Best and Worst Quarterly Returns** |
| 19.19% | 2<sup>nd</sup> quarter, 2020 |
| -22.50% | 1<sup>st</sup> quarter, 2020 |

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**Average Annual Total Returns for Periods Ended December 31, 2025** 

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| | | | |
|:---|:---|:---|:---|
|  | **<u>1 Year</u>** | **<u>5 Years</u>** | **Since Inception**<br>**<u>(May 1, 2019)</u>** |
| Return Before Taxes | 21.87% | 6.82% | 8.61% |
| Return After Taxes on Distributions | 21.69% | 6.57% | 8.42% |
| Return After Taxes on Distributions and Sale of Fund Shares | 13.42% | 5.48% | 7.01% |
| MSCI/EAFE<sup>®</sup> Index (reflects no deduction for fees, expenses or taxes) | 31.89% | 9.47% | 9.56% |
| Lipper International Large-Cap Core Funds Index (reflects no deduction for taxes) | 32.15% | 9.32% | 8.82% |

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After-tax returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. The return after taxes on distributions and sale of Fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. Actual after-tax returns depend on your tax situation and may differ from those shown. In addition, the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements such as 401(k) plans and individual retirement accounts.

**Investment Adviser:** Luther King Capital Management Corporation.

**Portfolio Managers:** 

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| | | |
|:---|:---|:---|
| **<u>Name</u>** | **<u>Title</u>** | **<u>Experience with the Fund</u>** |
| Mason D. King, CFA | Principal, Vice President, Portfolio Manager and Analyst | Since Inception in 2019 |
| J. Luther King, Jr., CFA | Principal, President and Portfolio Manager | Since Inception in 2019 |

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**Purchase and Sale of Fund Shares:** Investors may purchase, exchange or redeem Fund shares by mail (LKCM Funds, c/o U.S. Bank Global Fund Services, 801 Pennsylvania Ave, Suite 219252, Kansas City, MO 64105-1307), or by telephone at 1-800-688-LKCM. Redemptions by telephone are only permitted upon previously receiving appropriate authorization. Transactions normally will only occur on days the New York Stock Exchange is scheduled to be open. Investors who wish to purchase or redeem Fund shares through a financial intermediary should contact the financial intermediary directly for information relative to the purchase or sale of Fund shares. The minimum initial amount of investment in the Fund and exchanges into the Fund from another fund in the LKCM Funds is $2,000. Subsequent investments in the Fund for all types of accounts may be made with a minimum investment of $500.

**Tax Information:** The Fund's distributions are taxable to you 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, in which case the withdrawal of your investment from the tax-deferred arrangement may be taxable.

**Payments to Broker-Dealers and Other Financial Intermediaries:** If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a financial adviser), the Fund and its related companies may pay the intermediary for the sale of Fund shares and/or other services. If made, these payments may create a conflict 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.

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**ADDITIONAL INFORMATION REGARDING THE INVESTMENT OBJECTIVES** 

**AND PRINCIPAL INVESTMENT STRATEGIES OF THE FUNDS** 

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| | |
|:---|:---|
| **Small Cap Equity Fund** | The Fund seeks to maximize long-term capital appreciation.<br>The Fund seeks to achieve its investment objective by primarily choosing investments that Luther King Capital Management Corporation ("Adviser") believes are likely to have above-average growth in revenue and/or earnings and potential for above-average capital appreciation. The Fund invests under normal circumstances at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of smaller companies. Smaller companies are those with market capitalizations at the time of investment between $0.8 billion and $7 billion. The Fund is not required to sell equity securities whose market values appreciate or depreciate outside this market capitalization range. The equity securities in which the Fund invests primarily consist of common stocks, American Depositary Receipts ("ADRs"), and real estate investment trusts ("REITs"). From time to time, in pursuing its investment strategies, the Fund may hold a significant percentage of its investments in specific sectors of the economy.<br>The Adviser's primary strategy in managing the Fund is to identify high quality companies, as determined by the Adviser, that typically exhibit certain characteristics, including high profitability levels, strong balance sheet quality, competitive advantages, ability to generate excess cash flows, meaningful management ownership stakes, attractive reinvestment opportunities, strong market share positions, and/or attractive relative valuation. |
| **Small-Mid Cap Equity Fund** | The Fund seeks to maximize long-term capital appreciation.<br>The Fund seeks to achieve its investment objective by primarily choosing investments that the Adviser believes are likely to have above-average growth in revenue and/or earnings and potential for above-average capital appreciation. The Fund invests under normal circumstances at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of small-mid capitalization companies. Small-mid capitalization companies are those with market capitalizations at the time of investment between $2 billion and $20 billion. The Fund is not required to sell equity securities whose market values appreciate or depreciate outside this market capitalization range. The equity securities in which the Fund invests primarily consist of common stocks, ADRs, and REITs. From time to time, in pursuing its investment strategies, the Fund may hold a significant percentage of its investments in specific sectors of the economy. <br>The Adviser's primary strategy in managing the Fund is to identify high quality companies, as determined by the Adviser, that typically exhibit certain characteristics, including high profitability levels, strong balance sheet quality, competitive advantages, ability to generate excess cash flows, meaningful management ownership stakes, attractive reinvestment opportunities, strong market share positions, and/or attractive relative valuation.  |
| **Equity Fund** | The Fund seeks to maximize long-term capital appreciation.<br>The Fund seeks to achieve its investment objective by primarily choosing investments that the Adviser believes are likely to have above-average growth in revenue and/or earnings, above-average returns on shareholders' equity, potential for above-average capital appreciation, and/or companies that the Adviser believes have attractive relative valuations. The Fund invests under normal circumstances at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities. The equity securities in which the Fund invests primarily consist of common stocks, ADRs, and REITs. The Fund may invest in equity securities of small, mid and large capitalization companies, including dividend paying securities. From time to time, in pursuing its investment strategies, the Fund may hold a significant percentage of its investments in specific sectors of the economy, such as the information technology sector.<br>The Adviser's primary strategy in managing the Fund is to identify high quality companies, as determined by the Adviser, that typically exhibit certain characteristics, including high profitability levels, strong balance sheet quality, competitive advantages, ability to generate excess cash flows, meaningful management ownership stakes, attractive reinvestment opportunities and/or strong market share positions.  |

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|:---|:---|
| **Balanced Fund** | The Fund seeks current income and long-term capital appreciation.<br>The Fund seeks to achieve its investment objective by investing primarily in a portfolio of equity and fixed income securities. The Fund's investments in equity securities primarily consist of common stocks, ADRs, and REITs. Under normal circumstances, 25% or more of the Fund's total assets will consist of fixed income securities. The Fund's investments in fixed income securities consist primarily of investment grade corporate fixed income securities and fixed income securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities. The Fund may also invest in variable and floating rate bonds. The Fund typically invests in fixed income securities with short-to intermediate-term maturities from one to ten years. Investment grade debt securities are considered to be those rated within the four highest rating categories by a nationally recognized statistical ratings organization, such as Moody's Investors Service, Inc., Fitch Ratings, Inc. or S&P Global Ratings, or of equivalent quality as determined by the Adviser. The Fund may invest in fixed income securities with call features. The Fund does not presently intend to invest more than 20% of its total assets in equity securities that do not pay dividends. From time to time, in pursuing its investment strategies, the Fund may hold a significant percentage of its investments in specific sectors of the economy.<br>The Adviser's primary strategy in managing the Fund's equity investments is to identify high quality companies, as determined by the Adviser, that typically exhibit certain characteristics, including high profitability levels, strong balance sheet quality, competitive advantages, ability to generate excess cash flows, meaningful management ownership stakes, attractive reinvestment opportunities, strong market share positions, and/or attractive relative valuation. The Fund may invest in securities of small, mid and large capitalization companies, including dividend paying securities. <br>The Adviser's primary strategy in managing the Fund's fixed income investments is to select debt securities based on factors such as price, coupon, yield to maturity, the credit quality of the issuer, the issuer's cash flow and related coverage ratios, the property, if any, securing the obligation and the terms of the security, including subordination, default, sinking fund and early redemption provisions. If securities held by the Fund are downgraded below investment grade, the Adviser will consider whether or not to continue to hold such securities.  |
| **Fixed Income Fund** | The Fund seeks current income.<br>The Fund invests under normal circumstances at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of investment grade corporate and U.S. Government fixed income securities. The Fund's investments in fixed income securities consist primarily of investment grade corporate fixed income securities and fixed income securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities. The Fund typically invests in fixed income securities with short- to intermediate-term maturities from one to ten years. Investment grade debt securities are considered to be those rated within the four highest rating categories assigned by a nationally recognized statistical ratings organization, such as Moody's Investors Service, Inc., Fitch Ratings, Inc. or S&P Global Ratings, or of equivalent quality as determined by the Adviser. The Fund may invest in all types of domestic or U.S. dollar-denominated foreign fixed income securities in any proportion, including bonds, notes, convertible bonds, mortgage pass-through securities, government and government agency securities, variable and floating rate bonds, preferred stock and short-term obligations such as commercial paper and notes and other financial obligations. The Fund may invest in fixed income securities with call features.<br>The Fund seeks to maintain an average effective maturity of its portfolio between three and ten years under normal market and economic conditions. The effective maturity of securities with sinking fund or other early redemption features will be estimated by the Adviser, based upon prevailing interest rate trends and the issuer's financial position. The average effective maturity of the Fund's portfolio may be less than three years if the Adviser believes a defensive posture is appropriate. From time to time, in pursuing its investment strategies, the Fund may hold a significant percentage of its investments in specific sectors of the economy. <br>The Adviser's primary strategy in managing the Fund is to select debt securities based on factors such as price, coupon, yield to maturity, the credit quality of the issuer, the issuer's cash flow and related coverage ratios, the property, if any, securing the obligation and the terms of the security, including subordination, default, sinking fund and early redemption provisions. If securities held by the Fund are downgraded below investment grade, the Adviser will consider whether or not to continue to hold such securities.  |

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|:---|:---|
| **International Equity Fund** | The Fund seeks to maximize long-term capital appreciation.<br>The Fund seeks to achieve its investment objective by investing primarily in equity securities of non-U.S. companies. The Fund invests under normal circumstances at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities. These equity securities primarily consist of common stocks, preferred stocks, ADRs, and REITs. In determining the origin of a company, the Fund primarily relies on the country where the company is incorporated, headquartered or has its principal place of business. The Fund may consider a company to be from a particular country even if it is not incorporated or headquartered in, or does not have its principal place of business in, that country if a majority of its assets are located in, or it derives a majority of its total revenues or profits from, goods or services produced or sales made in that country. The Fund generally invests in companies from developed markets, though it may invest to a lesser extent in companies from emerging markets. The Fund may focus its investments in companies located in or economically tied to particular countries or geographic regions. The Fund focuses its investments in issuers that are incorporated in, headquartered in, or have their principal place of business in, European countries, including the United Kingdom. To a limited degree, the Fund may also invest in companies based in the U.S. The Fund may also purchase or sell futures contracts and options on futures contracts for foreign or U.S. equity securities, indices or currencies, may purchase foreign currency forward contracts, including non-deliverable forwards, for hedging purposes, and may hold foreign currencies. From time to time, in pursuing its investment strategies, the Fund may hold a significant percentage of its investments in specific sectors of the economy. <br>The Adviser's primary strategy in managing the Fund is to identify high quality companies, as determined by the Adviser, that typically exhibit certain characteristics, including high profitability levels, strong balance sheet quality, competitive advantages, ability to generate excess cash flows, meaningful management ownership stakes, attractive reinvestment opportunities, strong market share positions, and/or attractive relative valuation. The Fund may invest in equity securities of small, mid and large capitalization companies, including dividend paying securities. |

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Each Fund (except for the Balanced Fund, which does not have an 80% investment policy) has adopted a non-fundamental policy to notify its shareholders at least 60 days before it changes its 80% investment policy described above. Each Fund's investment objective is non-fundamental, which means that it may be changed by action of the Board of Trustees of the Trust without shareholder approval.

**DISCUSSION OF INVESTMENT APPROACH** 

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| | |
|:---|:---|
| **Small Cap Equity, Small-Mid Cap Equity, Equity, Balanced (Equity Portfolio) and International Equity Funds** | &nbsp;&nbsp;&nbsp;The Adviser follows an equity investment approach grounded in the fundamental analysis of individual companies. The Adviser seeks to identify high quality companies, as determined by the Adviser, based on various quantitative and qualitative financial and fundamental criteria. Companies meeting these criteria will typically exhibit a number of the following characteristics:  |
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• High profitability levels; <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Strong balance sheet quality; <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Competitive advantages; <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Strong market share positions; <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Attractive reinvestment opportunities; <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Ability to generate excess cash flow after capital expenditures; <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Management with a meaningful ownership stake in the company; and/or <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Attractive relative valuation.  |
| **Balanced (Fixed Income Portfolio) and Fixed Income Funds** | &nbsp;&nbsp;&nbsp;The Adviser's fixed income investment approach concentrates primarily on investment grade corporate fixed income securities and fixed income securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities with short- to intermediate-term maturities from one to ten years. The Adviser's security selection process is heavily credit-driven and focuses on the issuer's earnings and cash flow trends, its competitive positioning, and the dynamics of its industry. The Adviser's fixed income philosophy typically combines noncallable bonds for their offensive characteristics with callable bonds for their defensive characteristics in an attempt to enhance returns while controlling the level of risk. <br>The Adviser's fixed income approach also seeks to identify securities with a combination of attractive coupons and various early redemption features. These defensive issues can offer higher levels of current income with relatively limited price volatility due to the possibility that they will be retired by the issuer much sooner than the final maturity. Callable bonds are typically used as alternatives to traditional short-term noncallable securities. Maturity decisions are primarily a function of the Adviser's macroeconomic analysis and are typically implemented utilizing short to intermediate maturity, noncallable securities. Finally, the credit analysis performed by the Adviser on individual companies, as well as industries, is enhanced by the Adviser's experience in the equity markets and the quantitative and qualitative financial and fundamental criteria incorporated into the Adviser's equity investment approach. The analytical effort typically concentrates on market leading, profitable, well-financed debt issuers.  |

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To respond to adverse market, economic, political or other conditions, each Fund may adopt a temporary defensive position, during which the Fund may invest in cash, time deposits, commercial paper, certificates of deposit, short term corporate and government

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obligations, repurchase agreements and bankers' acceptances. To the extent that a Fund engages in a temporary, defensive strategy, the Fund may not achieve its investment objective. A defensive position, taken at the wrong time, such as when the markets unexpectedly rise rather than decline, may have an adverse impact on a Fund's performance.

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**ADDITIONAL INFORMATION REGARDING THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS** 

An investment in any of the Funds entails risks. You should be aware that you may lose money by investing in the Funds, and the Funds' performance could trail that of other investment alternatives. There is no assurance that a Fund will meet its investment objectives. The table below provides additional principal risks of investing in the Funds. Following the table, each risk is explained. The principal risks of investing in each Fund listed below are presented in alphabetical order and not in order of importance or potential exposure. Among other matters, this presentation is intended to facilitate your ability to find particular risks and make comparisons with those of other funds. Each risk summarized below is considered a "principal risk" of investing in a Fund, regardless of the order in which it appears.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Small Cap**<br>**Equity Fund** | **Small-**<br>**Mid Cap**<br>**Equity Fund** | **Equity**<br>**Fund**  | **Balanced**<br>**Fund** | **Fixed Income**<br>**Fund** | **International**<br>**Equity Fund** |
| **Call Risk** | | | | **X** | **X** | |
| **Convertible Debt Securities Risk** | | | | | **X** | |
| **Credit Risk** | | | | **X** | **X** | |
| **Currency Risk** | | | | | | **X** |
| **Cybersecurity Risk** | **X** | **X** | **X** | **X** | **X** | **X** |
| **Derivatives Risk** | | | | | | **X** |
| **Dividend Paying Securities Risk** | | | **X** | **X** | | **X** |
| **Emerging Markets Risk** | | | | | | **X** |
| **Equity Securities Risk** | **X** | **X** | **X** | **X** | | **X** |
| **Fixed Income Securities Risk** | | | | **X** | **X** | |
| **Foreign Securities Risk** | | | **X** | **X** | **X** | **X** |
| **Geographic Concentration Risk** | | | | | | **X** |
| **Government-Sponsored Enterprises Risk** | | | | | **X** | |
| **Hedging Risk** | | | | | | **X** |
| **Inflation Risk** | **X** | **X** | **X** | **X** | **X** | **X** |
| **Interest Rate Risk** | | | | **X** | **X** | |
| **Investment Risk** | **X** | **X** | **X** | **X** | **X** | **X** |
| **Large Cap Companies Risk** | | | **X** | **X** | | **X** |
| **Liquidity Risk** | | | | **X** | **X** | **X** |
| **Market Risk** | **X** | **X** | **X** | **X** | **X** | **X** |
| **Mortgage Pass-Through Securities Risk** | | | | | **X** | |
| **Preferred Stocks Risk** | | | | | **X** | |
| **Redemption Risk** | **X** | **X** | **X** | **X** | **X** | **X** |
| **Sector Weighting Risk** | **X** | **X** | **X** | **X** | **X** | **X** |
| **Security Selection Risk** | **X** | **X** | **X** | **X** | **X** | **X** |
| **Small Cap Companies Risk** | **X** | | | | | |
| **Small and Mid Cap Companies Risk** | | **X** | **X** | **X** | | **X** |
| **U.S. Government Securities Risk** | | | | **X** | **X** | |
| **Valuation Risk** | | | | | | **X** |
| **Variable and Floating Rate Securities Risk** | | | | **X** | **X** | |

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| ***Call Risk:*** | During periods of falling interest rates, an issuer of a callable bond held by a Fund may "call" or repay the security before its stated maturity. A Fund would then lose any price appreciation above the bond's call price and the income that would have been earned to maturity on the security. In the event of a call, the Fund may have to reinvest the proceeds at lower interest rates, also resulting in a decline in the Fund's income. In addition, the market value of a callable security may decrease if it is perceived by the market as likely to be called, which could have a negative impact on a Fund's total return. |

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| ***Convertible Debt<br>Securities Risk:*** | A convertible security is a form of hybrid security; that is, a security with both debt and equity characteristics. The value of a convertible security is based on its yield and fluctuates in relation to changes in interest rates and the credit quality of the issuer and in relation to changes in the price of the underlying common stock. A convertible security tends to perform more like common stock when the underlying common stock price is high relative to the conversion price of the convertible security and more like a fixed income security when the underlying common stock price is low relative to the conversion price of the convertible security. A convertible security may be subject to redemption at the option of the issuer at a price established in the convertible security's governing instrument, which may be less than the current market price of the security. Convertible securities are subject to market risk, credit risk and interest rate risk as well as the same types of market and issuer-specific risks that apply to the underlying common stock. Convertible securities are normally "junior" securities, which means an issuer usually must pay interest on its non-convertible debt securities before it can make payments on its convertible securities. If an issuer stops making interest or principal payments, these securities may become worthless and a Fund could lose its entire investment in such securities. In the event of a liquidation of the issuing company, holders of convertible securities may be paid before the company's common stockholders but after holders of any senior debt obligations of the company. |

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| ***Credit Risk:*** | A Fund is subject to the risk that the issuer or guarantor of a fixed income security becomes unable or unwilling, or is perceived (whether by market participants, ratings agencies, pricing services or otherwise) as unable or unwilling, to make timely interest or principal payments or otherwise honor its obligations, which may cause the Fund's holdings to lose value. The extent of this risk varies based on the terms of the particular security and the financial condition of the issuer, guarantor or counterparty. A security's degree of credit risk is often reflected in its credit rating, with higher ratings corresponding to lower perceived credit risk. A downgrade in an issuer's credit rating, factors affecting an issuer directly, factors affecting the industry in which a particular issuer operates, and changes in general social, economic or political conditions can increase the risk of default by an issuer or reduce the market value of that issuer's securities. The credit quality of a security can deteriorate suddenly and rapidly. Lower credit quality also may lead to greater volatility in the price of a security and may negatively affect a security's liquidity. In addition, credit ratings agencies may fail to make timely changes to credit ratings in response to subsequent events and a credit rating may fail to reflect changes in an issuer's financial condition. Credit ratings reflect a rating agency's opinion regarding a security's quality but are not a guarantee of quality and do not protect against a decline in a security's value. The ratings assigned to securities by rating agencies do not purport to fully reflect the true risks of an investment, and rating agencies may not always change their credit rating on an issuer or security in a timely manner to reflect events that could affect the issuer's ability to make timely payments on its obligations. Changes in the actual or perceived creditworthiness of an issuer, or a downgrade or default affecting any of a Fund's securities, could affect a Fund's performance. Credit risk is typically greater for securities with ratings that are downgraded below investment grade. Generally, the longer the maturity of a security, the more sensitive it is to credit risk. |

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| ***Currency Risk:*** | A Fund may have exposure to foreign currencies by making direct investments in securities denominated in non-U.S. currencies, purchasing or selling futures contracts and options on futures contracts for foreign or U.S. equity securities, indices or currencies, purchasing foreign currency forward contracts, and/or holding foreign currencies. Foreign currencies may decline in value relative to the U.S. dollar, or, in the case of hedging positions, the U.S. dollar may decline in value relative to the currency being hedged, and thereby negatively affect a Fund's holdings of foreign (non-U.S.) currencies or securities that trade in, and receive revenues in, or in derivatives that provide exposure to, foreign (non-U.S.) currencies. As a result, a Fund's exposure to foreign currencies may reduce the returns of a Fund. Currency exchange rates may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the U.S. or abroad. As a result, a Fund's investments in foreign currency denominated securities may reduce the returns of such Fund. Currency futures, forwards or options may not always work as intended, and in specific cases a Fund may be more negatively impacted than if it had not used such instrument(s). There may not always be suitable hedging instruments available. Even where suitable hedging instruments are available, a Fund may not hedge its currency risks. |

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| ***Cybersecurity Risk:*** | A Fund, its service providers, third-party fund distribution platforms and other market participants increasingly depend on complex information technology and communications systems, including artificial intelligence, which are subject to a number of different threats and risks that could adversely affect a Fund and its shareholders. Operational risks arising from, among other things, human or processing errors, systems and technology disruptions or failures, or cybersecurity incidents may negatively impact a Fund, its service providers, and third-party fund distribution platforms, as well as the ability of shareholders to transact with a Fund, and result in financial losses. Cybersecurity incidents may allow unauthorized parties to gain access to or misappropriate a Fund's assets, shareholder data, or confidential or proprietary information, or cause a Fund or its service providers, as well as securities trading venues and their service providers, to suffer data corruption or lose operational functionality, including the inability to process Fund transactions, interference with a Fund's ability to calculate its net asset value, physical damage to a computer or network system or remediation costs associated with system repairs. Market events also may occur at a pace that overloads current information technology and communication systems and processes of a Fund, its service providers or other market participants, which could impact the ability to conduct a Fund's operations or shareholders' ability to invest in a Fund. In addition, authorized persons could inadvertently release Fund shareholder data or confidential or proprietary information stored on the Fund's systems. The occurrence of any of these problems could result in a loss of information, violations of applicable privacy and other laws, regulatory scrutiny, penalties, fines, reputational damage, additional compliance requirements and other consequences, any of which may have a material effect on a Fund or its shareholders. It is not possible for a Fund or its service providers to identify all of the operational risks that may affect a Fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects. Recent geopolitical tensions may increase the scale and sophistication of deliberate attacks, particularly those from nation-states or from entities with nation-state backing. A Fund cannot control the cybersecurity and operational plans and systems of its service providers, its counterparties or the issuers or securities in which the Fund invests. Portfolio companies in which a Fund invests are also exposed to various risks related to cybersecurity incidents, and the value of a Fund's investments in such portfolio companies could be adversely impacted in the event any such cybersecurity incidents occur. A Fund may incur substantial costs to prevent or address cybersecurity incidents.<br>A Fund and its service providers, including the Adviser, may utilize artificial intelligence ("AI") technologies, including machine learning models and generative AI, to improve operational efficiency and in connection with research. In addition, counterparties used by a Fund may utilize AI in their business activities. While the Adviser may restrict certain uses of AI tools, a Fund and the Adviser are not in a position to control the use of AI in third-party products or services. The use of AI introduces numerous potential challenges and the use of AI can lead to reputational damage, legal liabilities, and competitive disadvantages, as well as negatively impact business operations, which may occur with or without mismanagement in the use of the AI. AI requires the collection and processing of substantial amounts of data, which poses risks of data inaccuracies, incompleteness, and inherent biases, and which can degrade the technology's effectiveness and reliability. Such data can include proprietary information, the use of which by AI may be unauthorized and subject to potential liability. Rapid technological advancements further complicate risk predictions, and competitors who adopt AI more swiftly may gain a competitive edge. The complexity and opacity of AI systems raise significant accountability and ethical concerns. AI has enhanced the ability of threat actors to amplify the potency, scale, and speed of cybersecurity attacks. AI's role in increasing automation raises concerns about job displacement and may lead to economic and social disruptions. The unpredictable nature of AI's impact on market dynamics complicates traditional risk assessment models, making it challenging to identify risks and opportunities using historical data. Legal and regulatory frameworks governing AI's use, particularly concerning data privacy and protection, are evolving rapidly. These changes could materially alter how AI is used, which may negatively impact a Fund. |

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| ***Derivatives Risk:*** | Derivatives are instruments, such as futures, foreign currency forward contracts and options, whose value is derived from that of other assets, rates, indices, or currencies. A Fund may use derivatives to hedge against fluctuations in currency exchange rates, to manage certain investment risks or as a substitute for the purchase or sale of the underlying currencies or securities. A Fund may also hold derivative instruments to obtain economic exposure to an issuer without directly holding its securities.<br>The use of derivatives may be considered to carry more risk than other types of investments and may expose a Fund to additional risks that it would not be subject to if it invested directly in the securities or other instruments underlying those derivatives. If a Fund uses derivatives, such Fund will be directly exposed to the risks of those derivatives. Derivatives can be highly complex and their use within an investment strategy can require specialized skills. There can be no assurance that any strategy used will succeed. There may also be material and prolonged deviations between the theoretical value and realizable value of a derivative. In addition, leverage embedded in a derivative instrument can expose a Fund to greater risk and increase its costs. Gains or losses in the value of a derivative instrument may be magnified and be much greater than the original amount invested (generally the initial margin deposit). Some derivatives have the potential for unlimited loss, regardless of the size of a Fund's initial investment, for example, where a Fund may be called upon to deliver a security it does not own. Derivatives may be illiquid and may be more volatile than other types of investments. A Fund may not be able to close out or sell a derivative position at a particular time or at an anticipated price. A Fund may buy or sell derivatives not traded on an exchange or contract market and which may be subject to heightened liquidity and valuation risk. Derivative instruments are subject to a number of other risks including counterparty, interest rate, market, credit and management risks. As a result, a Fund may obtain no recovery of its investment or may only obtain a limited recovery, and any recovery may be delayed. Not all derivative transactions require a counterparty to post collateral, which may expose a Fund to greater losses in the event that a counterparty is or becomes unwilling or unable to satisfy its obligation to make timely principal, interest or settlement payments or to otherwise honor its obligations to such Fund. |
|  | Certain derivatives, including futures and written options, require a Fund to post margin to secure its future obligation, and if such Fund has insufficient cash, it may have to sell investments from its portfolio to meet daily variation margin requirements at a time when it may be disadvantageous to do so. Because the markets for certain derivative instruments (including markets located in foreign countries) are relatively new and still developing, suitable derivatives transactions may not be available in all circumstances for risk management or other purposes, and there can be no assurance that a Fund will use derivatives to reduce exposure to other risks when that might have been beneficial. Changes in the value of a derivative may not correlate perfectly with the underlying asset, rate, index or currency, and an abrupt change in the price of the reference instrument could render a derivative worthless. A Fund's use of derivatives also may create financial leverage, which may result in losses that exceed the amount originally invested and accelerate the rate of losses. When a Fund uses derivatives, it may be required to provide margin or collateral. These practices will not prevent a Fund from incurring losses on derivatives. However, the need to provide margin or collateral could limit a Fund's ability to pursue other opportunities as they arise.<br>Upon the expiration of a particular contract, the Adviser may wish to retain a Fund's position in the derivative instrument by entering into a similar contract, but may be unable to do so if the counterparty to the original contract is unwilling to enter into the new contract and no other suitable counterparty can be found. A Fund's ability to use derivatives may also be limited by certain regulatory and tax considerations. For example, the Commodity Futures Trading Commission ("CFTC") and the designated contract markets have established position limits for futures and option contracts that may restrict the ability of a Fund, or the Adviser entering trades on such Fund's behalf, to make certain trading decisions.<br>Ongoing changes to regulation of the derivatives markets and potential changes in the regulation of funds using derivative instruments could limit a Fund's ability to pursue its investment strategies. The extent and impact of the regulation is not yet fully known and may not be for some time. New regulation may make derivatives more costly, may limit their availability, may disrupt markets, or may otherwise adversely affect their value or performance. In addition to other changes, these rules provide for central clearing of derivatives that in the past were traded exclusively over-the-counter and may increase costs and margin requirements, but are expected to reduce certain counterparty risks. Rule 18f-4 places limits on the use of derivatives by registered investment companies, such as a Fund. A Fund that relies on Rule 18f-4 is required to comply with limits on the amount of leverage-related risk that the fund may obtain, and may also be required to adopt and implement a derivatives risk management program and designate a derivatives risk manager or adopt policies and procedures designed to manage a fund's derivatives risks. |
|  | Certain of the other risks to which a Fund might be exposed due to its use of derivatives include the following: |

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| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Foreign Currency Forward Contracts*. Foreign currency forward contracts, including non-deliverable forwards ("NDFs"), are derivative instruments pursuant to a contract with a counterparty to buy or sell a specific currency at a future date at a price set at the time of the contract. The use of foreign currency forward contracts may expose a Fund to additional risks, such as credit risk, liquidity risk and counterparty risk, that it would not be subject to if it invested directly in the securities or currencies underlying the foreign currency forward contract. Foreign currency forward transactions include risks associated with fluctuations in foreign currency. There are no limitations on daily price movements of forward contracts. There may at times be an imperfect correlation between the price of a forward contract and the underlying security, index or currency which will increase the volatility of a Fund. Not all forward contracts, including NDFs, require a counterparty to post collateral, which may expose a Fund to greater losses in the event of a default by a counterparty. If such a default occurs, a Fund will have contractual remedies pursuant to the forward contract, but such remedies may be subject to bankruptcy and insolvency laws which could affect such Fund's rights as a creditor. Forward currency transactions include risks associated with fluctuations in foreign currency.  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Futures Contracts*. Futures contracts are derivative instruments where the parties agree to a fixed price for an agreed amount of securities or other underlying assets at an agreed date or to buy or sell a specific currency at a future date at a price set at the time of the contract. There may at times be an imperfect correlation between the movement in the prices of futures contracts and the value of their underlying instruments or indexes. Futures contracts may experience dramatic price changes (losses) and imperfect correlations between the price of the contract and the underlying security, index or currency which will increase the volatility of a Fund. An abrupt change in the price of an underlying security could render the underlying futures contract worthless. Futures contracts may involve a small investment of cash (the amount of initial and variation margin) relative to the magnitude of the risk assumed (the potential increase or decrease in the price of the futures contract). When a Fund purchases or sells a futures contract, it is subject to daily variation margin calls that could be substantial. If a Fund has insufficient cash to meet daily variation margin requirements, it might need to sell securities at a time when such sales are disadvantageous. There may not be a liquid secondary market for the futures contract. A Fund's use of futures contracts also depends on an investment manager's ability to predict correctly the direction of securities prices, currency exchange rates and other economic factors. Transaction costs associated with futures contracts may be significant, which could cause or increase losses or reduce gains. Equity index futures contracts expose a Fund to volatility in an underlying securities index. Foreign currency futures contracts expose the Fund to risks associated with fluctuations in the value of foreign currencies. Foreign currency futures contracts are similar to foreign currency forward contracts, except that they are traded on exchanges, may have margin requirements, and are standardized as to contract size and delivery date.  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Options.* A call option gives the purchaser the right to buy an underlying asset or other reference item at a specified price, regardless of the instrument's market price at the time. In order for the purchase of a call option to be profitable to the purchaser, the market price of the underlying security or instrument must rise sufficiently above the call option exercise price to cover the premium and transaction costs. These costs will reduce any profit that might otherwise have been realized had the purchaser bought the underlying instrument instead of the call option. A Fund will receive a premium from writing call options, but the premium received may not be sufficient to offset any losses sustained from exercised options. If a Fund sells a call option on an underlying asset and the underlying asset has increased in value when the call option is exercised, such Fund will be required to sell the underlying asset at the call price and will not be able to realize any of the underlying asset's value above the call price. Furthermore, the asset could still decline in value.  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A put option gives the purchaser the right to sell an underlying asset or other reference instrument at a specified price, regardless of the instrument's market price at the time. For the purchase of a put option to be profitable to the purchaser, the market price of the underlying security or instrument must decline sufficiently below the put option's exercise price to cover the premium and transaction costs. By using put options in this manner, the purchaser will reduce any profit it might otherwise have realized from having shorted the declining underlying security by the premium paid for the put option and by transaction costs. A Fund will receive a premium from writing put options, but the premium received may not be sufficient to offset any losses sustained from exercised options. If a Fund sells a put option, there is a risk that such Fund may be required to buy the underlying asset at a disadvantageous price. Options on futures contracts may be subject to additional risks, including risks associated with the underlying futures contract. <br>If an option that a Fund has purchased expires unexercised, such Fund will experience a loss in the amount of the premium it paid.  |

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| ***Dividend Paying <br>Securities Risk:*** | A Fund's investments in dividend paying securities could cause a Fund to underperform funds that invest without consideration of a company's track record of paying dividends. Securities that pay higher dividends as a group can fall out of favor with the market, causing these companies to underperform companies that do not pay high or any dividends. An issuer of stock held by a Fund may choose not to declare a dividend or the dividend rate might not remain at current levels. Changes in the dividend policies of companies owned by a Fund and the capital resources available for these companies' dividend payments may reduce the level of dividend payments and adversely affect the Fund. Dividend paying securities also may not experience the same level of earnings growth or capital appreciation as non-dividend paying securities, and a sharp rise in interest rates or an economic downturn could cause a company to unexpectedly reduce or eliminate its dividend. Securities that pay dividends may be sensitive to changes in interest rates, and as interest rates rise or fall, the prices of such securities may fluctuate. The income received by a Fund will fluctuate due to the amount of dividends that companies elect to pay. |

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| ***Emerging Markets Risk:*** | When investing in emerging markets, the risks of investing in foreign securities generally are heightened. The economies and political environments of emerging market countries tend to be more unstable than those of developed countries, resulting in more volatile rates of return than the developed markets and substantially greater risk to investors. Emerging markets have unique risks that are greater than, or in addition to, investing in developed markets because emerging markets are generally smaller, less developed, less liquid and more volatile than the securities markets of the U.S. and other developed markets. Stock markets in many emerging market countries are relatively small, expensive to trade in and generally have higher risks than those in developed markets. Securities in emerging markets also may be less liquid than those in developed markets and foreigners are often limited in their ability to invest in, and withdraw assets from, these markets. Additional restrictions may be imposed under other conditions. The governments of emerging market countries may also be more unstable and more likely to impose capital controls, nationalize a company or industry, place restrictions on foreign ownership and on withdrawing sale proceeds of securities from the country, intervene in the financial markets, and/or impose burdensome taxes that could adversely affect security prices. Numerous emerging market countries have a history of, and continue to experience serious, and potentially continuing, economic and political challenges. There are also risks of: greater political and economic uncertainties; an economy's dependence on revenues from particular commodities or on international aid or development assistance; currency transfer restrictions; a limited number of potential buyers for such securities, resulting in increased volatility and limited liquidity for emerging market securities; trading suspensions and other restrictions on investment; delays and disruptions in securities clearing and settlement procedures; market manipulation; and significant limitations on investor rights and recourse. Emerging market countries often have less uniformity in accounting, auditing, financial reporting and recordkeeping requirements and less reliable clearance and settlement, registration and custodial procedures. In addition, there may be less information publicly available, or less reliable information available, to make investment decisions and accurately evaluate securities of issuers in emerging markets than would be available about issuers in more developed capital markets, which can impede the Adviser's ability to accurately evaluate foreign securities. Such issuers may not be subject to accounting, auditing, financial reporting and recordkeeping standards and requirements comparable to those to which U.S. companies are subject. Certain foreign jurisdictions may not provide the Public Company Accounting Oversight Board (PCAOB) with sufficient access to inspect audit workpapers and practices, or otherwise do not cooperate with U.S. regulators, potentially exposing investors to significant risks. In certain emerging market countries, fraud and corruption may be more prevalent than in developed market countries, and investor protections may be more limited than those in other countries. It may be difficult to obtain or enforce legal judgments against non-U.S. companies and non-U.S. persons in foreign jurisdictions, either through the foreign judicial system or through a private arbitration process. These matters have the potential to impact a Fund's investment objectives and performance. |

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| ***Equity Securities Risk:*** | Funds that invest in equity securities are subject to investment risk, issuer risk, market risks and significant fluctuations in price in response to changes in a company's financial condition as well as general market, economic and political conditions, and other factors. The Fund may experience a significant or complete loss on its investment in an equity security. In addition, stock prices may be sensitive to rising interest rates, which increase borrowing costs and the costs of capital for the issuer. Equity securities generally are subordinate to an issuer's debt in the event of liquidation or bankruptcy. A Fund's investments in equity securities primarily consist of ADRs, common stocks, and REITs. Investing in such securities may expose the Funds to additional risks. |

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| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *ADRs.* ADRs are receipts issued by domestic banks or trust companies that represent the deposit of a security of a foreign issuer and are publicly traded in the United States. Investments in ADRs are subject to certain of the risks associated with investing directly in foreign securities, including, but not limited to, currency fluctuations, capital restrictions, less liquidity, less government regulation, less publicly available information, increased price volatility, and political, economic and financial instability in the home country of an issuer of the underlying ADR. In addition, foreign companies may use different accounting and financial standards. Such events could negatively affect the value of a Fund's shares. The securities underlying ADRs trade on foreign exchanges at times when the U.S. markets are not open for trading. As a result, the value of ADRs may not track the price of the underlying securities and may change materially at times when the U.S. markets are not open for trading. Any distributions paid to the holders of depositary receipts may be subject to a fee charged by the depositary. Holders of depositary receipts may have limited voting rights, and investment restrictions in certain countries may adversely impact the value of depositary receipts because such restrictions may limit the ability to convert the equity shares into depositary receipts and vice versa. Such restrictions may cause the equity shares of the underlying issuer to trade at a discount or premium to the market price of the depositary receipts.  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Common Stock.* The value of a company's common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company's products or services. A common stock's value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company's common stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, exchange rates or industry regulation. Companies that pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company's common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock generally is subordinate to the issuing company's debt securities and preferred stock upon the dissolution or bankruptcy of the issuing company. In the event of an issuer's bankruptcy, there is a substantial risk that there will be nothing left to pay common stockholders after payments, if any, to bondholders and preferred stockholders have been made.  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *REITs.* Investments in REITs are subject to the risks associated with investing in the real estate industry, adverse governmental actions, regulatory limitations on rents and operating expenses, declines in property and real estate values, risks related to general and local economic conditions, increases in property taxes and operating expenses, overbuilding, changes in interest rates, and liabilities resulting from environmental problems. Any domestic REIT could be adversely affected by the failure of a REIT to qualify for federal income-tax-free "pass-through" of net income and net realized gains that are distributed to shareholders and exemption from registration as an investment company. The failure of a company to qualify for treatment as a REIT under the federal tax law likely would have an adverse impact on a Fund's after-tax performance. REITs also are subject to heavy cash flow dependency, defaults by borrowers and self-liquidation. In the event of a default by a borrower or lessee, a REIT may experience delays in enforcing its rights as a mortgagee or lessor and may incur substantial costs to protect its investments. REITs are dependent upon specialized management skills and may invest in relatively few properties, and may not be diversified geographically or by property or tenant type. Investments in REITs may be volatile. REITs are pooled investment vehicles with their own fees and expenses, and a Fund will indirectly bear a proportionate share of those fees and expenses when investing in REITs.  |

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| ***Fixed Income Securities Risk:*** | Fixed income securities risk is the risk that the prices of, and the income generated by, fixed income securities held by a Fund may decline significantly and/or rapidly in response to adverse issuer, political, regulatory, general economic and market conditions, or other developments, such as regional or global economic instability (including war, terrorism, pandemic and related geopolitical risks), interest rate fluctuations, and those events directly involving the issuers that may cause broad changes in market value, public perceptions concerning these developments, and adverse investor sentiment. These events may lead to periods of volatility, which may be exacerbated by changes in bond market size and structure. A Fund's fixed income investments may, in some cases, be subject to unusual liquidity issues, credit downgrades and increased likelihood of default. |

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| ***Foreign Securities Risk:*** | Non-U.S. investments carry potential risks not associated with domestic investments. Such risks may include, but are not limited to: currency exchange rate fluctuations, political and financial instability, less liquidity and greater price volatility, lack of uniform accounting, auditing, recordkeeping and financial reporting standards, different government regulation and supervision of foreign banks, stock exchanges, brokers and listed companies, delays in transaction settlements in some foreign markets, and any regulatory, political, currency, security, economic and other risks associated with a particular country in which a Fund invests, including tariffs, trade disputes and sanctions. Trading in foreign markets generally involves higher transaction costs than trading in U.S. markets. There may be very limited oversight of certain foreign banks or securities depositories that hold foreign securities and currencies and the laws of certain countries may limit the ability to recover such assets if a foreign bank, depository or their agents goes bankrupt. In certain countries, legal remedies available to investors may be more limited than those available with respect to investments in the U.S. and investors may encounter difficulties in enforcing contractual obligations. Additionally, in certain markets, a Fund may not receive timely payment for securities or other instruments it has delivered or receive delivery of securities paid for and may be subject to increased risk that the counterparty will fail to make payments or delivery when due or default completely. To the extent a Fund invests a significant portion of its assets in securities of a single country or geographic region at any one time, it is more likely to be affected by events or conditions in that country or region. A Fund's investment in a foreign issuer may subject the Fund to regulatory, political, currency, security, economic and other risks associated with that country, including tariffs, trade disputes or the imposition of economic and other sanctions by the U.S. or another country against a particular country, as well as competition from subsidized foreign competitors with lower production costs. In addition, as a result of increasingly interconnected global economies and financial markets, the value and liquidity of a Fund's investments may be negatively affected by events impacting a country or region, regardless of whether the Fund invests in issuers located in or with significant exposure to such country or region. There may be restrictions on the flow of international capital, including the possible seizure or nationalization of the securities issued by non-U.S. issuers held by a Fund. In addition, the repatriation of investment income, capital or the proceeds of sales of securities from certain of the countries may require advance government notification or authority, and if a deterioration occurs in a country's balance of payments, the country could impose temporary restrictions on foreign capital remittances. A Fund also could be adversely affected by delays in, or a refusal to grant, any required governmental approval for repatriation, as well as by the application to it of other restrictions on investment. Investments in foreign securities subject a Fund to the risk of market timing activities by shareholders. Some investors may engage in frequent short-term trading in a Fund to take advantage of any price differentials that may be reflected in the NAV of a Fund's shares. Global economic and financial markets have become increasingly interconnected and conditions (including recent volatility, terrorism, war and political instability) and events (including natural disasters) in one country, region or financial market may adversely impact issuers in a different country, region or financial market. In addition, securities of issuers traded on foreign exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. Furthermore, securities of a foreign company, including depositary receipts, could be delisted from U.S. stock exchanges. Trading suspensions may be applied from time to time to the securities of individual issuers for reasons specific to that issuer, or may be applied broadly by exchanges or governmental authorities in response to market events. In the event that a Fund holds material positions in such suspended securities, a Fund's ability to liquidate its positions or provide liquidity to investors may be compromised and the Fund could incur significant losses. |
| ***Geographic <br>Concentration Risk:*** | A Fund may focus its investments in companies located in or economically tied to particular countries or geographic regions. This could increase the risk that economic, political, business, regulatory, diplomatic, social and environmental conditions in that particular country or geographic region may have a significant impact on a Fund's performance. Investing in such a manner could cause a Fund's performance to be more volatile than the performance of more geographically diverse funds. The economies and financial markets of certain countries or regions can be highly interdependent. Therefore, a decline in the economies or financial markets of one country or region may adversely affect the economies or financial markets of another. Periods of unusually high financial market volatility and restrictive credit conditions, at times limited to a particular geographic area, have occurred in the past and may be expected to recur in the future. In addition, the risks associated with investing in a narrowly defined geographic area are generally more pronounced with respect to investments in emerging market countries. |

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| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *European Securities Risk* – To the extent a Fund invests significantly in the securities of European companies, the Fund's performance may be influenced by social, political and economic conditions in Europe, such as growth of economic output (the gross national product of the countries in the region), the rate of inflation, the rate at which capital is reinvested into European economies, the success of governmental actions to reduce budget deficits, the resource self-sufficiency of European countries, interest rates in European countries, monetary exchange rates between European countries, and conflict between European countries. The economies of European Union ("EU") member countries and their trading partners, as well as the broader global economy, may be adversely affected by changes in the exchange rate of the euro, the common currency of the EU, decreasing imports or exports, changes in EU or governmental regulations on trade, the threat of default or an actual default by an EU member country on its sovereign debt, and/or an economic recession in one or more EU member countries, which could negatively impact a Fund's investments and cause it to lose money. The EU's Economic and Monetary Union requires member countries to comply with restrictions on interest rates, deficits, debt levels, inflation rates, fiscal and monetary controls, and other factors, each of which may significantly impact European countries and their economic partners. <br>In recent years, the European financial markets have experienced and may continue to experience volatility and adverse trends due to concerns relating to economic downturns, rising government debt levels and national unemployment, the possible default of governmental debt in several European countries, public health crises; political unrest; economic sanctions; inflation; energy crises; the future of the euro as a common currency; and, war and military conflict, such as the Russian invasion of Ukraine. Russia's response to sanctions imposed by the U.S. and other countries are impossible to predict but have been and could continue to be significant and have a severe adverse impact on the region, including significant impacts on the regional, European, and global economies and the markets for certain securities and commodities, such as oil and natural gas. The Russia/Ukraine war has adversely affected European economic activity and the exchange rate of the euro and may continue to significantly affect European countries. Responses to financial problems by European governments, central banks, and others, including austerity measures, interest rate increases and other reforms, may not produce the desired results, may result in social unrest and may limit future growth and economic recovery or may have unintended consequences. A European country's default or debt restructuring would adversely affect the holders of the country's debt and sellers of instruments linked to the country's creditworthiness and could negatively impact global markets more generally. In addition, uncertainties regarding the viability of the EU have impacted and may continue to impact markets around the world. The United Kingdom has withdrawn from the EU, and if one or more other countries were to exit the EU, or if any eurozone country were to abandon the use of the euro as its currency, or if the possibility of such withdrawals, or the dissolution of the EU, increased, the value of investments tied to relevant countries could decline significantly and unexpectedly.  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *United Kingdom Securities Risk* – A Fund's exposure to issuers located in, or with economic ties to, the United Kingdom, could expose a Fund to risks associated with investments in the United Kingdom to a greater extent than more geographically diverse funds. Investments in United Kingdom issuers may subject a Fund to regulatory, political, currency, and economic risks specific to the United Kingdom. Increasing commodity prices and rising inflation levels caused or exacerbated by the war between Russia and Ukraine prompted the United Kingdom government and other relevant authorities to implement significant policy changes. It is difficult to predict what effects any such policies (or the suggestion of such policies) may have and the duration of those effects, which may last for extended periods. These effects may have a material, potentially negative, impact on the United Kingdom economy that could affect the performance of a Fund's investments. Additionally, the transitional period following the United Kingdom's departure from the European Union (commonly referred to as "Brexit") ended on December 31, 2020 and European Union law ceased to have effect in the United Kingdom except to the extent retained by the United Kingdom by unilateral act. The United Kingdom and European Union then reached a trade agreement that was ratified by all applicable United Kingdom and European Union governmental bodies. The economic effects of Brexit, including certain negative impacts on the ability of the United Kingdom to trade seamlessly with the European Union, are becoming clearer but some political, regulatory and commercial uncertainty in relation to the longer term impacts nevertheless remains to be resolved. Accordingly, there remains a risk that the aftermath of Brexit, including its ongoing effect on the United Kingdom's relationships with other countries, including the United States and the European Union, may negatively impact the United Kingdom, the broader global economy, or the value of the British pound sterling, any of which may impact the value of investments held by a Fund.  |

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| ***Government-Sponsored Enterprises Risk:*** | Investments in U.S. Government-sponsored enterprises are debt obligations issued by agencies and instrumentalities of the U.S. Government. These obligations vary in the level of support they receive from the U.S. Government. They may be: (i) supported by the full faith and credit of the U.S. Treasury, such as those of the Government National Mortgage Association; (ii) supported by the right of the issuer to borrow from the U.S. Treasury, such as those of the Federal Home Loan Bank and the Federal Farm Credit Banks; (iii) supported by the discretionary authority of the U.S. Government to purchase the agency obligations, such as those of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation; or (iv) supported only by the credit of the issuer, such as those of the Federal Farm Credit Bureau. The U.S. Government may choose not to provide financial support to U.S. Government-sponsored enterprises if it is not legally obligated to do so, in which case an issuer may not have the funds to meet its payment obligations. If the issuer defaulted, a Fund holding securities of such issuer might not be able to recover its investment from the U.S. Government. Like all bonds, U.S. Government-sponsored enterprise bonds are also subject to market risk, credit risk and interest rate risk. The rising U.S. national debt may lead to adverse impacts on the value of U.S. government securities due to potentially higher costs for the U.S. government to obtain new financing. The maximum potential liabilities of the issuers of some securities issued by the U.S. Government or government-sponsored enterprises that are held by a Fund may greatly exceed their current resources, including any legal right to support from the U.S. Treasury, and it is possible that these issuers may not have the funds to meet their payment obligations in the future. |

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| ***Hedging Risk:*** | Gains or losses from positions in hedging instruments may be much greater than the instrument's original cost. The counterparty may be unable to honor its financial obligation to a Fund. In addition, the Adviser may be unable to close the transaction at a desired time or at the price it believes the security is currently worth. If a Fund uses a hedging instrument at the wrong time or judges the market conditions incorrectly, or the hedged instrument does not correlate to the risk sought to be hedged, the hedge might be unsuccessful, reduce such Fund's return, or create a loss. A Fund is not required to hedge and may not do so. |

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| ***Inflation Risk:*** | Stocks, bonds and other securities may fall in value due to higher actual or anticipated inflation. Further, a rapid increase in prices for goods and services may have an adverse effect on corporate profits and consumer spending, which also may result in lower values for stocks, bonds and other securities. If a Fund's investments do not keep pace with inflation, the present value of the Fund's assets and the value of the Fund's distributions could decline. |

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| ***Interest Rate Risk:*** | Changes in interest rates may affect the yield, liquidity and value of investments in income producing or debt securities. The market values of fixed income securities are generally inversely related to actual changes in interest rates. Generally, when interest rates rise, the market value of a Fund's fixed income securities generally will decrease, and when interest rates decline the value of a Fund's fixed income securities generally will increase. Interest rates may rise, perhaps significantly and/or rapidly, potentially resulting in heightened volatility in the fixed income markets, impacting issuers' willingness or ability to make principal and interest payments when due, and adversely affecting the liquidity of certain fixed income investments, any of which may result in substantial losses to a Fund. Interest rate changes can be sudden and unpredictable, and are influenced by a number of factors, including government policy, central bank monetary policy, inflation expectations, perceptions of risk, and supply and demand of debt securities. Changes in government monetary policy may substantially impact interest rates, but there can be no guarantee that any particular policy will be continued, discontinued or changed, or that it will have the desired effect on interest rates. Short-term and long-term interest rates, and interest rates in different countries, do not necessarily move in the same direction or by the same amount. The yields received by a Fund on its fixed income investments will generally decline as interest rates decline. Additionally, the value of the income-oriented equity securities that pay dividends may decline when interest rates rise, as rising interest rates can reduce companies' profitability and their ability to pay dividends. Typically, the longer the maturity or duration of a debt security, the greater the effect a change in interest rates could have on the security's price. Duration is a measurement of a debt security's sensitivity to changes in interest rates. For every 1% change in interest rates, a debt security's price generally changes approximately 1% in the opposite direction for each year of duration. For example, if a portfolio of fixed income securities has an average weighted duration of ten years, its value can be expected to fall about 10% if interest rates rise by 1%. Conversely, the portfolio's value can be expected to rise approximately 10% if interest rates fall by 1%. Interest rate changes may have a more pronounced effect on the market value of fixed-rate instruments than on floating-rate instruments. When interest rates decline, issuers may prepay higher-yielding securities held by a Fund, resulting in a Fund reinvesting in securities with lower yields, which may cause a decline in its income. In a low or negative interest rate environment, some investors may seek to reallocate assets to other income-producing assets. This may cause the price of such higher yielding instruments to rise, could further reduce the value of instruments with a negative yield, and may limit a fund's ability to locate fixed income instruments containing the desired risk/return profile. In addition, decreases in fixed income dealer market-making capacity may lead to lower trading volume, heightened volatility, wider bid-ask spreads, and less transparent pricing in certain fixed income markets. A Fund may not be able to hedge against changes in interest rates or may choose not to do so for cost or other reasons. In addition, any hedges may not work as intended. |

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| ***Investment Risk:*** | An investment in a Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The share price of a Fund fluctuates, which means that when you sell your shares of a Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in a Fund. |

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| ***Large Cap Companies Risk:*** | The securities of large market capitalization companies may underperform other segments of the market because such companies may be less responsive to competitive challenges and opportunities, such as changes in technology and consumer tastes. Large market capitalization companies may be unable to attain or maintain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. |

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| ***Liquidity Risk:*** | A Fund is susceptible to the risk that certain investments held by the Fund may be difficult or impossible to purchase or sell at favorable times or prices or become less liquid in response to market developments or adverse credit events that may affect issuers or guarantors of a security. When there is little or no active trading market for specific types of securities, it can become more difficult for a Fund to sell the securities at or near their perceived value. During such periods, certain investments held by a Fund may be difficult to sell at favorable times or prices. As a result, a Fund may have to lower the price on certain securities that it is trying to sell, sell other securities instead or forego an investment opportunity, and of which could have a negative effect on the Fund. Market developments, financial distress or geopolitical events such as sanctions, trading halts or wars may cause a Fund's investments to become less liquid or illiquid and subject to erratic price movements. Investments that are illiquid or that trade in lower volumes may be more difficult to value. A Fund also may not receive proceeds from the sale of certain investments for an extended period of time. Certain investments that were liquid when purchased may become illiquid, sometimes abruptly, particularly in times of overall economic distress or adverse investor perception. An inability to sell a portfolio position can adversely affect a Fund's value or prevent the Fund from being able to take advantage of other investment opportunities.<br>Redemptions by a few large investors in a Fund at such times may have a significant adverse effect on a Fund's net asset value and remaining Fund shareholders. A Fund may lose money or face difficulty in meeting shareholder redemptions if it is forced to sell certain investments to meet redemption requests or other cash needs. Liquidity risk is particularly acute in the case of foreign investments that are traded in smaller, less-developed or emerging markets and securities issued by issuers with smaller market capitalizations. |

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| ***Market Risk:*** | A Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect a Fund's performance. Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. Markets may at times be volatile and the value of a Fund's investments may decline in price, sometimes significantly and/or rapidly, because of changes in prices of its holdings or a broad decline in the financial markets. The value of a security may decline due to adverse issuer-specific conditions or general market conditions which are not specifically related to a particular company, such as real or perceived adverse geopolitical, regulatory, market, economic or other developments that may cause broad changes in market value, changes in the general outlook for corporate earnings, changes in interest, currency or inflation rates, lack of liquidity in the markets, public perceptions concerning these developments or adverse market sentiment generally. Changes in the financial condition of a single issuer or market segment also can impact the market as a whole. The value of a security may also decline due to factors that affect a particular industry or industries, such as tariffs, labor shortages or increased production costs and competitive conditions within an industry. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously.  |
| | Geopolitical and other events, including terrorism, economic uncertainty, regional or global economic instability, trade disputes, pandemics, public health crises, natural disasters, cybersecurity incidents, and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity, which may adversely affect the value of your investment. The imposition by the U.S. of tariffs on goods imported from foreign countries and reciprocal tariffs levied on U.S. goods by those countries also may lead to volatility and instability in domestic and foreign markets. Such market disruptions have caused, and may continue to cause, broad changes in market value, negative public perceptions concerning these developments, a reduction in the willingness and ability of some lenders to extend credit, difficulty for some borrowers in obtaining financing on attractive terms, and adverse investor sentiment or publicity. Changes in value may be temporary or may last for extended periods. Adverse market events may also lead to increased shareholder redemptions, which could cause a Fund to sell investments at an inopportune time to meet redemption requests by shareholders and may increase a Fund's portfolio turnover, which could increase the costs that a Fund incurs and lower a Fund's performance. Even when securities markets perform well, there is no assurance that the investments held by a Fund will increase in value along with the broader market.  |

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| Policy changes by the U.S. government, the U.S. Federal Reserve and/or foreign governments, and political and economic changes within the U.S. and abroad, such as inflation, changes in interest rates, recessions, changes in the U.S. presidential administration and Congress, the U.S. government's inability at times to agree on a long-term budget and deficit reduction plan, the threat or occurrence of a federal government shutdown or the occurrence of a failure to increase the federal government's debt limit, which could result in a default on the government's obligations, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations. Global economies and financial markets are becoming increasingly interconnected, which increases the possibility of many markets being affected by events in a single country or events affecting a single or small number of issuers. |
| Both U.S. and international markets have experienced significant volatility in recent years. As a result of such volatility, investment returns may fluctuate significantly, and the risks discussed herein associated with an investment in a Fund may be increased. Deteriorating economic fundamentals may increase the risk of default or insolvency of particular issuers, negatively impact market value, increase market volatility, cause credit spreads to widen, reduce bank balance sheets and cause unexpected changes in interest rates. Any of these could cause an increase in market volatility, reduce liquidity across various sectors or markets or decrease confidence in the markets.  |
| Some countries, including the U.S., have adopted more protectionist trade policies, including trade tariffs and other trade barriers, which is a trend that appears to be continuing globally. The current political environment has intensified concerns about a global trade war. Slowing global economic growth, the rise in protectionist trade policies, inflationary pressures, changes to some major international trade and security agreements, risks associated with trade and security agreements between countries and regions, including the U.S. and other foreign nations, political or economic dysfunction within some countries or regions, including the U.S., and dramatic changes in consumer sentiment, commodity prices and currency values could affect the economies and markets of many nations, including the U.S., in ways that cannot necessarily be foreseen at the present time and may create significant market volatility. In addition, these policies, including the impact on the U.S. dollar, may decrease foreign demand for U.S. assets, which could have a negative impact on certain issuers and/or industries. Historical patterns of correlation among asset classes may break down in unanticipated ways during times of high volatility, disrupting investment programs and potentially causing losses. |
| The United States has imposed or threatened to impose tariffs and other trade barriers on imports of certain categories of goods from Canada, Mexico, and European countries. The United States also has imposed or threatened to impose tariffs and other trade barriers on imports of certain categories of goods from China, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. These countries have imposed or threatened to impose retaliatory tariffs on U.S. goods. If relations between the United States and these and other foreign countries do not improve or continue to deteriorate, markets and individual securities may be severely affected both regionally and globally, and the value of a Fund's investments may go down. |
| The Federal Reserve and certain foreign central banks have started to lower interest rates though economic or other factors, such as inflation, could reverse or stop such changes. It is difficult to accurately predict the pace at which interest rates might change, the timing, frequency or magnitude of any such changes in interest rates, or when such changes might stop or again reverse course. Unexpected changes in interest rates could lead to significant market volatility or reduce liquidity in certain sectors of the market. Over the longer term, rising interest rates may present a greater risk than has historically been the case due to the prior period of relatively low rates and the effect of government fiscal and monetary policy initiatives and potential market reaction to those initiatives, or their alteration or cessation. It is difficult to predict the impact on various markets of significant rate changes or other significant policy changes. |
| Markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, the execution of ransomware and other cyberattacks, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. In certain cases, an exchange or market may close or issue trading halts on either specific securities or even the entire market, which may result in a Fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments. These fluctuations in securities prices could be a sustained trend or a drastic movement. The financial markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations.  |

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| Tensions, war or open conflict between nations, such as among the United States, Israel and Iran, between Russia and Ukraine, otherwise in the Middle East or in eastern Asia could affect the economies of many nations, including the United States and may contribute to increased volatility and uncertainty in the financial markets. The extent and duration of ongoing hostilities and any sanctions and related events, including the potential for cyber warfare, remain uncertain and cannot be predicted. Those events have presented and could continue to present material uncertainty and risk with respect to markets globally, including in the oil and gas markets and potentially other industries and sectors, and the performance of a Fund and its investments or operations could be negatively impacted whether or not a Fund invests in securities of issuers located in or with significant exposure to the countries or regions directly affected. For example, the armed conflict among the United States, Israel and Iran that commenced in February 2026 has contributed to increased volatility and uncertainty in financial markets as well as significant volatility in the oil and natural gas markets, which has created widespread economic disruption.  |
| Regulators in the U.S. have adopted a number of changes to regulations involving the markets and issuers, some of which apply to a Fund. The full effect of such regulations is not currently known and certain changes, which may be revised or rescinded, could limit a Fund's ability to pursue its investment strategies or make certain investments, may make it more costly for a Fund to operate, or adversely impact its performance. Further, advancements in technology may also adversely impact market movements and liquidity and may affect the overall performance of a Fund. For example, the advanced development and increased regulation of artificial intelligence may adversely impact market movements and liquidity. As artificial intelligence is used more widely, which can occur rapidly, the profitability and growth of certain issuers may be negatively impacted in ways that cannot be foreseen and could adversely affect a Fund's performance. |
| High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. There is no assurance that the U.S. Congress will act to raise the nation's debt ceiling; a failure to do so could cause market turmoil and substantial investment risks that cannot now be fully predicted. Unexpected political, regulatory and diplomatic events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial markets and the broader economy. |
| Certain illnesses spread rapidly and have the potential to significantly and adversely affect the global economy. The impact of epidemics and/or pandemics that may arise in the future could negatively affect the economies of many nations, individual companies and the global securities and commodities markets, including their liquidity, in ways that cannot necessarily be foreseen at the present time and could last for an extended period of time. China's economy, which has been sustained through debt-financed spending on housing and infrastructure, appears to be experiencing a significant slowdown and growing at a lower rate than prior years. Due to the size of China's economy, such a slowdown could impact financial markets and the broader economy. |
| Global climate change can have potential effects on property and security values. Certain issuers, industries and regions may be adversely affected by the impact of climate change in ways that cannot be foreseen. The impact of legislation, regulation and international accords related to climate change, including any direct or indirect consequences, may negatively impact certain issuers, industries and regions. A rise in sea levels, a change in weather patterns, including an increase in powerful storms and large wildfires, and/or a climate-driven increase in flooding could cause properties to lose value or become unmarketable altogether. Unlike previous declines in the real estate market, properties in affected zones may not ever recover their value. Regulatory changes and divestment movements tied to concerns about climate change could adversely affect the value of certain land and the viability of industries whose activities or products are seen as accelerating climate change. |

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| ***Mortgage Pass-Through Securities Risk:*** | Investments in mortgage pass-through securities are subject to market risks for fixed income securities which include, but are not limited to, market risk, interest rate risk and credit risk. Mortgage-backed securities tend to increase in value less than other debt securities when interest rates decline, but are subject to similar or greater risk of decline in market value during periods of rising interest rates. Additionally, although the value of a mortgage-pass through security may decline when interest rates rise, the converse is not necessarily true, since in periods of declining interest rates the mortgages underlying the security are more likely to be prepaid, causing a Fund to purchase new securities at market rates, which usually will be lower. Mortgage pass-through securities also are subject to prepayment risk and extension risk. When interest rates decline, borrowers tend to repay their mortgages more quickly, such as by refinancing them. When this occurs, the mortgages that back these securities suffer a higher rate of prepayment. When mortgages are prepaid, a Fund may have to reinvest in securities with a lower yield or fail to recover premiums paid for securities with higher interest rates. This could cause a decrease in a Fund's income and net asset value. Extension risk is the flip side of prepayment risk. When interest rates rise, mortgage payments may decline and principal may be paid later than expected, extending the duration of these securities and a Fund may exhibit additional volatility. These securities are subject to the risk of default on the underlying mortgages, and such risk is heightened during periods of economic downturn. |

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| ***Preferred Stocks Risk:*** | If interest rates rise, the dividend on preferred stocks may be less attractive, causing the price of preferred stocks to decline. Preferred stocks may have mandatory sinking fund provisions, as well as provisions for their call or redemption prior to maturity which can have a negative effect on their prices when interest rates decline. The market prices of preferred stocks generally are more sensitive to actual or perceived changes in the issuer's financial condition or prospects than are prices of debt securities. Issuers may threaten preferred stockholders with the cancellation of all dividends and liquidation preference rights in an attempt to force their conversion to less secure common stock. In certain situations, an issuer may call or redeem its preferred stock or convert it to common stock. Certain preferred stocks are equity securities because they do not constitute a liability of the issuer and therefore do not offer the same degree of protection of capital or continuation of income as debt securities. The rights of preferred stock on distribution of a corporation's assets in the event of its liquidation are generally subordinated to the rights associated with a corporation's debt securities. Therefore, in the event of an issuer's bankruptcy, there is a substantial risk that there will be nothing left to pay preferred stockholders after payments, if any, to bondholders have been made. Preferred stocks may also be subject to credit risk. |

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| ***Redemption Risk:*** | A Fund may experience periods of significant redemptions that could cause a Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is greater to the extent that one or more investors or intermediaries control a large percentage of investments in a Fund, have shorter investment horizons, or have unpredictable cash flow needs. Redemption risk is heightened during periods of rising interest rates and declining or illiquid markets, which may cause investors to move out of fixed income, and potentially other, securities on a large scale. Significant redemptions, whether by a few large investors or many smaller investors, could hurt a Fund's performance. This risk may be heightened if a Fund invests in less liquid securities. The sale of assets to meet redemption requests may require a Fund to realize net capital gains, which could require a Fund to make substantial capital gains distributions to its shareholders. |

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| ***Sector Weighting Risk:*** | A Fund may focus its investments in particular sectors of the economy. To the extent a Fund emphasizes investments in particular sectors of the economy, a Fund will be subject to a greater degree of risks particular to those sectors. Market conditions, interest rates, availability of basic resources or supplies, and other economic, regulatory, financial or geopolitical developments could significantly affect securities in particular sectors more than securities of issuers in other industries and sectors. Depending on the weightings of a Fund's investments in particular sectors, the Fund may have increased exposure to price movements of securities in those sectors. A Fund's sector weightings could have an adverse impact on the Fund and lead to a decline in the Fund's net asset value. |
| | •&nbsp;&nbsp;&nbsp;&nbsp;Information Technology Sector Risk: The information technology sector includes companies engaged in internet software and services, technology hardware and storage peripherals, electronic equipment, instruments and components, and semiconductors and semiconductor equipment. The market prices of information technology-related securities tend to exhibit a greater degree of market risk and sharp price fluctuations than other types of securities. These securities may fall out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices. The information technology sector is subject to intense competition, both domestically and internationally, which may have an adverse effect on their profit margins, and government regulation. Like other technology companies, information technology companies may have limited product lines, markets, financial resources or personnel. The products of information technology companies may face rapid product obsolescence due to technological developments, frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel. Failure to introduce new products, develop and maintain a loyal customer base or achieve general market acceptance for their products could have a material adverse effect on a company's business. Companies in the information technology sector are heavily dependent on intellectual property rights and the loss of patent, copyright and trademark protections may adversely affect the profitability of these companies. |

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| ***Security Selection Risk:*** | Securities selected by the Adviser may perform differently than the overall market or may not meet the Adviser's expectations. This may be a result of specific factors relating to the issuer's financial condition or operations or changes in the economy, governmental actions or inactions, factors affecting a security's industry, poor operating performance, weak demand for an issuer's products or services, an issuer's failure to meet earnings or other operating performance expectations, financial leverage or credit deterioration, litigation or regulatory issues, a decline in the value of an issuer's business and assets, or changes in investor perceptions regarding the issuer. This could result in a Fund's underperformance compared to other funds with similar investment objectives. |

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|:---|:---|
| ***Small Cap Companies Risk:*** | Investments in small capitalization companies generally involve greater risks and the possibility of greater price volatility than investments in larger, more established companies. Small capitalization companies often have narrower commercial markets and more limited operating histories, product lines, and managerial and financial resources than larger, more established companies. As a result, performance can be more volatile and they face greater risk of business failure, which could increase the volatility of a Fund's portfolio. Additionally, small capitalization companies may have less market liquidity than larger capitalization companies, and they can be sensitive to changes in interest rates, borrowing costs and earnings. Generally, the smaller the company size, the greater these risks. |

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|:---|:---|
| ***Small and Mid Cap Companies Risk:*** | Investments in small and mid capitalization companies generally involve greater risks and the possibility of greater price volatility than investments in larger, more established companies. Small and mid capitalization companies often have narrower commercial markets and more limited operating histories, product lines, and managerial and financial resources than larger, more established companies. As a result, performance can be more volatile and they face greater risk of business failure, which could increase the volatility of a Fund's portfolio. Additionally, stocks of these companies may trade less frequently and in more limited volume than stocks of large capitalization companies, may have less market liquidity than larger capitalization companies, and they can be sensitive to changes in interest rates, borrowing costs and earnings. Generally, the smaller the company size, the greater these risks. |

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|:---|:---|
| ***U.S. Government Securities Risk:*** | The securities of U.S. Government agencies and instrumentalities in which a Fund may invest may not be backed by the full faith and credit of the U.S. Government. A security backed by the U.S. Treasury or the full faith and credit of the United States is only guaranteed by the applicable entity as to the stated interest rate and face value at maturity, not its current market price. Notwithstanding that a security may be backed by the full faith and credit of the U.S. Government, circumstances could arise that could prevent the payment of interest or principal, which would result in losses to a Fund. The market prices for such securities are not guaranteed and will fluctuate with changing interest rates and the credit rating of the U.S. Government. In addition, because many types of U.S. Government securities trade actively outside the United States, their prices may rise and fall as changes in global economic conditions affect the demand for these securities. Any guarantee by the U.S. government or its agencies or instrumentalities of a security a Fund holds does not apply to the market value of the security or the shares of the Fund. It is possible that the U.S. Government will not have the funds to meet its payment obligations in the future. Like all fixed income securities, U.S. Government fixed income securities are also subject to market risk, credit risk and interest rate risk. |
| ***Valuation Risk:*** | A Fund is exposed to the risk that it has valued a security at a price different from the price at which the security can be sold. This risk may be especially pronounced for investments, such as derivatives and foreign investments, which may be illiquid or which may become illiquid, and for securities that trade in relatively thin markets and/or markets that experience extreme volatility. If market conditions make it difficult to value certain investments, SEC rules and applicable accounting protocols may require a Fund to value these investments using more subjective methods, such as fair-value methodologies. Investors who purchase or redeem a Fund's shares on days when such Fund is holding fair-valued securities may receive fewer or more shares, or lower or higher redemption proceeds, than they would have received if such Fund had not fair-valued the securities or had used a different valuation methodology. The value of foreign securities, certain fixed income securities and currencies, as applicable, may be materially affected by events after the close of the markets on which they are traded, but before such Fund determines its NAV. A Fund's ability to value its investments in an accurate and timely manner may be impacted by technological issues and/or errors by third party service providers, such as pricing services or accounting agents. |

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|:---|:---|
| ***Variable and Floating Rate Securities Risk:*** | The interest rates payable on certain fixed income securities in which a Fund may invest are not fixed and may fluctuate based upon changes in market rates. A variable rate obligation has an interest rate which is adjusted at predesignated periods in response to changes in the market rate of interest on which the interest rate is based. The interest rate on a floating rate bond is a variable rate which is tied to another interest rate, such as a money-market index or Treasury bill rate. Although the impact of interest rate changes on variable and floating rate investments is intended to be mitigated by the periodic interest rate reset of those securities, variable and floating rate securities may fluctuate in value in response to interest rate changes if there is a delay between changes in market interest rates and the interest reset date for the obligation, or for other reasons. In addition, because of the interest rate adjustment features, variable and floating rate securities provide a Fund with a certain degree of protection against increases in interest rates, but a Fund will participate in any declines in interest rates as well. Thus, investing in variable and floating rate securities may allow less opportunity for capital appreciation and depreciation than investing in instruments with a fixed interest rate, and variable and floating rate bonds are less effective at locking in a particular yield. Variable and floating rate bonds are subject to market risk, interest rate risk and credit risk. Certain types of variable and floating rate instruments may also be subject to greater liquidity risk than other debt securities, may be subject to legal or contractual restrictions on resale, or may trade infrequently. |

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**PORTFOLIO HOLDINGS INFORMATION** 

The Funds make available their top ten and complete portfolio holdings on their website (www.lkcmfunds.com) on a quarterly basis. The top ten and complete portfolio holdings information is generally available no earlier than 10 and 30 days after the end of the calendar quarter, respectively, and will remain available through at least the end of the current quarter. Monthly portfolio disclosures are filed quarterly with the SEC on Form N-PORT, with quarter-end disclosures being made public 60 days after the end of each fiscal quarter. A description of the Funds' policies and procedures with respect to the disclosure of the Funds' portfolio securities is available in the Funds' Statement of Additional Information. The Statement of Additional Information is available by contacting the Funds at 1-800-688-LKCM or at www.lkcmfunds.com.

**MANAGEMENT** 

**INVESTMENT ADVISER** 

Luther King Capital Management Corporation (the "Adviser"), 301 Commerce Street, Suite 1600, Fort Worth, Texas 76102, serves as the investment adviser to the Funds. The Adviser was founded in 1979 and provides investment management services to investment companies, employee benefit plans, endowment funds, foundations, estates, trusts, high net-worth individuals, and private investment funds. As of December 31, 2025, the Adviser had approximately $30.4 billion in assets under management.

Under an Investment Advisory Agreement with the Funds, each Fund pays the Adviser an advisory fee, calculated daily and payable quarterly, equal to the annual rate set forth under "Contractual Advisory Fee" in the table below based on the Fund's average daily net assets for the quarter. The Adviser has contractually agreed to waive its advisory fees and/or reimburse expenses through May 1, 2027 to the extent necessary to keep the total operating expenses for the Funds from exceeding the respective caps shown in

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the table below as a percentage of average daily net assets. This expense limitation excludes interest, taxes, brokerage commissions, indirect fees and expenses relating to investments in other investment companies, including money market funds (Acquired Fund Fees and Expenses), and extraordinary expenses. The fee waiver and expense reimbursement agreement may be terminated only with the consent of the Board of Trustees.

The contractual advisory fees, actual advisory fees paid by the Funds net of waivers, and contractual expense caps for the Funds for the fiscal year ended December 31, 2025 were as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **Contractual**<br>**Advisory Fee**  | **Net Advisory**<br>**Fee Paid**  | **Expense Cap** |
| Small Cap Equity Fund | 0.75% | 0.70% | 1.00% |
| Small-Mid Cap Equity Fund | 0.75% | 0.44% | 1.00% |
| Equity Fund | 0.70% | 0.51% | 0.80% |
| Balanced Fund | 0.65% | 0.43% | 0.80% |
| Fixed Income Fund | 0.50% | 0.19% | 0.50% |
| International Equity Fund | 0.90% | 0.54% | 1.00% |

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Any fee waiver or reimbursements will have the effect of lowering the overall expense ratio for the applicable Fund and increasing its overall return to investors at the time any such amounts were waived and/or reimbursed.

A discussion regarding the basis on which the Board of Trustees approved the investment advisory agreement for each Fund, is available in Item 11 of the Funds' <u>[Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/918942/000113322825009327/lsar-efp16898_ncsrs.htm)</u>as filed with the SEC for the fiscal period ended June 30, 2025.

The International Equity Fund is authorized to invest in derivatives, but does not currently do so. If, in the future, the International Equity Fund invests in derivatives, the Adviser may rely on an exclusion from regulation as a commodity pool operator under CFTC Regulation 4.5 on behalf of the International Equity Fund.

**PORTFOLIO MANAGERS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**J. Luther King, Jr., CFA,** is the lead portfolio manager of the LKCM Equity Fund (since inception in 1996). Mr. King is primarily responsible for the day-to-day management of, and oversees the investment team responsible for, the LKCM Equity Fund. Mr. King is also a member of the investment teams responsible for the LKCM Small Cap Equity Fund (since inception in 1994), LKCM Small-Mid Cap Equity Fund (since inception in 2011), LKCM Balanced Fund (since inception in 1997) and LKCM International Equity Fund (since inception in 2019). Mr. King has been President, Principal and Portfolio Manager of the Adviser since 1979, and has been a Trustee of the Funds since 1994. Mr. King graduated with a Bachelor of Science and a Master of Business Administration from Texas Christian University.

**Scot C. Hollmann, CFA,** is the lead portfolio manager of the LKCM Balanced Fund (since inception in 1997). Mr. Hollmann is primarily responsible for the day-to-day management of, and oversees the investment team responsible for, the LKCM Balanced Fund. Mr. Hollmann is also a member of the investment teams responsible for the LKCM Equity Fund (since 2010), LKCM Fixed Income Fund (since 2010) and LKCM Aquinas Catholic Equity Fund (since 2017). Mr. Hollmann joined the Adviser in 1983 and has served as Principal (since 1986) and Vice President and Portfolio Manager (since 1983). Mr. Hollmann graduated with a Bachelor of Business Administration and a Master of Business Administration from Texas Christian University.

**Joan M. Maynard** is the lead portfolio manager of the LKCM Fixed Income Fund (since inception in 1997). Ms. Maynard is primarily responsible for the day-to-day management of, and oversees the investment team responsible for, the LKCM Fixed Income Fund. Ms. Maynard joined the Adviser in 1986 and has served as Principal (since 2015) and Vice President and Portfolio Manager (since 1986). Ms. Maynard graduated with a Bachelor of Business Administration from the University of Texas at San Antonio and a Master of Business Administration from Texas Christian University.

**Mark L. Johnson, CFA,** is a member of the investment teams responsible for the LKCM Balanced Fund (since 2010), the LKCM Fixed Income Fund (since 2010), and the LKCM Small Cap Equity Fund (since 2021). Mr. Johnson joined the Adviser in 2002 and has served as Principal (since 2013) and Vice President and Portfolio Manager (since 2002). Mr. Johnson graduated with a Bachelor of Arts from Duke University.

**Mason D. King, CFA**, is the lead portfolio manager of the LKCM International Equity Fund (since inception in 2019) and the LKCM Small Cap Equity Fund (since 2021). Mr. King is primarily responsible for the day-to-day management of, and oversees the investment team responsible for, the LKCM International Equity Fund and the LKCM Small Cap Equity Fund. Mr. King is also a member of the investment teams responsible for the LKCM Equity Fund (since 2010) and the LKCM Small-Mid Cap Equity Fund (since 2017), and he has served as a member of the investment team responsible for the LKCM Small Cap Equity Fund from 2017 to 2021. Mr. King joined the Adviser in 2004 and has served as Principal (since 2013) and Vice President, Portfolio Manager and Analyst (since 2004). Mr. King graduated with a Bachelor of Arts from Princeton University and a Master of Business Administration from the University of Texas.

**Daniel C. Downes, CFA, CPA**, is the lead portfolio manager of the LKCM Small-Mid Cap Equity Fund (since 2021). Mr. Downes is primarily responsible for the day-to-day management of, and oversees the investment team responsible for, the LKCM Small-Mid Cap Equity Fund. Mr. Downes joined the Adviser in 2014 and has been a Vice President and Analyst since 2014 and Principal and Portfolio Manager since 2021. Mr. Downes graduated with a Bachelor of Science in Finance from Miami University and a Master of Business Administration from the University of Pennsylvania's Wharton School of Business.

The Statement of Additional Information provides additional information about the portfolio managers' compensation, other accounts managed, and ownership of shares of the Funds that they manage.

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**DISTRIBUTION OF FUND SHARES** 

**DISTRIBUTOR** 

Quasar Distributors, LLC, 190 Middle Street, Suite 301, Portland, ME 04101, a registered broker-dealer and member of the Financial Industry Regulatory Authority, distributes the Funds' shares.

**DISTRIBUTION PLAN** 

The Funds have adopted a distribution plan under Rule 12b-1 of the Investment Company Act of 1940, as amended (the "Investment Company Act"), (the "Distribution Plan") that allows the Funds to pay distribution and service fees for the sale and distribution of their shares and for services provided to shareholders. The Distribution Plan allows the Funds to finance with Fund assets activities that promote the sale and retention of the Funds' shares such as printing prospectuses and reports and preparing and distributing advertising material and sales literature and providing services to shareholders. The Distribution Plan authorizes each Fund to annually pay up to 0.75% of average daily net assets for distribution and other services.

Currently, the Board of Trustees has not authorized payments under the Distribution Plan and, as a result, the Funds neither accrue nor pay any fees under the Distribution Plan. If the Funds were using the Distribution Plan, because fees would be paid out of a Fund's assets on an ongoing basis, over time these fees would increase the cost of your investment and may cost you more than paying other types of sales charges.

**PURCHASE OF SHARES** 

You may purchase shares of each Fund at the net asset value ("NAV") per share next determined after receipt of the purchase order. Each Fund normally determines NAV as of the scheduled close of normal trading of the New York Stock Exchange ("NYSE") (generally 4:00 P.M. Eastern Time) each day that the NYSE is scheduled to be open for business.

**INITIAL INVESTMENTS** 

The Funds are offered for purchase directly from LKCM Funds, through financial intermediaries who have entered into agreements with the Funds' distributor, and from certain other distribution channels. The policies that apply to the purchase of Fund shares directly through the Funds' transfer agent, U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (the "Transfer Agent"), are discussed below. If you establish an account with a broker-dealer or other financial intermediary, ask them for information on how to purchase, sell and exchange Fund shares. Your broker-dealer or other financial intermediary also may charge fees that are in addition to those described in this Prospectus. Each Fund's minimum initial investment is $2,000, but financial intermediaries may impose different initial investment minimums for a Fund. Please contact your financial intermediary for information regarding how to purchase, exchange and redeem shares and applicable fees.

**Through Your Financial Adviser.** You may invest in shares of a Fund by contacting your financial adviser. Your financial adviser can help you open a new account and help you review your financial needs and formulate long-term investment goals and objectives. Investors may be charged a fee if they effect transactions in Fund shares through a broker or agent.

The Funds have authorized certain broker-dealers and other financial intermediaries to receive on their behalf purchase and redemption orders of Fund shares. These broker-dealers may also designate intermediaries to receive Fund orders on their behalf. The Funds are deemed to have received purchase and redemption orders for Fund shares when an authorized broker-dealer or its designee or financial intermediary receives such orders. All such orders are executed at the next NAV calculated after the order is received by an authorized broker-dealer or its designee or financial intermediary. Your broker-dealer or other financial intermediary is responsible for transmitting orders to be received by the Funds in proper form and in a timely manner. The Funds are not responsible for the failure of a broker-dealer or financial intermediary to transmit a purchase or redemption order in proper form and in a timely manner.

**By Mail.** You may open an account directly with the Transfer Agent by completing and signing a New Account Application, and mailing it, together with a check ($2,000 minimum initial investment) payable to LKCM Funds. Your order will not be accepted until the completed New Account Application is received by the Funds or the Transfer Agent.

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|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By regular mail to: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By express, registered or certified mail to: |
| LKCM Funds – [Fund name]<br>c/o U.S. Bank Global Fund Services<br>P.O. Box 219252<br>Kansas City, MO 64121-9252 | &nbsp;&nbsp;LKCM Funds – [Fund name]<br>c/o U.S. Bank Global Fund Services<br>801 Pennsylvania Ave, Suite 219252 <br>Kansas City, MO 64105-1307 |

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The Funds do not consider the U.S. Postal Service or other independent delivery services to be their agents. Therefore, deposit in the mail or with such services, or receipt at the U.S. Bank Global Fund Services post office box of purchase orders or redemption requests does not constitute receipt by the Transfer Agent. Receipt of purchase orders or redemption requests is based on when the order is received at the Transfer Agent's offices. The Funds are deemed to have received purchase and redemption orders for Fund shares when an authorized broker-dealer or its designee or financial intermediary receives such orders.

Once a Fund receives and accepts your New Account Application in the mail, your payment for shares will be credited to your account at the NAV per share of a Fund next determined after receipt. If you purchase shares using a check or electronic funds transfer through the Automated Clearing House ("ACH") network and soon after make a redemption request, the Funds will honor the redemption request at the next determined NAV, but will not send you the proceeds until your payment for purchase has cleared (within 7 business days). The Funds will not accept payment in cash or money orders. To prevent check fraud, the Funds will not accept third party checks, U.S. Treasury checks, credit card checks, traveler's checks or starter checks for the purchase of shares. The Funds are unable to accept postdated checks or any conditional order or payment. Payment should be made by check in U.S. Dollars

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drawn on a U.S. bank or credit union. If your bank does not honor your check, you could be liable for any loss sustained by the Funds, as well as a service charge imposed by the Transfer Agent in the amount of $25.

In compliance with the USA PATRIOT Act of 2001, when you open an account directly with the Funds, please note that the Transfer Agent will verify certain information on your New Account Application as part of the Funds' Anti-Money Laundering Program. As requested on the New Account Application, you must supply your full name, date of birth, social security number and permanent street address. If you are opening the account in the name of a legal entity (*e.g*., partnership, limited liability company, business trust, corporation, etc.), you must also supply the identity of the beneficial owners. Broker-dealers and other financial intermediaries also are required to comply with the USA PATRIOT Act and, as a result, may request similar information when you open an account. Mailing addresses containing only a P.O. Box will not be accepted. Please contact the Transfer Agent at 1-800-688-LKCM if you need additional assistance when completing your New Account Application.

If the Funds do not have a reasonable basis for determining your identity, your account will be rejected or you will not be allowed to perform a transaction on the account until the necessary information to confirm your identity is received. If the Transfer Agent is unable to verify your identity, the Fund reserves the right to redeem your account at the current day's net asset value.

**By Wire.** You may purchase shares of a Fund by wiring federal funds ($2,000 minimum). If you are making your first investment in the Funds, before you wire funds, the Transfer Agent must have received and processed a completed New Account Application from you. You can mail or overnight deliver your New Account Application to the Transfer Agent. Upon receipt of your completed New Account Application, the Transfer Agent will establish an account for you. The account number assigned will be required as part of the instruction that should be given to your bank to send the wire. The wire must be received by the time as of which the NAV is calculated in order to receive the same day's NAV. Your bank must include both the name of the Fund you are purchasing, your name and account number so that monies can be correctly applied. Your bank should transmit funds by wire to:

U.S. Bank, N.A.

777 East Wisconsin Avenue

Milwaukee, WI 53202

ABA #075000022

For credit to U.S. Bancorp Fund Services, LLC

Account #112-952-137

For further credit to LKCM Funds

[Name of Fund]

[Shareholder account number]

Federal fund purchases will be accepted only on a day on which the Funds and the custodian are open for business. The Funds and U.S. Bank, N.A. are not responsible for the consequences of delays resulting from the banking or Federal Reserve wire system, or from incomplete wiring instructions.

**SUBSEQUENT INVESTMENTS** 

**By Mail or Wire.** To make additional investments once you have opened your account (minimum subsequent investment $500), write your account number on a check made payable to LKCM Funds and send it together with the Invest by Mail form from your most recent confirmation statement received from the Transfer Agent to the address noted in the section entitled "Initial Investments – By Mail." If you do not have the Invest by Mail form, include the Fund name, your name, address, and account number on a separate piece of paper along with your check. Additional investments may also be made by wire. Before sending your wire, please contact the Transfer Agent at 1-800-688-LKCM to advise them of your intent to wire funds. This will ensure prompt and accurate credit upon receipt of your wire. Instruct your bank to wire monies as outlined above.

**By Telephone.** To make additional investments by telephone, you must check the appropriate box on your New Account Application authorizing telephone purchases. If you have given authorization for telephone transactions and your account has been open for at least 7 business days, you may call the Funds toll free at 1-800-688-LKCM to move money, in the amount of $500 or more, from your bank account to your Fund account upon request. Only bank accounts held at U.S. institutions that are ACH members may be used for telephone transactions. For security reasons, requests by telephone may be recorded. Shares of the Funds will be purchased in your account at the NAV next determined after your order is placed. Telephone trades must be received by or prior to market close. During periods of high market activity, shareholders may encounter higher than usual call waits. Please allow sufficient time to place your telephone transaction.

If you purchased shares of a Fund through a financial intermediary, you must contact your financial intermediary for information concerning how to effect subsequent investments in the Fund's shares.

**AUTOMATIC INVESTMENT PROGRAM** 

The Automatic Investment Program (the "Program") permits investors that own shares of a Fund with a value of $2,000 or more to purchase shares (minimum of $100 per transaction) at regular intervals selected by the investor. This Program provides a convenient method to have monies deducted from your checking or savings account, for investment into a Fund, on a monthly or quarterly basis. Only bank accounts held at domestic institutions that are ACH members may be used for this option. If you wish to change the amount of your investment or to terminate the Program, please contact the Transfer Agent five days prior to the effective date. Additionally, the Transfer Agent will charge a $25 fee for any payment returned. To establish the Program, an investor must complete the appropriate sections of the New Account Application. For additional information on the Program, please call 1-800-688-LKCM.

**RETIREMENT PLANS AND ACCOUNTS** 

The Funds make available individual retirement accounts ("IRAs"), including Simplified Employee Pension Plans, traditional IRAs, Roth IRAs and IRA "Rollover Accounts," offered by U.S. Bank Global Fund Services. Detailed information on these plans and accounts is available by calling the Funds at 1-800-688-LKCM. The Transfer Agent charges an annual fee of $15 for maintaining each plan and account up to a maximum of $30 per Social Security number, which is in addition to other fees and expenses payable to the

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Funds or Transfer Agent as described herein. Investors should consult with their own tax advisers before establishing a retirement plan or account.

**OTHER PURCHASE INFORMATION** 

Each Fund reserves the right, in its sole discretion, to suspend the offering of its shares, to reject any purchase order, or to waive any minimum investment requirements.

Purchases of each Fund's shares will be made in full and fractional shares of the Fund calculated to three decimal places.

**POLICY ON PROHIBITION OF FOREIGN SHAREHOLDERS** 

Shares of the Funds have not been registered for sale outside of the United States. Accordingly, the Funds generally require that shareholders must be U.S. persons with a valid U.S. taxpayer identification number to open an account with the Funds. Each Fund may sell shares to investors residing outside the United States in its discretion. The Funds reserve the right to close an account (generally within 30 days) if clarifying information/documentation is not received by the Funds from any such investors.

**UNCLAIMED PROPERTY** 

It is important that the Funds maintain a correct address for each shareholder. An incorrect address may cause a shareholder's account statements and other mailings to be returned to the Funds. Based upon statutory requirements for returned mail, a Fund will attempt to locate the shareholder or rightful owner of the account. If the Fund is unable to locate the shareholder, then it will determine whether the shareholder's account can legally be considered abandoned. Your mutual fund account may be transferred to the state government of your state of residence if no activity occurs within your account during the "inactivity period" specified in your state's abandoned property laws. The Funds are legally obligated to escheat (or transfer) abandoned property to the appropriate state's unclaimed property administrator in accordance with statutory requirements. The shareholder's last known address of record determines which state has jurisdiction. Please proactively contact the Transfer Agent at 1-800-688-LKCM at least annually to ensure your account remains in active status.

If you are a resident of the state of Texas, you may designate a representative to receive notifications that, due to inactivity, your mutual fund account assets may be delivered to the Texas Comptroller. Please contact the Transfer Agent if you wish to complete a Texas Designation of Representative form.

**HOUSEHOLDING** 

In an effort to decrease costs, the Funds may reduce the number of duplicate prospectuses, supplements, and certain other shareholder documents you receive by sending only one copy of each to those addresses shared by two or more accounts and to shareholders the Funds reasonably believe are from the same family or household. If implemented, and if you would like to discontinue householding for your accounts, please call toll-free at 1-800-688-LKCM to request individual copies of documents. Once a Fund receives notice to stop householding, it will begin sending individual copies thirty days after receiving your request. This policy does not apply to account statements.

If you hold your Fund shares through a financial intermediary, your financial intermediary's document policies will apply. Please contact your financial intermediary for further information.

**MARKET TIMING POLICY** 

"Market timing" typically refers to the practice of frequent trading in the shares of mutual funds in order to exploit inefficiencies in fund pricing. Market timing transactions include trades in mutual fund shares that occur when the fund's NAV may not fully reflect the value of the fund's holdings – for example, when the fund has in its portfolio particular holdings, such as foreign or thinly traded securities, that are valued on a basis that does not include the most updated information possible. Market timing can have a dilutive effect on the value of the investments of long-term fund shareholders and can increase the transaction costs of a fund, which will be borne by all fund shareholders.

The Funds are typically intended for long-term investing. Market timing by Fund shareholders may adversely affect the Funds by interfering with portfolio management and increasing portfolio transaction and administrative costs. The Board of Trustees of the Funds has adopted policies and procedures to detect and prevent market timing activities in the Funds. To discourage market timing, each Fund charges a 1.00% redemption fee on shares exchanged or redeemed within 30 days of purchase, except on shares held in separately managed accounts of the Adviser. The redemption fee may be waived with the approval of the Board of Trustees. The redemption fee also may be waived by the Adviser or an officer of the Funds, provided such waivers are reported to the Board of Trustees. In addition, a Fund may temporarily suspend or terminate future purchase and exchange orders by investors or groups of investors who the Funds believe have engaged in market timing practices and which may have an adverse impact on the Funds. The Funds will also terminate, without notice, the exchange privilege of any investor who, in the opinion of the Funds, uses the exchange privilege excessively.

The Funds and/or the Adviser monitor for market timers and attempt to detect abusive trading practices. The criteria and techniques may change from time to time as determined by the Funds or the Adviser. The Transfer Agent may reject any purchase or exchange order, in whole or in part, including trading that the Funds or the Adviser believe may be excessive in frequency and/or amount or otherwise potentially disruptive to the affected Funds. Although these efforts are designed to discourage abusive trading practices, these tools cannot eliminate the possibility that such activity will occur.

Furthermore, due to the complexity involved in identifying abusive trading activity and the volume of shareholder transactions the Funds handle, there can be no assurance that the efforts of the Funds or the Adviser will identify all trades or trading practices that may be considered abusive. In addition, the ability of the Funds or the Adviser to monitor trades that are placed by individual shareholders within omnibus and retirement accounts maintained by financial intermediaries may be limited. However, the Funds and the Adviser attempt to monitor aggregate trades placed in omnibus accounts and seek to work with financial intermediaries to discourage shareholders from engaging in abusive trading practices and to impose restrictions on excessive trades. In this regard, the

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Funds have entered into agreements with certain financial intermediaries that generally require them to provide the Funds with information concerning those individual shareholders involved in any such aggregated trades. For those financial intermediaries with whom the Funds have not entered into such agreements, the Funds treat such intermediaries as individual shareholders for purposes of their market timing and redemption fee policies. However, there can be no assurance that the Funds or the Adviser will be able to detect and prevent abusive trading in accounts maintained by financial intermediaries through the foregoing measures or otherwise.

**EXCHANGING SHARES** 

Exchanges of all or a portion of your investment from a Fund to an identically registered account in another LKCM Fund may be made. Any new account established through an exchange will be subject to the minimum investment requirements described above. Exchanges will be executed on the basis of the relative NAV of the shares exchanged after your request for an exchange is received. An exchange is considered to be a sale of shares of the Fund from which you are exchanging for federal income tax purposes, on which you may realize a taxable gain or loss. In addition, exchanges of shares held for fewer than 30 days will be subject to a 1.00% redemption fee, except shares held in separately managed accounts of the Adviser or as otherwise determined by a Fund in its discretion. The Transfer Agent charges a $5 fee for each exchange via telephone. Call the Funds to learn more about exchanges. If you purchased shares of a Fund through your financial intermediary, please contact your financial intermediary to determine if you may take advantage of the exchange policies described in this section and for its policies to effect an exchange.

The Funds are intended as long-term investment vehicles and not to provide a means of speculating on short-term market movements. In addition, excessive trading can hurt the Funds' performance and shareholders. Therefore, each Fund may terminate, without notice, the exchange privilege of any investor who uses the exchange privilege excessively. The Funds may change or temporarily suspend the exchange privilege during unusual market conditions.

**REDEMPTION OF SHARES** 

You may redeem shares of the Funds by contacting your financial adviser, by mail or, if authorized, by telephone or wire. The Funds do not charge a fee for making redemptions, except that each Fund charges a 1.00% redemption fee on shares exchanged or redeemed within 30 days of purchase unless such shares are held in separately managed accounts of the Adviser. The redemption fee may be waived with the approval of the Board of Trustees. The redemption fee also may be waived by the Adviser or an officer of the Funds, provided such waivers are reported to the Board of Trustees. If you purchased your shares through a broker-dealer or other financial intermediary, please contact your broker-dealer or financial intermediary for information regarding how to sell your shares.

**By Mail.** You may redeem your shares by mailing a written request to:

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By regular mail to: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By express, registered or certified mail to: |
| LKCM Funds – [Fund name]<br>c/o U.S. Bank Global Fund Services<br>P.O. Box 219252<br>Kansas City, MO 64121-9252 | &nbsp;&nbsp;LKCM Funds – [Fund name]<br>c/o U.S. Bank Global Fund Services<br>801 Pennsylvania Ave, Suite 219252 <br>Kansas City, MO 64105-1307 |

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The Funds do not consider the U.S. Postal Service or other independent delivery services to be their agents. Therefore, deposit in the mail or with such services, or receipt at the U.S. Bank Global Fund Services post office box of purchase orders or redemption requests does not constitute receipt by the Transfer Agent. Receipt of purchase orders or redemption requests is based on when the order is received at the Transfer Agent's offices. The Funds are deemed to have received purchase and redemption orders for Fund shares when an authorized broker-dealer or its designee or financial intermediary receives such orders. The Funds are not responsible for the failure of a broker-dealer or financial intermediary to transmit a purchase or redemption order in proper form and in a timely manner.

After your request is in "good order" the Fund will redeem your shares at the next NAV. To be in "good order," redemption requests must include the following documentation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The share certificates, if issued;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;A letter of instruction, if required, or a stock assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are registered;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Any required signature guarantees; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Other supporting legal documents, if required, in the case of estates, trusts, guardianships, custodianships, corporations, pension and profit sharing plans, and other organizations.

**Signature Guarantees.** To protect your account, the Funds and U.S. Bank Global Fund Services from fraud, signature guarantees are required to enable the Funds to verify the identity of the person that has authorized a redemption from an account. Signature guarantees, from either a Medallion program member or a non-Medallion program member, are required for (1) redemptions where the proceeds are payable or sent to any person, address or bank account not on record, (2) share transfer requests, or (3) any redemption request if a change of address request has been received by the Transfer Agent within the last 15 calendar days. In addition to the situations described above, the Funds and /or the Transfer Agent reserve the right to require a signature guarantee in other instances based on the circumstances relative to the particular situation. The Funds reserve the right to waive any signature guarantee requirement at their discretion.

Non-financial transactions including establishing or modifying certain services on an account may require a signature guarantee, signature verification from a Signature Validation Program member, or other acceptable form of authentication from a financial institution source.

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Signature guarantees will generally be accepted from domestic banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations, as well as from participants in the New York Stock Exchange Medallion Signature Program and the Securities Transfer Agents Medallion Program ("STAMP"). A notary public is not an acceptable signature guarantor. Please contact the Funds at 1-800-688-LKCM for further details.

**By Telephone.** If you indicated on your New Account Application, or have subsequently arranged in writing to do so, you may redeem shares by calling the Funds. You may have the redemption proceeds mailed by check to the primary registration address or wired directly to your bank. You may also have your proceeds sent via electronic funds transfer through the ACH network to your predetermined bank account. Other redemption fees may be applicable. See the section titled "Other Redemption Information" below. The Transfer Agent imposes a $15 fee for each wire redemption. There is no charge for an electronic funds transfer, however the funds may not be available for 2-3 days. The redemption proceeds will be paid to the same bank and account as designated on the New Account Application or in written instructions subsequently received by the Funds. No telephone redemptions may be made within 15 days of any address change.

If you would like to arrange for redemption by wire or telephone or change the bank or account designated to receive redemption proceeds, you must send a written request to the Funds at the address listed in the section entitled "Redemption of Shares – By Mail." The investor must sign such requests. Further documents and signature verifications may be required.

The Funds reserve the right to refuse a wire or telephone redemption. Procedures for redeeming shares by wire or telephone may be modified or terminated at any time. The Funds and the Transfer Agent will not be liable for any loss, liability, cost or expense for acting upon telephone instructions that are reasonably believed to be genuine. Before executing an instruction received by telephone, the Transfer Agent will use reasonable procedures to confirm that the telephone instructions are genuine. The telephone call may be recorded and the caller may be asked to verify or provide certain personal identification information. If an account has more than one owner or authorized person, the Fund will accept telephone instructions from any one owner or authorized person. If the Funds or their agents follow these procedures, they cannot be held liable for any loss, expense or cost arising out of any telephone redemption request that is reasonably believed to be genuine. This includes fraudulent or unauthorized requests. Once you place a telephone transaction request, it cannot be canceled or modified after the close of regular trading on the NYSE (generally, 4:00 p.m., Eastern Time). Telephone trades must be received by or prior to market close. During periods of high market activity, shareholders may encounter higher than usual call waits. Please allow sufficient time to place your telephone transaction.

Shareholders who have an IRA or other retirement plan must indicate on their written redemption request whether to withhold federal income tax. Redemption requests failing to elect not to withhold tax will generally be subject to 10% withholding.

Shares held in IRA or other retirement plan accounts may be redeemed by telephone at 1-800-688-LKCM. Investors will be asked whether to withhold taxes from any distribution.

**30-Day Redemption Fee**. If you redeem or exchange shares held for less than 30 days after the date of purchase, you will be subject to a 1.00% redemption fee. This fee will be deducted from the proceeds of your redemption. For purposes of applying the fee, the first day of the holding period is trade date plus one. The holding period will be determined on a "first-in, first-out" basis, meaning the Fund shares purchased first will be redeemed first. The redemption fee will not apply to shares of the Funds held in accounts separately managed by the Adviser. The redemption fee may be waived with the approval of the Board of Trustees. The redemption fee also may be waived by the Adviser or an officer of the Funds, provided such waivers are reported to the Board of Trustees. Transactions in shares of the Funds by financial intermediaries with whom the Funds do not have information sharing agreements in place may be subject to the redemption fee. The redemption fee will be retained by a Fund for the benefit of its shareholders. Redemption fees will not apply to shares acquired through the reinvestment of dividends, or to shares purchased through the Automatic Investment Program.

**Other Redemption Information.** Payment of the redemption proceeds will normally be made within seven calendar days after receipt of a redemption request in "good order." Redemption proceeds for shares of the Funds purchased by check or electronic funds transfer through the ACH network may not be distributed until payment for the purchase has been collected, which may take up to seven business days. Shareholders can avoid this delay by utilizing the wire purchase option.

Due to the relatively high cost of maintaining small accounts, the Funds reserve the right to redeem shares in any account for their then-current value (which will be promptly paid to the investor) if at any time, due to redemption by the investor, the shares in the account do not have a value of at least $1,000. You will receive advance notice of a mandatory redemption and will be given at least 30 days to bring the value of the account up to at least $1,000.

Normally, redemption proceeds paid via check will be sent via mail within two business days following the business day a Fund receives the redemption order (assuming the order is received in good order prior to the time as of which the day's NAV is calculated), while redemption proceeds paid via ACH and electronic fund transfers will generally be sent to your bank account within two business days following the business day we receive the redemption order (assuming the order is received in good order prior to the time as of which the day's NAV is calculated). However, payment of redemption proceeds may take up to 7 calendar days. In addition, the Funds may suspend the right of redemption or postpone redemptions when the NYSE is closed (other than customary weekend and holiday closings) or under any other emergency circumstances permitted by the SEC.

If you are redeeming shares which you recently purchased by check or electronic funds transfer, payment may be delayed to verify that your check or electronic funds transfer has cleared (which may take up to seven business days from the date of purchase). If your account is held through an intermediary, redemption proceeds will generally be paid to the intermediary within two business days following the business day we receive the redemption order (assuming the order is received in good order prior to the time as of which that day's NAV is calculated).

The Funds typically expect to meet redemption requests by paying out proceeds from cash or cash equivalent portfolio holdings, or by selling portfolio holdings. In stressed market conditions, redemption methods may include redeeming in kind. The Funds have reserved the right to redeem in kind (*i.e.,* in securities) any redemption request during any 90-day period in excess of the lesser of:

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(i) $250,000 or (ii) 1% of a Fund's NAV being redeemed. If your shares are redeemed in kind, then you will incur transaction costs when you subsequently sell the securities distributed to you.

**TRANSFER OF REGISTRATION** 

The registration of Fund shares may be transferred by writing to LKCM Funds, c/o U.S. Bank Global Fund Services, P.O. Box 219252, Kansas City, MO 64121-9252. As in the case of redemptions, the written request with signature(s) guaranteed must be received in "good order."

**PAYMENTS TO FINANCIAL INTERMEDIARIES** 

The Funds and the Adviser make payments to certain financial intermediaries in connection with the promotion and sale of shares of the Funds and as compensation for shareholder-related services, including administrative, sub-transfer agency, recordkeeping and shareholder communications services. The Funds and the Adviser also pay such compensation to make shares of the Funds available to investors through certain fund platforms, supermarkets or similar programs or for services provided in connection with such platforms, supermarkets and programs. These payments generally benefit the Funds and may provide applicable financial intermediaries with an incentive to recommend sales of shares of the Funds over other potential investments.

The Funds and the Adviser compensate financial intermediaries differently depending upon the level and type of services provided by such financial intermediaries. The compensation paid to a financial intermediary may be based on a variety of factors, including average net assets of the applicable Fund distributed and/or serviced by the financial intermediary and/or the number of accounts serviced by the financial intermediary that invest in the Funds. Compensation paid by a Fund for distribution-related expenses are made from the Fund's Rule 12b-1 fees. Compensation paid by the Adviser or its affiliates includes amounts from the Adviser's or its affiliates' own resources and constitute what is sometimes referred to as "revenue sharing."

Any compensation received by a financial intermediary, whether from the Funds or the Adviser, and the prospect of receiving such compensation may provide the financial intermediary with an incentive to recommend shares of the Funds over other potential investments. You should ask your financial intermediary for details about any such payments it receives from the Funds or the Adviser, or any other fees, expenses, or commissions your financial intermediary may charge you in addition to those disclosed in this Prospectus.

A Fund's shares may be available for purchase and sale on brokerage and other financial intermediary platforms of firms that have agreements with the Funds' distributor to offer such shares solely when acting as an agent for the investor. The Funds do not charge any front-end load, deferred sales charge or other asset-based fee for sales or distribution of their shares. However, investors that purchase and/or sell shares of a Fund through brokers or other financial intermediaries may be required to pay commissions and/or other types of compensation to such brokers or other financial intermediaries in connection with such purchases or sales in an amount determined and separately disclosed to you by the broker or other financial intermediary. Please contact your broker or other financial intermediary for further detail. Because the Funds are not parties to any such commission arrangement between you and your broker or financial intermediary, any purchases and redemptions of a Fund's shares will be made at the applicable net asset value (before imposition of the commission). Any such commissions charged by a broker or financial intermediary are not reflected in the fees and expenses listed in the "Fees and Expenses of the Fund" section of the Summary Section for each Fund nor are they reflected in the performance information shown in the prospectus for the Funds because they are not charged by the Funds.

**VALUATION OF SHARES** 

**Calculation of NAV**. The NAV per share is computed by dividing the total value of the investments and other assets of a Fund, less any liabilities, by the total outstanding shares of the Fund. The NAV per share normally is determined as of the scheduled close of normal trading on the NYSE (generally 4:00 p.m. Eastern Time) on each day that the NYSE is scheduled to be open for business. The NAV normally is not determined on days the NYSE is scheduled to be closed. The NYSE is scheduled to be closed on weekends and most national holidays. The price at which a purchase order or redemption request is effected is based on the next calculation of NAV after the order is received by the Fund. A Fund's NAV may not be calculated on days during which the Fund receives no orders to purchase shares and no shares are tendered for redemption. In determining NAV, expenses are accrued and applied daily and investments for which market values are readily available are valued at market value.

Equity securities listed or traded on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price on the exchange on which the security is primarily traded. Nasdaq Global Market securities are valued at the Nasdaq Official Closing Price. Unlisted U.S. equity securities and listed U.S. equity securities not traded on a particular valuation date are valued at the mean of the most recent quoted bid and ask price on the relevant exchanges or markets. Equity securities listed on a foreign exchange for which market quotations are readily available are valued at the last quoted sales price on the exchange on which the security is primarily traded. Debt securities are normally valued at the mean of the closing bid and ask price and/or by using a combination of broker quotations or evaluated prices provided by an independent pricing service. Futures contracts and options on futures contracts are valued at the settlement prices established each day on the principal exchange on which they are traded. Forward contracts are valued based on the forward rate using information provided by an independent pricing service. Other assets and securities for which no market or broker quotations or evaluated prices are readily available are valued by the Adviser in good faith at fair value.

**Fair Value Procedures for the Funds.** Rule 2a-5 under the Investment Company Act (the "Valuation Rule") establishes requirements for determining fair value in good faith for purposes of the Investment Company Act, including related oversight and reporting requirements. The Valuation Rule also defines when market quotations are "readily available" for purposes of the Investment Company Act, the threshold for determining whether a security must be fair valued. In many cases, fixed income and foreign securities are not considered to have a "readily available market quotation" under the Valuation Rule. Accordingly, such securities typically are fair-valued.

The Valuation Rule permits a Fund's board to designate the Fund's investment adviser as "valuation designee" to perform the Fund's fair value determinations subject to board oversight and certain reporting and other requirements intended to ensure that the registered investment company's board receives the information it needs to oversee the investment adviser's fair value determinations.

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The Board has designated the Adviser as valuation designee under the Valuation Rule to perform fair value functions in accordance with the requirements of the Valuation Rule. The Adviser may value securities at fair value in good faith pursuant to the Adviser's and the Funds' procedures. The Adviser may use prices provided by independent pricing services to assist in the fair valuation of the Fund's portfolio securities.

The policies and procedures adopted by the Fund and the Adviser authorize the Adviser to fair value a security in good faith if, among other things, the Adviser determines that (i) closing prices of foreign securities do not reflect their fair market value due to events that occur between the closing of foreign markets and the time at which a Fund calculates its NAV, (ii) trading in a security is halted and does not resume prior to the closing of the exchange or other market on which such security normally trades, or (iii) the price for such security provided by independent pricing services appears invalid, is not readily available, or otherwise provides a valuation that in the judgment of the Adviser does not represent the fair market value of such security. Prices provided by independent pricing services may be used to assist in the fair valuation of the Funds' portfolio securities. For foreign securities held by the International Equity Fund, such prices generally will be based on such independent pricing services' proprietary multi-factor models that measure movements in relevant indices, market indicators and other factors between the time the relevant foreign markets have closed and the time a Fund calculates its NAV, and therefore may differ from quoted or official closing prices for such foreign securities in such foreign markets.

The trading hours for most foreign securities end prior to the scheduled close of the NYSE, which is, generally the time as of which the Funds' NAVs are calculated. Securities listed on a foreign exchange for which market quotations are readily available are valued at the last quoted sales price, unless events materially affecting the value of foreign securities occur. The occurrence of certain events after the close of foreign markets, but prior to the close of the U.S. market (such as a significant surge or decline in the U.S. market and/or movements in relevant indices or other appropriate market indicators) often will result in an adjustment to the trading prices of foreign securities when foreign markets open on the following business day. If such events occur, the foreign securities may be valued at fair value, taking into account such events and other factors, when the Funds calculate their NAVs. Consequently, fair valuation of portfolio securities may occur on a daily basis. In such cases, use of fair valuation can reduce an investor's ability to seek to profit by estimating a Fund's NAV in advance of the time as of which NAV is calculated. Because some foreign markets are open on days when the Funds do not price their shares, the value of a Fund's holdings (and correspondingly, the Fund's NAV) could change at a time when you are not able to buy or sell Fund shares. If fair value pricing is utilized, the fair values assigned to such Fund's foreign investments may not be the quoted or published prices of the investments on their primary markets or exchanges.

There can be no assurance that the Funds could purchase or sell a portfolio security at the price used to calculate the Funds' NAVs. In the case of fair valued portfolio securities, lack of information and uncertainty as to the significance of information may lead to a conclusion that a prior valuation is the best indication of a portfolio security's present value. Fair valuations may remain unchanged until new information becomes available. Consequently, changes in the fair valuation of portfolio securities may be less frequent and of greater magnitude than changes in the price of portfolio securities valued by an independent pricing service, or based on market quotations. Valuing securities at fair value involves greater reliance on judgment than valuation of securities based on readily available market quotations. There can be no assurance that a Fund can obtain the fair value assigned to a security if it were to sell the security at approximately the time at which the Fund determines its NAV.

**DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES** 

**DIVIDENDS AND OTHER DISTRIBUTIONS** 

Each of the Small Cap Equity, Small-Mid Cap Equity, Equity and International Equity Funds intends to declare and pay income dividends at least on an annual basis. Each of the Balanced and Fixed Income Funds intends to declare and pay income dividends on a quarterly basis. Each Fund intends to distribute net capital gains, if any, on an annual basis. A Fund may make additional distributions if necessary to avoid federal income or excise taxes or as otherwise approved by the Board of Trustees.

A Fund's dividends and other distributions, if any, will automatically be paid in additional shares of the Fund unless the shareholder elects otherwise. Such election must be made in writing or by calling the Funds at least five days prior to the record date of the distribution. If a shareholder elects to receive distributions in cash and the U.S. Postal Service cannot deliver the shareholder's check, or if a check remains uncashed for six months, the Funds reserve the right to reinvest the amount of the distribution check in the shareholder's account at the distributing Fund's then-current NAV per share and to reinvest all subsequent distributions.

**TAXES** 

Dividends, whether paid in cash or reinvested in additional shares, from a Fund's net investment income, the excess of its net short-term capital gain over its net long-term capital loss and its net gains from certain foreign currency transactions, if any, will be taxable to its shareholders as ordinary income (unless a shareholder is exempt from income tax or entitled to a tax deferral), except as noted in the following sentence. A Fund's dividends attributable to its "qualified dividend income" (*i.e*., dividends it receives on stock of most U.S. and certain foreign corporations with respect to which it satisfies certain holding period and other restrictions) generally will be subject to federal income tax for individual and certain other non-corporate shareholders (each, a "non-corporate shareholder") who satisfy those restrictions with respect to the shares on which the Fund dividends were paid at the lower rates for long-term capital gains - - a maximum of 15% for a single shareholder with taxable income not exceeding $545,500 ($613,700 for married shareholders filing jointly) and 20% for non-corporate shareholders with taxable income exceeding those respective amounts (which apply for 2026 and will be adjusted for inflation annually thereafter). A portion of a Fund's dividends–not exceeding the aggregate dividends it receives from domestic corporations only– also may be eligible for the dividends-received deduction allowed to corporations ("DRD"), subject to similar holding period and other restrictions. There can be no assurance as to what portion, if any, of a Fund's distributions will constitute qualified dividend income or be eligible for the DRD.

Distributions to non-corporate shareholders of net capital gain (that is, the excess of net long-term capital gain over net short-term capital loss), whether paid in cash or reinvested in additional shares (or, if a Fund makes a certain election, any net capital gain that is retained by the Fund), will be taxable as long-term capital gain, at the 15% and 20% maximum rates mentioned above; capital gain distributions to corporate shareholders will be subject to federal income tax at the same rate as ordinary income, 21%. The classification of a Fund's capital gain distribution or retained net capital gain (and, consequently, the applicable tax rate) is determined

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by the length of time that the Fund has held the securities that generated the gain and not the length of time you have held shares in the Fund. Shareholders will be notified annually as to the federal tax status of dividends and other distributions paid by a Fund.

Any dividends and other distributions a Fund declares in the months of October, November or December to shareholders of record on a date in such a month will be deemed to have been paid by the Fund and received by those shareholders on December 31 if the distributions are paid before February 1 of the following year. If you purchase shares of a Fund shortly before a distribution, you will be subject to income tax on the distribution, even though the value of your investment (plus cash received, if any) remains the same.

When a shareholder redeems shares of a Fund, the redemption may result in a taxable gain or loss, depending on whether the redemption proceeds are more or less than the shareholder's adjusted basis in the shares. Any capital gain a non-corporate shareholder recognizes on a redemption of Fund shares that have been held for more than one year will qualify for the 15% and 20% maximum rates mentioned above. In addition, if shares of a Fund are bought within 30 days before or after redeeming at a loss other shares of that Fund (regardless of class), all or part of that loss will not be deductible and instead will increase the basis in the newly purchased shares.

Each Fund is required by federal law to withhold and remit to the U.S. Treasury 24% of dividends, capital gain distributions and redemption proceeds, (regardless of the extent to which gain or loss may be realized) otherwise payable to non-corporate shareholders who fail to certify that the taxpayer identification number furnished to the Fund is correct or who furnish an incorrect number (together with the withholding described in the next sentence, "backup withholding"). Withholding at that rate also is required from each Fund's dividends and capital gain distributions otherwise payable to a non-corporate shareholder who (1) is subject to backup withholding for failure to report the receipt of interest or dividend income properly or (2) fails to certify to the Fund that he or she is not subject to backup withholding or that it is a corporation or other exempt recipient. Backup withholding is not an additional tax, and any amounts so withheld may be credited against a shareholder's federal income tax liability or refunded.

An individual is required to pay a 3.8% federal tax on the lesser of (1) the individual's "net investment income," which generally includes dividends, interest, and net gains from the disposition of investment property (including dividends and capital gain distributions a Fund pays and net gains realized on the redemption or exchange of Fund shares), or (2) the excess of the individual's "modified adjusted gross income" over a threshold amount ($250,000 for married persons filing jointly and $200,000 for single taxpayers). This tax is in addition to any other taxes due on that income. A similar tax applies to estates and trusts. Shareholders should consult their own tax advisers regarding the effect, if any, this provision may have on their investment in Fund shares.

A shareholder's basis in shares of a Fund that he or she acquired or acquires after December 31, 2011 ("Covered Shares"), will be determined in accordance with the Funds' default method, which is average basis, unless the shareholder affirmatively elects in writing, which may be electronic, to use a different acceptable basis determination method, such as a specific identification method. Each Fund, or its administrative agent, must report to the Internal Revenue Service ("IRS") and furnish to its shareholders the basis information for Covered Shares. See "Taxation" in the Statement of Additional Information for a description of the rules regarding that election and each Fund's reporting obligation. Fund shareholders should consult with their tax advisers to determine the best IRS-accepted basis determination method for their tax situation and to obtain more information about how the basis reporting law applies to them.

Dividends and other distributions each Fund declares, as well as redemption proceeds, may also be subject to state and local taxes.

**The foregoing summarizes some of the important federal income tax considerations generally affecting each Fund and its shareholders. Potential investors in a Fund should see the Statement of Additional Information for further information regarding the tax consequences of investing in the Fund and consult their tax advisers with specific reference to their own tax situation.** 

**INDEX DESCRIPTIONS** 

The Bloomberg U.S. Aggregate Bond Index is an unmanaged broad-based index that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market, and includes government, corporate and securitized securities. Securities included in the index must meet the following criteria: fixed as opposed to variable rate; remaining maturity of at least one year; minimum outstanding par value of $300 million; rated investment grade or higher by Moody's Investors Service or equivalent; must be dollar denominated and non-convertible; and must be publicly issued. A direct investment in an index is not possible.

The Bloomberg U.S. Intermediate Government/Credit Bond Index is an unmanaged market value weighted index measuring both the principal price changes of, and income provided by, the underlying universe of securities that comprise the index. Securities included in the index must meet the following criteria: fixed as opposed to variable rate; remaining maturity of one to ten years; minimum outstanding par value of $300 million; rated investment grade or higher by Moody's Investors Service or equivalent; must be dollar denominated and non-convertible; and must be publicly issued. A direct investment in an index is not possible.

The Lipper International Large-Cap Core Funds Index is an unmanaged index generally considered representative of international large-cap core mutual funds tracked by Lipper, Inc. A direct investment in an index is not possible.

The Lipper Large-Cap Core Funds Index is an unmanaged index generally considered representative of large cap core mutual funds tracked by Lipper, Inc. A direct investment in an index is not possible.

The Lipper Mixed-Asset Target Allocation Growth Funds Index is an unmanaged index generally considered representative of mutual funds tracked by Lipper, Inc. that, by portfolio practice, maintain a mix of between 60%-80% equity securities, with the remainder invested in bonds, cash and cash equivalents. A direct investment in an index is not possible.

The Lipper Short Intermediate Investment-Grade Debt Funds Index is an unmanaged index generally considered representative of short intermediate investment grade mutual funds tracked by Lipper, Inc. A direct investment in an index is not possible.

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The Lipper Small-Cap Core Funds Index is an unmanaged index generally considered representative of small cap core mutual funds tracked by Lipper, Inc. A direct investment in an index is not possible.

The Russell 2000<sup>®</sup> Index is an unmanaged index which measures the performance of the 2,000 smallest companies in the Russell 3000<sup>®</sup> Index. The Russell 3000<sup>®</sup> Index is an unmanaged index that measures the performance of the 3,000 largest U.S. companies, based on total market capitalization. A direct investment in an index is not possible.

The Russell 2500<sup>®</sup> Index is an unmanaged index which measures the performance of the 2,500 smallest companies in the Russell 3000<sup>®</sup> Index. The Russell 3000<sup>®</sup> Index is an unmanaged index that measures the performance of the 3,000 largest U.S. companies, based on total market capitalization. A direct investment in an index is not possible.

The Russell 3000<sup>®</sup> Index is an unmanaged index that measures the performance of the 3,000 largest U.S. companies, based on total market capitalization. A direct investment in an index is not possible.

The S&P 500<sup>®</sup> Index is an unmanaged capitalization-weighted index of 500 selected stocks that is generally considered representative of the performance of large capitalization companies in the U.S. stock market. A direct investment in an index is not possible.

The MSCI/EAFE<sup>®</sup> Index is an unmanaged index composed of large-cap and mid-cap securities across 21 developed markets, including countries in Europe, Australasia and the Far East. The MSCI/EAFE<sup>®</sup> Index is a recognized international index and is weighted by market capitalization. A direct investment in an index is not possible.

**ADDITIONAL INFORMATION** 

The LKCM Funds (the "Trust") enters into contractual arrangements with various parties, including among others, the Funds' investment adviser, principal underwriter, custodian and transfer agent who provide services to the Funds. Shareholders are not parties to any such contractual arrangements or intended beneficiaries of those contractual arrangements, and those contractual arrangements are not intended to create in any shareholder any right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the Trust.

This Prospectus provides information concerning the Funds that you should consider in determining whether to purchase Fund shares. Neither this Prospectus nor the Statement of Additional Information is intended, or should be read, to be or give rise to an agreement or contract between the Trust, the Trustees or any Fund and any investor, or to give rise to any rights in any shareholder or other person other than any rights under federal or state law that may not be waived. Nothing in this Prospectus, the Statement of Additional Information or the Funds' reports to shareholders is intended to provide investment advice and should not be construed as investment advice.

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**FINANCIAL HIGHLIGHTS** 

The financial highlights tables set forth below are intended to help you understand each Fund's financial performance for the past five years. Certain information reflects financial results for a single Fund share. The total returns in the tables represent the rates that an investor would have earned (or lost) on an investment in a Fund (assuming reinvestment of all dividends and other distributions). This information has been derived from the Funds' financial statements and financial highlights which have been audited by Deloitte & Touche LLP, whose report, along with the Funds' financial statements and financial highlights, is incorporated by reference in the Statement of Additional Information and included in the Funds' <u>[Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/918942/000113322826003110/lf-efp22616_ncsr.htm#fihi1)</u> for the year ended December 31, 2025, which is available free of charge upon request.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **LKCM SMALL CAP EQUITY FUND** | **LKCM SMALL CAP EQUITY FUND** | **LKCM SMALL CAP EQUITY FUND** | **LKCM SMALL CAP EQUITY FUND** | **LKCM SMALL CAP EQUITY FUND** |
|  | ***Year*** <br>***Ended*** ***December 31, 2025***  | ***Year*** <br>***Ended*** ***December 31,***<br> ***2024***  | ***Year*** <br>***Ended*** ***December 31,*** <br>***2023***  | ***Year*** <br>***Ended*** ***December 31, 2022***  | ***Year*** <br>***Ended*** ***December 31, 2021***  |
| **PER SHARE DATA:** |  |  |  |  |  |
| Net asset value, beginning of year | $21.03 | $19.53 | $16.37 | $21.54 | $21.77 |
| **INVESTMENT OPERATIONS:** |  |  |  |  |  |
| Net investment loss<sup>(a)</sup> | (0.04) |  | (0.01) | (0.04) | (0.08) |
| Net realized and unrealized gain (loss) on investments<sup>(b)</sup> | 2.85 | 3.03 | 3.71 | (4.73) | 3.23 |
| **Total from investment operations** | 2.81 | 3.03 | 3.70 | (4.77) | 3.15 |
| **LESS DISTRIBUTIONS FROM:** |  |  |  |  |  |
| Net investment income | 0.00<sup>(d)</sup> | 0.00 | 0.00 | 0.00 | 0.00 |
| Net realized gains | (1.96) | (1.53) | (0.54) | (0.40) | (3.38) |
| **Total distributions** | (1.96) | (1.53) | (0.54) | (0.40) | (3.38) |
| Redemption fee per share | 0.00<sup>(c)</sup> | 0.00<sup>(c)</sup> |  |  |  |
| **Net asset value, end of year** | $21.88 | $21.03 | $19.53 | $16.37 | $21.54 |
| Total Return | 13.29% | 15.45% | 22.57% | (22.11)% | 14.49% |
| **SUPPLEMENTAL DATA AND RATIOS:** |  |  |  |  |  |
| Net assets, end of year (in thousands) | $325488 | $283014 | $231550 | $170039 | $229199 |
| Ratio of expenses to average net assets: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Before expense reimbursement/recoupment | 1.05% | 1.06% | 1.07% | 1.07% | 1.03% |
| &nbsp;&nbsp;&nbsp;&nbsp;After expense reimbursement/recoupment | 1.00% | 1.00% | 1.00% | 1.00% | 1.00% |
| Ratio of net investment income (loss) to average net assets | (0.18)% | 0.01% | (0.08)% | (0.23)% | (0.32)% |
| Portfolio turnover rate | 40% | 29% | 28% | 42% | 42% |

---

(a) Net investment income per share has been calculated based on average shares outstanding during the years.

(b) Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the years, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the years.

(c) Amount represents less than $0.005 per share.

(d) Amount is less than 0.005.

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **LKCM SMALL-MID CAP EQUITY FUND** | **LKCM SMALL-MID CAP EQUITY FUND** | **LKCM SMALL-MID CAP EQUITY FUND** | **LKCM SMALL-MID CAP EQUITY FUND** | **LKCM SMALL-MID CAP EQUITY FUND** |
|  | ***Year*** <br>***Ended*** ***December 31, 2025*** | ***Year*** <br>***Ended*** ***December 31, 2024***  | ***Year*** <br>***Ended*** ***December 31, 2023***  | ***Year*** <br>***Ended*** ***December 31, 2022***  | ***Year*** <br>***Ended*** ***December 31, 2021***  |
| **PER SHARE DATA:** |  |  |  |  |  |
| Net asset value, beginning of year | $11.46 | $9.91 | $7.88 | $10.97 | $11.15 |
| **INVESTMENT OPERATIONS:** |  |  |  |  |  |
| Net investment loss<sup>(a)</sup> | (0.01) | (0.02) |  | (0.01) | (0.06) |
| Net realized and unrealized gain (loss) on investments<sup>(b)</sup> | 0.62 | 1.57 | 2.03 | (2.43) | 1.77 |
| **Total from investment operations** | 0.61 | 1.55 | 2.03 | (2.44) | 1.71 |
| **LESS DISTRIBUTIONS FROM:** |  |  |  |  |  |
| Net realized gains | (0.72) |  |  | (0.65) | (1.89) |
| **Total distributions** | (0.72) |  |  | (0.65) | (1.89) |
| Redemption fee per share |  | 0.00<sup>(c)</sup> | 0.00<sup>(c)</sup> |  |  |
| **Net asset value, end of year** | $11.35 | $11.46 | $9.91 | $7.88 | $10.97 |
| Total Return | 5.28% | 15.64% | 25.76% | (22.12)% | 15.37% |
| **SUPPLEMENTAL DATA AND RATIOS:** |  |  |  |  |  |
| Net assets, end of year (in thousands) | $43126 | $39020 | $28494 | $15234 | $14355 |
| Ratio of expenses to average net assets: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Before expense reimbursement/recoupment | 1.31% | 1.40% | 1.74% | 1.80% | 1.74% |
| &nbsp;&nbsp;&nbsp;&nbsp;After expense reimbursement/recoupment | 1.00% | 1.00% | 1.00% | 1.00% | 1.00% |
| Ratio of net investment income (loss) to average net assets: | (0.09)% | (0.15)% | (0.03)% | (0.11)% | (0.49)% |
| Portfolio turnover rate | 44% | 31% | 32% | 50% | 50% |

---

<sup>(a)</sup> Net investment income per share has been calculated based on average shares outstanding during the years.

<sup>(b)</sup> Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the years, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the years.

<sup>(c)</sup> Amount represents less than $0.005 per share.

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **LKCM EQUITY FUND** | **LKCM EQUITY FUND** | **LKCM EQUITY FUND** | **LKCM EQUITY FUND** | **LKCM EQUITY FUND** |
|  | ***Year*** <br>***Ended*** ***December 31, 2025*** | ***Year*** <br>***Ended*** ***December 31, 2024***  | ***Year*** <br>***Ended*** ***December 31, 2023***  | ***Year*** <br>***Ended*** ***December 31, 2022***  | ***Year*** <br>***Ended*** ***December 31, 2021***  |
| **PER SHARE DATA:** |  |  |  |  |  |
| Net asset value, beginning of year | $36.88 | $34.41 | $30.99 | $38.69 | $33.74 |
| **INVESTMENT OPERATIONS:** |  |  |  |  |  |
| Net investment income<sup>(a)</sup> | 0.19 | 0.19 | 0.30 | 0.31 | 0.16 |
| Net realized and unrealized gain (loss) on investments<sup>(b)</sup> | 3.66 | 4.79 | 3.62 | (6.31) | 7.43 |
| **Total from investment operations** | 3.85 | 4.98 | 3.92 | (6.00) | 7.59 |
| **LESS DISTRIBUTIONS FROM:** |  |  |  |  |  |
| Net investment income | (0.21) | (0.19) | (0.31) | (0.30) | (0.17) |
| Net realized gains | (2.91) | (2.32) | (0.19) | (1.40) | (2.47) |
| **Total distributions** | (3.12) | (2.51) | (0.50) | (1.70) | (2.64) |
| Redemption fee per share | 0.00<sup>(c)</sup> | 0.00<sup>(c)</sup> |  | 0.00<sup>(c)</sup> |  |
| **Net asset value, end of year** | $37.61 | $36.88 | $34.41 | $30.99 | $38.69 |
| Total Return | 10.36% | 14.44% | 12.65% | (15.44)% | 22.48% |
| **SUPPLEMENTAL DATA AND RATIOS:** |  |  |  |  |  |
| Net assets, end of year (in thousands) | $506561 | $508483 | $494677 | $460642 | $542696 |
| Ratio of expenses to average net assets: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Before expense reimbursement/recoupment | 0.99% | 0.98% | 1.00% | 0.97% | 0.96% |
| &nbsp;&nbsp;&nbsp;&nbsp;After expense reimbursement/recoupment | 0.80% | 0.80% | 0.80% | 0.80% | 0.80% |
| Ratio of net investment income (loss) to average net assets | 0.50% | 0.52% | 0.93% | 0.91% | 0.43% |
| Portfolio turnover rate | 9% | 9% | 10% | 11% | 11% |

---

<sup>(a)</sup> Net investment income per share has been calculated based on average shares outstanding during the years.

<sup>(b)</sup> Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the years, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the years.

<sup>(c)</sup> Amount represents less than $0.005 per share.

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **LKCM BALANCED FUND** | **LKCM BALANCED FUND** | **LKCM BALANCED FUND** | **LKCM BALANCED FUND** | **LKCM BALANCED FUND** |
|  | ***Year*** <br>***Ended*** ***December 31, 2025*** | ***Year*** <br>***Ended*** ***December 31, 2024*** | ***Year*** <br>***Ended*** ***December 31, 2023***  | ***Year***<br> ***Ended*** ***December 31, 2022***  | ***Year*** <br>***Ended*** ***December 31, 2021***  |
| **PER SHARE DATA:** |  |  |  |  |  |
| Net asset value, beginning of year | $27.59 | $26.00 | $24.29 | $29.21 | $26.76 |
| **INVESTMENT OPERATIONS:** |  |  |  |  |  |
| Net investment income<sup>(a)</sup> | 0.40 | 0.33 | 0.28  | 0.26 | 0.20 |
| Net realized and unrealized gain (loss) on investments<sup>(b)</sup> | 1.93 | 2.53 | 2.34 | (4.30) | 3.54 |
| **Total from investment operations** | 2.33 | 2.86 | 2.62 | (4.04) | 3.74 |
| **LESS DISTRIBUTIONS FROM:** |  |  |  |  |  |
| Net investment income | (0.42) | (0.33) | (0.29) | (0.27) | (0.20) |
| Net realized gains | (1.28) | (0.94) | (0.62) | (0.61) | (1.09) |
| **Total distributions** | (1.70) | (1.27) | (0.91) | (0.88) | (1.29) |
| Redemption fee per share | 0.00<sup>(c)</sup> | 0.00<sup>(c)</sup> | 0.00<sup>(c)</sup> | 0.00<sup>(c)</sup> |  |
| **Net asset value, end of year** | $28.22 | $27.59 | $26.00 | $24.29 | $29.21 |
| Total Return | 8.44% | 10.99% | 10.84% | (13.84)% | 14.01% |
| **SUPPLEMENTAL DATA AND RATIOS:** |  |  |  |  |  |
| Net assets, end of year (in thousands) | $109143 | $114923 | $113667 | $108746 | $144901 |
| Ratio of expenses to average net assets: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Before expense reimbursement/recoupment | 1.02% | 1.02% | 1.04% | 0.99% | 0.96% |
| &nbsp;&nbsp;&nbsp;&nbsp;After expense reimbursement/recoupment | 0.80% | 0.80% | 0.80% | 0.80% | 0.80% |
| Ratio of net investment income (loss) to average net assets | 1.42% | 1.20% | 1.11% | 1.01% | 0.69% |
| Portfolio turnover rate | 6% | 15% | 11% | 13% | 11% |

---

<sup>(a)</sup> Net investment income per share has been calculated based on average shares outstanding during the years.

<sup>(b)</sup> Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the years, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the years.

<sup>(c)</sup> Amount represents less than $0.005 per share.

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **LKCM FIXED INCOME FUND** | **LKCM FIXED INCOME FUND** | **LKCM FIXED INCOME FUND** | **LKCM FIXED INCOME FUND** | **LKCM FIXED INCOME FUND** |
|  | ***Year*** <br>***Ended*** ***December 31, 2025*** | ***Year*** <br>***Ended*** ***December 31, 2024*** | ***Year*** <br>***Ended*** ***December 31, 2023***  | ***Year*** <br>***Ended*** ***December 31, 2022***  | ***Year*** <br>***Ended*** ***December 31, 2021***  |
| **PER SHARE DATA:** |  |  |  |  |  |
| Net asset value, beginning of year | $10.36 | $10.36 | $10.10 | $10.87 | $11.19 |
| **INVESTMENT OPERATIONS:** |  |  |  |  |  |
| Net investment income<sup>(a)</sup> | 0.38 | 0.31  | 0.24  | 0.16 | 0.15 |
| Net realized and unrealized gain (loss) on investments<sup>(b)</sup> | 0.30 |  | 0.26 | (0.77) | (0.32) |
| **Total from investment operations** | 0.68 | 0.31 | 0.50 | (0.61) | (0.17) |
| **LESS DISTRIBUTIONS FROM:** |  |  |  |  |  |
| Net investment income | (0.38) | (0.31) | (0.24) | (0.15) | (0.15) |
| Net realized gains |  |  |  | (0.01) | (0.00)<sup>(c)</sup> |
| **Total distributions** | (0.38) | (0.31) | (0.24) | (0.16) | (0.15) |
| Redemption fee per share |  |  | 0.00<sup>(c)</sup> |  |  |
| **Net asset value, end of year** | $10.66 | $10.36 | $10.36 | $10.10 | $10.87 |
| Total Return | 6.66% | 3.06% | 4.98% | (5.63)% | (1.54)% |
| **SUPPLEMENTAL DATA AND RATIOS:** |  |  |  |  |  |
| Net assets, end of year (in thousands) | $282170 | $277122 | $286492 | $275387 | $295745 |
| Ratio of expenses to average net assets: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Before expense reimbursement/recoupment | 0.81% | 0.81% | 0.81% | 0.79% | 0.78% |
| &nbsp;&nbsp;&nbsp;&nbsp;After expense reimbursement/recoupment | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% |
| Ratio of net investment income (loss) to average net assets | 3.55% | 3.01% | 2.33% | 1.54% | 1.33% |
| Portfolio turnover rate | 34% | 25% | 23% | 21% | 31% |

---

<sup>(a)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Net investment income per share has been calculated based on average shares outstanding during the years.

<sup>(b)</sup> Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the years, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the years.

<sup>(c)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Amount represents less than $0.005 per share.

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **LKCM INTERNATIONAL EQUITY FUND** | **LKCM INTERNATIONAL EQUITY FUND** | **LKCM INTERNATIONAL EQUITY FUND** | **LKCM INTERNATIONAL EQUITY FUND** | **LKCM INTERNATIONAL EQUITY FUND** |
|  | ***Year*** <br>***Ended*** ***December 31, 2025*** | ***Year*** <br>***Ended*** ***December 31, 2024*** | ***Year*** <br>***Ended*** ***December 31, 2023***  | ***Year*** <br>***Ended*** ***December 31, 2022***  | ***Year*** <br>***Ended*** ***December 31, 2021***  |
| **PER SHARE DATA:** |  |  |  |  |  |
| Net asset value, beginning of year | $13.11 | $12.68 | $11.08 | $14.50 | $12.44 |
| **INVESTMENT OPERATIONS:** |  |  |  |  |  |
| Net investment income<sup>(a)</sup> | 0.18 | 0.18 | 0.19 | 0.45 | 0.10 |
| Net realized and unrealized gain (loss) on investments<sup>(b)</sup> | 2.69 | 0.43 | 1.59 | (3.42) | 2.14 |
| **Total from investment operations** | 2.87 | 0.61 | 1.78 | (2.97) | 2.24 |
| **LESS DISTRIBUTIONS FROM:** |  |  |  |  |  |
| Net investment income | (0.21) | (0.18) | (0.18) | (0.30) | (0.08) |
| Net realized gains |  |  |  | (0.15) | (0.10) |
| **Total distributions** | (0.21) | (0.18) | (0.18) | (0.45) | (0.18) |
| **Net asset value, end of year** | $15.77 | $13.11 | $12.68 | $11.08 | $14.50 |
| Total Return | 21.87% | 4.83% | 16.09% | (20.51)% | 18.00% |
| **SUPPLEMENTAL DATA AND RATIOS:** |  |  |  |  |  |
| Net assets, end of year (in thousands) | $73943 | $60329 | $60245 | $45009 | $55504 |
| Ratio of expenses to average net assets: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Before expense reimbursement/recoupment | 1.36% | 1.38% | 1.41% | 1.45% | 1.40% |
| &nbsp;&nbsp;&nbsp;&nbsp;After expense reimbursement/recoupment | 1.00% | 1.00% | 1.00% | 1.00% | 1.00% |
| Ratio of net investment income (loss) to average net assets | 1.21% | 1.36% | 1.58% | 3.80% | 0.69% |
| Portfolio turnover rate | 21% | 17% | 11% | 26% | 15% |

---

<sup>(a)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Net investment income per share has been calculated based on average shares outstanding during the years.

<sup>(b)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the years, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the years.

------

**LKCM Funds** 

**FOR MORE INFORMATION** 

You may obtain the LKCM Funds' Statement of Additional Information, Annual and Semi-Annual Reports to Shareholders, and annual and semi-annual financial statements and accompanying notes, free of charge, as set forth below:

***Statement of Additional Information (SAI) dated May 1, 2026, as it may be supplemented from time to time*** 

The SAI is incorporated into this Prospectus by reference (*i.e.,* legally made a part of this Prospectus). The SAI provides more details about the Funds' policies and management.

***Annual and Semi-Annual Reports to Shareholders and Annual and Semi-Annual Financial Statements and Accompanying Notes***

The annual financial statements included in the Funds' Form N-CSR are <u>[incorporated herein by reference](https://www.sec.gov/ix?doc=/Archives/edgar/data/918942/000113322826003110/lf-efp22616_ncsr.htm#fihi1)</u>. The Annual and Semi-Annual Reports to Shareholders and Form N-CSR filings include additional information about each Fund's investments. The Annual Report to Shareholders also contains a discussion of the market conditions and investment strategies that materially affected a Fund's performance during the reporting period. The Form N-CSR includes each Fund's annual and semi-annual financial statements, as well as the report of the Funds' independent registered public accounting firm in the annual financial statements.

**TO RECEIVE THE SAI, ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS, AND ANNUAL AND SEMI-ANNUAL FINANCIAL STATEMENTS AND ACCOMPANYING NOTES, FREE OF CHARGE, OR TO MAKE INQUIRIES TO THE FUND:** 

**By Telephone:** 

1-800-688-LKCM

**By Mail:** 

LKCM Funds

c/o U.S. Bank Global Fund Services

P.O. Box 219252

Kansas City, MO 64121-9252

**From the Funds' Website:** 

You can access the Funds' SAI, Annual Reports and Semi-Annual Reports, and financial statements and accompanying notes, on the Funds' website at: **<u>www.lkcmfunds.com.</u>** 

**On the Internet:** 

Electronic versions of Fund documents can be viewed online or downloaded free from the EDGAR database on the SEC's Internet site at: **www.sec.gov.** 

**From the SEC:** 

You may write to the SEC Public Reference Room at the regular mailing address or the e-mail address below and ask them to mail you information about the Funds, including the SAI. They will charge you a fee for this duplicating service.

Public Reference Section

Securities and Exchange Commission

Washington, D.C. 20549-1520

publicinfo@sec.gov

Investment Company Act File # 811-08352

------

![Image_0.jpg](ck0000918942-20260429_g8.jpg)

Investing in More than Monetary Values

PROSPECTUS

May 1, 2026

---

| | |
|:---|:---|
| **LKCM Aquinas Catholic Equity Fund** | **LKCM Aquinas Catholic Equity Fund** |
| | **(AQEIX)** |
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LKCM Aquinas Catholic Equity Fund follows the socially responsible investing guidelines set forth by the United States Conference of Catholic Bishops to incorporate Catholic Values into the investment process.<br>**www.aquinasfunds.com**<br>**This Prospectus contains information you should consider before you invest in the LKCM Aquinas Catholic Equity Fund. Please read it carefully and keep it for future reference.**<br>**Neither the Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved of the securities offered by this Prospectus, nor has the SEC or any state securities commission passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.** |
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LKCM Aquinas Catholic Equity Fund follows the socially responsible investing guidelines set forth by the United States Conference of Catholic Bishops to incorporate Catholic Values into the investment process.<br>**www.aquinasfunds.com**<br>**This Prospectus contains information you should consider before you invest in the LKCM Aquinas Catholic Equity Fund. Please read it carefully and keep it for future reference.**<br>**Neither the Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved of the securities offered by this Prospectus, nor has the SEC or any state securities commission passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.** |
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LKCM Aquinas Catholic Equity Fund follows the socially responsible investing guidelines set forth by the United States Conference of Catholic Bishops to incorporate Catholic Values into the investment process.<br>**www.aquinasfunds.com**<br>**This Prospectus contains information you should consider before you invest in the LKCM Aquinas Catholic Equity Fund. Please read it carefully and keep it for future reference.**<br>**Neither the Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved of the securities offered by this Prospectus, nor has the SEC or any state securities commission passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.** |
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LKCM Aquinas Catholic Equity Fund follows the socially responsible investing guidelines set forth by the United States Conference of Catholic Bishops to incorporate Catholic Values into the investment process.<br>**www.aquinasfunds.com**<br>**This Prospectus contains information you should consider before you invest in the LKCM Aquinas Catholic Equity Fund. Please read it carefully and keep it for future reference.**<br>**Neither the Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved of the securities offered by this Prospectus, nor has the SEC or any state securities commission passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.** |
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LKCM Aquinas Catholic Equity Fund follows the socially responsible investing guidelines set forth by the United States Conference of Catholic Bishops to incorporate Catholic Values into the investment process.<br>**www.aquinasfunds.com**<br>**This Prospectus contains information you should consider before you invest in the LKCM Aquinas Catholic Equity Fund. Please read it carefully and keep it for future reference.**<br>**Neither the Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved of the securities offered by this Prospectus, nor has the SEC or any state securities commission passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.** |
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LKCM Aquinas Catholic Equity Fund follows the socially responsible investing guidelines set forth by the United States Conference of Catholic Bishops to incorporate Catholic Values into the investment process.<br>**www.aquinasfunds.com**<br>**This Prospectus contains information you should consider before you invest in the LKCM Aquinas Catholic Equity Fund. Please read it carefully and keep it for future reference.**<br>**Neither the Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved of the securities offered by this Prospectus, nor has the SEC or any state securities commission passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.** |
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LKCM Aquinas Catholic Equity Fund follows the socially responsible investing guidelines set forth by the United States Conference of Catholic Bishops to incorporate Catholic Values into the investment process.<br>**www.aquinasfunds.com**<br>**This Prospectus contains information you should consider before you invest in the LKCM Aquinas Catholic Equity Fund. Please read it carefully and keep it for future reference.**<br>**Neither the Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved of the securities offered by this Prospectus, nor has the SEC or any state securities commission passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.** |
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LKCM Aquinas Catholic Equity Fund follows the socially responsible investing guidelines set forth by the United States Conference of Catholic Bishops to incorporate Catholic Values into the investment process.<br>**www.aquinasfunds.com**<br>**This Prospectus contains information you should consider before you invest in the LKCM Aquinas Catholic Equity Fund. Please read it carefully and keep it for future reference.**<br>**Neither the Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved of the securities offered by this Prospectus, nor has the SEC or any state securities commission passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.** |

---

------

**TABLE OF CONTENTS** 

---

| | |
|:---|:---|
| **[SUMMARY SECTION](#ic4b8961d1a9b44729eab01c7d2f43bb3_330)** | &nbsp;&nbsp;[1](#ic4b8961d1a9b44729eab01c7d2f43bb3_330) |
| **[ADDITIONAL INFORMATION REGARDING THE INVESTMENT](#ic4b8961d1a9b44729eab01c7d2f43bb3_205)[](#ic4b8961d1a9b44729eab01c7d2f43bb3_205)[OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES OF THE FUND](#ic4b8961d1a9b44729eab01c7d2f43bb3_205)** | &nbsp;&nbsp;[6](#ic4b8961d1a9b44729eab01c7d2f43bb3_205) |
| **[DISCUSSION OF INVESTMENT APPROACH](#ic4b8961d1a9b44729eab01c7d2f43bb3_200)** | &nbsp;&nbsp;[6](#ic4b8961d1a9b44729eab01c7d2f43bb3_200) |
| **[ADDITIONAL INFORMATION REGARDING THE PRINCIPAL RISKS OF INVESTING IN THE FUND](#ic4b8961d1a9b44729eab01c7d2f43bb3_195)** | &nbsp;&nbsp;[7](#ic4b8961d1a9b44729eab01c7d2f43bb3_195) |
| **[PORTFOLIO HOLDINGS INFORMATION](#ic4b8961d1a9b44729eab01c7d2f43bb3_190)** | &nbsp;&nbsp;[12](#ic4b8961d1a9b44729eab01c7d2f43bb3_190) |
| **[MANAGEMENT](#ic4b8961d1a9b44729eab01c7d2f43bb3_185)** | &nbsp;&nbsp;[12](#ic4b8961d1a9b44729eab01c7d2f43bb3_221) |
| **[DISTRIBUTION OF FUND SHARES](#ic4b8961d1a9b44729eab01c7d2f43bb3_180)** | &nbsp;&nbsp;[13](#ic4b8961d1a9b44729eab01c7d2f43bb3_180) |
| **[PURCHASE OF SHARES](#ic4b8961d1a9b44729eab01c7d2f43bb3_175)** | &nbsp;&nbsp;[13](#ic4b8961d1a9b44729eab01c7d2f43bb3_175) |
| **[MARKET TIMING POLICY](#ic4b8961d1a9b44729eab01c7d2f43bb3_170)** | &nbsp;&nbsp;[15](#ic4b8961d1a9b44729eab01c7d2f43bb3_170) |
| **[EXCHANGING SHARES](#ic4b8961d1a9b44729eab01c7d2f43bb3_165)** | &nbsp;&nbsp;[16](#ic4b8961d1a9b44729eab01c7d2f43bb3_165) |
| **[REDEMPTION OF SHARES](#ic4b8961d1a9b44729eab01c7d2f43bb3_160)** | &nbsp;&nbsp;[16](#ic4b8961d1a9b44729eab01c7d2f43bb3_160) |
| **[VALUATION OF SHARES](#ic4b8961d1a9b44729eab01c7d2f43bb3_155)** | &nbsp;&nbsp;[18](#ic4b8961d1a9b44729eab01c7d2f43bb3_155) |
| **[DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES](#ic4b8961d1a9b44729eab01c7d2f43bb3_150)** | &nbsp;&nbsp;[19](#ic4b8961d1a9b44729eab01c7d2f43bb3_150) |
| **[INDEX DESCRIPTIONS](#ic4b8961d1a9b44729eab01c7d2f43bb3_145)** | &nbsp;&nbsp;[20](#ic4b8961d1a9b44729eab01c7d2f43bb3_145) |
| **[ADDITIONAL INFORMATION](#ic4b8961d1a9b44729eab01c7d2f43bb3_140)** | &nbsp;&nbsp;[20](#ic4b8961d1a9b44729eab01c7d2f43bb3_140) |
| **[FINANCIAL HIGHLIGHTS](#ic4b8961d1a9b44729eab01c7d2f43bb3_135)** | &nbsp;&nbsp;[22](#ic4b8961d1a9b44729eab01c7d2f43bb3_135) |

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**LKCM Aquinas Catholic Equity Fund**

**Investment Objective:** The Fund seeks to maximize long-term capital appreciation, while incorporating Catholic values investing principles in the investment process.

**Fees and Expenses of the Fund:** The following table describes the fees and expenses that you may pay if you buy, hold and sell shares of the Fund. **You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.** The Fund does not impose any sales charges in connection with purchases and sales of Fund shares.

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| | |
|:---|:---|
| **Shareholder Fees** |  |
| (fees paid directly from your investment) |  |
| Redemption Fee (as a percentage of the amount redeemed on shares held for less than 30 days) | 1.00% |
| **Annual Fund Operating Expenses** |  |
| (expenses that you pay each year as a percentage of the value of your investment) |  |
| Management Fees | 0.90% |
| Distribution and Service (12b-1) Fees | 0.10% |
| Other Expenses | 0.47% |
| Total Annual Fund Operating Expenses | 1.47% |
| Fee Waiver and/or Expense Reimbursement<sup>(1)</sup> | -0.47% |
| Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement<sup>(1)</sup> | 1.00% |

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<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp; Luther King Capital Management Corporation ("Adviser"), the Fund's investment adviser, has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund through May 1, 2027 in order to limit the Fund's Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement to 1.00% per annum (excluding any interest, taxes, brokerage commissions, indirect fees and expenses relating to investments in other investment companies, including money market funds ("Acquired Fund Fees and Expenses"), and extraordinary expenses). The fee waiver and expense reimbursement agreement may be terminated or changed only with the consent of the Board of Trustees.

**Example** 

The following example is intended to help you compare the costs 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 (except that the example reflects the fee waiver/expense reimbursement arrangement through May 1, 2027). Although your actual costs may be higher or lower, based on these assumptions, whether or not you redeem your shares, your costs would be as follows:

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| | | | |
|:---|:---|:---|:---|
| **<u>1 Year</u>** | **<u>3 Years</u>**  | **<u>5 Years</u>**  | **<u>10 Years</u>**  |
| $102 | $419 | $758 | $1717 |

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**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 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 9% of the average value of its portfolio.

**Principal Investment Strategies:** The Fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities. The Fund primarily invests in companies the Adviser believes are likely to have above-average growth in revenues and/or earnings, above-average returns on shareholders' equity, potential for above-average capital appreciation, and/or companies the Adviser believes have attractive relative valuations. The Fund may invest in equity securities of small, mid and large capitalization companies, including dividend paying securities. From time to time, in pursuing its investment strategies, the Fund may hold a significant percentage of its investments in specific sectors of the economy, such as the information technology sector. However, as the sector composition of the Fund's portfolio changes over time, the Fund's exposure to the information technology sector may be lower at a future date, and the Fund's exposure to other market sectors may be higher.

The Fund seeks to invest in the equity securities of high quality companies, as determined by the Adviser, that typically exhibit certain characteristics, including high profitability levels, strong balance sheet quality, competitive advantages, ability to generate excess cash flows, meaningful management ownership stakes, attractive reinvestment opportunities, and/or strong market share positions. These equity securities primarily consist of common stocks, American Depositary Receipts ("ADRs"), and real estate investment trusts ("REITs").

The Fund practices socially responsible investing within the framework provided by the United States Conference of Catholic Bishops' Socially Responsible Investment Guidelines ("Catholic Guidelines"). The Catholic Guidelines reflect the United States Conference of Catholic Bishops' investment guidelines with respect to companies that engage in, participate in, or otherwise support activities related to, among other things, abortion, contraceptives, embryonic stem cells, human cloning, human rights, weapons

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production, and pornography. The Fund's investment approach incorporates the Catholic Guidelines through a combination of screening portfolio companies based on criteria set forth in the Catholic Guidelines, dialogue with companies whose policies and practices conflict with the Catholic Guidelines, and/or potentially excluding from the Fund's portfolio the securities of those companies that are unwilling to alter their policies and practices over a reasonable period of time. The Adviser monitors companies selected for the Fund for policies on various issues contemplated by the Catholic Guidelines. If the Fund invests in a company whose policies and practices are inconsistent with the Catholic Guidelines, the Adviser may attempt to influence the company or sell the company's securities or otherwise exclude future investments in such company.

**Principal Risks:** The greatest risk of investing in the Fund is that you could lose money. There is no assurance that the Fund will achieve its investment objective. The principal risks of investing in the Fund listed below are presented in alphabetical order and not in order of importance or potential exposure. Among other matters, this presentation is intended to facilitate your ability to find particular risks and make comparisons with those of other funds. Each risk summarized below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Catholic Values Investing Risk* – Since the Fund practices socially responsible investing within the framework provided by the Catholic Guidelines, this may limit the types and number of investment opportunities available to the Fund and may cause the Fund to make different investments than funds that have a similar investment style but do not invest within the investment framework provided by the Catholic Guidelines. The Fund may forego a profitable investment opportunity or sell a security when it may be disadvantageous to do so, and may underperform funds that do not consider socially responsible investing within the framework provided by the Catholic Guidelines. The integration of these considerations may affect the Fund's exposure to certain investments and may impact the Fund's relative investment performance depending on the performance of those issuers. The Adviser may use research and/or information provided by one or more third parties in performing its analysis and, because there are few generally accepted standards to use in such considerations, the information and considerations used for the Fund may differ from the information and considerations used for other funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Cybersecurity Risk* – The Fund, its service providers, third-party fund distribution platforms and other market participants increasingly depend on complex information technology and communications systems, including artificial intelligence, which are subject to a number of different threats and risks that could adversely affect the Fund and its shareholders. Operational risks arising from, among other things, human or processing errors, systems and technology disruptions or failures, or cybersecurity incidents may negatively impact the Fund, its service providers, and third-party fund distribution platforms, as well as the ability of shareholders to transact with the Fund, and result in financial losses. Cybersecurity incidents may allow unauthorized parties to gain access to or misappropriate Fund assets, shareholder data, or confidential or proprietary information, or cause the Fund or its service providers, as well as securities trading venues and their service providers, to suffer data corruption or lose operational functionality. In addition, authorized persons could inadvertently release Fund shareholder data or confidential or proprietary information stored on the Fund's systems. Cybersecurity incidents can result from deliberate attacks or unintentional events. It is not possible for the Fund or its service providers to identify all of the operational risks that may affect the Fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects. Portfolio companies in which the Fund invests are also exposed to various risks related to cybersecurity incidents, and the value of the Fund's investments in such portfolio companies could be adversely impacted in the event any such cybersecurity incidents occur. The Fund cannot control the cybersecurity and operational plans and systems of its service providers, its counterparties or the issuers of securities in which the Fund invests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Dividend Paying Securities Risk* – Securities that pay higher dividends as a group can fall out of favor with the market, causing these companies to underperform companies that do not pay high or any dividends. Also, changes in the dividend policies of companies owned by the Fund and the capital resources available for these companies' dividend payments may reduce the level of dividend payments and adversely affect the Fund. Dividend paying securities might not experience the same level of earnings growth or capital appreciation as non-dividend paying securities. Securities that pay dividends may be sensitive to changes in interest rates, and as interest rates rise or fall, the prices of such securities may fluctuate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Equity Securities Risk* – The Fund invests in equity securities and therefore is subject to investment risk, issuer risk, market risks and significant fluctuations in value in response to changes in a company's financial condition as well as general market, economic and political conditions, and other factors. The Fund may experience a significant or complete loss on its investment in an equity security. In addition, stock prices may be sensitive to rising interest rates, which increase borrowing costs and the costs of capital for the issuer. Equity securities are generally subordinate to an issuer's debt in the event of liquidation or bankruptcy. The Fund's investments in equity securities primarily consist of ADRs, common stocks, and REITs.

*ADRs* – Investments in ADRs are subject to certain of the risks associated with investing directly in foreign securities, such as currency fluctuations, political and economic instability, capital restrictions, less government regulation, less publicly available information, less liquidity, increased price volatility, and differences in financial reporting standards. ADRs may not accurately track the prices of the underlying foreign securities and their value may change materially at times when the U.S. markets are not open for trading. Investing in such securities may expose the Fund to additional risk.

*Common Stock* – The value of an issuing company's common stock may rise or fall as a result of factors affecting the issuing company, other companies in the same industry or sector, or the financial markets overall. Common stock generally is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company.

*REITs* – Investments in REITs are subject to the risks associated with investing in the real estate industry, adverse governmental actions, regulatory limitations on rents and operating expenses, declines in property and real estate values, risks related to general and local economic conditions, increases in property taxes and operating expenses, overbuilding, changes in interest rates, liabilities resulting from environmental problems, and the potential failure

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of a REIT to qualify for federal income-tax-free "pass-through" of net income and net realized gains that are distributed to shareholders and exemption from registration as an investment company. REITs are dependent upon specialized management skills and may invest in relatively few properties, and may not be diversified geographically or by property or tenant type. As a result, investments in REITs may be volatile. REITs are pooled investment vehicles with their own fees and expenses and the Fund will indirectly bear a proportionate share of those fees and expenses when investing in REITs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Foreign Securities Risk* – Non-U.S. investments carry potential risks not associated with domestic investments. Such risks may include, but are not limited to: currency exchange rate fluctuations, political and financial instability, less liquidity and greater volatility of foreign investments, lack of uniform accounting, auditing, recordkeeping and financing reporting standards, different government regulation and supervision of foreign banks, stock exchanges, brokers and listed companies, significant limitations in transaction settlements in some foreign markets, and any regulatory, political, currency, security, economic and other risks associated with a particular country in which the Fund invests, including tariffs, trade disputes and sanctions. Additionally, trading in foreign markets generally involves higher transaction costs than trading in U.S. markets. The unavailability and/or unreliability of public information may impede the Fund's ability to accurately evaluate foreign securities. It also may be difficult to enforce contractual obligations or invoke judicial or arbitration processes against non-U.S. companies and non-U.S. persons in foreign jurisdictions. There may be very limited oversight of certain foreign banks or securities depositories that hold foreign securities and currencies and the laws of certain countries may limit the ability to recover such assets if a foreign bank or depositary or their agents goes bankrupt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Inflation Risk* – Higher actual or anticipated inflation may have an adverse effect on corporate profits or consumer spending or the financial markets overall and result in lower values for securities held by the Fund. If Fund investments do not keep pace with inflation, the present value of Fund assets and the value of Fund distributions could decline.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Investment Risk* – An investment in the Fund is not a deposit with a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. When you sell your shares of the Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Large Cap Companies Risk* – The securities of large market capitalization companies may underperform other segments of the market because such companies may be less responsive to competitive challenges and opportunities and may be unable to attain or maintain high growth rates during periods of economic expansion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Market Risk* – The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund's performance. Factors that affect markets in general, including geopolitical, regulatory, market and economic developments and other developments that impact specific economic sectors, industries, companies and segments of the market, could adversely impact the Fund's investments and lead to a decline in the value of your investment in the Fund. Geopolitical and other events, including tensions, war, or open conflict between nations, such as among the United States, Israel and Iran, between Russia and Ukraine, otherwise in the Middle East and in eastern Asia, could affect the economies of many countries including the United States and may contribute to increased volatility and uncertainty in the financial markets. The extent and duration of ongoing hostilities and any sanctions and the repercussions of such events cannot be predicted. Those events have presented and could continue to present material uncertainty and risk with respect to markets globally, including in the oil and gas markets and potentially other industries and sectors. Trade disputes, pandemics, public health crises, natural disasters, cybersecurity incidents, and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity in equity, credit and fixed income markets, which may disrupt economies and markets and adversely affect the value of your investment. The imposition by the U.S. of tariffs on goods imported from foreign countries and reciprocal tariffs levied on U.S. goods by those countries also may lead to volatility and instability in domestic and foreign markets. In addition, policy changes by the U.S. government, the U.S. Federal Reserve and/or foreign governments and political and economic changes within the U.S. and abroad, such as inflation, changes in interest rates, recessions, changes in the U.S. presidential administration and Congress, the U.S. government's inability at times to agree on a long-term budget and deficit reduction plan, the threat or occurrence of a federal government shutdown, threats not to increase the federal government's debt limit which could result in a default on the government's obligations, and the shutdown of certain financial institutions, may cause increased volatility in financial markets, affect investor and consumer confidence and adversely impact the broader financial markets and economy, perhaps suddenly and to a significant degree. Slowing global economic growth, the rise in protectionist trade policies, inflationary pressures, changes to some major international trade and security agreements, the imposition of tariffs, risks associated with trade and security agreements between countries and regions, including the U.S. and other foreign nations, political or economic dysfunction within some countries or regions, including the U.S., and dramatic changes in consumer sentiment, commodity prices and currency values could affect the economies and markets of many nations, including the U.S., in ways that cannot necessarily be foreseen at the present time and may create significant market volatility. The Federal Reserve and certain foreign central banks have started to lower interest rates, though economic or other factors, such as inflation, could reverse or stop such changes. It is difficult to accurately predict the pace at which interest rates might change, the timing, frequency or magnitude of any such changes in interest rates, or when such changes might stop or again reverse course. Unexpected changes in interest rates could lead to significant market volatility or reduce liquidity in certain sectors of the market. Market disruptions have caused, and may continue to cause, broad changes in market value, negative public perceptions concerning these developments, and adverse investor sentiment or publicity. Advancements in technology, including advanced development and increased regulation of artificial intelligence, may adversely impact market movements and liquidity. As artificial intelligence is used more widely, which can occur rapidly, the profitability and growth of certain issuers and industries may be negatively impacted in ways that cannot be foreseen and could adversely impact its performance. Changes in value may be temporary or may last for extended periods. Regulators in the U.S. have adopted a number of changes to regulations affecting markets and issuers, some of which apply to the Fund. Due to the broad scope of the regulations being adopted, certain of these changes, which may be revised or rescinded, could

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limit the Fund's ability to pursue its investment strategies or make certain investments, may make it more costly for it to operate, or adversely impact performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Redemption Risk* – The Fund may experience periods of significant redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is heightened during periods of declining or illiquid markets. Significant redemptions could hurt the Fund's performance. The sale of assets to meet redemption requests may require the Fund to realize net capital gains, which could require the Fund to make substantial capital gains distributions to shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Sector Weighting Risk* – The Fund may focus its investments in particular sectors of the economy. To the extent the Fund emphasizes investments in particular sectors of the economy, the Fund will be subject to a greater degree of risks particular to those sectors. Market conditions, interest rates, and economic, regulatory, financial or geopolitical developments could significantly affect securities in particular sectors. Depending on the weightings of the Fund's investments in particular sectors, the Fund may have increased exposure to price movements of securities in those sectors.

*Information Technology Sector Risk* – The information technology sector includes companies engaged in internet software and services, technology hardware and storage peripherals, electronic equipment and components, and semiconductors and semiconductor equipment. The market prices of information technology-related securities tend to exhibit a greater degree of market risk and sharp price fluctuations than other types of securities. These securities may fall out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices. Information technology companies face intense competition, both domestically and internationally, which may have an adverse effect on profit margins. Information technology companies may have limited product lines, markets, financial resources or personnel. The products of information technology companies may face rapid product obsolescence due to technological developments and frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Security Selection Risk* – Securities selected by the Fund may not perform as anticipated due to a number of factors impacting the company that issued the securities or its particular industry or sector, such as poor operating or management performance, weak demand for the company's products or services, the company's failure to meet earnings or other operating performance expectations, financial leverage or credit deterioration, litigation or regulatory issues, or a decline in the value of the issuer's business and assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Small and Mid Cap Companies Risk* – The Fund invests in small and mid capitalization companies that may not have the size, resources and other assets of large capitalization companies. Small and mid capitalization companies may also have narrower commercial markets and more limited operating histories, product lines, and managerial and financial resources than larger, more established companies. Small and mid capitalization companies may be more sensitive to changes in interest rates, borrowing costs and earnings. Stocks of these companies may trade less frequently and in more limited volume than stocks of large capitalization companies. As a result, the securities of small and mid capitalization companies held by the Fund may be less liquid and subject to greater market risks and fluctuations in value than large capitalization companies or may not correspond to changes in the stock market in general. In general, these risks are greater for small capitalization companies than for mid capitalization companies.

**Performance:** The bar chart and table that follow illustrate annual Fund returns for periods ended December 31. This information is intended to give you some indication of the risks of investing in the Fund by showing changes in the Fund's performance from year to year and how the Fund's average annual returns over time compare with those of a broad-based securities market index and an index of funds with similar investment objectives. The Fund's performance prior to August 1, 2016 reflects the Fund's prior investment strategies. 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 is available on the Fund's website at www.aquinasfunds.com or by calling the Fund toll-free at 1-800-423-6369.

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**Calendar Year Returns as of 12/31**![549755837719](ck0000918942-20260429_g9.jpg)

During the period shown on the bar chart, the Fund's best and worst quarters are shown below:

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| | |
|:---|:---|
| **Best and Worst Quarterly Returns** | **Best and Worst Quarterly Returns** |
| 24.01% | 2nd quarter, 2020 |
| -19.79% | 1st quarter, 2020 |

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**Average Annual Total Returns for Periods Ended December 31, 2025** 

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| | | | |
|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;**<u>1 Year</u>** | &nbsp;&nbsp;&nbsp;&nbsp;**<u>5 Years</u>** | &nbsp;&nbsp;&nbsp;&nbsp;**<u>10 Years</u>** |
| Return Before Taxes | 6.72% | 7.20% | 10.88% |
| Return After Taxes on Distributions | 5.30% | 5.54% | 8.69% |
| Return After Taxes on Distributions and Sale of Fund Shares | 5.01% | 5.51% | 8.38% |
| S&P 500<sup>®</sup> Index (reflects no deduction for fees, expenses or taxes) | 17.88% | 14.42% | 14.82% |
| Lipper Large-Cap Core Funds Index (reflects no deduction for taxes) | 17.72% | 13.65% | 13.84% |

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After-tax returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. The return after taxes on distributions and sale of Fund shares may exceed the return before taxes due to an assumed tax benefit from any losses on a sale of Fund shares at the end of the measurement period. Actual after-tax returns depend on your tax situation and may differ from those shown. In addition, the after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements such as 401(k) plans and individual retirement accounts.

**Investment Adviser:** Luther King Capital Management Corporation.

**Portfolio Managers:** 

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| | | |
|:---|:---|:---|
| **<u>Name</u>**  | **<u>Title</u>**  | **<u>Experience with the Fund</u>**  |
| Paul W. Greenwell | Principal, Vice President and Portfolio Manager | Since Inception in 2005 |
| Scot C. Hollmann, CFA | Principal, Vice President and Portfolio Manager | Since 2017 |

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**Purchase and Sale of Fund Shares:** Investors may purchase, exchange or redeem Fund shares by mail (LKCM Funds, c/o U.S. Bank Global Fund Services, 801 Pennsylvania Ave, Suite 219252, Kansas City, MO 64105-1307), or by telephone at 1-800-423-6369. Redemptions by telephone are only permitted upon previously receiving appropriate authorization. Transactions normally will only occur on days the New York Stock Exchange is scheduled to be open. Investors who wish to purchase or redeem Fund shares through a financial intermediary should contact the financial intermediary directly for information relative to the purchase or sale of Fund shares. The minimum initial amount of investment in the Fund and exchanges into the Fund from another fund in the LKCM Funds is $2,000. Subsequent investments in the Fund for all types of accounts may be made with a minimum investment of $500.

**Tax Information:** The Fund's distributions are taxable to you 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, in which case the withdrawal of your investment from the tax-deferred arrangement may be taxable.

**Payments to Broker-Dealers and Other Financial Intermediaries:** If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a financial adviser), the Fund and its related companies may pay the intermediary for the sale of Fund shares and/or other services. If made, these payments may create a conflict 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.

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**ADDITIONAL INFORMATION REGARDING THE INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES OF THE FUND** 

The Fund seeks to maximize long-term capital appreciation, while incorporating Catholic values investing principles in the investment process.

The Fund seeks to achieve its investment objective by primarily choosing investments that Luther King Capital Management Corporation ("Adviser") believes are likely to have above-average growth in revenue or earnings, above-average returns on shareholders' equity, potential for above-average capital appreciation, and/or companies that the Adviser believes have attractive relative valuations. The Fund invests, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities. These equity securities primarily consist of common stocks, American Depositary Receipts ("ADRs"), and real estate investment trusts ("REITs"). The Fund may invest in equity securities of small, mid and large capitalization companies, including dividend paying securities. From time to time, in pursuing its investment strategies, the Fund may hold a significant percentage of its investments in specific sectors of the economy, such as the information technology sector. However, as the sector composition of the Fund's portfolio changes over time, the Fund's exposure to the information technology sector may be lower at a future date, and the Fund's exposure to other market sectors may be higher.

The Adviser's primary strategy in managing the Fund is to identify high quality companies, as determined by the Adviser, that typically exhibit certain characteristics, including high profitability levels, strong balance sheet quality, competitive advantages, ability to generate excess cash flows, meaningful management ownership stakes, attractive reinvestment opportunities, and/or strong market share positions.

The Fund practices socially responsible investing within the framework provided by the United States Conference of Catholic Bishops' Socially Responsible Investment Guidelines ("Catholic Guidelines"). The Catholic Guidelines reflect the United States Conference of Catholic Bishops' investment guidelines with respect to companies that engage in, participate in, or otherwise support activities related to, among other things, abortion, contraceptives, embryonic stem cells, human cloning, human rights, weapons production, and pornography. The Fund's investment approach incorporates the Catholic Guidelines through a combination of screening portfolio companies based on criteria set forth in the Catholic Guidelines, dialogue with companies whose policies and practices conflict with the Catholic Guidelines, and/or potentially excluding from the Fund's portfolio the securities of those companies that are unwilling to alter their policies and practices over a reasonable period of time. The Adviser monitors companies selected for the Fund for policies on various issues contemplated by the Catholic Guidelines. If the Fund invests in a company whose policies and practices are inconsistent with the Catholic Guidelines, the Adviser may attempt to influence the company or sell the company's securities or otherwise exclude future investments in such company.

The Fund has adopted a non-fundamental policy to notify its shareholders at least 60 days before it changes the 80% investment policy described above. The Fund's investment objective is non-fundamental, which means that it may be changed by action of the Board of Trustees of the Trust without shareholder approval.

**DISCUSSION OF INVESTMENT APPROACH** 

The Adviser follows an equity investment approach grounded in the fundamental analysis of individual companies. The Adviser seeks to identify high quality companies, as determined by the Adviser, based on various quantitative and qualitative financial and fundamental criteria. Companies meeting these criteria will typically exhibit a number of the following characteristics: high profitability levels, strong balance sheet quality, competitive advantages, strong market share positions, attractive reinvestment opportunities, ability to generate excess cash flow after capital expenditures, management with a meaningful ownership stake in the company, and/or attractive relative valuation.

To respond to adverse market, economic, political or other conditions, the Fund may adopt a temporary defensive position, during which it may invest in cash, time deposits, commercial paper, certificates of deposit, short term corporate and government obligations, repurchase agreements and bankers' acceptances. To the extent that the Fund engages in a temporary, defensive strategy, the Fund may not achieve its investment objective. A defensive position, taken at the wrong time, such as when the markets unexpectedly rise rather than decline, may have an adverse impact on the Fund's performance.

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**ADDITIONAL INFORMATION REGARDING THE PRINCIPAL RISKS OF INVESTING IN THE FUND** 

An investment in the Fund entails risks. You should be aware that you may lose money by investing in the Fund and the Fund's performance could trail that of other investment alternatives. There is no assurance that the Fund will meet its investment objective. The principal risks of investing in the Fund listed below are presented in alphabetical order and not in order of importance or potential exposure. Among other matters, this presentation is intended to facilitate your ability to find particular risks and make comparisons with those of other funds. Each risk summarized below is considered a "principal risk" of investing in the Fund, regardless of the order in which it appears.

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|:---|:---|
| ***Catholic Values <br>Investing Risk:*** | Since the Fund practices socially responsible investing within the framework provided by the Catholic Guidelines, this may limit the types and number of investment opportunities available to the Fund and may cause the Fund to make different investments than funds that have a similar investment style but do not invest within the investment framework provided by the Catholic Guidelines. The Fund may forego a profitable investment opportunity or sell a security when it may be disadvantageous to do so, and may underperform funds that do not consider socially responsible investing within the framework provided by the Catholic Guidelines. The integration of these considerations may affect the Fund's exposure to certain investments and may impact the Fund's relative investment performance depending on the performance of those issuers. Although the Adviser incorporates the Catholic Guidelines through a combination of screening portfolio companies based on criteria set forth in the Catholic Guidelines, dialogue with companies whose policies and practices conflict with the Catholic Guidelines, and/or potentially excluding from the Fund's portfolio the securities of those companies that are unwilling to alter their policies and practices over a reasonable period of time, these processes may not be successful. The Adviser may use research and/or information provided by one or more third parties in performing its analysis and, because there are few generally accepted standards to use in such considerations, the information and considerations used for the Fund may differ from the information and considerations used for other funds. |
| ***Cybersecurity Risk:*** | The Fund, its service providers, third-party fund distribution platforms and other market participants increasingly depend on complex information technology and communications systems, including artificial intelligence, which are subject to a number of different threats and risks that could adversely affect the Fund and its shareholders. Operational risks arising from, among other things, human or processing errors, systems and technology disruptions or failures, or cybersecurity incidents may negatively impact the Fund, its service providers, and third-party fund distribution platforms, as well as the ability of shareholders to transact with the Fund, and result in financial losses. Cybersecurity incidents may allow unauthorized parties to gain access to or misappropriate Fund assets, shareholder data, or confidential or proprietary information, or cause the Fund or its service providers, as well as securities trading venues and their service providers, to suffer data corruption or lose operational functionality, including the inability to process Fund transactions, interference with the Fund's ability to calculate its net asset value, physical damage to a computer or network system or remediation costs associated with system repairs. Market events also may occur at a pace that overloads current information technology and communication systems and processes of the Fund, its service providers or other market participants, which could impact the ability to conduct the Fund's operations or shareholders' ability to invest in the Fund. In addition, authorized persons could inadvertently release Fund shareholder data or confidential or proprietary information stored on the Fund's systems. The occurrence of any of these problems could result in a loss of information, violations of applicable privacy and other laws, regulatory scrutiny, penalties, fines, reputational damage, additional compliance requirements and other consequences, any of which may have a material effect on the Fund or its shareholders. It is not possible for the Fund or its service providers to identify all of the operational risks that may affect the Fund or to develop processes and controls to completely eliminate or mitigate their occurrence or effects. Recent geopolitical tensions may increase the scale and sophistication of deliberate attacks, particularly those from nation-states or from entities with nation-state backing. The Fund cannot control the cybersecurity and operational plans and systems of its service providers, its counterparties or the issuers or securities in which the Fund invests. Portfolio companies in which the Fund invests are also exposed to various risks related to cybersecurity incidents, and the value of the Fund's investments in such portfolio companies could be adversely impacted in the event any such cybersecurity incidents occur. The Fund may incur substantial costs to prevent or address cybersecurity incidents.<br>The Fund and its service providers, including the Adviser, may utilize artificial intelligence ("AI") technologies, including machine learning models and generative AI, to improve operational efficiency and in connection with research. In addition, counterparties used by the Fund may utilize AI in their business activities. While the Adviser may restrict certain uses of AI tools, the Fund and the Adviser are not in a position to control the use of AI in third-party products or services. The use of AI introduces numerous potential challenges and the use of AI can lead to reputational damage, legal liabilities, and competitive disadvantages, as well as negatively impact business operations, which may occur with or without mismanagement in the use of the AI. AI requires the collection and processing of substantial amounts of data, which poses risks of data inaccuracies, incompleteness, and inherent biases, and which can degrade the technology's effectiveness and reliability. Such data can include proprietary information, the use of which by AI may be unauthorized and subject to potential liability. Rapid technological advancements further complicate risk predictions, and competitors who adopt AI more swiftly may gain a competitive edge. The complexity and opacity of AI systems raise significant accountability and ethical concerns. AI has enhanced the ability of threat actors to amplify the potency, scale, and speed of cybersecurity attacks. AI's role in increasing automation raises concerns about job displacement and may lead to economic and social disruptions. The unpredictable nature of AI's impact on market dynamics complicates traditional risk assessment models, making it challenging to identify risks and opportunities using historical data. Legal and regulatory frameworks governing AI's use, particularly concerning data privacy and protection, are evolving rapidly. These changes could materially alter how AI is used, which may negatively impact the Fund. |

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| ***Dividend Paying Securities Risk:*** | The Fund's investments in dividend paying securities could cause the Fund to underperform funds that invest without consideration of a company's track record of paying dividends. Securities that pay higher dividends as a group can fall out of favor with the market, causing these companies to underperform companies that do not pay high or any dividends. An issuer of stock held by the Fund may choose not to declare a dividend or the dividend rate might not remain at current levels. Changes in the dividend policies of companies owned by the Fund and the capital resources available for these companies' dividend payments may reduce the level of dividend payments and adversely affect the Fund. Dividend paying securities also may not experience the same level of earnings growth or capital appreciation as non-dividend paying securities, and a sharp rise in interest rates or an economic downturn could cause a company to unexpectedly reduce or eliminate its dividend. Securities that pay dividends may be sensitive to changes in interest rates, and as interest rates rise or fall, the prices of such securities may fluctuate. The income received by the Fund will fluctuate due to the amount of dividends that companies elect to pay. |
| ***Equity Securities Risk:*** | Funds that invest in equity securities are subject to investment risk, issuer risk, market risks and significant fluctuations in price in response to changes in a company's financial condition as well as general market, economic and political conditions, and other factors. The Fund may experience a significant or complete loss on its investment in an equity security. In addition, stock prices may be sensitive to rising interest rates, which increase borrowing costs and the costs of capital for the issuer. Equity securities generally are subordinate to an issuer's debt in the event of liquidation or bankruptcy. |
|  | The Fund's investments in equity securities primarily consist of ADRs, common stocks, and REITs. Investing in such securities may expose the Fund to additional risks. |
|  | • *ADRs.* ADRs are receipts issued by domestic banks or trust companies that represent the deposit of a security of a foreign issuer and are publicly traded in the United States. Investments in ADRs are subject to certain of the risks associated with investing directly in foreign securities, including, but not limited to, currency fluctuations, capital restrictions, less liquidity, less government regulation, less publicly available information, increased price volatility, and political, economic and financial instability in the home country of an issuer of the underlying ADR. In addition, foreign companies may use different accounting and financial standards. Such events could negatively affect the value of the Fund's shares. The securities underlying ADRs trade on foreign exchanges at times when the U.S. markets are not open for trading. As a result, the value of ADRs may not track the price of the underlying securities and may change materially at times when the U.S. markets are not open for trading. Any distributions paid to the holders of depositary receipts may be subject to a fee charged by the depositary. Holders of depositary receipts may have limited voting rights, and investment restrictions in certain countries may adversely impact the value of depositary receipts because such restrictions may limit the ability to convert the equity shares into depositary receipts and vice versa. Such restrictions may cause the equity shares of the underlying issuer to trade at a discount or premium to the market price of the depositary receipts.  |
|  | • *Common Stock.* The value of a company's common stock may fall as a result of factors directly relating to that company, such as decisions made by its management or decreased demand for the company's products or services. A common stock's value may also decline because of factors affecting not just the company, but also companies in the same industry or sector. The price of a company's common stock may also be affected by changes in financial markets that are relatively unrelated to the company, such as changes in interest rates, exchange rates or industry regulation. Companies that pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company's common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock generally is subordinate to the issuing company's debt securities and preferred stock upon the dissolution or bankruptcy of the issuing company. In the event of an issuer's bankruptcy, there is a substantial risk that there will be nothing left to pay common stockholders after payments, if any, to bondholders and preferred stockholders have been made. |
|  | • *REITs.* Investments in REITs are subject to the risks associated with investing in the real estate industry, adverse governmental actions, regulatory limitations on rents and operating expenses, declines in property and real estate values, risks related to general and local economic conditions, increases in property taxes and operating expenses, overbuilding, changes in interest rates, and liabilities resulting from environmental problems. Any domestic REIT could be adversely affected by the failure of a REIT to qualify for federal income-tax-free "pass-through" of net income and net realized gains that are distributed to shareholders and exemption from registration as an investment company. The failure of a company to qualify for treatment as a REIT under the federal tax law likely would have an adverse impact on the Fund's after-tax performance. REITs also are subject to heavy cash flow dependency, defaults by borrowers and self-liquidation. In the event of a default by a borrower or lessee, a REIT may experience delays in enforcing its rights as a mortgagee or lessor and may incur substantial costs to protect its investments. REITs are dependent upon specialized management skills and may invest in relatively few properties, and may not be diversified geographically or by property or tenant type. Investments in REITs may be volatile. REITs are pooled investment vehicles with their own fees and expenses, and the Fund will indirectly bear a proportionate share of those fees and expenses when investing in REITs. |

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| ***Foreign Securities Risk:*** | Non-U.S. investments carry potential risks not associated with domestic investments. Such risks may include, but are not limited to: currency exchange rate fluctuations, political and financial instability, less liquidity and greater price volatility, lack of uniform accounting, auditing, recordkeeping and financial reporting standards, different government regulation and supervision of foreign banks, stock exchanges, brokers and listed companies, delays in transaction settlements in some foreign markets, and any regulatory, political, currency, security, economic and other risks associated with a particular country in which the Fund invests, including tariffs, trade disputes and sanctions. Trading in foreign markets generally involves higher transaction costs than trading in U.S. markets. There may be very limited oversight of certain foreign banks or securities depositories that hold foreign securities and currencies and the laws of certain countries may limit the ability to recover such assets if a foreign bank, depository or their agents goes bankrupt. In certain countries, legal remedies available to investors may be more limited than those available with respect to investments in the U.S. and investors may encounter difficulties in enforcing contractual obligations. Additionally, in certain markets, the Fund may not receive timely payment for securities or other instruments it has delivered or receive delivery of securities paid for and may be subject to increased risk that the counterparty will fail to make payments or delivery when due or default completely. To the extent the Fund invests a significant portion of its assets in securities of a single country or geographic region at any one time, it is more likely to be affected by events or conditions in that country or region. The Fund's investment in a foreign issuer may subject the Fund to regulatory, political, currency, security, economic and other risks associated with that country, including tariffs, trade disputes or the imposition of economic and other sanctions by the U.S. or another country against a particular country, as well as competition from subsidized foreign competitors with lower production costs. In addition, as a result of increasingly interconnected global economies and financial markets, the value and liquidity of the Fund's investments may be negatively affected by events impacting a country or region, regardless of whether the Fund invests in issuers located in or with significant exposure to such country or region. There may be restrictions on the flow of international capital, including the possible seizure or nationalization of the securities issued by non-U.S. issuers held by the Fund. In addition, the repatriation of investment income, capital or the proceeds of sales of securities from certain of the countries may require advance government notification or authority, and if a deterioration occurs in a country's balance of payments, the country could impose temporary restrictions on foreign capital remittances. The Fund also could be adversely affected by delays in, or a refusal to grant, any required governmental approval for repatriation, as well as by the application to it of other restrictions on investment. Investments in foreign securities subject the Fund to the risk of market timing activities by shareholders. Some investors may engage in frequent short-term trading in the Fund to take advantage of any price differentials that may be reflected in the NAV of the Fund's shares. Global economic and financial markets have become increasingly interconnected and conditions (including recent volatility, terrorism, war and political instability) and events (including natural disasters) in one country, region or financial market may adversely impact issuers in a different country, region or financial market. In addition, securities of issuers traded on foreign exchanges may be suspended, either by the issuers themselves, by an exchange or by governmental authorities. Furthermore, securities of a foreign company, including depositary receipts, could be delisted from U.S. stock exchanges. Trading suspensions may be applied from time to time to the securities of individual issuers for reasons specific to that issuer, or may be applied broadly by exchanges or governmental authorities in response to market events. In the event that the Fund holds material positions in such suspended securities, the Fund's ability to liquidate its positions or provide liquidity to investors may be compromised and the Fund could incur significant losses. |
| ***Inflation Risk:*** | Stocks and other securities may fall in value due to higher actual or anticipated inflation. Further, a rapid increase in prices for goods and services may have an adverse effect on corporate profits and consumer spending, which also may result in lower values for stocks and other securities. If Fund investments do not keep pace with inflation, the present value of Fund assets and the value of Fund distributions could decline. |
| ***Investment Risk:*** | An investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The share price of the Fund fluctuates, which means that when you sell your shares of the Fund, they could be worth less than what you paid for them. Therefore, you may lose money by investing in the Fund. |
| ***Large Cap Companies Risk:*** | The securities of large market capitalization companies may underperform other segments of the market because such companies may be less responsive to competitive challenges and opportunities, such as changes in technology and consumer tastes. Large market capitalization companies may be unable to attain or maintain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. |
| ***Market Risk:*** | The Fund is subject to the risk that the securities markets will move down, sometimes rapidly and unpredictably, based on overall economic conditions and other factors, which may negatively affect the Fund's performance. Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. Markets may at times be volatile and the value of the Fund's investments may decline in price, sometimes significantly and/or rapidly, because of changes in prices of its holdings or a broad decline in the financial markets. The value of a security may decline due to adverse issuer-specific conditions or general market conditions which are not specifically related to a particular company, such as real or perceived adverse geopolitical, regulatory, market, economic or other developments that may cause broad changes in market value, changes in the general outlook for corporate earnings, changes in interest, currency or inflation rates, lack of liquidity in the markets, public perceptions concerning these developments or adverse market sentiment generally. Changes in the financial condition of a single issuer or market segment also can impact the market as a whole. The value of a security may also decline due to factors that affect a particular industry or industries, such as tariffs, labor shortages or increased production costs and competitive conditions within an industry. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously.  |

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| Geopolitical and other events, including terrorism, economic uncertainty, regional or global economic instability, trade disputes, pandemics, public health crises, natural disasters, cybersecurity incidents, and related events have led, and in the future may continue to lead, to instability in world economies and markets generally and reduced liquidity, which may adversely affect the value of your investment. The imposition by the U.S. of tariffs on goods imported from foreign countries and reciprocal tariffs levied on U.S. goods by those countries also may lead to volatility and instability in domestic and foreign markets. Such market disruptions have caused, and may continue to cause, broad changes in market value, negative public perceptions concerning these developments, a reduction in the willingness and ability of some lenders to extend credit, difficulty for some borrowers in obtaining financing on attractive terms, and adverse investor sentiment or publicity. Changes in value may be temporary or may last for extended periods. Adverse market events may also lead to increased shareholder redemptions, which could cause the Fund to sell investments at an inopportune time to meet redemption requests by shareholders and may increase the Fund's portfolio turnover, which could increase the costs that the Fund incurs and lower the Fund's performance. Even when securities markets perform well, there is no assurance that the investments held by the Fund will increase in value along with the broader market. |
| Policy changes by the U.S. government, the U.S. Federal Reserve and/or foreign governments, and political and economic changes within the U.S. and abroad, such as inflation, changes in interest rates, recessions, changes in the U.S. presidential administration and Congress, the U.S. government's inability at times to agree on a long-term budget and deficit reduction plan, the threat or occurrence of a federal government shutdown or the occurrence of a failure to increase the federal government's debt limit, which could result in a default on the government's obligations, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations. Global economies and financial markets are becoming increasingly interconnected, which increases the possibility of many markets being affected by events in a single country or events affecting a single or small number of issuers. |
| Both U.S. and international markets have experienced significant volatility in recent years. As a result of such volatility, investment returns may fluctuate significantly, and the risks discussed herein associated with an investment in the Fund may be increased. Deteriorating economic fundamentals may increase the risk of default or insolvency of particular issuers, negatively impact market value, increase market volatility, cause credit spreads to widen, reduce bank balance sheets and cause unexpected changes in interest rates. Any of these could cause an increase in market volatility, reduce liquidity across various sectors or markets or decrease confidence in the markets.  |
| Some countries, including the U.S., have adopted more protectionist trade policies, including trade tariffs and other trade barriers, which is a trend that appears to be continuing globally. The current political environment has intensified concerns about a global trade war. Slowing global economic growth, the rise in protectionist trade policies, inflationary pressures, changes to some major international trade and security agreements, risks associated with trade and security agreements between countries and regions, including the U.S. and other foreign nations, political or economic dysfunction within some countries or regions, including the U.S., and dramatic changes in consumer sentiment, commodity prices and currency values could affect the economies and markets of many nations, including the U.S., in ways that cannot necessarily be foreseen at the present time and may create significant market volatility. In addition, these policies, including the impact on the U.S. dollar, may decrease foreign demand for U.S. assets, which could have a negative impact on certain issuers and/or industries. Historical patterns of correlation among asset classes may break down in unanticipated ways during times of high volatility, disrupting investment programs and potentially causing losses. |
| The United States has imposed or threatened to impose tariffs and other trade barriers on imports of certain categories of goods from Canada, Mexico, and European countries. The United States also has imposed or threatened to impose tariffs and other trade barriers on imports of certain categories of goods from China, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. These countries have imposed or threatened to impose retaliatory tariffs on U.S. goods. If relations between the United States and these and other foreign countries do not improve or continue to deteriorate, markets and individual securities may be severely affected both regionally and globally, and the value of the Fund's investments may go down. |
| The Federal Reserve and certain foreign central banks have started to lower interest rates though economic or other factors, such as inflation, could reverse or stop such changes. It is difficult to accurately predict the pace at which interest rates might change, the timing, frequency or magnitude of any such changes in interest rates, or when such changes might stop or again reverse course. Unexpected changes in interest rates could lead to significant market volatility or reduce liquidity in certain sectors of the market. Over the longer term, rising interest rates may present a greater risk than has historically been the case due to the prior period of relatively low rates and the effect of government fiscal and monetary policy initiatives and potential market reaction to those initiatives, or their alteration or cessation. It is difficult to predict the impact on various markets of significant rate changes or other significant policy changes. |
| Markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, the execution of ransomware and other cyberattacks, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. In certain cases, an exchange or market may close or issue trading halts on either specific securities or even the entire market, which may result in the Fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments. These fluctuations in securities prices could be a sustained trend or a drastic movement. The financial markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations. |

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| | Tensions, war or open conflict between nations, such as among the United States, Israel and Iran, between Russia and Ukraine, otherwise in the Middle East or in eastern Asia could affect the economies of many nations, including the United States and may contribute to increased volatility and uncertainty in the financial markets. The extent and duration of ongoing hostilities and any sanctions and related events, including the potential for cyber warfare, remain uncertain and cannot be predicted. Those events have presented and could continue to present material uncertainty and risk with respect to markets globally, including in the oil and gas markets and potentially other industries and sectors, and the performance of the Fund and its investments or operations could be negatively impacted whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries or regions directly affected. For example, the armed conflict among the United States, Israel and Iran that commenced in February 2026 has contributed to increased volatility and uncertainty in financial markets as well as significant volatility in the oil and natural gas markets, which has created widespread economic disruption.  |
| | Regulators in the U.S. have adopted a number of changes to regulations involving the markets and issuers, some of which apply to the Fund. The full effect of such regulations is not currently known and certain changes, which may be revised or rescinded, could limit the Fund's ability to pursue its investment strategies or make certain investments, may make it more costly for the Fund to operate, or adversely impact its performance. Further, advancements in technology may also adversely impact market movements and liquidity and may affect the overall performance of the Fund. For example, the advanced development and increased regulation of artificial intelligence may adversely impact market movements and liquidity. As artificial intelligence is used more widely, which can occur rapidly, the profitability and growth of certain issuers may be negatively impacted in ways that cannot be foreseen and could adversely affect the Fund's performance. |
| | High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. There is no assurance that the U.S. Congress will act to raise the nation's debt ceiling; a failure to do so could cause market turmoil and substantial investment risks that cannot now be fully predicted. Unexpected political, regulatory and diplomatic events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial markets and the broader economy.  |
| | Certain illnesses spread rapidly and have the potential to significantly and adversely affect the global economy. The impact of epidemics and/or pandemics that may arise in the future could negatively affect the economies of many nations, individual companies and the global securities and commodities markets, including their liquidity, in ways that cannot necessarily be foreseen at the present time and could last for an extended period of time. China's economy, which has been sustained through debt-financed spending on housing and infrastructure, appears to be experiencing a significant slowdown and growing at a lower rate than prior years. Due to the size of China's economy, such a slowdown could impact financial markets and the broader economy. |
| | Global climate change can have potential effects on property and security values. Certain issuers, industries and regions may be adversely affected by the impact of climate change in ways that cannot be foreseen. The impact of legislation, regulation and international accords related to climate change, including any direct or indirect consequences, may negatively impact certain issuers, industries and regions. A rise in sea levels, a change in weather patterns, including an increase in powerful storms and large wildfires, and/or a climate-driven increase in flooding could cause properties to lose value or become unmarketable altogether. Unlike previous declines in the real estate market, properties in affected zones may not ever recover their value. Regulatory changes and divestment movements tied to concerns about climate change could adversely affect the value of certain land and the viability of industries whose activities or products are seen as accelerating climate change. |
| ***Redemption Risk:*** | The Fund may experience periods of significant redemptions that could cause the Fund to sell assets at inopportune times or at a loss or depressed value. Redemption risk is greater to the extent that one or more investors or intermediaries control a large percentage of investments in the Fund, have shorter investment horizons, or have unpredictable cash flow needs. Redemption risk is heightened during periods of rising interest rates and declining or illiquid markets, which may cause investors to move out of securities on a large scale. Significant redemptions, whether by a few large investors or many smaller investors, could hurt the Fund's performance. This risk may be heightened if the Fund invests in less liquid securities. The sale of assets to meet redemption requests may require the Fund to realize net capital gains, which could require the Fund to make substantial capital gains distributions to its shareholders. |
| ***Sector Weighting Risk:*** | The Fund may focus its investments in particular sectors of the economy. To the extent the Fund emphasizes investments in particular sectors of the economy, the Fund will be subject to a greater degree of risks particular to those sectors. Market conditions, interest rates, availability of basic resources or supplies, and other economic, regulatory, financial or geopolitical developments could significantly affect securities in particular sectors more than securities of issuers in other industries and sectors. Depending on the weightings of the Fund's investments in particular sectors, the Fund may have increased exposure to price movements of securities in those sectors. The Fund's sector weightings could have an adverse impact on the Fund and lead to a decline in the Fund's net asset value. |

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| | • *Information Technology Sector Risk:* The information technology sector includes companies engaged in internet software and services, technology hardware and storage peripherals, electronic equipment, instruments and components, and semiconductors and semiconductor equipment. The market prices of information technology-related securities tend to exhibit a greater degree of market risk and sharp price fluctuations than other types of securities. These securities may fall out of favor with investors rapidly, which may cause sudden selling and dramatically lower market prices. The information technology sector is subject to intense competition, both domestically and internationally, which may have an adverse effect on their profit margins, and government regulation. Like other technology companies, information technology companies may have limited product lines, markets, financial resources or personnel. The products of information technology companies may face rapid product obsolescence due to technological developments, frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel. Failure to introduce new products, develop and maintain a loyal customer base or achieve general market acceptance for their products could have a material adverse effect on a company's business. Companies in the information technology sector are heavily dependent on intellectual property rights and the loss of patent, copyright and trademark protections may adversely affect the profitability of these companies. |
| ***Security Selection Risk:*** | Securities selected by the Adviser may perform differently than the overall market or may not meet the Adviser's expectations. This may be a result of specific factors relating to the issuer's financial condition or operations or changes in the economy, governmental actions or inactions, factors affecting a security's industry, poor operating performance, weak demand for an issuer's products or services, an issuer's failure to meet earnings or other operating performance expectations, financial leverage or credit deterioration, litigation or regulatory issues, a decline in the value of an issuer's business and assets, or changes in investor perceptions regarding the issuer. This could result in the Fund's underperformance compared to other funds with similar investment objectives. |
| ***Small and Mid Cap Companies Risk:*** | Investments in small and mid capitalization companies generally involve greater risks and the possibility of greater price volatility than investments in larger, more established companies. Small and mid capitalization companies often have narrower commercial markets and more limited operating histories, product lines, and managerial and financial resources than larger, more established companies. As a result, performance can be more volatile and they face greater risk of business failure, which could increase the volatility of the Fund's portfolio. Additionally, stocks of these companies may trade less frequently and in more limited volume than stocks of large capitalization companies, may have less market liquidity than larger capitalization companies, and they can be sensitive to changes in interest rates, borrowing costs and earnings. Generally, the smaller the company size, the greater these risks. |

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**PORTFOLIO HOLDINGS INFORMATION**

The Fund makes available its top ten and complete portfolio holdings on its website at www.aquinasfunds.com on a quarterly basis. The top ten and complete portfolio holdings information is generally available no earlier than 10 and 30 days after the end of the calendar quarter, respectively, and will remain available through at least the end of the current quarter. Monthly portfolio disclosures are filed quarterly with the SEC on Form N-PORT, with quarter-end disclosures being made public 60 days after the end of each fiscal quarter. A description of the Fund's policies and procedures with respect to the disclosure of the Fund's portfolio securities is available in the Fund's Statement of Additional Information. The Statement of Additional Information is available by contacting the Fund at 1-800-423-6369 or at www.aquinasfunds.com.

**MANAGEMENT** 

**INVESTMENT ADVISER** 

Luther King Capital Management Corporation (the "Adviser"), 301 Commerce Street, Suite 1600, Fort Worth, Texas 76102, serves as the investment adviser to the Fund. The Adviser was founded in 1979 and provides investment management services to investment companies, employee benefit plans, endowment funds, foundations, estates, trusts, high net-worth individuals, and private investment funds. As of December 31, 2025, the Adviser had approximately $30.4 billion in assets under management.

Under an Investment Advisory Agreement with the Fund, the Fund pays the Adviser an advisory fee, calculated daily and payable quarterly, equal to an annual rate of 0.90% of the Fund's average daily net assets for the quarter. The Adviser has contractually agreed to waive its advisory fees and/or reimburse expenses through May 1, 2026 to the extent necessary to keep the total operating expenses for the Fund from exceeding 1.00% of the Fund's average daily net assets. This expense limitation excludes interest, taxes, brokerage commissions, indirect fees and expenses relating to investments in other investment companies, including money market funds (Acquired Fund Fees and Expenses), and extraordinary expenses. The fee waiver and expense reimbursement agreement may be terminated only with the consent of the Board of Trustees.

The contractual advisory fees and actual advisory fees paid by the Fund net of waivers for the fiscal year ended December 31, 2025 were 0.90% and 0.43%, respectively.

Any fee waiver or reimbursements will have the effect of lowering the overall expense ratio for the Fund and increasing its overall return to investors at the time any such amounts were waived and/or reimbursed.

A discussion regarding the basis on which the Board of Trustees approved the investment advisory agreement for the Fund is available in Item 11 of the Fund's <u>[Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/918942/000113322825009327/lsar-efp16898_ncsrs.htm)</u> as filed with the SEC for the fiscal period ended June 30, 2025.

**PORTFOLIO MANAGERS** 

**Paul W. Greenwell** is the lead portfolio manager of the Fund (since inception in 2005). Mr. Greenwell is primarily responsible for the day-to-day management of the Fund and oversees the investment team responsible for the Fund. Mr. Greenwell joined the

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Adviser in 1983 and has served as Principal (since 1986) and Vice President and Portfolio Manager (since 1983). Mr. Greenwell graduated with a Bachelor of Science from the University of Missouri.

**Scot C. Hollmann, CFA**, is a member of the investment team responsible for the Fund (since 2017). Mr. Hollmann is also a member of the investment teams responsible for the LKCM Equity Fund (since 2010), LKCM Balanced Fund (since inception in 1997), and LKCM Fixed Income Fund (since 2010). Mr. Hollmann joined the Adviser in 1983 and has served as Principal (since 1986) and Vice President and Portfolio Manager (since 1983). Mr. Hollmann graduated with a Bachelor of Business Administration and a Master of Business Administration from Texas Christian University.

The Statement of Additional Information provides additional information about the portfolio managers' compensation, other accounts managed, and ownership of shares of the Fund.

**DISTRIBUTION OF FUND SHARES** 

**DISTRIBUTOR** 

Quasar Distributors, LLC, 190 Middle Street, Suite 301, Portland, ME 04101, a registered broker-dealer and member of the Financial Industry Regulatory Authority, distributes the Fund's shares.

**DISTRIBUTION PLAN** 

The Fund has adopted a distribution plan under Rule 12b-1 of the Investment Company Act of 1940, as amended (the "Investment Company Act"), (the "Distribution Plan") that allows the Fund to pay distribution and service fees for the sale and distribution of its shares and for services provided to shareholders. The Distribution Plan authorizes the Fund to annually pay up to 1.00% of its average daily net assets for distribution and other services. Also, the Distribution Plan allows the Fund to finance with Fund assets activities that promote the sale and retention of Fund shares such as printing prospectuses and reports and preparing and distributing advertising material and sales literature and providing services to shareholders. The Board of Trustees has authorized an annual fee of 0.10% of the average daily net assets of the Fund under the Distribution Plan. Because the fees are paid out of the Fund's assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.

**PURCHASE OF SHARES** 

You may purchase shares of the Fund at the net asset value ("NAV") per share next determined after receipt of the purchase order. The Fund normally determines NAV as of the scheduled close of normal trading of the New York Stock Exchange ("NYSE") (generally 4:00 P.M. Eastern Time) each day that the NYSE is scheduled to be open for business.

**INITIAL INVESTMENTS** 

The Fund is offered for purchase through financial intermediaries who have entered into agreements with the Fund's distributor, directly from LKCM Funds and from certain other distribution channels. The policies that apply to the purchase of Fund shares directly through the Fund's transfer agent, U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (the "Transfer Agent"), are discussed below. If you establish an account with a broker-dealer or other financial intermediary, ask them for information on how to purchase, sell and exchange Fund shares. Your broker-dealer or other financial intermediary also may charge fees that are in addition to those described in this Prospectus. The Fund's minimum initial investment is $2,000, but financial intermediaries may impose different initial investment minimums for the Fund. Please contact your financial intermediary for information regarding how to purchase, exchange and redeem shares and applicable fees.

**Through Your Financial Adviser.** You may invest in shares of the Fund by contacting your financial adviser. Your financial adviser can help you open a new account and help you review your financial needs and formulate long-term investment goals and objectives. Investors may be charged a fee if they effect transactions in Fund shares through a broker or agent.

The Fund has authorized certain broker-dealers and other financial intermediaries to receive on their behalf purchase and redemption orders of Fund shares. These broker-dealers may also designate intermediaries to receive Fund orders on their behalf. The Fund is deemed to have received purchase and redemption orders for Fund shares when an authorized broker-dealer or its designee or financial intermediary receives such orders. All such orders are executed at the next NAV calculated after the order is received by an authorized broker-dealer or its designee or financial intermediary. Your broker-dealer or other financial intermediary is responsible for transmitting orders to be received by the Fund in proper form and in a timely manner. The Fund is not responsible for the failure of a broker-dealer or financial intermediary to transmit a purchase or redemption order in proper form and in a timely manner.

**By Mail.** You may open an account directly with the Transfer Agent by completing and signing a New Account Application, and mailing it, together with a check ($2,000 minimum initial investment) payable to LKCM Funds. Your order will not be accepted until the completed New Account Application is received by the Fund or the Transfer Agent.

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**By regular mail to:** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**By express, registered or certified mail to:** |
| LKCM Funds – LKCM Aquinas Catholic Equity Fund<br>c/o U.S. Bank Global Fund Services<br>P.O. Box 219252<br> Kansas City, MO 64121-9252 | LKCM Funds – LKCM Aquinas Catholic Equity Fund<br>c/o U.S. Bank Global Fund Services<br>801 Pennsylvania Ave, Suite 219252 <br>Kansas City, MO 64105-1307 |

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The Fund does not consider the U.S. Postal Service or other independent delivery services to be its agents. Therefore, deposit in the mail or with such services, or receipt at the U.S. Bank Global Fund Services post office box of purchase orders or redemption

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requests does not constitute receipt by the Transfer Agent. Receipt of purchase orders or redemption requests is based on when the order is received at the Transfer Agent's offices. The Funds are deemed to have received purchase and redemption orders for Fund shares when an authorized broker-dealer or its designee or financial intermediary receives such orders.

Once the Fund receives and accepts your New Account Application in the mail, your payment for shares will be credited to your account at the NAV per share of the Fund next determined after receipt. If you purchase shares using a check or electronic funds transfer through the Automated Clearing House ("ACH") network and soon after make a redemption request, the Fund will honor the redemption request at the next determined NAV, but will not send you the proceeds until your payment for purchase has cleared (within seven business days). The Fund will not accept payment in cash or money orders. To prevent check fraud, the Fund will not accept third party checks, U.S. Treasury checks, credit card checks, traveler's checks or starter checks for the purchase of shares. The Fund is unable to accept postdated checks or any conditional order or payment. Payment should be made by check in U.S. Dollars drawn on a U.S. bank or credit union. If your bank does not honor your check, you could be liable for any loss sustained by the Fund, as well as a service charge imposed by the Transfer Agent in the amount of $25.

In compliance with the USA PATRIOT Act of 2001, when you open an account directly with the Fund, please note that the Transfer Agent will verify certain information on your New Account Application as part of the Fund's Anti-Money Laundering Program. As requested on the New Account Application, you must supply your full name, date of birth, social security number and permanent street address. If you are opening the account in the name of a legal entity (*e.g*., partnership, limited liability company, business trust, corporation, etc.), you must also supply the identity of the beneficial owners. Broker-dealers and other financial intermediaries also are required to comply with the USA PATRIOT Act and, as a result, may request similar information when you open an account. Mailing addresses containing only a P.O. Box will not be accepted. Please contact the Transfer Agent at 1-800-423-6369 if you need additional assistance when completing your New Account Application.

If the Fund does not have a reasonable basis for determining your identity, your account will be rejected or you will not be allowed to perform a transaction on the account until the necessary information to confirm your identity is received. If the Transfer Agent is unable to verify your identity, the Fund reserves the right to redeem your account at the current day's net asset value.

**By Wire.** You may purchase shares of the Fund by wiring federal funds ($2,000 minimum). If you are making your first investment in the Fund, before you wire funds, the Transfer Agent must have received and processed a completed New Account Application from you. You can mail or overnight deliver your New Account Application to the Transfer Agent. Upon receipt of your completed New Account Application, the Transfer Agent will establish an account for you. The account number assigned will be required as part of the instruction that should be given to your bank to send the wire. The wire must be received by the time as of which the NAV is calculated in order to receive the same day's NAV. Your bank must include both the name of the Fund, your name and account number so that monies can be correctly applied. Your bank should transmit funds by wire to:

U.S. Bank, N.A.

777 East Wisconsin Avenue

Milwaukee, WI 53202

ABA #075000022

For credit to U.S. Bancorp Fund Services, LLC

Account #112-952-137

For further credit to LKCM Funds

LKCM Aquinas Catholic Equity Fund

[Shareholder account number]

Federal fund purchases will be accepted only on a day on which the Fund and the custodian are open for business. The Fund and U.S. Bank, N.A. are not responsible for the consequences of delays resulting from the banking or Federal Reserve wire system, or from incomplete wiring instructions.

**SUBSEQUENT INVESTMENTS** 

**By Mail or Wire.** To make additional investments once you have opened your account (minimum subsequent investment $500), write your account number on a check made payable to LKCM Funds and send it together with the Invest by Mail form from your most recent confirmation statement received from the Transfer Agent to the address noted in the section entitled "Initial Investments – By Mail." If you do not have the Invest by Mail form, include the Fund name, your name, address, and account number on a separate piece of paper along with your check. Additional investments may also be made by wire. Before sending your wire, please contact the Transfer Agent at 1-800-423-6369 to advise them of your intent to wire funds. This will ensure prompt and accurate credit upon receipt of your wire. Instruct your bank to wire monies as outlined above.

**By Telephone.** To make additional investments by telephone, you must check the appropriate box on your New Account Application authorizing telephone purchases. If you have given authorization for telephone transactions and your account has been open for at least 7 business days, you may call the Fund toll free at 1-800-423-6369 to move money, in the amount of $500 or more, from your bank account to your Fund account upon request. Only bank accounts held at U.S. institutions that are ACH members may be used for telephone transactions. For security reasons, requests by telephone may be recorded. Shares of the Fund will be purchased in your account at the NAV next determined after your order is placed. Telephone trades must be received by or prior to market close. During periods of high market activity, shareholders may encounter higher than usual call waits. Please allow sufficient time to place your telephone transaction.

If you purchased shares of the Fund through a financial intermediary, you must contact your financial intermediary for information concerning how to effect subsequent investments in the Fund's shares.

**AUTOMATIC INVESTMENT PROGRAM** 

The Automatic Investment Program (the "Program") permits investors that own shares of the Fund with a value of $2,000 or more to purchase shares (minimum of $100 per transaction) at regular intervals selected by the investor. This Program provides a

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convenient method to have monies deducted from your checking or savings account, for investment into the Fund, on a monthly or quarterly basis. Only bank accounts held at domestic institutions that are ACH members may be used for this option. If you wish to change the amount of your investment or to terminate the Program, please contact the Transfer Agent five days prior to the effective date. Additionally, the Transfer Agent will charge a $25 fee for any payment returned. To establish the Program, an investor must complete the appropriate sections of the New Account Application. For additional information on the Program, please call 1-800-423-6369.

**RETIREMENT PLANS AND ACCOUNTS** 

The Fund makes available individual retirement accounts ("IRAs"), including Simplified Employee Pension Plans, traditional IRAs, Roth IRAs and IRA "Rollover Accounts," offered by U.S. Bank Global Fund Services. Detailed information on these plans and accounts is available by calling the Fund at 1-800-423-6369. The Transfer Agent charges an annual fee of $15 for maintaining each plan and account up to a maximum of $30 per Social Security number, which is in addition to other fees and expenses payable to the Fund or Transfer Agent as described herein. Investors should consult with their own tax advisers before establishing a retirement plan or account.

**OTHER PURCHASE INFORMATION** 

The Fund reserves the right, in its sole discretion, to suspend the offering of its shares, to reject any purchase order, or to waive any minimum investment requirements.

Purchases of the Fund's shares will be made in full and fractional shares of the Fund calculated to three decimal places.

**POLICY ON PROHIBITION OF FOREIGN SHAREHOLDERS** 

Shares of the Fund have not been registered for sale outside of the United States. Accordingly, the Fund generally requires that shareholders must be U.S. persons with a valid U.S. taxpayer identification number to open an account with the Fund. The Fund may sell shares to investors residing outside the United States in its discretion. The Fund reserves the right to close an account (generally within 30 days) if clarifying information/documentation is not received by the Fund from any such investors.

**UNCLAIMED PROPERTY** 

It is important that the Fund maintains a correct address for each shareholder. An incorrect address may cause a shareholder's account statements and other mailings to be returned to the Fund. Based upon statutory requirements for returned mail, the Fund will attempt to locate the shareholder or rightful owner of the account. If the Fund is unable to locate the shareholder, then it will determine whether the shareholder's account can legally be considered abandoned. Your mutual fund account may be transferred to the state government of your state of residence if no activity occurs within your account during the "inactivity period" specified in your state's abandoned property laws. The Fund is legally obligated to escheat (or transfer) abandoned property to the appropriate state's unclaimed property administrator in accordance with statutory requirements. The shareholder's last known address of record determines which state has jurisdiction. Please proactively contact the Transfer Agent at 1-800-423-6369 at least annually to ensure your account remains in active status.

If you are a resident of the state of Texas, you may designate a representative to receive notifications that, due to inactivity, your mutual fund account assets may be delivered to the Texas Comptroller. Please contact the Transfer Agent if you wish to complete a Texas Designation of Representative form.

**HOUSEHOLDING** 

In an effort to decrease costs, the Fund may reduce the number of duplicate prospectuses, supplements, and certain other shareholder documents you receive by sending only one copy of each to those addresses shared by two or more accounts and to shareholders the Fund reasonably believes are from the same family or household. If implemented, and if you would like to discontinue householding for your accounts, please call toll-free at 1-800-423-6369 to request individual copies of documents. Once the Fund receives notice to stop householding, it will begin sending individual copies thirty days after receiving your request. This policy does not apply to account statements.

If you hold your Fund shares through a financial intermediary, your financial intermediary's document policies will apply. Please contact your financial intermediary for further information.

**MARKET TIMING POLICY** 

"Market timing" typically refers to the practice of frequent trading in the shares of mutual funds in order to exploit inefficiencies in fund pricing. Market timing transactions include trades in mutual fund shares that occur when the fund's NAV may not fully reflect the value of the fund's holdings – for example, when the fund has in its portfolio particular holdings, such as foreign or thinly traded securities, that are valued on a basis that does not include the most updated information possible. Market timing can have a dilutive effect on the value of the investments of long-term fund shareholders and can increase the transaction costs of a fund, which will be borne by all fund shareholders.

The Fund is typically intended for long-term investing. Market timing by Fund shareholders may adversely affect the Fund by interfering with portfolio management and increasing portfolio transaction and administrative costs. The Board of Trustees of the Fund has adopted policies and procedures to detect and prevent market timing activities in the Fund. To discourage market timing, the Fund charges a 1.00% redemption fee on shares exchanged or redeemed within 30 days of purchase, except on shares held in separately managed accounts of the Adviser. The redemption fee may be waived with the approval of the Board of Trustees. The redemption fee also may be waived by the Adviser or an officer of the Fund, provided such waivers are reported to the Board of Trustees. In addition, the Fund may temporarily suspend or terminate future purchase and exchange orders by investors or groups of investors who the Fund

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believes have engaged in market timing practices and which may have an adverse impact on the Fund. The Fund will also terminate, without notice, the exchange privilege of any investor who, in the opinion of the Fund, uses the exchange privilege excessively.

The Fund and/or the Adviser monitor for market timers and attempt to detect abusive trading practices. The criteria and techniques may change from time to time as determined by the Fund or the Adviser. The Transfer Agent may reject any purchase or exchange order, in whole or in part, including trading that the Fund or the Adviser believes may be excessive in frequency and/or amount or otherwise potentially disruptive to the Fund. Although these efforts are designed to discourage abusive trading practices, these tools cannot eliminate the possibility that such activity will occur.

Furthermore, due to the complexity involved in identifying abusive trading activity and the volume of shareholder transactions the Fund handles, there can be no assurance that the efforts of the Fund or the Adviser will identify all trades or trading practices that may be considered abusive. In addition, the ability of the Fund or the Adviser to monitor trades that are placed by individual shareholders within omnibus and retirement accounts maintained by financial intermediaries may be limited. However, the Fund and the Adviser attempt to monitor aggregate trades placed in omnibus accounts and seek to work with financial intermediaries to discourage shareholders from engaging in abusive trading practices and to impose restrictions on excessive trades. In this regard, the Fund has entered into agreements with certain financial intermediaries that generally require them to provide the Fund with information concerning those individual shareholders involved in any such aggregated trades. For those financial intermediaries with whom the Fund has not entered into such agreements, the Fund treats such intermediaries as individual shareholders for purposes of the Fund's market timing and redemption fee policies. However, there can be no assurance that the Fund or the Adviser will be able to detect and prevent abusive trading in accounts maintained by financial intermediaries through the foregoing measures or otherwise.

**EXCHANGING SHARES** 

Exchanges of all or a portion of your investment from the Fund to an identically registered account in another LKCM Fund may be made. Any new account established through an exchange will be subject to the minimum investment requirements described above. Exchanges will be executed on the basis of the relative NAV of the shares exchanged after your request for an exchange is received. An exchange is considered to be a sale of shares of the Fund for federal income tax purposes, on which you may realize a taxable gain or loss. In addition, exchanges of shares held for fewer than 30 days will be subject to a 1.00% redemption fee, except shares held in separately managed accounts of the Adviser or as otherwise determined by the Fund in its discretion. The Transfer Agent charges a $5 fee for each exchange via telephone. Call the Fund to learn more about exchanges. If you purchased shares of the Fund through your financial intermediary, please contact your financial intermediary to determine if you may take advantage of the exchange policies described in this section and for its policies to effect an exchange.

The Fund is intended as a long-term investment vehicle and not to provide a means of speculating on short-term market movements. In addition, excessive trading can hurt the Fund's performance and shareholders. Therefore, the Fund may terminate, without notice, the exchange privilege of any investor who uses the exchange privilege excessively. The Fund may change or temporarily suspend the exchange privilege during unusual market conditions.

**REDEMPTION OF SHARES** 

You may redeem shares of the Fund by contacting your financial adviser, by mail or, if authorized, by telephone or wire. The Fund does not charge a fee for making redemptions, except that the Fund charges a 1.00% redemption fee on shares exchanged or redeemed within 30 days of purchase unless such shares are held in separately managed accounts of the Adviser. The redemption fee may be waived with the approval of the Board of Trustees. The redemption fee also may be waived by the Adviser or an officer of the Fund, provided such waivers are reported to the Board of Trustees. If you purchased your shares through a broker-dealer or other financial intermediary, please contact your broker-dealer or financial intermediary for information regarding how to sell your shares.

 **By Mail.** You may redeem your shares by mailing a written request to:

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| | |
|:---|:---|
| **By regular mail to:** | **By express, registered or certified mail to:** |
| LKCM Funds – LKCM Aquinas Catholic Equity Fund<br>c/o U.S. Bank Global Fund Services<br>P.O. Box 219252<br> Kansas City, MO 64121-9252 | LKCM Funds – LKCM Aquinas Catholic Equity Fund<br>c/o U.S. Bank Global Fund Services<br>801 Pennsylvania Ave, Suite 219252 <br>Kansas City, MO 64105-1307 |

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The Fund does not consider the U.S. Postal Service or other independent delivery services to be its agents. Therefore, deposit in the mail or with such services, or receipt at the U.S. Bank Global Fund Services post office box of purchase orders or redemption requests does not constitute receipt by the Transfer Agent. Receipt of purchase orders or redemption requests is based on when the order is received at the Transfer Agent's offices. The Funds are deemed to have received purchase and redemption orders for Fund shares when an authorized broker-dealer or its designee or financial intermediary receives such orders. The Fund is not responsible for the failure of a broker-dealer or financial intermediary to transmit a purchase or redemption order in proper form and in a timely manner.

After your request is in "good order," the Fund will redeem your shares at the next NAV. To be in "good order," redemption requests must include the following documentation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;The share certificates, if issued;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;A letter of instruction, if required, or a stock assignment specifying the number of shares or dollar amount to be redeemed, signed by all registered owners of the shares in the exact names in which they are registered;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;Any required signature guarantees; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;Other supporting legal documents, if required, in the case of estates, trusts, guardianships, custodianships, corporations, pension and profit sharing plans, and other organizations.

**Signature Guarantees.** To protect your account, the Fund and U.S. Bank Global Fund Services from fraud, signature guarantees are required to enable the Fund to verify the identity of the person that has authorized a redemption from an account. Signature guarantees, from either a Medallion program member or a non-Medallion program member, are required for (1) redemptions where the proceeds are payable or sent to any person, address or bank account not on record, (2) share transfer requests, or (3) any redemption request if a change of address request has been received by the Transfer Agent within the last 15 calendar days. In addition to the situations described above, the Fund and/or the Transfer Agent reserves the right to require a signature guarantee in other instances based on the circumstances relative to the particular situation. The Fund reserves the right to waive any signature guarantee requirement in its discretion.

Non-financial transactions including establishing or modifying certain services on an account may require a signature guarantee, signature verification from a Signature Validation Program member, or other acceptable form of authentication from a financial institution source.

Signature guarantees will generally be accepted from domestic banks, brokers, dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations, as well as from participants in the New York Stock Exchange Medallion Signature Program and the Securities Transfer Agents Medallion Program (STAMP). *A notary public is not an acceptable signature guarantor*. Please contact the Fund at 1-800-423-6369 for further details.

**By Telephone.** If you indicated on your New Account Application or have subsequently arranged in writing to do so, you may redeem shares by calling the Fund. You may have the redemption proceeds mailed by check to the primary registration address or wired directly to your bank. You may also have your proceeds sent via electronic funds transfer through the ACH network to your predetermined bank account. Other redemption fees may be applicable. See the section titled "Other Redemption Information" below. The Transfer Agent imposes a $15 fee for each wire redemption. There is no charge for an electronic funds transfer, however the funds may not be available for 2-3 days. The redemption proceeds will be paid to the same bank and account as designated on the New Account Application or in written instructions subsequently received by the Fund. No telephone redemptions may be made within 15 days of any address change.

If you would like to arrange for redemption by wire or telephone or change the bank or account designated to receive redemption proceeds, you must send a written request to the Fund at the address listed in the section entitled "Redemption of Shares – By Mail." The investor must sign such requests. Further documents and signature verifications may be required.

The Fund reserves the right to refuse a wire or telephone redemption. Procedures for redeeming shares by wire or telephone may be modified or terminated at any time. The Fund and the Transfer Agent will not be liable for any loss, liability, cost or expense for acting upon telephone instructions that are reasonably believed to be genuine. Before executing an instruction received by telephone, the Transfer Agent will use reasonable procedures to confirm that the telephone instructions are genuine. The telephone call may be recorded and the caller may be asked to verify or provide certain personal identification information. If an account has more than one owner or authorized person, the Fund will accept telephone instructions from any one owner or authorized person. If the Fund or its agents follow these procedures, they cannot be held liable for any loss, expense or cost arising out of any telephone redemption request that is reasonably believed to be genuine. This includes fraudulent or unauthorized requests. Once you place a telephone transaction request, it cannot be canceled or modified after the close of regular trading on the NYSE (generally, 4:00 p.m., Eastern Time). Telephone trades must be received by or prior to market close. During periods of high market activity, shareholders may encounter higher than usual call waits. Please allow sufficient time to place your telephone transaction.

Shareholders who have an IRA or other retirement plan must indicate on their written redemption request whether to withhold federal income tax. Redemption requests failing to elect not to withhold tax will generally be subject to 10% withholding.

Shares held in IRA or other retirement plan accounts may be redeemed by telephone at 1-800-423-6369. Investors will be asked whether to withhold taxes from any distribution.

**30-Day Redemption Fee**. If you redeem or exchange shares held for less than 30 days after the date of purchase, you will be subject to a 1.00% redemption fee. This fee will be deducted from the proceeds of your redemption. For purposes of applying the fee, the first day of the holding period is trade date plus one. The holding period will be determined on a "first-in, first-out" basis, meaning the Fund shares purchased first will be redeemed first. The redemption fee will not apply to shares of the Fund held in accounts separately managed by the Adviser. The redemption fee may be waived with the approval of the Board of Trustees. The redemption fee also may be waived by the Adviser or an officer of the Fund, provided such waivers are reported to the Board of Trustees. Transactions in shares of the Fund by financial intermediaries with whom the Fund does not have information sharing agreements in place may be subject to the redemption fee. The redemption fee will be retained by the Fund for the benefit of its shareholders. Redemption fees will not apply to shares acquired through the reinvestment of dividends, or to shares purchased through the Automatic Investment Program.

**Other Redemption Information.** Payment of the redemption proceeds will normally be made within seven calendar days after receipt of a redemption request in "good order." Redemption proceeds for shares of the Fund purchased by check or electronic funds transfer through the ACH network may not be distributed until payment for the purchase has been collected, which may take up to seven business days. Shareholders can avoid this delay by utilizing the wire purchase option.

Due to the relatively high cost of maintaining small accounts, the Fund reserves the right to redeem shares in any account for their then-current value (which will be promptly paid to the investor) if at any time, due to redemption by the investor, the shares in the account do not have a value of at least $1,000. You will receive advance notice of a mandatory redemption and will be given at least 30 days to bring the value of the account up to at least $1,000.

Normally, redemption proceeds paid via check will be sent via mail within two business days following the business day the Fund receives the redemption order (assuming the order is received in good order prior to the time as of which the day's NAV is calculated), while redemption proceeds paid via ACH and electronic fund transfers will generally be sent to your bank account within

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two business days following the business day we receive the redemption order (assuming the order is received in good order prior to the time as of which the day's NAV is calculated). However, payment of redemption proceeds may take up to 7 calendar days. In addition, the Fund may suspend the right of redemption or postpone redemptions when the NYSE is closed (other than customary weekend and holiday closings) or under any other emergency circumstances permitted by the SEC.

If you are redeeming shares which you recently purchased by check or electronic funds transfer, payment may be delayed to verify that your check or electronic funds transfer has cleared (which may take up to seven business days from the date of purchase). If your account is held through an intermediary, redemption proceeds will generally be paid to the intermediary within two business days following the business day we receive the redemption order (assuming the order is received in good order prior to the time as of which that day's NAV is calculated).

The Fund typically expects to meet redemption requests by paying out proceeds from cash or cash equivalent portfolio holdings, or by selling portfolio holdings. In stressed market conditions, redemption methods may include redeeming in kind. The Fund has reserved the right to redeem in kind (*i.e.,* in securities) any redemption request during any 90-day period in excess of the lesser of: (i) $250,000 or (ii) 1% of the Fund's NAV being redeemed. If your shares are redeemed in kind, then you will incur transaction costs when you subsequently sell the securities distributed to you.

**TRANSFER OF REGISTRATION** 

The registration of Fund shares may be transferred by writing to LKCM Funds, c/o U.S. Bank Global Fund Services, P.O. Box 219252, Kansas City, MO 64121-9252. As in the case of redemptions, the written request with signature(s) guaranteed must be received in "good order."

**PAYMENTS TO FINANCIAL INTERMEDIARIES** 

The Fund and the Adviser make payments to certain financial intermediaries in connection with the promotion and sale of shares of the Fund and as compensation for shareholder-related services, including administrative, sub-transfer agency, recordkeeping and shareholder communications services. The Fund and the Adviser also pay such compensation to make shares of the Fund available to investors through certain fund platforms, supermarkets or similar programs or for services provided in connection with such platforms, supermarkets and programs. These payments generally benefit the Fund and may provide applicable financial intermediaries with an incentive to recommend sales of shares of the Fund over other potential investments.

The Fund and the Adviser compensate financial intermediaries differently depending upon the level and type of services provided by such financial intermediaries. The compensation paid to a financial intermediary may be based on a variety of factors, including average net assets of the Fund distributed and/or serviced by the financial intermediary and/or the number of accounts serviced by the financial intermediary that invest in the Fund. Compensation paid by the Fund for distribution-related expenses are made from the Fund's Rule 12b-1 fees. Compensation paid by the Adviser or its affiliates includes amounts from the Adviser's or its affiliates' own resources and constitute what is sometimes referred to as "revenue sharing."

Any compensation received by a financial intermediary, whether from the Fund or the Adviser, and the prospect of receiving such compensation may provide the financial intermediary with an incentive to recommend shares of the Fund over other potential investments. You should ask your financial intermediary for details about any such payments it receives from the Fund or the Adviser, or any other fees, expenses, or commissions your financial intermediary may charge you in addition to those disclosed in this Prospectus.

The Fund's shares may be available for purchase and sale on brokerage and other financial intermediary platforms of firms that have agreements with the Fund's distributor to offer such shares solely when acting as an agent for the investor. The Fund does not charge any front-end load or deferred sales charge. However, investors that purchase and/or sell shares of the Fund through brokers or other financial intermediaries may be required to pay commissions and/or other types of compensation to such brokers or other financial intermediaries in connection with such purchases or sales in an amount determined and separately disclosed to you by the broker or other financial intermediary. Please contact your broker or other financial intermediary for further detail. Because the Fund is not a party to any such commission arrangement between you and your broker or financial intermediary, any purchases and redemptions of the Fund's shares will be made at the applicable net asset value (before imposition of the commission). Any such commissions charged by a broker or financial intermediary are not reflected in the fees and expenses listed in the "Fees and Expenses of the Fund" section of the Summary Section for the Fund nor are they reflected in the performance information shown in the prospectus for the Fund because they are not charged by the Fund.

**VALUATION OF SHARES** 

**Calculation of NAV.** The NAV per share is computed by dividing the total value of the investments and other assets of the Fund, less any liabilities, by the total outstanding shares of the Fund. The NAV per share is normally determined as of the scheduled close of normal trading on the NYSE (generally 4:00 p.m. Eastern Time) on each day that the NYSE is scheduled to be open for business. The NAV normally is not determined on days the NYSE is scheduled to be closed. The NYSE is scheduled to be closed on weekends and most national holidays. The price at which a purchase order or redemption request is effected is based on the next calculation of NAV after the order is received by the Fund. The Fund's NAV may not be calculated on days during which the Fund receives no orders to purchase shares and no shares are tendered for redemption. In determining NAV, expenses are accrued and applied daily and investments for which market values are readily available are valued at market value.

Equity securities listed or traded on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price on the exchange on which the security is primarily traded. Nasdaq Global Market securities are valued at the Nasdaq Official Closing Price. Unlisted U.S. equity securities and listed U.S. equity securities not traded on a particular valuation date are valued at the mean of the most recent quoted bid and ask price on the relevant exchanges or markets. Equity securities listed on a foreign exchange for which market quotations are readily available are valued at the last quoted sales price on the exchange on which the security is primarily traded. Debt securities are normally valued at the mean of the closing bid and ask price and/or by using a combination of broker quotations or evaluated prices provided by an independent pricing service. Futures contracts and options on futures contracts are valued at the settlement

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prices established each day on the principal exchange on which they are traded. Forward contracts are valued based on the forward rate using information provided by an independent pricing service. Other assets and securities for which no market or broker quotations or evaluated prices are readily available are valued by the Adviser in good faith at fair value.

**Fair Value Procedures for the Fund.** Rule 2a-5 under the Investment Company Act (the "Valuation Rule") establishes requirements for determining fair value in good faith for purposes of the Investment Company Act, including related oversight and reporting requirements. The Valuation Rule also defines when market quotations are "readily available" for purposes of the Investment Company Act, the threshold for determining whether a security must be fair valued. In many cases, fixed income and foreign securities are not considered to have a "readily available market quotation" under the Valuation Rule. Accordingly, such securities typically are fair-valued.

The Valuation Rule permits the Fund's board to designate the Fund's investment adviser as "valuation designee" to perform the Fund's fair value determinations subject to board oversight and certain reporting and other requirements intended to ensure that the registered investment company's board receives the information it needs to oversee the investment adviser's fair value determinations. The Board has designated the Adviser as valuation designee under the Valuation Rule to perform fair value functions in accordance with the requirements of the Valuation Rule. The Adviser may value securities at fair value in good faith pursuant to the Adviser's and the Fund's procedures. The Adviser may use prices provided by independent pricing services to assist in the fair valuation of the Fund's portfolio securities.

The policies and procedures adopted by the Fund and the Adviser authorize the Adviser to fair value a security in good faith if, among other things, the Adviser determines that (i) closing prices of foreign securities do not reflect their fair market value due to events that occur between the closing of foreign markets and the time at which the Fund calculates its NAV, (ii) trading in a security is halted and does not resume prior to the closing of the exchange or other market on which such security normally trades, or (iii) the price for such security provided by independent pricing services appears invalid, is not readily available, or otherwise provides a valuation that in the judgment of the Adviser does not represent the fair market value of such security. Prices provided by independent pricing services may be used to assist in the fair valuation of the Fund's portfolio securities. For foreign securities, such prices may be based on such independent pricing services' proprietary multi-factor models that measure movements in relevant indices, market indicators and other factors between the time the relevant foreign markets have closed and the time the Fund calculates its NAV, and therefore may differ from quoted or official closing prices for such foreign securities in such foreign markets.

The trading hours for most foreign securities end prior to the scheduled close of the NYSE, which is generally the time as of which the Fund's NAV is calculated. Securities listed on a foreign exchange for which market quotations are readily available are valued at the last quoted sales price, unless events materially affecting the value of foreign securities occur. The occurrence of certain events after the close of foreign markets, but prior to the close of the U.S. market (such as a significant surge or decline in the U.S. market and/or movements in relevant indices or other appropriate market indicators) often will result in an adjustment to the trading prices of foreign securities when foreign markets open on the following business day. If such events occur, foreign securities may be valued at fair value, taking into account such events and other factors, when the Fund calculates its NAV. Consequently, fair valuation of portfolio securities may occur on a daily basis. In such cases, use of fair valuation can reduce an investor's ability to seek to profit by estimating the Fund's NAV in advance of the time as of which the NAV is calculated. Because some foreign markets are open on days when the Fund does not price its shares, the value of the Fund's holdings (and correspondingly, the Fund's NAV) could change at a time when you are not able to buy or sell Fund shares. If fair value pricing is utilized, the fair values assigned to the Fund's foreign investments may not be the quoted or published prices of the investments on their primary markets or exchanges.

There can be no assurance that the Fund could purchase or sell a portfolio security at the price used to calculate the Fund's NAV. In the case of fair valued portfolio securities, lack of information and uncertainty as to the significance of information may lead to a conclusion that a prior valuation is the best indication of a portfolio security's present value. Fair valuations may remain unchanged until new information becomes available. Consequently, changes in the fair valuation of portfolio securities may be less frequent and of greater magnitude than changes in the price of portfolio securities valued by an independent pricing service, or based on market quotations. Valuing securities at fair value involves greater reliance on judgment than valuation of securities based on readily available market quotations. There can be no assurance that the Fund can obtain the fair value assigned to a security if it were to sell the security at approximately the time at which the Fund determines its NAV.

**DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES** 

**DIVIDENDS AND OTHER DISTRIBUTIONS** 

The Fund intends to declare and pay income dividends at least on an annual basis. The Fund intends to distribute net capital gains, if any, on an annual basis. The Fund may make additional distributions if necessary to avoid federal income or excise taxes or as otherwise approved by the Board of Trustees.

Dividends and other distributions, if any, will automatically be paid in additional shares of the Fund unless the shareholder elects otherwise. Such election must be made in writing or by calling the Fund at least five days prior to the record date of the distribution. If a shareholder elects to receive distributions in cash and the U.S. Postal Service cannot deliver the shareholder's check, or if a check remains uncashed for six months, the Fund reserves the right to reinvest the amount of the distribution check in the shareholder's account at the distributing Fund's then-current NAV per share and to reinvest all subsequent distributions.

**TAXES** 

Dividends, whether paid in cash or reinvested in additional shares, from the Fund's net investment income, the excess of its net short-term capital gains over its net long-term capital loss and its net gains from certain foreign currency transactions, if any, will be taxable to shareholders as ordinary income (unless a shareholder is exempt from income tax or entitled to a tax deferral), except as noted in the following sentence. The Fund's dividends attributable to its "qualified dividend income" (*i.e*., dividends it receives on stock of most U.S. and certain foreign corporations with respect to which the Fund satisfies certain holding period and other restrictions) generally will be subject to federal income tax for individual and certain other non-corporate shareholders (each, a "non-corporate shareholder") who satisfy those restrictions with respect to the shares on which the Fund dividends were paid at the lower rates for long-term capital gains – a maximum of 15% for a single shareholder with taxable income not exceeding $545,500 ($613,700 for married shareholders filing jointly) and 20% for non-corporate shareholders with taxable income exceeding those respective amounts (which apply for 2026 and will be adjusted for inflation annually thereafter). A portion of the Fund's dividends – not

------

exceeding the aggregate dividends it receives from domestic corporations only – also may be eligible for the dividends-received deduction allowed to corporations ("DRD"), subject to similar holding period and other restrictions. There can be no assurance as to what portion, if any, of the Fund's distributions will constitute qualified dividend income or be eligible for the DRD.

Distributions to non-corporate shareholders of net capital gain (that is the excess of net long-term capital gain over net short-term capital loss), whether paid in cash or reinvested in additional shares (or, if the Fund makes a certain election, any net capital gain that is retained by the Fund), will be taxable as long-term capital gain, at the 15% and 20% maximum rates mentioned above; capital gain distributions to corporate shareholders will be subject to federal income tax at the same rate as ordinary income, 21%. The classification of the Fund's capital gain distribution or retained net capital gain (and, consequently, the applicable tax rate) is determined by the length of time that the Fund has held the securities that generated the gain and not the length of time you have held shares in the Fund. Shareholders will be notified annually as to the federal tax status of dividends and other distributions paid by the Fund.

Any dividends and other distributions the Fund declares in the months of October, November or December to shareholders of record on a date in such a month will be deemed to have been paid by the Fund and received by those shareholders on December 31 if the distributions are paid before February 1 of the following year. If you purchase shares of the Fund shortly before a distribution, you will be subject to income tax on the distribution, even though the value of your investment (plus cash received, if any) remains the same.

When a shareholder redeems shares of the Fund, the redemption may result in a taxable gain or loss, depending on whether the redemption proceeds are more or less than the shareholder's adjusted basis in the shares. Any capital gain a non-corporate shareholder recognizes on a redemption of Fund shares that have been held for more than one year will qualify for the 15% and 20% maximum rates mentioned above. In addition, if shares of the Fund are bought within 30 days before or after redeeming at a loss other shares of that Fund (regardless of class), all or part of that loss will not be deductible and instead will increase the basis in the newly purchased shares.

The Fund is required by federal law to withhold and remit to the U.S. Treasury 24% of dividends, capital gain distributions and redemption proceeds, (regardless of the extent to which gain or loss may be realized) otherwise payable to non-corporate shareholders who fail to certify that the taxpayer identification number furnished to the Fund is correct or who furnish an incorrect number (together with the withholding described in the next sentence, "backup withholding"). Withholding at that rate also is required from the Fund's dividends and capital gain distributions otherwise payable to a non-corporate shareholder who (1) is subject to backup withholding for failure to report the receipt of interest or dividend income properly; or (2) fails to certify to the Fund that he or she is not subject to backup withholding or that it is a corporation or other exempt recipient. Backup withholding is not an additional tax, and any amounts so withheld may be credited against a shareholder's federal income tax liability or refunded.

An individual is required to pay a 3.8% federal tax on the lesser of (1) the individual's "net investment income," which generally includes dividends, interest, and net gains from the disposition of investment property (including dividends and capital gain distributions the Fund pays and net gains realized on the redemption or exchange of Fund shares), or (2) the excess of the individual's "modified adjusted gross income" over a threshold amount ($250,000 for married persons filing jointly and $200,000 for single taxpayers). This tax is in addition to any other taxes due on that income. A similar tax applies to estates and trusts. Shareholders should consult their own tax advisers regarding the effect, if any, this provision may have on their investment in Fund shares.

A shareholder's basis in shares of the Fund that he or she acquired or acquires after December 31, 2011 ("Covered Shares"), will be determined in accordance with the Fund's default method, which is average basis, unless the shareholder affirmatively elects in writing, which may be electronic, to use a different acceptable basis determination method, such as a specific identification method. The Fund, or its administrative agent, must report to the Internal Revenue Service ("IRS") and furnish to its shareholders the basis information for Covered Shares. See "Taxation" in the Statement of Additional Information for a description of the rules regarding that election and the Fund's reporting obligation. Fund shareholders should consult with their tax advisers to determine the best IRS-accepted basis determination method for their tax situation and to obtain more information about how the basis reporting law applies to them.

Dividends and other distributions the Fund declares, as well as redemption proceeds, may also be subject to state and local taxes.

**The foregoing summarizes some of the important federal income tax considerations generally affecting the Fund and its shareholders. Potential investors in the Fund should see the Statement of Additional Information for further information regarding the tax consequences of investing in the Fund and consult their tax advisers with specific reference to their own tax situation.** 

**INDEX DESCRIPTIONS** 

The Lipper Large-Cap Core Funds Index is an unmanaged index generally considered representative of large cap core mutual funds tracked by Lipper, Inc. A direct investment in an index is not possible.

The S&P 500<sup>®</sup> Index is an unmanaged capitalization-weighted index of 500 selected stocks that is generally considered representative of the performance of large capitalization companies in the U.S. stock market. A direct investment in an index is not possible.

**ADDITIONAL INFORMATION** 

The LKCM Funds (the "Trust") enters into contractual arrangements with various parties, including among others, the Fund's investment adviser, principal underwriter, custodian and transfer agent who provide services to the Fund. Shareholders are not parties to any such contractual arrangements or intended beneficiaries of those contractual arrangements, and those contractual arrangements are not intended to create in any shareholder any right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the Trust.

------

This Prospectus provides information concerning the Fund that you should consider in determining whether to purchase Fund shares. Neither this Prospectus nor the Statement of Additional Information is intended, or should be read, to be or give rise to an agreement or contract between the Trust, the Trustees or the Fund and any investor, or to give rise to any rights in any shareholder or other person other than any rights under federal or state law that may not be waived. Nothing in this Prospectus, the Statement of Additional Information or the Fund's reports to shareholders is intended to provide investment advice and should not be construed as investment advice.

------

**FINANCIAL HIGHLIGHTS** 

The financial highlights table set forth below is intended to help you understand the financial performance of the Fund for the past five years. 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 other distributions). This information has been derived from the Fund's financial statements and financial highlights, which have been audited by Deloitte & Touche LLP, whose report, along with the Fund's financial statements and financial highlights, is incorporated by reference in the Statement of Additional Information and included in the Fund's <u>[Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/918942/000113322826003110/lf-efp22616_ncsr.htm#fha)</u> for the year ended December 31, 2025, which is available free of charge upon request.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;**LKCM AQUINAS CATHOLIC EQUITY FUND**  | &nbsp;&nbsp;**LKCM AQUINAS CATHOLIC EQUITY FUND**  | &nbsp;&nbsp;**LKCM AQUINAS CATHOLIC EQUITY FUND**  | &nbsp;&nbsp;**LKCM AQUINAS CATHOLIC EQUITY FUND**  | &nbsp;&nbsp;**LKCM AQUINAS CATHOLIC EQUITY FUND**  | &nbsp;&nbsp;**LKCM AQUINAS CATHOLIC EQUITY FUND**  |
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2025** | **2024** | **2023** | **2022** | **2021** |
| **PER SHARE DATA:** |  |  |  |  |  |
| Net asset value, beginning of year | $17.59 | $16.73 | $15.05 | $19.52 | $17.53 |
| **INVESTMENT OPERATIONS:** |  |  |  |  |  |
| Net investment income <sup>(a)</sup> | 0.06 | 0.05 | 0.12 | 0.17 | 0.05 |
| Net realized and unrealized gains (losses) on investments<sup>(b)</sup> | 1.13 | 2.20 | 2.00 | (3.72) | 4.40 |
| **Total from investment operations** | 1.19 | 2.25 | 2.12 | (3.55) | 4.45 |
| **LESS DISTRIBUTIONS FROM:** |  |  |  |  |  |
| Net investment income | (0.07) | (0.05) | (0.12) | (0.18) | (0.05) |
| Net realized gains | (0.99) | (1.34) | (0.32) | (0.74) | (2.41) |
| **Total distributions** | (1.06) | (1.39) | (0.44) | (0.92) | (2.46) |
| Redemption fee per share | 0.00<sup>(c)</sup> | 0.00<sup>(c)</sup> | 0.00<sup>(c)</sup> |  |  |
| **Net asset value, end of year** | $17.72 | $17.59 | $16.73 | $15.05 | $19.52 |
| Total return | 6.72% | 13.37% | 14.07% | -18.17% | 25.34% |
| **SUPPLEMENTAL DATA AND RATIOS:** |  |  |  |  |  |
| Net assets, end of year (in thousands) | $59653 | $60109 | $58223 | $50083 | $63916 |
| Ratio of expenses to average net assets: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Before expense reimbursement/recoupment | 1.47% | 1.47% | 1.53% | 1.45% | 1.40% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After expense reimbursement/recoupment | 1.00% | 1.00% | 1.00% | 1.00% | 1.00% |
| Ratio of net investment income (loss) to average net assets: | 0.33% | 0.30% | 0.77% | 1.02% | 0.25% |
| Portfolio turnover rate | 9% | 11% | 16% | 23% | 18% |

---

(a) Net investment income per share has been calculated based on average shares outstanding during the years.

(b) Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the years, and may not reconcile with the aggregate gains and losses in the Statement of Operations due to share transactions for the years.

(c) Amount represents less than $0.005 per share.

------

**LKCM Funds**

**FOR MORE INFORMATION** 

You may obtain the LKCM Funds' Statement of Additional Information, Annual and Semi-Annual Reports to Shareholders, and annual and semi-annual financial statements and accompanying notes, free of charge, as set forth below:

***Statement of Additional Information (SAI) dated May 1, 2026, as it may be supplemented from time to time*** 

The SAI is incorporated into this Prospectus by reference (*i.e.,* legally made a part of this Prospectus). The SAI provides more details about the Fund's policies and management.

***Annual and Semi-Annual Reports to Shareholders and Annual and Semi-Annual Financial Statements and Accompanying Notes***

The annual financial statements included in the Fund's Form N-CSR are <u>[incorporated herein by reference](https://www.sec.gov/ix?doc=/Archives/edgar/data/918942/000113322826003110/lf-efp22616_ncsr.htm#fha)</u>. The Annual and Semi-Annual Reports to Shareholders and Form N-CSR filings include additional information about the Fund's investments. The Annual Report to Shareholders also contains a discussion of the market conditions and investment strategies that materially affected the Fund's performance during the reporting period. The Form N-CSR includes the Fund's annual and semi-annual financial statements, as well as the report of the Fund's independent registered public accounting firm in the annual financial statements.

**TO RECEIVE THE SAI, ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS, AND ANNUAL AND SEMI-ANNUAL FINANCIAL STATEMENTS AND ACCOMPANYING NOTES, FREE OF CHARGE, OR TO MAKE INQUIRIES TO THE FUND:** 

**By Telephone:** 

1-800-423-6369

**By Mail:** 

LKCM Funds

c/o U.S. Bank Global Fund Services

P.O. Box 219252

Kansas City, MO 64121-9252

**From the Fund's Website:**

You can access the Fund's SAI, Annual Report and Semi-Annual Report, and financial statements and accompanying notes, on the Fund's website at **www.aquinasfunds.com.**

**On the Internet:**

Electronic versions of Fund documents can be viewed online or downloaded free from the EDGAR database on the SEC's Internet site at: www.sec.gov.

**From the SEC:** 

You may write to the SEC Public Reference Room at the regular mailing address or the e-mail address below and ask them to mail you information about the Fund, including the SAI. They will charge you a fee for this duplicating service.

Public Reference Section

Securities and Exchange Commission

Washington, D.C. 20549-1520

publicinfo@sec.gov

Investment Company Act File # 811-08352

------

**LKCM FUNDS** 

**LKCM SMALL CAP EQUITY FUND** 

**(LKSCX)** 

**LKCM SMALL-MID CAP EQUITY FUND** 

**(LKSMX)** 

**LKCM EQUITY FUND** 

**(LKEQX)** 

**LKCM BALANCED FUND** 

**(LKBAX)** 

**LKCM FIXED INCOME FUND** 

**(LKFIX)** 

**LKCM INTERNATIONAL EQUITY FUND** 

**(LKINX)** 

**301 COMMERCE STREET, SUITE 1600** 

**FORT WORTH, TEXAS 76102** 

**STATEMENT OF ADDITIONAL INFORMATION** 

May 1, 2026

This Statement of Additional Information ("SAI") is not a prospectus and should be read in conjunction with the Prospectus of each of the above series of LKCM Funds (each a "Fund" and collectively the "Funds") dated May 1, 2026, as such Prospectus may be supplemented or revised from time to time. A copy of the Prospectus may be obtained without charge by calling the Funds at (800) 688-LKCM or by visiting www.lkcmfunds.com.

The Funds' audited financial statements and accompanying notes for the year ended December 31, 2025 are <u>[incorporated herein by reference](https://www.sec.gov/ix?doc=/Archives/edgar/data/918942/000113322826003110/lf-efp22616_ncsr.htm#sopa)</u> to Item 7 of the Funds' Form N-CSR for the fiscal year ended December 31, 2025. A copy of the Funds' Annual and Semi-Annual Reports, and financial statements and accompanying notes, may be obtained without charge by calling the Funds at (800) 688-LKCM or by visiting www.lkcmfunds.com.

------

**TABLE OF CONTENTS** 

---

| | |
|:---|:---|
|  | **Page** |
| **[FUND ORGANIZATION](#i0f81937db7574a4a9a57b19fe53502b6_238)** | [1](#i0f81937db7574a4a9a57b19fe53502b6_238) |
| **[INVESTMENT LIMITATIONS](#i0f81937db7574a4a9a57b19fe53502b6_205)** | [1](#i0f81937db7574a4a9a57b19fe53502b6_205) |
| **[INVESTMENT OBJECTIVES AND POLICIES](#i0f81937db7574a4a9a57b19fe53502b6_200)** | [2](#i0f81937db7574a4a9a57b19fe53502b6_200) |
| **[TRUSTEES AND OFFICERS OF THE LKCM FUNDS](#i0f81937db7574a4a9a57b19fe53502b6_195)** | [18](#i0f81937db7574a4a9a57b19fe53502b6_195) |
| **[CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS](#i0f81937db7574a4a9a57b19fe53502b6_190)** | [23](#i0f81937db7574a4a9a57b19fe53502b6_190) |
| **[PROXY VOTING PROCEDURES](#i0f81937db7574a4a9a57b19fe53502b6_185)** | [26](#i0f81937db7574a4a9a57b19fe53502b6_185) |
| **[INVESTMENT ADVISER](#i0f81937db7574a4a9a57b19fe53502b6_180)** | [27](#i0f81937db7574a4a9a57b19fe53502b6_180) |
| **[PORTFOLIO MANAGERS](#i0f81937db7574a4a9a57b19fe53502b6_175)** | [29](#i0f81937db7574a4a9a57b19fe53502b6_175) |
| **[PORTFOLIO TRANSACTIONS AND BROKERAGE](#i0f81937db7574a4a9a57b19fe53502b6_170)** | [32](#i0f81937db7574a4a9a57b19fe53502b6_170) |
| **[PORTFOLIO TURNOVER](#i0f81937db7574a4a9a57b19fe53502b6_165)** | [32](#i0f81937db7574a4a9a57b19fe53502b6_165) |
| **[CUSTODIAN](#i0f81937db7574a4a9a57b19fe53502b6_160)** | [32](#i0f81937db7574a4a9a57b19fe53502b6_160) |
| **[TRANSFER AGENT](#i0f81937db7574a4a9a57b19fe53502b6_155)** | [32](#i0f81937db7574a4a9a57b19fe53502b6_155) |
| **[ADMINISTRATOR](#i0f81937db7574a4a9a57b19fe53502b6_150)** | [32](#i0f81937db7574a4a9a57b19fe53502b6_150) |
| **[DISTRIBUTOR](#i0f81937db7574a4a9a57b19fe53502b6_145)** | [33](#i0f81937db7574a4a9a57b19fe53502b6_145) |
| **[DISTRIBUTION PLAN](#i0f81937db7574a4a9a57b19fe53502b6_140)** | [33](#i0f81937db7574a4a9a57b19fe53502b6_140) |
| **[PAYMENTS TO FINANCIAL INTERMEDIARIES](#i0f81937db7574a4a9a57b19fe53502b6_135)** | [33](#i0f81937db7574a4a9a57b19fe53502b6_135) |
| **[INTERESTS OF CERTAIN PERSONS](#i0f81937db7574a4a9a57b19fe53502b6_130)** | [34](#i0f81937db7574a4a9a57b19fe53502b6_130) |
| **[CODE OF ETHICS](#i0f81937db7574a4a9a57b19fe53502b6_125)** | [34](#i0f81937db7574a4a9a57b19fe53502b6_125) |
| **[PURCHASE AND PRICING OF SHARES](#i0f81937db7574a4a9a57b19fe53502b6_120)** | [34](#i0f81937db7574a4a9a57b19fe53502b6_120) |
| **[PORTFOLIO HOLDINGS INFORMATION](#i0f81937db7574a4a9a57b19fe53502b6_115)** | [36](#i0f81937db7574a4a9a57b19fe53502b6_115) |
| **[EXCHANGES](#i0f81937db7574a4a9a57b19fe53502b6_110)** | [36](#i0f81937db7574a4a9a57b19fe53502b6_110) |
| **[REDEMPTIONS IN KIND](#i0f81937db7574a4a9a57b19fe53502b6_105)** | [36](#i0f81937db7574a4a9a57b19fe53502b6_105) |
| **[TAXATION](#i0f81937db7574a4a9a57b19fe53502b6_100)** | [36](#i0f81937db7574a4a9a57b19fe53502b6_100) |
| **[INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM](#i0f81937db7574a4a9a57b19fe53502b6_95)** | [39](#i0f81937db7574a4a9a57b19fe53502b6_95) |
| **[FINANCIAL STATEMENTS](#i0f81937db7574a4a9a57b19fe53502b6_90)** | [40](#i0f81937db7574a4a9a57b19fe53502b6_90) |
| **[APPENDIX A](#i0f81937db7574a4a9a57b19fe53502b6_10)** | [A-1](#i0f81937db7574a4a9a57b19fe53502b6_10) |

---

In deciding whether to invest in one or more Funds, you should rely on information in this SAI and the Prospectus. The Funds have not authorized others to provide additional information in any state or jurisdiction in which such offering may not legally be made.

Luther King Capital Management Corporation (the "Adviser") serves as the investment adviser for the Funds.

------

**FUND ORGANIZATION** 

**DESCRIPTION OF SHARES AND VOTING RIGHTS** 

The LKCM Funds (the "Trust") is an open-end, diversified, management investment company. Each Fund is a diversified and separate series of the Trust, a Delaware statutory trust that was established by a Declaration of Trust dated February 10, 1994 (as amended, the "Declaration of Trust"). The Declaration of Trust permits the Trustees of the Trust to issue an unlimited number of shares of beneficial interest, without par value, from an unlimited number of series. Currently, the Trust offers seven series, six of which are the LKCM Small Cap Equity Fund ("Small Cap Equity Fund"), LKCM Small-Mid Cap Equity Fund ("Small-Mid Cap Equity Fund"), LKCM Equity Fund ("Equity Fund"), LKCM Balanced Fund ("Balanced Fund"), LKCM Fixed Income Fund ("Fixed Income Fund") and LKCM International Equity Fund ("International Equity Fund") (the "Funds") and described more fully herein.

Pursuant to the Declaration of Trust, the Trustees may also authorize the creation of additional series (the proceeds of which would be invested in separate, independently managed funds with distinct investment objectives and policies and share purchase, redemption and net asset valuation procedures) with such preferences, privileges, limitations and voting and dividend rights as the Trustees may determine. All consideration received by the Trust for shares of any additional series, and all assets in which such consideration is invested, would belong to that series only and would be subject to the liabilities related thereto.

When issued, the shares of the Funds are fully paid and non-assessable, have no preemptive or subscription rights and are fully transferable. There are no conversion rights. Each share of a Fund is entitled to participate equally in dividends and capital gain distributions and in the assets of the Fund in the event of liquidation. The shares of the Funds have non-cumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in the shareholder's name on the books of a Fund.

The Funds are not required, and do not intend, to hold regular annual shareholder meetings. The Funds may hold special meetings for consideration of proposals requiring shareholder approval, such as changing fundamental policies. The Trust will assist in shareholder communication in such matters to the extent required by law.

Shares of the Funds do not currently charge a Rule 12b-1 fee. More information regarding the Rule 12b-1 Plans can be found under the sub-heading "Distribution Plan."

**SHAREHOLDER AND TRUSTEE LIABILITY** 

The Declaration of Trust contains an express disclaimer of shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or executed by the Trust or the Trustees, but this disclaimer may not be effective in some jurisdictions or as to certain types of claims. The Declaration of Trust further provides for indemnification out of the Trust's property of any shareholder held personally liable for the obligations of the Trust. The Declaration of Trust also provides that the Trust shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the Trust itself would be unable to meet its obligations.

The Declaration of Trust further provides that the Trustees will not be liable for errors of judgment or mistakes of fact or law, but nothing in the Declaration of Trust protects a Trustee against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of the office.

**INVESTMENT LIMITATIONS** 

**ALL FUNDS** 

The Funds are subject to the following restrictions, which are fundamental policies and may not be changed without the approval of a majority of a Fund's outstanding voting securities. As used herein, a "majority of a Fund's outstanding voting securities" means the lesser of: (1) at least 67% of the voting securities of a Fund present at a meeting if the holders of more than 50% of the outstanding voting securities of the Fund are present or represented by proxy, or (2) more than 50% of the outstanding voting securities of a Fund.

As a matter of fundamental policy, each Fund will not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.invest in physical commodities or contracts on physical commodities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.purchase or sell real estate, although it may purchase and sell securities of companies that deal in real estate, other than real estate limited partnerships, and may purchase and sell marketable securities that are secured by interests in real estate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.make loans except: (i) by purchasing debt securities in accordance with its investment objective and policies or entering into repurchase agreements; or (ii) with respect to the Small Cap Equity, Small-Mid Cap Equity, Balanced, Fixed Income, and International Equity Funds, by lending their portfolio securities to banks, brokers, dealers and other financial institutions, so long as such loans are not inconsistent with the Investment Company Act of 1940, as amended (the "1940 Act"), or the rules and regulations or interpretations of the Securities and Exchange Commission ("SEC") thereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.with respect to 75% of its assets, purchase more than 10% of any class of the outstanding voting securities of any issuer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. with respect to 75% of its assets, invest more than 5% of its total assets in the securities of any single issuer (other than obligations issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.borrow money, except (i) from banks and as a temporary measure for extraordinary or emergency purposes (not for leveraging or investment) or (ii) with respect to the Small Cap Equity, Small-Mid Cap Equity, Balanced, Fixed

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Income, and International Equity Funds in connection with reverse repurchase agreements provided that (i) and (ii) in combination do not exceed 33 1/3% of the Fund's total assets (including the amount borrowed) less liabilities (exclusive of borrowings); and the Small Cap Equity, Small-Mid Cap Equity, Equity, and International Equity Funds cannot buy additional securities if they borrow more than 5% of their total assets; provided, however, with respect to the International Equity Fund, that the purchase or sale of options, futures contracts, options on futures contracts, forward contracts, swaps, caps, floors, collars and other similar financial instruments and margin deposits, security interests, liens and collateral arrangements with respect to such instruments shall not constitute borrowing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.underwrite the securities of other issuers (except to the extent that the Fund may be deemed to be an underwriter within the meaning of the Securities Act of 1933, as amended (the "Securities Act") in the disposition of restricted securities);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the Fund's total assets would be invested in securities of companies within such industry; provided, however, that there shall be no limitation on the purchase of obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.issue senior securities, except that this limitation shall not apply to: (i) evidence of indebtedness which the Fund is permitted to incur; (ii) shares of the separate classes or series of the Trust; or (iii) collateral arrangements with respect to currency-related contracts, futures contracts, options or other permitted investments, including deposits of initial and variation margin.

With the exception of fundamental investment limitation (6) above if a percentage limitation on the investment or utilization of assets as set forth above is adhered to at the time an investment is made, a later change in percentage resulting from changes in the value of the investment or a Fund's assets will not require the sale of securities.

The Funds are also subject to the following restrictions, which are non-fundamental policies and may be changed by the Board of Trustees of the Trust (the "Board of Trustees") without shareholder approval. As a matter of non-fundamental policy, each Fund will not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.purchase securities on margin, except for use of short-term credit as may be necessary for the clearance of purchases and sales of securities, but it may make margin deposits in connection with transactions in options, futures, and options on futures; or sell securities short unless, by virtue of its ownership of other securities, it has the right to obtain securities equivalent in kind and amount to the securities sold and, if the right is conditional, the sale is made upon the same conditions. Transactions in futures contracts, options and options on futures are not deemed to constitute selling securities short;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.pledge, mortgage, or hypothecate any of its assets to an extent greater than 33 1/3% of its total assets at fair market value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.invest more than an aggregate of 15% of the net assets of a Fund in securities deemed to be illiquid, including securities which are not readily marketable, the disposition of which is restricted (excluding securities that are not registered under the Securities Act but which can be sold to qualified institutional investors in accordance with Rule 144A under the Securities Act and commercial paper sold in reliance on Section 4(2) of the Securities Act), repurchase agreements having maturities of more than seven days and certain over-the-counter options;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.invest its assets in securities of any investment company, except by purchase in the open market involving only customary brokers' commissions or in connection with mergers, acquisitions of assets or consolidations, or except as may otherwise be permitted by the 1940 Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.write or acquire options or interests in oil, gas or other mineral exploration or development programs or leases; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.with respect to each of the Small Cap Equity Fund, Small-Mid Cap Equity Fund, Equity Fund, Fixed Income Fund and International Equity Fund, make any change in its investment policy of investing at least 80% of its net assets in the investments suggested by the Fund's name without first providing the Fund's shareholders with at least 60 days' prior notice.

**INVESTMENT OBJECTIVES AND POLICIES** 

The investment objectives and policies of the Funds are described in detail in the summary prospectuses under the caption "Principal Investment Strategies" and in the statutory prospectus under the caption "Additional Information Regarding the Investment Objectives and Principal Investment Strategies of the Funds." These sections provide a description of the securities in which a Fund principally may invest to achieve its investment objective, the principal strategies it may employ and the corresponding risks of such securities and strategies. Unless otherwise indicated, each Fund may invest in the securities and other instruments described below. The greatest risk of investing in a Fund is that its returns will fluctuate and you could lose money. Both domestic and foreign equity markets could experience volatility and turmoil.

**DERIVATIVES (International Equity Fund Only)** 

Generally, a derivative is a financial instrument, the value of which is based on, or "derived" from, a traditional security, asset, currency, or market index (collectively referred to as "reference assets"). Some "derivatives" such as mortgage-related and other asset-backed securities are in many respects like any other investment, although they may be more volatile or less liquid than more traditional debt securities. There are, in fact, many different types of derivatives and many different ways to use them. The value of certain derivative securities is linked to other equity securities (such as depositary receipts), currencies, interest rates, indices or other financial indicators (reference assets).

The International Equity Fund is authorized to invest in derivatives, but does not currently do so. If, in the future, the International Equity Fund invests in derivatives, LKCM may rely on an exclusion from regulation as a commodity pool operator

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("CPO") under Commodity Futures Trading Commission ("CFTC") Regulation 4.5 on behalf of the International Equity Fund. In order for LKCM to rely on the exclusion, the International Equity Fund's commodity interests other than those used for bona fide hedging purposes (as defined by the CFTC) must be limited such that the aggregate initial margin and premiums required to establish the positions (after taking into account unrealized profits and unrealized losses on any such positions and excluding the amount by which options that are "in-the-money" at the time of purchase) do not exceed 5% of the Fund's NAV, or alternatively, the aggregate net notional value of the positions, determined at the time the most recent position was established, does not exceed 100% of the Fund's NAV (after taking into account unrealized profits and unrealized losses on any such positions). Further, to qualify for the exclusion, the Fund must satisfy the marketing test, which requires, among other things, that a fund not hold itself out as a vehicle for trading commodity interests. The International Equity Fund's ability to use derivatives also may be limited by federal income tax considerations. See the section entitled "Taxation."

Derivatives may involve significant risk. Some derivatives have the potential for unlimited loss, regardless of the size of the International Equity Fund's initial investment. Not all derivative transactions require a counterparty to post collateral, which may expose the International Equity Fund to greater losses in the event of a default by a counterparty.

Derivatives may be illiquid and may be more volatile than other types of investments. The International Equity Fund may buy and sell derivatives that are neither centrally cleared nor traded on an exchange. Such derivatives may be subject to heightened counterparty, liquidity and valuation risk.

The regulation of the U.S. and non-U.S. derivatives markets has undergone substantial change in recent years and such change may continue.

The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act") resulted in historic and comprehensive reform relating to derivatives, including the manner in which they are entered into, reported, recorded, executed, and settled or cleared. Pursuant to the Dodd-Frank Act, the SEC and CFTC have promulgated a broad range of regulations and guidance based on the use of derivatives by registered investment companies. In addition, regulations adopted by the banking regulators require certain banks to include in a range of financial contracts, including many derivatives contracts, terms delaying or restricting default, termination and other rights in the event that the bank and/or its affiliates become subject to certain types of resolution or insolvency proceedings. The regulations could limit a Fund's ability to exercise a range of cross-default rights if its counterparty, or an affiliate of the counterparty, is subject to bankruptcy or similar proceeding. Such regulations could further negatively impact a Fund's use of derivatives. In addition, Rule 18f-4 under the 1940 Act permits a Fund to enter into Derivatives Transactions (as defined below) and certain other transaction notwithstanding the restrictions on the issuance of senior securities under Section 18 of the 1940 Act. Section 18 of the 1940 Act, among other things, prohibits open-end funds, including the Funds, from issuing or selling any "senior security," other than borrowing from a bank (subject to a requirement to maintain 300% "asset coverage").

Under Rule 18f-4, "Derivatives Transactions" include the following: (1) any futures contract, forward contract, option (excluding purchased options), swap, security-based swap, any combination of the foregoing, or any similar instrument, under which a fund is or may be required to make any payment or delivery of cash or other assets during the life of the instrument or at maturity or early termination, whether as margin or settlement payment or otherwise; (2) any short sale borrowing; (3) any reverse repurchase agreements or similar financing transactions, if a fund elects to treat these transactions as Derivatives Transactions under Rule 18f-4; and (4) when-issued or forward-settling securities (e.g., firm and standby commitments, including to-be-announced commitments, and dollar rolls) and non-standard settlement cycle securities, unless such transactions meet the Delayed-Settlement Securities Provision (as defined below).

For a fund using a significant amount of Derivatives, the Derivatives Rule mandates a fund adopt and/or implement: (i) value at risk limitations in lieu of asset segregation requirements; (ii) a written derivatives risk management program; (iii) new board oversight responsibilities; and (iv) new reporting and recordkeeping requirements. The Derivatives Rule provides an exception to most of its requirements for a fund with Derivatives exposure not exceeding 10% of its net assets, excluding certain currency and interest rate hedging transactions (a "Limited Derivatives User"). A Limited Derivatives User is still required to implement written compliance policies and procedures reasonably designed to manage its Derivatives risks. Currently, none of the Funds is required to implement a derivatives risk management program pursuant to the Derivatives Rule.

**Forward Foreign Currency Contracts**. The International Equity Fund may enter into forward foreign currency contracts ("forward currency contracts"). A forward currency contract involves an obligation to purchase or sell a specified currency at a fixed price at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties at a price set at the time of the contract. Because these forward currency contracts normally are settled through an exchange of currencies, they are traded in the interbank market directly between currency traders (usually large commercial banks) and their customers.

Forward currency contracts may serve as long hedges. For example, the International Equity Fund may purchase a forward currency contract to lock in the U.S. dollar price of a security denominated in a foreign currency that it intends to acquire. Forward currency contract transactions also may serve as short hedges. For example, the International Equity Fund may sell a forward currency contract to lock in the U.S. dollar equivalent of the proceeds from the anticipated sale of a security or from a dividend or interest payment on a security denominated in a foreign currency. The International Equity Fund may enter into forward currency contracts to sell a foreign currency for a fixed U.S. dollar amount approximating the value of some or all of its respective portfolio securities denominated in such foreign currency. In addition, the International Equity Fund may use forward currency contracts when the Adviser wishes to "lock in" the U.S. dollar price of a security when the International Equity Fund is purchasing or selling a security denominated in a foreign currency or anticipates receiving a dividend or interest payment denominated in a foreign currency. The International Equity Fund may enter into forward currency contracts for the purchase or sale of a specified currency at a specified future date either with respect to specific transactions or with respect to portfolio positions in order to minimize the risk to the International Equity Fund from adverse changes in the relationship between the U.S. dollar and foreign currencies. The International Equity Fund may use forward currency contracts to seek to hedge against changes in the value of a particular currency by using forward currency contracts on another foreign currency or a basket of currencies, the value of which the Adviser believes will have a positive correlation to the values of the currency being hedged. Use of a different foreign currency magnifies the risk that movements in the price of the forward contract will not correlate or will correlate unfavorably with the foreign currency being hedged. In addition, the International Equity Fund may use forward currency contracts to shift exposure to foreign currency fluctuations from one country

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to another. For example, if the International Equity Fund owned securities denominated in a foreign currency that the Adviser believed would decline relative to another currency, it might enter into a forward currency contract to sell an appropriate amount of the first foreign currency, with payment to be made in the second currency. Transactions that involve two foreign currencies are sometimes referred to as "cross hedging." Use of a different foreign currency magnifies the International Equity Fund's exposure to foreign currency exchange rate fluctuations.

The cost to the International Equity Fund of engaging in forward currency contracts varies with factors such as the currency involved, the length of the contract period and the market conditions then prevailing. Because forward currency contracts usually are entered into on a principal basis, no fees or commissions are involved. When the International Equity Fund enters into a forward currency contract, it relies on the counterparty to make or take delivery of the underlying currency at the maturity of the contract. Failure by the counterparty to do so would result in the loss of any expected benefit of the transaction.

Sellers or purchasers of forward currency contracts can enter into offsetting closing transactions, similar to closing transactions on futures, by purchasing or selling, respectively, an instrument identical to the instrument sold or bought, respectively. Secondary markets generally do not exist for forward currency contracts, however, with the result that closing transactions generally can be made for forward currency contracts only by negotiating directly with the counterparty. Thus, there can be no assurance that the International Equity Fund will in fact be able to close out a forward currency contract at a favorable price prior to maturity. In addition, in the event of insolvency of the counterparty, the International Equity Fund might be unable to close out a forward currency contract at any time prior to maturity. In either event, the International Equity Fund would continue to be subject to market risk with respect to the position and would continue to be required to maintain a position in the securities or currencies that are the subject of the hedge or to maintain cash or securities.

The precise matching of forward currency contract amounts and the value of securities whose U.S. dollar value is being hedged by those contracts involved generally will not be possible because the value of such securities, measured in the foreign currency, will change after the forward currency contract has been established.

Thus, the International Equity Fund might need to purchase or sell foreign currencies in the spot (cash) market to the extent such foreign currencies are not covered by forward contracts. The projection of short-term currency market movements is extremely difficult, and the successful execution of a short-term hedging strategy is highly uncertain.

The International Equity Fund bears the risk of loss of the amount expected to be received under a forward currency contract in the event of the default or bankruptcy of a counterparty. If such a default occurs, the International Equity Fund may have contractual remedies pursuant to the forward currency contract, but such remedies may be subject to bankruptcy and insolvency laws which could affect the International Equity Fund's rights as a creditor.

**Non-Deliverable Currency Forwards.** The International Equity Fund also may enter into non-deliverable currency forwards ("NDFs"). NDFs are cash-settled, short-term forward contracts on foreign currencies (each a "Reference Currency"), generally on currencies that are non-convertible, and may be thinly traded or illiquid. NDFs involve an obligation to pay a U. S. dollar amount (the "Settlement Amount") equal to the difference between the prevailing market exchange rate for the Reference Currency and the agreed upon exchange rate (the "NDF Rate"), with respect to an agreed notional amount. NDFs have a fixing date and a settlement (delivery) date. The fixing date is the date and time at which the difference between the prevailing market exchange rate and the agreed upon exchange rate is calculated. The settlement (delivery) date is the date by which the payment of the Settlement Amount is due to the party receiving payment.

Although NDFs are similar to other forward currency contracts, NDFs do not require physical delivery of each Reference Currency on the settlement date. Rather, on the settlement date, one counterparty pays the Settlement Amount. NDFs typically may have terms from one month up to two years and are settled in U.S. dollars. The International Equity Fund will typically use NDFs for hedging purposes or for direct investment in a foreign country for income or gain. The use of NDFs for hedging or to increase income or gain may not be successful, resulting in losses to the International Equity Fund, and the cost of such strategies may reduce the Fund's returns.

NDFs are subject to many of the risks associated with derivatives in general and forward currency transactions including risks associated with fluctuations in foreign currency and the risk that the counterparty will fail to fulfill its obligations. In addition, pursuant to the Dodd-Frank Act and regulations adopted by the CFTC in connection with implementing the Dodd-Frank Act, NDFs are deemed to be swaps, and consequently commodity interests for purposes of amended Regulation 4.5.

Although NDFs have historically been traded OTC, in the future pursuant to the Dodd-Frank Act, they may be exchange-traded. Under such circumstances, they will be centrally cleared and a secondary market for them will exist. All NDFs are subject to counterparty risk, which is the risk that the counterparty will not perform as contractually required under the NDF. With respect to NDFs that are centrally-cleared, the International Equity Fund could lose margin payments it has deposited with the clearing organization as well as the net amount of gains not yet paid by the clearing organization if it breaches its obligations under the NDF, becomes insolvent or goes into bankruptcy. In the event of bankruptcy of the clearing organization, the investor may be entitled to the net amount of gains the investor is entitled to receive plus the return of margin owed to it only in proportion to the amount received by the clearing organization's other customers, potentially resulting in losses to the investor.

**Futures Contracts.** The International Equity Fund may enter into futures contracts. Futures contracts obligate a purchaser to take delivery of, or cash settle, a specific amount of a commodity, security or obligation underlying the futures contract at a specified time in the future for a specified price. Likewise, the seller incurs an obligation to deliver the specified amount of the underlying obligation against receipt of the specified price. Futures are traded on both U.S. and foreign commodities exchanges. The purchase of futures can serve as a long hedge, and the sale of futures can serve as a short hedge.

No price is paid upon entering into a futures contract. Instead, at the inception of a futures contract the International Equity Fund is required to deposit "initial margin" consisting of cash or U.S. Government Securities in an amount set by the exchange on which the contract is traded and varying based on the volatility of the underlying asset. Margin must also be deposited when writing a call or put option on a futures contract, in accordance with applicable exchange rules. Unlike margin in securities transactions, initial margin on futures contracts does not represent a borrowing, but rather is in the nature of a performance bond or good-faith deposit that is returned

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to the International Equity Fund at the termination of the transaction if all contractual obligations have been satisfied. Under certain circumstances, such as periods of high volatility, the International Equity Fund may be required by a futures exchange to increase the level of its variable margin payment, and initial margin requirements might be increased generally in the future by regulatory action.

Subsequent "variation margin" payments (sometimes referred to as "maintenance margin" payments) are made to and from the futures broker daily as the value of the futures position varies, a process known as "marking-to-market." Variation margin does not involve borrowing, but rather represents a daily settlement of the International Equity Fund's obligations to or from a futures broker. When the International Equity Fund purchases or sells a futures contract, it is subject to daily or even intraday variation margin calls that could be substantial in the event of adverse price movements. If the International Equity Fund has insufficient cash to meet daily or intraday variation margin requirements, it might need to sell securities at a time when such sales are disadvantageous.

Purchasers and sellers of futures contracts can enter into offsetting closing transactions, by selling or purchasing, respectively, an instrument identical to the instrument purchased or sold. Positions in futures contracts may be closed only on a futures exchange or board of trade that trades that contract. There can be no assurance that such a market will exist for a particular contract at a particular time. In such event, it may not be possible to close a futures contract.

Although many futures contracts by their terms call for the actual delivery or acquisition of the underlying asset, in most cases the contractual obligation is fulfilled before the date of the contract without having to make or take delivery of the securities or currency. The offsetting of a contractual obligation is accomplished by buying (or selling, as appropriate) on a commodities exchange an identical futures contract calling for delivery in the same month. Such a transaction, which is effected through a member of an exchange, cancels the obligation to make or take delivery of the securities or currency. Since all transactions in the futures market are made, offset or fulfilled through a clearinghouse associated with the exchange on which the contracts are traded, the International Equity Fund will incur brokerage fees when it purchases or sells futures contracts.

Under certain circumstances, futures exchanges may establish daily limits on the amount that the price of a futures contract can vary from the previous day's settlement price; once that limit is reached, no trades may be made that day at a price beyond the limit. Daily price limits do not limit potential losses because prices could move to the daily limit for several consecutive days with little or no trading, thereby preventing liquidation of unfavorable positions.

If the International Equity Fund were unable to liquidate a futures contract due to the absence of a liquid secondary market or the imposition of price limits, it could incur substantial losses. The International Equity Fund would continue to be subject to market risk with respect to the position. In addition, the International Equity Fund would continue to be required to make daily variation margin payments and might be required to maintain the position being hedged by the futures contract or option thereon or to maintain cash or securities in a segregated account.

The ordinary spreads between prices in the cash and futures markets, due to differences in the nature of those markets, are subject to distortions. First, all participants in the futures market are subject to initial deposit and variation margin requirements. Rather than meeting additional variation margin deposit requirements, investors may close futures contracts through offsetting transactions that could distort the normal relationship between the cash and futures markets. Second, the liquidity of the futures market depends on participants entering into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery, liquidity in the futures market could be reduced, thus producing distortion. Third, from the point of view of speculators, the margin deposit requirements in the futures market are less onerous than margin requirements in the securities market. Therefore, increased participation by speculators in the futures market may cause temporary price distortions. Due to the possibility of distortion, a correct forecast of securities price or currency exchange rate trends by the Adviser may still not result in a successful transaction.

Futures contracts also entail other risks. Although the use of such contracts may benefit the International Equity Fund, if investment judgment about the general direction of, for example, an index is incorrect, the International Equity Fund's overall performance would be worse than if it had not entered into any such contract. There are differences between the securities and futures markets that could result in an imperfect correlation between the markets, causing a given transaction not to achieve its objectives.

**Options.** The use of options involves investment strategies and risks different from those associated with ordinary portfolio securities transactions. If a strategy is applied at an inappropriate time or market conditions or trends are judged incorrectly, the use of options may lower the International Equity Fund's return. There can be no guarantee that the use of options will increase the International Equity Fund's return or income. In addition, there may be an imperfect correlation between the movement in prices of options and the securities underlying them and there may at times not be a liquid secondary market for various options.

By writing put options, the International Equity Fund takes on the risk of declines in the value of the underlying instrument, including the possibility of a loss up to the entire strike price of each option it sells, but without the corresponding opportunity to benefit from potential increases in the value of the underlying instrument. When the International Equity Fund writes a put option, it assumes the risk that it must purchase the underlying instrument at a strike price that may be higher than the market price of the instrument. If there is a broad market decline and the International Equity Fund is not able to close out its written put options, it may result in substantial losses to the Fund. By writing a call option, the International Equity Fund may be obligated to deliver instruments underlying an option at less than the market price. When the International Equity Fund writes a covered call option, it gives up the opportunity to profit from a price increase in the underlying instrument above the strike price. If a covered call option that the International Equity Fund has written is exercised, the International Equity Fund will experience a gain or loss from the sale of the underlying instrument, depending on the price at which the Fund purchased the instrument and the strike price of the option. The International Equity Fund will receive a premium from writing options, but the premium received may not be sufficient to offset any losses sustained from exercised options. In the case of a covered call, the premium received may be offset by a decline in the market value of the underlying instrument during the option period. If an option that the International Equity Fund has purchased is never exercised or closed out, the International Equity Fund will lose the amount of the premium it paid and the use of those funds. Options on futures contracts may be subject to additional risks, including risks associated with the underlying futures contract.

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**EQUITY RELATED SECURITIES** 

The equity securities in which the Funds may invest include American Depositary Receipts ("ADRs"), common stocks, securities convertible into common stock ("convertible securities"), preferred stocks, shares of real estate investment trusts ("REITs"), rights and warrants.

**ADRs.** ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. ADRs are not considered to be foreign securities when calculating a Fund's foreign securities limitations, but such securities may be subject to many of the same risks as foreign securities. ADRs may be listed on a national securities exchange or may trade in the over-the-counter market. ADR prices are denominated in U.S. dollars; the underlying security is denominated in a foreign currency. ADRs may not be denominated in the same currency as the securities into which they may be converted. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities. There is generally less publicly available information about foreign companies and there may be less governmental regulation and supervision of foreign stock exchanges, brokers and listed companies. In addition, such companies may use different accounting and financial standards (and certain currencies may become unavailable for transfer from a foreign currency), resulting in a Fund's possible inability to convert immediately into U.S. currency proceeds realized upon the sale of portfolio securities of the affected foreign companies. The issuers of unsponsored depositary receipts generally are not obligated to disclose material information about the underlying securities to investors in the United States. Ownership of unsponsored depositary receipts may not entitle a Fund to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security. Please see "Foreign and Emerging Market Securities" below for a description of the risks associated with investments in foreign securities.

**Common Stocks.** Common stocks represent the residual ownership interest in the issuer and are generally subordinate to all of its other obligations, including preferred stock. Common stocks generally have voting rights. Common stocks fluctuate in price in response to many factors including historical and prospective earnings of the issuer, the value of its assets, factors affecting companies in the same industry or sector, general economic conditions, interest rates, currency exchange rates, investor perceptions and market liquidity. The price of a company's stock may also be affected by changes in financial markets that are relatively unrelated to the particular company, such as currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company's common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or traded over-the-counter ("OTC"). OTC stock may be less liquid than exchange-traded stock. In the event of an issuer's bankruptcy, there is a substantial risk that there will be nothing left to pay common stockholders after payments, if any, to bondholders and preferred stockholders have been made.

**Convertible Securities.** A convertible security is a bond, debenture, note, preferred stock or other security or debt obligation that entitles the holder to acquire a prescribed amount of common stock or other equity securities of the same or a different issuer within a particular period of time at a specified price or formula. A convertible security generally entitles the holder to receive interest paid or accrued until the convertible security matures or is redeemed, converted or exchanged. Before conversion, convertible securities have characteristics similar to nonconvertible debt securities, and generally have features of, and risks associated with, both equity and fixed income instruments. Convertible securities rank senior to common stock in a corporation's capital structure and, therefore, may entail less risk than the corporation's common stock, although 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. The market value of convertible securities tends to decline as interest rates increase and, conversely, to increase as interest rates decline. While convertible securities generally offer lower interest or dividend yields than non-convertible debt securities of similar quality, they do enable the investor to benefit from increases in the market price of the underlying common stock. Holders of convertible securities have a claim on the assets of the issuer prior to the common stockholders but may be subordinated to holders of similar non-convertible securities of the same issuer. A convertible security may be subject to redemption at the option of the issuer at a predetermined price. If a convertible security held by a Fund is called for redemption, the Fund would be required to permit the issuer to redeem the security and convert it to underlying common stock, or would sell the convertible security to a third party.

**Preferred Stocks.** Preferred stock generally offers a stated dividend rate payable from the corporation's earnings. These preferred stock dividends may be cumulative or non-cumulative, participating, or auction rate. If interest rates rise, the fixed dividend on preferred stocks may be less attractive, causing the price of preferred stocks to decline. Preferred stock may have mandatory sinking fund provisions, as well as call/redemption provisions prior to maturity, a negative feature when interest rates decline. The rights of preferred stocks are generally subordinate to rights associated with a corporation's debt securities. Dividends on some preferred stock may be "cumulative" if stated dividends from prior periods have not been paid. Preferred stock also generally has a preference over common stock on the distribution of a corporation's assets in the event of liquidation of the corporation, and may be "participating," which means that it may be entitled to a dividend exceeding the stated dividend in certain cases.

**Real Estate Investment Trusts.** The Funds may invest in shares of REITs. Equity REITs invest in income-producing real estate. They produce income from rental and lease payments as well as occasional sales of property. Mortgage REITs make construction, development, and long-term mortgage loans. They produce income from repayment of the loans and sales of the loan obligations. Hybrid REITs may invest in both real estate and real estate loans.

Unlike most corporations (and trusts and associations otherwise taxable as such for federal tax purposes), REITs do not have to pay federal income tax on net income and net realized gains they distribute to their shareholders if they meet certain requirements of the Internal Revenue Code of 1986, as amended. To qualify for that treatment, a REIT must, among other things, (1) distribute to its shareholders for each taxable year at least 90% of the sum of its "real estate investment trust taxable income" (which includes all net realized capital gains) and certain other income and (2) derive at least 75% of its gross income each taxable year from rents from real property, interest on mortgages secured by real property, gains from the disposition of real property or such mortgages, and certain other real estate related income. The failure of a company in which a Fund invests to qualify for treatment as a REIT under federal tax law may have an adverse impact on the Fund. REITs generally offer investors greater liquidity and diversification than direct ownership of real estate, as well as greater income potential than an investment in common stocks.

REITs are subject to real estate industry risk. These risks may include the following: declines in the value of real estate; risks related to general and local economic conditions; possible lack of availability of mortgage funds; lack of ability to access the credit or

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capital markets; overbuilding; extended vacancies of properties; defaults by borrowers or tenants, particularly during an economic downturn; increasing competition; increases in property taxes and operating expenses; changes in zoning laws; losses due to costs resulting from the clean-up of environmental problems; liability to third parties for damages resulting from environmental problems; casualty or condemnation losses; regulatory limitations on rents and operating expenses; changes in market and sub-market values and the appeal of properties to tenants; and changes in interest rates. In general, real estate values can be affected by a variety of factors, including supply and demand for properties, the economic health of the country as well as different regions, and the strength of specific industries that rent properties. Ultimately, an individual REIT's performance depends on the types and locations for the properties it owns and on how well the REIT manages its properties. For instance, rental income could decline because of extended vacancies, increased competition from nearby properties, tenants' failures to pay rent, or incompetent management. Property values could decrease because of overbuilding in the area, environmental liabilities, uninsured damages caused by natural disasters, a general decline in the neighborhood, losses due to casualty or condemnation, increases in property taxes, or changes in zoning laws. Any domestic REIT could be adversely affect by the failure of a REIT to qualify for federal income-tax-free "pass-through" of net income and net realized gains that are distributed to shareholders and exemption from registration as an investment company. The failure of a company to qualify for treatment as a REIT under the federal tax law likely would have an adverse impact on a Fund's after-tax performance.

REITs are also subject to interest rate risk. REIT stock prices overall will decline over short or even long periods in an environment of rising interest rates. In general, during periods of high interest rates, REITs may lose some of their appeal for investors who may be able to obtain higher yields from other income-producing investments. Higher interest rates also mean that financing for real estate purchases and improvements may be more costly and difficult to obtain.

REITs tend to be small or medium-size companies. Because small and mid-cap stocks are typically less liquid than large-cap stocks, REIT stocks may sometimes experience greater share-price fluctuation than the stocks of larger companies. REITs are pooled investment vehicles with their own fees and expenses and a Fund will indirectly bear its proportionate share of those fees and expenses, which can be significant.

**Rights and Warrants.** Rights and warrants are options to purchase equity securities at specific prices valid for a specific period of time. Their prices do not necessarily move parallel to the prices of the underlying securities. Rights are similar to warrants but normally have a short duration and are distributed by the issuer to its shareholders. Warrants and rights have no voting rights, receive no dividends and have no rights with respect to the assets of the issuer. The percentage increase or decrease in the value of a warrant may be greater than the percentage increase or decrease in the value of the underlying equity security. The market for warrants or rights may be very limited and it may be difficult to sell them promptly at an acceptable price.

**Securities Subject to Special Situations.** The Funds may invest in equity securities for which a tender or exchange offer has been made or announced and in securities of companies for which a merger, consolidation, bankruptcy, liquidation, restructuring or reorganization proposal or other unusual event has been announced or is anticipated. The primary risk of such investments is that if the contemplated transaction is abandoned, revised, delayed or becomes subject to uncertainty, the market price of the securities may decline below the purchase price paid by a Fund. Generally, securities which are the subject of such an offer or proposal sell at a premium to their historic market price immediately prior to the announcement of the offer or may also discount what the stated or appraised value of the security would be if the contemplated transaction were approved or consummated. Such investments may be advantageous when the discount significantly overstates the risk of the contingencies involved, significantly undervalues the securities, assets or cash to be received by shareholders of the target company as a result of the contemplated transaction, or fails adequately to recognize the possibility that the offer or proposal may be replaced or superseded by an offer or proposal of greater value.

The evaluation of such contingencies requires broad knowledge and experience on the part of the Adviser which must appraise not only the value of the issuer and its component businesses as well as the assets or securities to be received as a result of the contemplated transaction but also the financial resources and business motivation of the offeror and the dynamics and business and regulatory climate when the offer or proposal is in process. It may be difficult to obtain complete financial or other information about companies involved in certain special situations and management of such companies may be addressing a situation with which it has little experience. Since such investments are ordinarily short-term in nature, they will tend to increase the turnover ratio of a Fund, thereby increasing its brokerage and other transaction expenses, and be more speculative. Conversely, the terms of certain special situation investments may be subject to restrictions that prevent a Fund from selling the position until the special situation is largely resolved, which may limit a Fund's ability to pursue other opportunities as they arise.

**FOREIGN AND EMERGING MARKET SECURITIES** 

**Foreign Securities.** The Funds may invest in securities of foreign issuers. The Balanced Fund may invest up to 10% of its total assets in foreign securities. A Fund's investment in a foreign issuer may subject a Fund to regulatory, political, currency, security, economic and other risks associated with that country, including tariffs, trade disputes, or the imposition of economic and other sanctions by the U.S. or another country against a particular country, as well as competition from subsidized foreign competitors with lower production costs. In certain countries, legal remedies available to investors may be more limited than those available with respect to investments in the U.S. and investors may encounter difficulties in enforcing contractual obligations. Individual foreign companies also may differ favorably or unfavorably from U.S. companies in the same industry. Investing in foreign issuers involves certain special considerations that are not typically associated with investing in securities of U.S. issuers. Since the securities of foreign issuers are frequently denominated in foreign currencies, the Funds may purchase or sell non-U.S. currency futures contracts and options on non-U.S. currency futures, and the Funds may temporarily hold invested reserves in bank deposits in foreign currencies, the Funds will be affected favorably or unfavorably by changes in currency rates and in exchange control regulations, and may incur costs in connection with conversions between various currencies. Foreign currencies will fluctuate, and may decline, in value relative to the U.S. dollar and affect a Fund's investments in foreign currencies or in securities that trade in, and receive revenues in, or in derivatives that provide exposure to, foreign currencies.

As foreign companies are not generally subject to uniform accounting, auditing and financial reporting standards and practices comparable to those applicable to domestic companies, there may be less publicly available information about certain foreign companies than about domestic companies. Securities of some foreign companies are generally less liquid and more volatile than

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securities of comparable domestic companies. There is generally less government supervision and regulation of stock exchanges, brokers and listed companies than in the U.S. In addition, with respect to certain foreign countries, there is the possibility of expropriation or confiscatory taxation, political or social instability, or diplomatic developments that could affect U.S. investments in those countries. Trading practices, including those involving the release of assets in advance of payment, may involve increased risks in the event of a failed trade or the insolvency of a broker-dealer, and may involve substantial delays. Additionally, trading in foreign markets generally involves higher transaction costs than trading in U.S. markets. Although each Fund will endeavor to achieve most favorable execution costs in its portfolio transactions, fixed commissions on many foreign stock exchanges are generally higher than negotiated commissions on U.S. exchanges. In addition, it is expected that the expenses for custodian arrangements of the Funds' foreign securities will be somewhat greater than the expenses for the custodian arrangements for handling U.S. securities of equal value, especially for emerging market securities. Foreign markets have different clearance and settlement procedures. In certain markets, there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. Delays in settlement could result in temporary periods when a portion of the assets of the Funds are not invested and no return is earned thereon. The inability of the Funds to make intended security purchases due to settlement problems could cause the Funds to miss attractive investment opportunities. The inability of the Funds to dispose of portfolio securities due to settlement problems could result in losses to the Funds due to subsequent declines in value of the securities or, if the Funds have entered into a contract to sell the securities, could result in possible liability to the purchaser.

Interest rates prevailing in other countries may affect the prices of foreign securities and exchange rates for foreign currencies. Local factors, including the strength of the local economy, the demand for borrowing, the government's fiscal and monetary policies, and the international balance of payments, often affect interest rates in other countries. Individual foreign economies may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross national product, rate of inflation, capital reinvestment, resource self-sufficiency, and balance of payments position.

A Fund's income and gains from investments in non-U.S. issuers may be subject to non-U.S. withholding or other taxes, thereby reducing its income and gains. Certain foreign governments levy withholding or other taxes against dividend and interest income paid by citizens or corporations operating therein to investors from other countries. Although in some countries a portion of these taxes are recoverable, the non-recovered portion of those taxes will reduce a Fund's income received from an issuer subject thereto.

Investing in foreign securities may involve a greater risk for excessive trading due to "time-zone arbitrage." If an event occurring after the close of a foreign market, but before the time a Fund computes its current NAV, causes a change in the price of the foreign securities and such price is not reflected in the Funds' current NAV, investors may attempt to take advantage of anticipated price movements in securities held by the Funds based on such pricing discrepancies.

**Securities of European Issuers**. A Fund's performance may be affected by political, social and economic conditions in Europe, such as the growth of the economic output (the gross national product of the countries in the region), the rate of inflation, the rate at which capital is reinvested into European economies, the success of governmental actions to reduce budget deficits, the resource self-sufficiency of European countries, interest rates in European countries, monetary exchange rates between European countries, and conflict between European countries.

The Economic and Monetary Union ("EMU") of the European Union ("EU") is comprised of EU members that have adopted the euro currency. By adopting the euro as its currency, a member state relinquishes control of its own monetary policies and is subject to fiscal and monetary controls. The EMU requires Eurozone countries to comply with restrictions on interest rates, deficits, debt levels, and inflation rates, fiscal and monetary controls, and other factors. Although the EMU has adopted a common currency and central bank, there is no fiscal union; therefore, money does not automatically flow from countries with surpluses to those with deficits. These restrictions and characteristics may limit the ability of EMU member countries to implement monetary policy to address regional economic conditions and significantly impact every European country and their economic partners, including those countries that are not members of the EMU. In addition, those EU member states that are not currently in the Eurozone (Bulgaria, the Czech Republic, Denmark, Hungary, Poland, Romania, and Sweden), excluding Denmark, are required to seek to comply with convergence criteria to permit entry to the Eurozone. The economies and markets of European countries are often closely connected and interdependent, and events in one country in Europe can have an adverse impact on other European countries. Decreasing imports or exports, changes in governmental or other regulations on trade, changes in the exchange rate of the euro or other European currency, the threat of default or actual default by one or more EU member countries, or other European countries, on its sovereign debt, and/or an economic recession in one or more European countries may have a significant adverse effect on the economies of other European countries and major trading partners outside Europe.

The European financial markets have experienced and may continue to experience volatility and adverse trends due to concerns relating to economic downturns; rising government debt levels and national unemployment; the possible default of government debt in several European countries; public health crises; political unrest; economic sanctions; inflation; energy crises; the future of the euro as a common currency; and war and military conflict, such as the Russian invasion of Ukraine. These events have adversely affected the exchange rate of the euro and may continue to significantly affect European countries. Responses to financial problems by European governments, central banks, and others, including austerity measures and other reforms, may not produce the desired results, may result in social unrest and may limit future growth and economic recovery or may have unintended consequences. In order to prevent further economic deterioration, certain countries, without prior warning, can institute "capital controls." Countries may use these controls to restrict volatile movements of capital entering and exiting their country. Such controls may negatively affect a Fund's investments. In addition, one or more countries may abandon the euro and/or withdraw from the EU. The impact of these actions, especially if they occur in a disorderly fashion, could be significant and far-reaching. Many European nations are susceptible to economic risks associated with high levels of debt. Non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts, and other issuers have faced difficulties obtaining credit or refinancing existing obligations. A default or debt restructuring by any European country could adversely impact holders of that country's debt and sellers of credit default swaps linked to that country's creditworthiness, which may be located in other countries. Such a default or debt restructuring could affect exposures to other European countries and their financial companies as well. Further defaults on, or restructurings of, the debt of governments or other entities could have additional adverse effects on economies, financial markets and asset valuations around the world. In addition, issuers may face difficulties obtaining credit or refinancing existing obligations; financial institutions may require government or central bank support, or need to raise capital, and/or be impaired in their ability to extend credit.

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Furthermore, certain European countries have had to accept assistance from supranational agencies such as the International Monetary Fund, the European Stability Mechanism or others. The European Central Bank has also intervened to purchase Eurozone debt in an attempt to stabilize markets and reduce borrowing costs. There can be no assurance that any creditors or supranational agencies will continue to intervene or provide further assistance, and markets may react adversely to any expected reduction in the financial support provided by these creditors. Certain European countries have also developed increasingly strained relationships with the U.S., and if these relationships were to worsen, they could adversely affect European issuers that rely on the U.S. for trade.

In addition, the national politics of European countries have been unpredictable and subject to influence by disruptive political groups, ideologies, and polarizing political events such as the conflict between Israel and Hamas. Secessionist movements, as well as government or other responses to such movements, may create instability and uncertainty in a country or region. European governments may be subject to change and such countries may experience social and political unrest. Unanticipated or sudden political or social developments may result in sudden and significant investment losses. The occurrence of terrorist incidents throughout Europe and in the Middle East also could impact financial markets, as could military conflicts. For example, Houthi attacks on commercial shipping in the Red Sea and Gulf of Aden, and retaliatory action, may disrupt supply chains and cause difficulties for impacted businesses, including those that wish to ship goods through that route. The impact of these kinds of events could be significant and far-reaching and materially impact the value and liquidity of a Fund's investments. Russia's war with Ukraine has negatively impacted European economic activity. Additionally, Russia may continue to attempt to assert its influence in the European region through economic or even military measures. The Russia/Ukraine war and Russia's response to sanctions imposed by the U.S. and other countries are impossible to predict, but have severely impacted the performance of the economies of European and other countries, including through adverse effects to global financial and energy markets, global supply chains and global growth, and consequential inflation.

Certain countries have applied to become new member countries of the EU, and these candidate countries' accessions may become more controversial to the existing EU members. Some member states may repudiate certain candidate countries joining the EU due to concerns about the possible economic, immigration and cultural implications. Certain other countries have applied to join or, in the case of Finland and Sweden, have recently joined, the North Atlantic Treaty Organization ("NATO"). Russia is understood to oppose certain expansions, or potential expansions, of NATO and the EU, and its reaction to such developments could negatively impact European economic activity. The United Kingdom withdrew from the European Union on January 31, 2020. The United Kingdom and the European Union have reached an agreement on the terms of their future trading relationship, which principally relates to the trading of goods rather than services, including financial services. Notwithstanding this agreement, the longer-term economic, legal, and political framework between the United Kingdom and the EU may lead to ongoing political and economic uncertainty in the United Kingdom, Europe, and the global market. Investments in companies with significant operations and/or assets in the United Kingdom could be adversely impacted by past or future changes to the legal, political, and regulatory environment, whether by increased costs or impediments to the implementation of business plans. The uncertainty resulting from any further exits from the EU, or the possibility of such exits, would also be likely to cause market disruption in the EU and more broadly across the global economy, as well as introduce further legal, political, and regulatory uncertainty in Europe.

**Emerging Market Investments.** Investing in emerging markets can have more risk than investing in developed foreign markets, such as (i) low or non-existent trading volume, resulting in a lack of liquidity and increased volatility in prices for such securities, as compared to securities from more developed markets, (ii) uncertain national policies and social, political and economic instability, increasing the potential for expropriation of assets, confiscatory taxation, high rates of inflation or unfavorable diplomatic or geopolitical developments, (iii) possible fluctuations in exchange rates, differing legal systems and the existence or possible imposition of exchange controls, custodial restrictions or other non-U.S. or U.S. governmental laws or restrictions applicable to such investments, (iv) national policies that may limit a Fund's investment opportunities such as restrictions on investment in issuers or industries deemed sensitive to national interests, (v) the lack or relatively early development of legal structures governing private and foreign investments and private property, and (vi) less diverse or immature economic structures. The risks of investing in these markets may be exacerbated relative to investments in developed markets and investments in these countries may be subject to erratic and abrupt price movements. In addition, emerging markets may impose capital restrictions and thus, may adversely affect the operations of a Fund and certain emerging markets impose constraints on currency exchange and some currencies in emerging markets may have been devalued significantly against the U.S. dollar. In addition to withholding taxes on investment income, some countries in emerging markets may impose differential capital gain taxes on foreign investors. For these and other reasons, the prices of securities in emerging markets can fluctuate more significantly than the prices of securities of companies in developed markets. The less developed the country, the greater effect these risks may have on your investment in a Fund.

Emerging markets have evolved in a dynamic political and economic environment brought about by events over recent years that have reshaped political boundaries and traditional ideologies. In such a dynamic environment, there can be no assurance that these emerging markets will continue to present viable investment opportunities for a Fund. In the past, governments of countries in emerging markets have expropriated substantial amounts of private property, and most claims of the property owners have never been fully settled. There is no assurance that such expropriations will not reoccur. In such event, it is possible that a Fund could lose the entire value of its investments in the affected markets.

Some economies are less well developed and less diverse and more vulnerable to the ebb and flow of international trade, trade barriers and other protectionist or retaliatory measures. The economies of emerging market countries may be based predominately on only a few industries or may be dependent on revenues from participating commodities or on international aid or developmental assistance, may be highly vulnerable to changes in local or global trade conditions, and may suffer from extreme and volatile debt burdens or inflation rates. Many of these countries are grappling with severe inflation or recession, high levels of national debt, currency exchange problems and government instability.

Certain emerging market countries have historically experienced, and may continue to experience, high rates of inflation, high interest rates, exchange rate fluctuations, large amounts of external debt, balance of payments and trade difficulties and extreme poverty and unemployment. The issuer or governmental authority that controls the repayment of an emerging market country's debt may not be able or willing to repay the principal and/or interest when due in accordance with the terms of such debt. A debtor's willingness or ability to repay principal and interest due in a timely manner may be affected by, among other factors, its cash flow situation, and, in the case of a government debtor, the extent of its foreign reserves, the availability of sufficient foreign exchange on

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the date a payment is due, the relative size of the debt service burden to the economy as a whole and the political constraints to which a government debtor may be subject. Government debtors may default on their debt and may also be dependent on expected disbursements from foreign governments, multilateral agencies and others abroad to reduce principal and interest arrearages on their debt. Holders of government debt may be requested to participate in the rescheduling of such debt and to extend further loans to government debtors. If such an event occurs, a Fund may have limited legal recourse against the issuer and/or guarantor. Remedies must, in some cases, be pursued in the courts of the defaulting party itself, and the ability of the holder of foreign government fixed income securities to obtain recourse may be subject to the political climate in the relevant country. In addition, no assurance can be given that the holders of commercial bank debt will not contest payments to the holders of other foreign government debt obligations in the event of default under their commercial bank loan agreements.

A Fund may encounter substantial difficulties in obtaining and enforcing judgments against individuals and companies located in certain emerging market countries, either individually or in combination with other shareholders. It may be difficult or impossible to obtain or enforce legislation or remedies against governments, their agencies and sponsored entities. Additionally, in certain emerging market countries, fraud, corruption and attempts at market manipulation may be more prevalent than in developed market countries. Shareholder claims that are common in the U.S. and are generally viewed as determining misconduct, including class action securities law and fraud claims, generally are difficult or impossible to pursue as a matter of law or practicality in many emerging markets.

Also, there may be less publicly available information about issuers in emerging markets than would be available for issuers in more developed markets, and such issuers may not be subject to accounting, auditing and financial reporting standards and requirements comparable to those to which U.S. companies or issuers in more developed markets are subject. In certain countries with emerging markets, reporting standards vary widely. As a result, traditional investment measurements used in the U.S. may not be applicable. Emerging market investments may be substantially less liquid and more volatile than those of more developed markets, and securities may be held by a limited number of investors. This may adversely affect the timing and pricing of a Fund's acquisition or disposal of emerging market investments.

The laws in certain emerging market countries may be based upon or be highly influenced by religious codes or rules. The interpretation of how these laws apply to certain investments may change over time, which could have a negative impact on those investments and a Fund.

Practices in relation to settlement of securities transactions in emerging markets involve higher risks than those in developed markets, in part because a Fund may use brokers and counterparties that are less well capitalized, and custody and registration of assets in some countries may be unreliable.

Many emerging market countries have little experience with the corporate form of business organization and may not have well-developed corporation and business laws or concepts of fiduciary duty in the business context. The organizational structures of certain issuers in emerging markets may limit investor rights and recourse.

Regulatory authorities in some emerging markets currently do not provide the Public Company Accounting Oversight Board with the ability to inspect public accounting firms as required by U.S. law, including sufficient access to inspect audit work papers and practices, or otherwise do not cooperate with U.S. regulators, which potentially could expose investors to significant risks.

**FIXED INCOME SECURITIES** 

The fixed income securities in which the Funds may invest include securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities, and securities issued by domestic or foreign corporations and other entities. The Fixed Income Fund invests under normal circumstances at least 80% of its net assets in a portfolio of investment grade corporate fixed income securities and fixed income securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities.

**Recent Fixed Income Market Events.** The Federal Reserve and certain foreign central banks have started to lower interest rates, but it is difficult to accurately predict the pace at which interest rates might change, the timing, frequency or magnitude of any such changes in interest rates, or when such changes might stop or reverse course. Additionally, various economic and political factors, such as inflation, could cause the Federal Reserve or another foreign central bank to change their approach in the future and such actions may result in an economic slowdown in the U.S. and abroad. Unexpected changes in interest rates could lead to significant market volatility or reduce liquidity in certain sectors of the market. Deteriorating economic fundamentals may, in turn, increase the risk of default or insolvency of particular issuers, negatively impact market value, cause credit spreads to widen, and reduce bank balance sheets. Any of these could cause an increase in market volatility or reduce liquidity across various markets. Additionally, high public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. There is a potential for materially increased regulation in the future, as well as higher taxes or taxes restructured to incentivize different activities. These changes, should they occur, may impose added costs on a Fund and its service providers, and affect the businesses of various portfolio companies, in ways that cannot necessarily be foreseen at the present time. Markets may react strongly to expectations about the changes in these policies, which could increase volatility, especially if the markets' expectations for changes in government policies are not borne out. Policy changes by the U.S. Government, the Federal Reserve or the central banks may expose a Fund's investments in debt securities and the fixed income markets to heightened volatility and may reduce liquidity for certain Fund investments, which could cause the value of a Fund's investments and share price to decline. To the extent that a Fund experiences high redemptions because of these policy changes, the Fund may experience increased portfolio turnover, which will increase the costs that the Fund incurs and may lower the Fund's performance, and have trouble selling investments to meet shareholder redemptions.

**Ratings.** As noted above, all of the Funds may invest in various fixed income securities, including fixed income securities that are rated at the time of purchase as investment grade by a nationally recognized statistical rating organization ("NRSRO"), such as S&P Global Ratings ("S&P"), Moody's Investors Service, Inc. ("Moody's"), or Fitch Ratings, Inc. ("Fitch"), or of equivalent quality as determined by the Adviser. Investment grade fixed income securities include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Bonds or bank obligations rated in one of the four highest categories (such as BBB- or higher by S&P);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Short-term notes rated in one of the two highest categories (such as SP-2 or higher by S&P); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Commercial paper or short-term bank obligations rated in one of the three highest categories (such as A-3 or higher by S&P).

Investment grade fixed income securities are generally perceived to have a lower degree of credit risk. However, certain investment grade securities with lower ratings are considered medium quality and may be subject to greater credit risk than the highest rated securities. If a security's rating falls below that required at the time of purchase, the Adviser will consider what action, if any, should be taken consistent with a Fund's investment objective. Additional information concerning securities ratings is contained in Appendix A to this SAI.

**U.S. Government Agency Securities.** U.S. Government agency securities are issued or guaranteed by the U.S. Government or its agencies or instrumentalities or government sponsored enterprises. Some obligations issued by U.S. Government agencies and instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the U.S. Treasury; others by the discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality; and others only by the credit of the agency or instrumentality. U.S. Government securities bear fixed, floating or variable rates of interest. While the U.S. Government may provide financial support to certain U.S. Government-sponsored agencies or instrumentalities, no assurance can be given that it will do so, since it is not so obligated by law. U.S. Government agency obligations and repurchase agreements secured thereby are primarily subject to market risk, credit risk and interest rate risk.

**U.S. Treasury Obligations**. U.S. Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics, and include bills (initial maturities of one year or less), notes (initial maturities between two and ten years), and bonds (initial maturities over ten years) issued by the U.S. Treasury, Separately Traded Registered Interest and Principal component parts of such obligations known as STRIPS, which are traded independently, and Treasury inflation protected securities, whose principal value is periodically adjusted according to the rate of inflation. The prices of these securities (like all debt securities) change between issuance and maturity in response to fluctuating market interest rates. U.S. Treasury obligations are subject to credit risk and interest rate risk. The total amount of debt the Treasury is authorized to incur is subject to a statutory limit. Once the Treasury reaches the debt limit, Congress must raise, extend or otherwise modify the limit to enable the Treasury to incur additional debt to pay the obligations of the U.S. government, including principal and interest payments on certain U.S. Treasury obligations (such as Treasury bills, notes and bonds). The failure, or potential failure, to increase the statutory debt limit could: increase the risk that the U.S. government defaults on payments on certain U.S. Treasury obligations; cause the credit rating of the U.S. government to be downgraded or increase volatility in both stock and bond markets; result in higher debt servicing payments by the U.S. government; reduce prices of Treasury securities; and/or increase the costs of certain kinds of debt.

The Funds may invest in component parts of U.S. Treasury notes or bonds, namely either the principal of such Treasury obligations or one of the interest payments scheduled to be paid on such obligations. These obligations may take the form of: (1) Treasury obligations from which the interest coupons have been stripped; (2) the interest coupons that are stripped; (3) book-entries at a Federal Reserve member bank representing ownership of Treasury obligation components; or (4) receipts evidencing the component parts (principal or coupons) of Treasury obligations that have not actually been stripped. Such receipts evidence ownership of component parts of Treasury obligations (principal or coupons) purchased by a third party (typically an investment banking firm) and held on behalf of the third party in physical or book-entry form by a major commercial bank or trust company pursuant to a custody agreement with the third party. These custodial receipts are known by various names, including "Treasury Receipts," "Treasury Investment Growth Receipts" ("TIGRs") and "Certificates of Accrual on Treasury Securities" ("CATs"), and are not issued by the U.S. Treasury; therefore they are not U.S. Government securities, although the underlying bonds represented by these receipts are debt obligations of the U.S. Treasury.

**Investment Grade Fixed Income Securities.** The Funds may invest in fixed income securities of domestic or foreign issuers (corporate bonds, debentures, notes and other similar corporate debt instruments) rated as investment grade at the time of purchase by a NRSRO.

Even fixed income securities rated investment grade by a NRSRO possess some speculative characteristics. There are risks involved in applying credit ratings as a method for evaluating fixed income securities in that credit ratings evaluate the safety of principal and interest payments, not market value risk. In addition, credit ratings may not be correct and credit rating agencies may not change credit ratings on a timely basis to reflect changes in economic or company conditions that affect a security's market value. Changes in economic conditions or other circumstances may lead to a weakened capacity of the issuer to make principal and interest payments on such securities.

The Funds will rely on the judgment, analysis and experience of the Adviser in evaluating the creditworthiness of an issuer. In this evaluation, the Adviser may take into consideration, among other things, the issuer's financial resources and ability to cover its interest and fixed charges, factors relating to the issuer's industry and its sensitivity to economic conditions and trends, its operating history, the quality of the issuer's management and regulatory matters. The rate of return or return of principal on some debt obligations may be linked or indexed to the level of exchange rates between the U.S. dollar and a foreign currency or currencies.

The risk of loss due to default by the issuer is significantly greater for the holders of lower quality fixed income securities because such securities are generally unsecured and are often subordinated to other obligations of the issuer. During an economic downturn or a sustained period of rising interest rates, highly leveraged issuers of lower quality fixed income securities may experience financial stress and may not have sufficient revenues to meet their interest payment obligations. An issuer's ability to service its debt obligations may also be adversely affected by specific corporate developments, its inability to meet specific projected business forecasts, or the unavailability of additional financing.

Factors adversely affecting the market value of fixed income securities may adversely affect the net asset value of a Fund if it invests in such securities. In addition, a Fund may incur additional expenses to the extent it is required to seek recovery upon a default in the payment of principal of or interest on its portfolio holdings.

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The secondary trading market for lower-quality fixed income securities is generally not as liquid as the secondary market for higher-quality fixed income securities and is very thin for some fixed income securities. The relative lack of an active secondary market may have an adverse impact on market price and a Fund's ability to dispose of particular issues when necessary to meet the Fund's liquidity needs or in response to a specific economic event such as a deterioration in the creditworthiness of the issuer. The relative lack of an active secondary market for certain securities may also make it more difficult for a Fund to obtain information for purposes of valuing the Fund's portfolio. Pricing data is generally available on many high yield issues only from a limited number of dealers and may not necessarily represent firm bids of such dealers or prices for actual sales. During such times, the ability to value the securities becomes more difficult and judgment plays a greater role in valuation because there is less reliable, objective data available.

**Variable and Floating Rate Obligations.** The interest rates payable on certain fixed income securities in which a Fund may invest are not fixed and may fluctuate based upon changes in market rates. A variable rate obligation has an interest rate which is adjusted at predesignated periods in response to changes in the market rate of interest on which the interest rate is based. Variable and floating rate obligations are generally less effective than fixed rate instruments at locking in a particular yield. Nevertheless, such obligations may fluctuate in value in response to interest rate changes if there is a delay between changes in market interest rates and the interest reset date for the obligation, or for other reasons.

The Funds may invest in floating rate debt instruments ("floaters") and engage in credit spread trades. The interest rate on a floater is a variable rate which is tied to another interest rate, such as a money-market index or Treasury bill rate. The interest rate on a floater resets periodically, typically every six months. While, because of the interest rate reset feature, floaters provide a Fund with a certain degree of protection against rises in interest rates, a Fund will participate in any declines in interest rates as well. A credit spread trade is an investment position relating to a difference in the prices or interest rates of two securities or currencies, where the value of the investment position is determined by movements in the difference between the prices or interest rates, as the case may be, of the respective securities or currencies.

The floating rate obligations in which a Fund invests typically have multiple reset periods during the year with each reset period applicable to a designated portion of the obligations. If a Fund does so, it will consider the shortened period to be the adjustment period of the obligations. As short-term interest rates rise, interest payable to a Fund should increase. As short-term interest rates decline, interest payable to the Fund should decrease. The amount of time that will pass before a Fund experiences the effects of changing short-term interest rates will depend on the dollar-weighted average time until the next interest rate adjustment on the Fund's portfolio of obligations.

Obligations usually have mandatory and optional prepayment provisions. Because of prepayments, the actual remaining maturity of an obligation may be considerably less than its stated maturity. If an obligation is prepaid, a Fund will have to reinvest the proceeds in other obligations or securities, which may have a lower fixed spread over its base rate. In such a case, the amount of interest paid to a Fund would likely decrease.

In the event of a change in the benchmark interest rate on an obligation, the rate payable to lenders under the obligation will, in turn, change at the next scheduled reset date. If the benchmark rate goes up, a Fund as lender would earn interest at a higher rate, but only on and after the reset date. If the benchmark rate goes down, a Fund as lender would earn interest at a lower rate, but only on and after the reset date.

Market interest rate changes may also cause a Fund's NAV to experience volatility. This is because the value of an obligation asset in a Fund is partially a function of whether it is paying what the market perceives to be a market rate of interest for the particular obligation given its individual credit and other characteristics. If market interest rates change, an obligation's value could be affected to the extent the interest rate paid on that obligation does not reset at the same time. The rates of interest paid on the obligation in which a Fund invests have a weighted average reset period that typically is less than 90 days. Therefore, the impact of the lag between a change in market interest rates and the change in the overall rate on the portfolio is expected to be minimal.

Finally, to the extent that changes in market rates of interest are reflected, not in a change to a base rate, but in a change in the spread over the base rate which is payable on obligations of the type and quality in which a Fund invests, the Fund's NAV could be adversely affected. Again, this is because the value of an obligation asset in a Fund is partially a function of whether it is paying what the market perceives to be a market rate of interest for the particular obligation given its individual credit and other characteristics. However, unlike changes in market rates of interest for which there is only a temporary lag before the portfolio reflects those changes, changes in an obligation's value based on changes in the market spread on obligations in a Fund's portfolio may be of longer duration.

**Interest Rates and Portfolio Maturity.** Interest rates on securities in which a Fund invests may adjust periodically based on a base rate plus a premium or spread over the base rate. The base rate usually is the federal funds rate, the prime rate, or other base lending rates or Reference Rates (as defined below) used by commercial lenders. The prime rate quoted by a major U.S. bank is generally the interest rate at which that bank is willing to lend U.S. dollars to its most creditworthy borrowers, although it may not be the bank's lowest available rate.

Certain variable or floating securities have coupon rates that are based on the Secured Overnight Financing Rate ("SOFR"), Euro Interbank Offered Rate and other similar types of reference rates (each, a "Reference Rate"). These Reference Rates are generally intended to represent the rate at which contributing banks may obtain short-term borrowings within certain financial markets. The elimination of a Reference Rate or any other changes or reforms to the determination or supervision of Reference Rates could have an adverse impact on the market for or value of any securities or payments linked to those Reference Rates and other financial obligations held by a Fund or on its overall financial condition or results of operations. Any substitute Reference Rate and any pricing adjustments imposed by a regulator or by counterparties or otherwise may adversely affect a Fund's performance and/or NAV. At this time, it is not possible to completely identify or predict the effect of any such changes, any establishment of alternative Reference Rates or any other reforms to Reference Rates that may be enacted in the UK or elsewhere.

**Non-Investment Grade Fixed Income Securities.** The Funds may invest in non-investment grade fixed income securities (commonly known as "junk bonds"). The Small Cap Equity, Small-Mid Cap Equity, Equity, Balanced and International Equity Funds may only invest up to 5% of their respective total assets in non-investment grade fixed income securities. Investments in such securities are inherently speculative. The lower ratings reflect a greater possibility that adverse changes in the financial condition of the issuer or in general economic conditions, or both, or an unanticipated rise in interest rates, may impair the ability of the issuer to

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make payments of interest and principal. The inability (or perceived inability) of issuers to make timely payment of interest and principal would likely make the values of such securities held by a Fund more volatile and could limit the Fund's ability to sell its securities at prices approximating the values the Fund had placed on such securities. In the absence of a liquid trading market for securities held by a Fund, it may be difficult to establish a fair value of such securities. If the issuer defaults on its obligation, the value of the security would fall and a Fund's income also would decline.

Securities ratings are based largely on the issuer's historical financial condition and the rating agencies' analysis at the time of rating. Consequently, the rating assigned to any particular security is not necessarily a reflection of the issuer's current financial condition, which may be better or worse than the rating would indicate. In addition, the rating assigned to a security by an NRSRO does not reflect an assessment of the volatility of the security's market value or the liquidity of an investment in the security.

Like those of other fixed income securities, the values of non-investment grade securities generally go up and down in response to changes in interest rates. A decrease in interest rates generally will result in an increase in the value of fixed income securities. Conversely, during periods of rising interest rates, the value of a Fund's fixed income securities generally will decline. The values of non-investment grade fixed income securities often may be affected to a greater extent by changes in general economic conditions and business conditions affecting the issuers of such securities and their industries. Negative publicity or investor perceptions also may adversely affect the values of non-investment grade fixed income securities. Changes by NRSROs in their ratings of any fixed income security and changes in the ability of an issuer to make payments of interest and principal also may affect the value of these investments. Changes in the value of portfolio securities generally will not affect income derived from these securities, but will affect a Fund's net asset value.

Issuers of lower rated securities often are highly leveraged, so that their ability to service their debt obligations during an economic downturn or during sustained periods of rising interest rates may be impaired. Such issuers may not have more traditional methods of financing available to them and may be unable to repay outstanding obligations at maturity by refinancing. The risk of loss due to default in payment of interest or repayment of principal by such issuers is significantly greater because such securities frequently are unsecured and subordinated to the prior payment of senior indebtedness.

**Mortgage Pass-Through Securities**. The Balanced and Fixed Income Funds may invest in residential and commercial mortgage pass-through securities. Mortgage pass-through securities represent interests in pools of mortgages in which payments of both principal and interest on the securities are generally made monthly, in effect "passing through" monthly payments made by borrowers in the residential or commercial mortgage loans which underlie the securities (net of any fees paid to the issuer or guarantor of the securities). Mortgage pass-through securities differ from other forms of debt securities, which normally provide for periodic payment of interest in fixed amounts with principal payments at maturity or specified call dates. Early repayment of principal on mortgage pass-through securities (arising from prepayments of principal due to the sale of underlying property, refinancing, or foreclosure, net of fees and costs which may be incurred) may expose a Fund to a lower rate of return upon reinvestment of principal. Also, if a security subject to repayment has been purchased at a premium, in the event of prepayment, the value of the premium would be lost.

There are generally three types of mortgage pass-through securities: (1) those issued by the U.S. Government, one of its agencies or instrumentalities or a government sponsored enterprise, such as Government National Mortgage Association ("GNMA"), Fannie Mae ("FNMA"), and Federal Home Loan Mortgage Corporation ("FHLMC"); (2) those issued by private issuers that represent an interest in or are collateralized by pass-through securities issued or guaranteed by the U.S. Government or one of its agencies or instrumentalities; and (3) those issued by private issuers that represent an interest in or are collateralized by whole mortgage loans or pass-through securities without a government guarantee but may have some form of private credit enhancement.

GNMA is authorized to guarantee, with the full faith and credit of the U.S. Government, the timely payment of principal and interest on securities issued by institutions approved by GNMA (such as savings and loan institutions, commercial banks and mortgage banks), and backed by pools of FHA-insured or VA-guaranteed mortgages. Obligations of FNMA and FHLMC are not backed by the full faith and credit of the U.S. Government. In the case of obligations not backed by the full faith and credit of the U.S. Government, a Fund must look principally to the agency issuing or guaranteeing the obligation for ultimate repayment. FNMA and FHLMC may attempt to borrow from the U.S. Treasury to meet their obligations, but the U.S. Treasury is under no obligation to lend to FNMA or FHLMC.

The FHFA and the U.S. Treasury have imposed strict limits on the size of FNMA and FHLMC's mortgage portfolios. Discussions among policymakers continue, however, as to whether FNMA and FHLMC should be nationalized, privatized, restructured, or eliminated altogether. FNMA and FHLMC also are the subject of several continuing legal actions and investigations over certain accounting, disclosure or corporate governance matters, which (along with any resulting financial restatements) may continue to have an adverse effect on the guaranteeing entities. Importantly, the future of FNMA and FHLMC remains in question as the U.S. Government considers multiple options.

Under the direction of the FHFA, FNMA and FHLMC jointly developed a common securitization platform for the issuance of a uniform mortgage-backed security ("UMBS") (the "Single Security Initiative") that aligns the characteristics of FNMA and FHLMC certificates. In June 2019, under the Single Security Initiative, FNMA and FHLMC started issuing UMBS in place of their prior offerings of to-be-announced mortgage-backed securities ("TBA"). The Single Security Initiative seeks to support the overall liquidity of the TBA market by aligning the characteristics of FNMA and FHLMC certificates. The effects that the Single Security Initiative may have on the market for TBA and other mortgage-backed securities are uncertain.

Private mortgage pass-through securities are structured similarly to GNMA, FNMA, and FHLMC mortgage pass-through securities and are issued by originators of and investors in mortgage loans, including depository institutions, mortgage banks, investment banks and special purpose subsidiaries of the foregoing.

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or insurers, if any, will meet their obligations. Timely payment of interest and principal of these pools also may be partially supported by various enhancements such as over-collateralization and senior/subordination structures and by various forms of insurance or insured by governmental entities, private insurers and the mortgage poolers. Some mortgage pass-through securities issued by private organizations may not be readily marketable, may be more difficult to value accurately and may be more volatile than similar securities issued by a government entity.

**WHEN-ISSUED SECURITIES** 

The Small Cap Equity, Small-Mid Cap Equity, Balanced, Fixed Income, and International Equity Funds may purchase securities on a "when-issued" basis. In buying "when-issued" securities, a Fund commits to buy securities at a certain price even though the securities may not be delivered for up to 120 days. No payment or delivery is made by a Fund in a "when-issued" transaction until the Fund receives payment or delivery from the other party to the transaction. Although a Fund receives no income from the above-described securities prior to delivery, the market value of such securities is still subject to change. As a consequence, it is possible that the market price of the securities at the time of delivery may be higher or lower than the purchase price. When a Fund purchases securities on a when-issued basis, it will maintain with its custodian cash or liquid securities having an aggregate value equal to the amount of its purchase commitment until payment is made. The purpose and effect of such maintenance is to prevent a Fund from gaining investment leverage from when-issued transactions. When-issued securities may decline or increase in value during the period from a Fund's investment commitment to the settlement of the purchase.

**INITIAL PUBLIC OFFERINGS** 

The Small Cap Equity, Small-Mid Cap Equity, Equity, Balanced, and International Equity Funds may invest in initial public offerings ("IPOs"). By definition, IPOs have not traded publicly until the time of their offerings. Special risks associated with IPOs may include a limited number of shares available for trading, unseasoned trading, lack of investor knowledge of the company, and limited operating history, all of which may contribute to price volatility. Many IPOs are issued by undercapitalized companies of small or microcap size. Some of the companies involved in new industries may be regarded as developmental state companies, without revenues or operating income, or the near-term prospects of them. Investments in IPOs may have a magnified performance impact relative to other investments.

Pursuant to the Adviser's allocation policies and procedures, the Small Cap Equity, Small-Mid Cap Equity, Equity, Balanced and International Equity Funds generally will be eligible to participate on a rotating basis in any applicable IPOs that may come available to eligible clients of the Adviser.

**ILLIQUID INVESTMENTS, RESTRICTED SECURITIES AND PRIVATE PLACEMENT OFFERINGS** 

**Illiquid Investments.** The SEC's liquidity risk management rule, Rule 22e-4 (the "Liquidity Rule"), defines the term "illiquid investments" to mean any investments that the Funds reasonably expect cannot be sold or disposed of in current market conditions in seven calendar days or less in the ordinary course of business without the sale or disposition significantly changing the market value of the investment. Under the supervision of the Board of Trustees, the Adviser determines the liquidity of a Fund's investments and, through reports from the Adviser and the Funds' administrator, the Board monitors investments in illiquid investments. Illiquid investments may include securities and other financial instruments that do not have a readily available market, repurchase agreements which have a maturity of longer than seven calendar days, restricted securities, other than certain foreign securities, restricted securities pursuant to Rule 144A under the Securities Act and commercial paper sold in reliance on Section 4(2) of the Securities Act, unless, based upon a review of the relevant market, trading and investment-specific considerations, those investments are determined not to be illiquid. The absence of a trading market can make it difficult to ascertain a market value for illiquid investments. When no market quotations are available, illiquid investments are priced at fair value as determined in good faith by the Adviser using guidelines approved by the Board of Trustees. The Funds may not acquire any illiquid investment if, immediately after the acquisition, a Fund would have invested more than 15% of its net assets in illiquid investments. If through a change in values, net assets, or other circumstances, a Fund was in a position where more than 15% of its net assets were invested in illiquid investments, the Fund would take appropriate steps to protect liquidity. If the limitation on illiquid investments is exceeded, other than by a change in market values, the condition will be reported to the Board of Trustees and, when required by the Liquidity Rule, to the SEC. Disposing of these investments may involve time-consuming negotiation and legal expenses, and it may be difficult or impossible for a Fund to sell them promptly at an acceptable price and may have to dispose of such investments over extended periods of time.

**Restricted Securities.** Restricted securities can generally be sold in privately negotiated transactions, pursuant to an exemption from registration under the Securities Act or in a registered public offering. Where registration is required, a Fund may be obligated to pay all or part of the registration expense and a considerable period may elapse between the time the Fund decides to seek registration and the time the Fund may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, a Fund might obtain a less favorable price than prevailed at the time it decided to seek registration of the security.

**Private Placement Offerings**. The Small Cap Equity, Small-Mid Cap Equity, Balanced, Fixed Income and International Equity Funds may invest in private placement offerings. Investments in private placement offerings are made in reliance on the "private placement" exemption from registration afforded by Section 4(2) or Regulation D of the Securities Act ("Section 4(2) securities"). Section 4(2) securities are restricted as to disposition under the federal securities law and generally are sold to institutional investors such as the Funds that agree they are purchasing the securities for investment and not with an intention to distribute to the public.

**OTHER INVESTMENT COMPANIES** 

The Funds may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, exchange-traded funds ("ETFs"), exchange-traded notes ("ETNs"), and interests in unit investment trusts. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, a Fund becomes a shareholder of that investment company. As a result, Fund shareholders indirectly will bear a 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, and are indirectly exposed to the risks of the investments held by the other investment company. These other fees and expenses would be reflected as

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Acquired Fund Fees and Expenses and would be included in the Fees and Expenses Table in the Prospectus, if applicable. Investment in other investment companies may involve the payment of substantial premiums above the value of such issuer's portfolio securities or a Fund may have to sell such investments at a discount to the issuer's portfolio securities. Exchange-traded and closed-end funds may trade at premiums or discounts to their net asset values and be subject to trading halts.

Although a money market fund is designed to be a relatively low risk investment, it is not free of risk. Despite the short maturities and high credit quality of a money market fund's investments, increases in interest rates and deteriorations in the credit quality of the instruments the money market fund has purchased may reduce the money market fund's yield and can cause the price of a money market security to decrease. In addition, a money market fund is subject to the risk that the value of an investment may be eroded over time by inflation.

ETFs trade like a common stock and passive ETFs usually represent a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. If a Fund invests in ETFs, a Fund would typically purchase passive ETF shares to obtain exposure to all or a portion of the stock or bond market. As a shareholder of an ETF, a Fund would be subject to its ratable share of the ETF's expenses, including its advisory and administration expenses.

An investment in an ETF generally presents the same primary risks as an investment in a conventional mutual fund (i.e., one that is not exchange-traded) that has the same investment objective, strategies, and policies. The price of an ETF can fluctuate within a wide range, and a Fund could lose money investing in an ETF if the prices of the securities owned by the ETF go down. In addition, ETFs are subject to the following risks that do not apply to conventional funds: (1) the market price of the ETF's shares may trade at a discount or premium to their NAV; (2) an active trading market for an ETF's shares may not develop or be maintained; or (3) trading of an ETF's shares may be halted if the listing exchange's officials deem such action appropriate, the shares are de-listed from the exchange, or the activation of market-wide "circuit breakers" (which are tied to large decreases in stock prices) halts stock trading generally. A Fund may also invest in ETNs, which are structured debt securities. Whereas ETFs' liabilities are secured by their portfolio securities, ETNs' liabilities are unsecured general obligations of the issuer. ETFs and ETNs have expenses associated with their operation, typically including, with respect to ETFs, advisory fees.

Each Fund's investment in securities of other investment companies is generally limited to (i) 3% of the total voting stock of any one investment company, (ii) 5% of the Fund's total assets with respect to any one investment company and (iii) 10% of the Fund's total assets in all investment companies in the aggregate. However, a Fund may exceed these limits when investing in shares of an ETF or other investment company, subject to the terms and conditions of an exemptive order from the SEC obtained by the ETF or other investment company that permits an investing fund, such as the Fund, to invest in the ETF or other investment company in excess of the limits described above. A Fund may also exceed these limits when investing in shares of money market funds to the extent permitted by the 1940 Act and applicable rules and regulations adopted by the SEC thereunder.

Additionally, Rule 12d1-4 under the 1940 Act permits certain types of fund of fund arrangements without an exemptive order, subject to certain conditions, including limits on control and voting of acquired funds' shares, evaluations and findings by investment advisers, fund investment agreements, and limits on most three-tier fund structures.

**SECURITIES LENDING** 

The Small Cap Equity, Small-Mid Cap Equity, Balanced, Fixed Income, and International Equity Funds may lend securities to qualified brokers, dealers, banks and other financial institutions. Securities lending would allow a Fund to retain ownership of the securities loaned and, at the same time, to earn additional income. Since there may be delays in the recovery of loaned securities, or even a loss of rights in collateral supplied should the borrower fail financially, loans would be made only to parties deemed by the Adviser to be of good standing. In addition, they would only be made if, in the Adviser's judgment, the consideration to be earned from such loans would justify the risk. Such loans would not be made if, as a result, the aggregate of all outstanding loans of a Fund exceed one-third of the value of its total assets (including the value of all assets received as collateral for the loan). The Funds do not currently engage in securities lending activities.

**TEMPORARY INVESTMENTS** 

The temporary investments that the Funds may make include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Cash, time deposits, certificates of deposit (including marketable variable rate certificates of deposit) and bankers' acceptances issued by a commercial bank or savings and loan association. Time deposits are non-negotiable deposits maintained in a banking institution for a specified period of time at a stated interest rate. Time deposits maturing in more than seven days will not be purchased by the Funds. Certificates of deposit are negotiable short-term obligations issued by commercial banks or savings and loan associations against funds deposited in the issuing institution. Variable rate certificates of deposit are certificates of deposit on which the interest rate is periodically adjusted prior to their stated maturity based upon a specified market rate. A bankers' acceptance is a time draft drawn on a commercial bank by a borrower usually in connection with an international commercial transaction (to finance the import, export, transfer or storage of goods).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.The Funds may invest in obligations of U.S. banks, foreign branches of U.S. banks (Eurodollars), and U.S. branches of foreign banks (Yankee dollars). Euro and Yankee dollar investments will involve the same risks of investing in foreign securities discussed previously. Although the Adviser carefully considers these factors when making investments, the Funds do not limit the amount of its assets which can be invested in any one type of instrument or in any foreign country in which a branch of a U.S. bank or the parent of a U.S. branch is located.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.The Funds will not invest in any security issued by a commercial bank unless (i) the bank has total assets of at least $1 billion, or the equivalent in other currencies, or, in the case of a domestic bank that does not have total assets of at least $1 billion, the aggregate investment made in any one such bank is limited to $250,000 and the principal amount of such investment is insured in full by the Federal Deposit Insurance Corporation and (ii) in the case of U.S. banks, it is a member of the Federal Deposit Insurance Corporation.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.Commercial paper that at the time of purchase is rated in the highest rating category by a NRSRO or, if not rated, issued by a corporation having an outstanding unsecured debt issue that meets such rating requirement at time of purchase;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.Short-term corporate obligations rated in the highest rating category by a NRSRO at time of purchase;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.U.S. Government obligations, including bills, notes, bonds and other debt securities issued by the U.S. Treasury. These are direct obligations of the U.S. Government and differ mainly in interest rates, maturities and dates of issue;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.U.S. Government agency securities issued or guaranteed by U.S. Government sponsored instrumentalities and federal agencies. These include securities issued by the Federal Home Loan Banks, Federal Land Bank, Farmers Home Administration, Farm Credit Banks, Federal Intermediate Credit Bank, Fannie Mae, Federal Financing Bank, the Tennessee Valley Authority, and others; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.Repurchase agreements.

**REGULATORY AND RECENT MARKET EVENTS** 

Policy changes by the U.S. government, the U.S. Federal Reserve and/or foreign governments, and political and economic changes within the U.S. and abroad, such as inflation, changes in interest rates, recessions, changes in the U.S. presidential administration and Congress, the U.S. government's inability at times to agree on a long-term budget and deficit reduction plan, the threat or occurrence of a federal government shutdown or the occurrence of a failure to increase the federal government's debt limit, which could result in a default on the government's obligations, may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations. Global economies and financial markets are becoming increasingly interconnected, which increases the possibility of many markets being affected by events in a single country or events affecting a single or small number of issuers. Both U.S. and international markets have experienced significant volatility in recent years. As a result of such volatility, investment returns may fluctuate significantly, and the risks discussed herein associated with an investment in a Fund may be increased. Deteriorating economic fundamentals may increase the risk of default or insolvency of particular issuers, negatively impact market value, increase market volatility, cause credit spreads to widen, reduce bank balance sheets and cause unexpected changes in interest rates. Any of these could cause an increase in market volatility, reduce liquidity across various sectors or markets or decrease confidence in the markets.

Some countries, including the U.S., have adopted more protectionist trade policies, including trade tariffs and other trade barriers, which is a trend that appears to be continuing globally. The current political environment has intensified concerns about a global trade war. Slowing global economic growth, the rise in protectionist trade policies, inflationary pressures, changes to some major international trade and security agreements, risks associated with trade and security agreements between countries and regions, including the U.S. and other foreign nations, political or economic dysfunction within some countries or regions, including the U.S., and dramatic changes in consumer sentiment, commodity prices and currency values could affect the economies and markets of many nations, including the U.S., in ways that cannot necessarily be foreseen at the present time and may create significant market volatility. In addition, these policies, including the impact on the U.S. dollar, may decrease foreign demand for U.S. assets, which could have a negative impact on certain issuers and/or industries. Historical patterns of correlation among asset classes may break down in unanticipated ways during times of high volatility, disrupting investment programs and potentially causing losses.

The United States has imposed or threatened to impose tariffs and other trade barriers on imports of certain categories of goods from Canada, Mexico, and European countries. The United States also has imposed or threatened to impose tariffs and other trade barriers on imports of certain categories of goods from China, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. These countries have imposed or threatened to impose retaliatory tariffs on U.S. goods. If relations between the United States and these and other foreign countries do not improve or continue to deteriorate, markets and individual securities may be severely affected both regionally and globally, and the value of a Fund's investments may go down.

The Federal Reserve and certain foreign central banks have started to lower interest rates, though economic or other factors, such as inflation, could reverse or stop such changes. It is difficult to accurately predict the pace at which interest rates might change, the timing, frequency or magnitude of any such changes in interest rates, or when such changes might stop or again reverse course. Unexpected changes in interest rates could lead to significant market volatility or reduce liquidity in certain sectors of the market. Over the longer term, rising interest rates may present a greater risk than has historically been the case due to the prior period of relatively low rates and the effect of government fiscal and monetary policy initiatives and potential market reaction to those initiatives, or their alteration or cessation. It is difficult to predict the impact on various markets of significant rate changes or other significant policy changes.

Markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, the execution of ransomware and other cyberattacks, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. In certain cases, an exchange or market may close or issue trading halts on either specific securities or even the entire market, which may result in a Fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments. These fluctuations in securities prices could be a sustained trend or a drastic movement. The financial markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations.

Tensions, war or open conflict between nations, such as among the United States, Israel and Iran, between Russia and Ukraine, otherwise in the Middle East or in eastern Asia could affect the economies of many nations, including the United States and may contribute to increased volatility and uncertainty in the financial markets. The extent and duration of ongoing hostilities and any sanctions and related events, including the potential for cyber warfare, remain uncertain and cannot be predicted. Those events have presented and could continue to present material uncertainty and risk with respect to markets globally, including in the oil and gas markets and potentially other industries and sectors, and the performance of a Fund and its investments or operations could be negatively impacted whether or not a Fund invests in securities of issuers located in or with significant exposure to the countries or

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regions directly affected. For example, the armed conflict among the United States, Israel and Iran that commenced in February 2026 has contributed to increased volatility and uncertainty in financial markets as well as significant volatility in the oil and natural gas markets, which has created widespread economic disruption.

Regulators in the U.S. have adopted a number of changes to regulations involving the markets and issuers, some of which apply to a Fund. The full effect of such regulations is not currently known and certain changes, which may be revised or rescinded, could limit a Fund's ability to pursue its investment strategies or make certain investments, may make it more costly for a Fund to operate, or adversely impact its performance. Further, advancements in technology may also adversely impact market movements and liquidity and may affect the overall performance of a Fund. For example, the advanced development and increased regulation of artificial intelligence may adversely impact market movements and liquidity. As artificial intelligence is used more widely, which can occur rapidly, the profitability and growth of certain issuers may be negatively impacted in ways that cannot be foreseen and could adversely affect a Fund's performance.

High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. There is no assurance that the U.S. Congress will act to raise the nation's debt ceiling; a failure to do so could cause market turmoil and substantial investment risks that cannot now be fully predicted. Unexpected political, regulatory and diplomatic events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial markets and the broader economy.

Certain illnesses spread rapidly and have the potential to significantly and adversely affect the global economy. The impact of epidemics and/or pandemics that may arise in the future could negatively affect the economies of many nations, individual companies and the global securities and commodities markets, including their liquidity, in ways that cannot necessarily be foreseen at the present time and could last for an extended period of time. China's economy, which has been sustained through debt-financed spending on housing and infrastructure, appears to be experiencing a significant slowdown and growing at a lower rate than prior years. Due to the size of China's economy, such a slowdown could impact financial markets and the broader economy.

Global climate change can have potential effects on property and security values. Certain issuers, industries and regions may be adversely affected by the impact of climate change in ways that cannot be foreseen. The impact of legislation, regulation and international accords related to climate change, including any direct or indirect consequences, may negatively impact certain issuers, industries and regions. A rise in sea levels, a change in weather patterns, including an increase in powerful storms and large wildfires, and/or a climate-driven increase in flooding could cause properties to lose value or become unmarketable altogether. Unlike previous declines in the real estate market, properties in affected zones may not ever recover their value. Regulatory changes and divestment movements tied to concerns about climate change could adversely affect the value of certain land and the viability of industries whose activities or products are seen as accelerating climate change.

**CYBERSECURITY** 

With the increased use of technologies such as the internet and the dependence on computer systems to perform necessary business functions, the Funds and their service providers and third-party fund distribution platforms may have become more susceptible to operational, information security and related risks resulting from cybersecurity incidents, including cyberattacks. A cybersecurity incident may refer to intentional or unintentional events that allow an unauthorized party to gain access to Fund assets, shareholder data, or proprietary information, or cause a Fund or Fund service providers (including, but not limited to, the Adviser, distributor, fund accountants, custodian, transfer agent, sub-advisers (if applicable), and financial intermediaries), as well as securities trading venues and their service providers, to suffer data corruption, lose operational functionality, or be the target of ransomware. A cybersecurity incident could, among other things, result in the loss or theft of shareholder data or funds, impact a Fund's ability to calculate NAV per share, cause the release of private shareholder information or confidential business information, result in violations of applicable privacy and other laws, impede trading, subject the Funds to regulatory fines or financial losses and/or cause reputational damage. A cyber attack may also result in shareholders or service providers being unable to access electronic systems (also known as "denial of services"), loss or theft of proprietary information or corporate data, physical damage to a computer or network system, or remediation costs associated with system repairs. The Funds may also incur additional compliance costs for corrective measures or cybersecurity risk management purposes, and such costs may be ongoing because threats of cyber-attacks are constantly evolving as cyber-attackers become more sophisticated and their techniques become more complex. Similar types of cybersecurity risks are also present for issuers or securities in which the Funds may invest, which could result in material adverse consequences for such issuers and may cause a Fund's investment in such companies to lose value. Furthermore, as a result of cyber-attacks, disruptions or failures, an exchange or market may close or issue trading halts on specific securities or the entire market, which may result in Fund being, among other things, unable to buy or sell certain securities or unable to accurately price its investments. A Fund's service providers also may be negatively impacted due to operational risks arising from non-cybersecurity related factors such as processing errors and human errors, inadequate or failed internal or external processes, failures in systems and technology errors or malfunctions, changes in personnel, and errors caused by Fund service providers or counterparties.

In addition, other events or circumstances — whether foreseeable, unforeseeable, or beyond the Funds' control, such as acts of war, other conflicts, terrorism, natural disaster, widespread disease, pandemic or other public health crises may result in, among other things, quarantines and travel restrictions, workforce displacement and loss or reduction in personnel and other resources. In the above circumstances, the Funds and the Funds' service providers' operations may be significantly impacted, or even temporarily halted. The Funds' securities market counterparties or vendors may face the same or similar systems failure, cybersecurity breaches and other business disruptions risks.

Any of these results could have a substantial adverse impact on a Fund and its shareholders. For example, if a cybersecurity incident results in a denial of service, Fund shareholders could lose access to their electronic accounts and be unable to buy or sell Fund shares for an unknown period of time, and service providers could be unable to access electronic systems to perform critical duties for the Fund, such as trading, NAV calculation, shareholder accounting or fulfillment of Fund share purchases and redemptions. Cybersecurity incidents could cause a Fund or Fund service provider to incur regulatory penalties or scrutiny, reputational damage, additional compliance costs associated with corrective measures, or financial loss of a significant magnitude and could result in allegations that a Fund or Fund service provider violated privacy and other laws. Similar adverse consequences could result from cybersecurity incidents affecting issuers of securities in which a Fund invests, counterparties with which a Fund engages in transactions, governmental and other regulatory authorities, exchange and other financial market operators, banks, brokers, dealers,

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insurance companies, and other financial institutions and other parties. Furthermore, as a result of cyberattacks, disruptions or failures, an exchange or market may close or issue trading halts on specific securities or the entire market, which may result in a Fund being, among other things, unable to buy or sell certain securities or unable to accurately price its investments. Risk management systems and business continuity plans seek to reduce the risks associated with cybersecurity in the event there is a cybersecurity breach, but there are inherent limitations in these systems and plans, including the possibility that certain risks may not have been adequately identified or prepared for, in large part because different or unknown threats may emerge in the future. Furthermore, the Funds do not control the cybersecurity systems and plans of the issuers of securities in which the Funds invest or the Funds' third party service providers or trading counterparties or any other service providers whose operations may affect the Funds or their shareholders. The widespread use of work from home arrangements, such as during the COVID-19 pandemic, may increase operational and information security risks. Most issuers in which the Funds invest are heavily dependent on computers and other technological platforms and resources for data storage and operations, which require ready access to the internet to conduct their business. Thus, cybersecurity incidents could also affect issuers of securities in which a Fund invests, leading to significant loss of value in the securities of issuers impacted by any such cybersecurity incidents.

The use of cloud-based service providers could heighten or change these risks. In addition, remote and hybrid arrangements by a Fund, the Adviser or their service providers could increase all of the above risks, create additional data and information accessibility concerns, and make a Fund, the Adviser or their service providers susceptible to operational disruptions, any of which could adversely impact their operations.

A Fund and its service providers, including the Adviser, may utilize artificial intelligence ("AI") technologies, including machine learning models and generative AI, to improve operational efficiency and in connection with research. In addition, counterparties used by a Fund may utilize AI in their business activities. While the Adviser may restrict certain uses of AI tools, a Fund and the Adviser are not in a position to control the use of AI in third-party products or services. The use of AI introduces numerous potential challenges and the use of AI can lead to reputational damage, legal liabilities, and competitive disadvantages, as well as negatively impact business operations, which may occur with or without mismanagement in the use of the AI. AI requires the collection and processing of substantial amounts of data, which poses risks of data inaccuracies, incompleteness, and inherent biases, and which can degrade the technology's effectiveness and reliability. Such data can include proprietary information, the use of which by AI may be unauthorized and subject to potential liability. Rapid technological advancements further complicate risk predictions, and competitors who adopt AI more swiftly may gain a competitive edge. The complexity and opacity of AI systems raise significant accountability and ethical concerns. AI has enhanced the ability of threat actors to amplify the potency, scale, and speed of cybersecurity attacks. AI's role in increasing automation raises concerns about job displacement and may lead to economic and social disruptions. The unpredictable nature of AI's impact on market dynamics complicates traditional risk assessment models, making it challenging to identify risks and opportunities using historical data. Legal and regulatory frameworks governing AI's use, particularly concerning data privacy and protection, are evolving rapidly. These changes could materially alter how AI is used, which may negatively impact a Fund.

**TRUSTEES AND OFFICERS OF THE LKCM FUNDS** 

**The Board of Trustees** 

The Trust is governed by its Board of Trustees. The Board is responsible for and oversees the overall management and operations of the Trust and the Funds, which includes the general oversight and review of the Funds' investment activities, in accordance with federal law and the law of the State of Delaware, as well as the stated policies of the Funds. The Board oversees the Trust's officers and service providers, including the Adviser, which is responsible for the management of the day-to-day operations of the Funds based on policies and agreements reviewed and approved by the Board. In carrying out these responsibilities, the Board regularly interacts with and receives reports from senior personnel of service providers, including the Adviser's personnel and the Trust's Chief Compliance Officer ("CCO"). The Board also is assisted by the Trust's independent registered public accounting firm (who reports directly to the Trust's Audit and Compliance Committee), independent counsel and other experts as appropriate, all of whom are selected by the Board. The Board met four times during the fiscal year ended December 31, 2025.

*Risk Oversight* 

Consistent with its responsibility for oversight of the Trust and the Funds, the Board oversees the management of risks relating to the administration and operation of the Trust and the Funds. The Adviser, as part of its responsibilities for the day-to-day operations of the Funds, is responsible for day-to-day risk management for the Funds. The Board, in the exercise of its reasonable business judgment, also separately considers potential risks that may impact the Funds. The Board performs this risk management oversight directly and, as to certain matters, through its committees and through the Independent Trustees. The following provides an overview of the principal, but not all, aspects of the Board's oversight of risk management for the Trust and the Funds.

In general, a Fund's risks include, among others, investment risk, credit risk, liquidity risk, valuation risk and operational risk. The Board has adopted, and periodically reviews, policies and procedures designed to address risks to the Trust and the Funds. In addition, under the general oversight of the Board, the Adviser and other service providers to the Funds have adopted a variety of policies, procedures and controls designed to address particular risks to the Funds. Different processes, procedures and controls are employed with respect to different types of risks.

The Board also oversees risk management for the Trust and the Funds through review of regular reports, presentations and other information from officers of the Trust and other persons. The Funds' CCO and senior officers of the Adviser regularly report to the Board on a range of matters, including those relating to risk management. The Board also regularly receives reports from the Adviser with respect to the Funds' investments. In addition to regular reports from the Adviser, the Board also receives reports regarding other service providers to the Trust, either directly or through the Adviser or the Funds' CCO, on a periodic or regular basis. At least annually, the Board receives a report from the Funds' CCO regarding the effectiveness of the Funds' compliance program. Also, on an annual basis, the Board receives reports, presentations and other information from the Adviser in connection with the Board's consideration of the renewal of the Trust's advisory agreement with the Adviser and the Trust's distribution plans under Rule 12b-1 under the 1940 Act.

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The CCO also reports regularly to the Board on Fund valuation matters. In addition, the Audit and Compliance Committee receives regular reports from the Trust's independent registered public accounting firm on internal control and financial reporting matters. On at least a quarterly basis, the Independent Trustees meet with the Funds' CCO to discuss matters relating to the Funds' compliance program.

*Board Structure and Related Matters* 

Board members who are not "interested persons" of the Funds as defined in Section 2(a)(19) of the 1940 Act ("Independent Trustees") constitute a majority of the Board. Larry J. Lockwood, an Independent Trustee, serves as Chairman of the Board. As Chairman, Mr. Lockwood's responsibilities include: setting an agenda for each meeting of the Board; presiding at all meetings of the Board and Independent Trustees; and serving as a liaison with other Trustees, the Trust's officers and other management personnel, and counsel to the Funds. As Chairman, Mr. Lockwood also performs such other duties as the Board may from time to time determine.

The Trustees discharge their responsibilities collectively as a Board, as well as through Board committees, each of which operates pursuant to a charter approved by the Board that delineates the specific responsibilities of that committee. The Board has established three standing committees: the Audit and Compliance Committee, the Nominating Committee and the Qualified Legal Compliance Committee. The members and responsibilities of each Board committee are summarized below.

The Board periodically evaluates its structure and composition as well as various aspects of its operations. The Board believes that its leadership structure, including its independent Chairman and Board committees, is appropriate for the Trust in light of, among other factors, the asset size and nature of the Funds, the number of Funds overseen by the Board, the arrangements for the conduct of the Funds' operations, the number of Trustees, and the Board's responsibilities. On an annual basis, the Board conducts a self-evaluation that considers, among other matters, whether the Board and its committees are functioning effectively and whether, given the size and composition of the Board and each of its committees, the Trustees are able to oversee effectively the number of Funds in the complex.

The Board holds four regularly scheduled meetings each year. The Board may hold special meetings, as needed, either in person or by telephone, to address matters arising between regular meetings. During a portion of each regular meeting, the Independent Trustees meet outside of management's presence. The Independent Trustees may hold special meetings, as needed, either in person or by telephone.

The Trustees of the Trust are identified in the tables below, which provide information as to their year of birth and positions with the Trust, term of office with the Trust and length of time served, their principal occupations for the past five years and other directorships held in public companies during the past five years.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Independent Trustees** | **Independent Trustees** | **Independent Trustees** | **Independent Trustees** | **Independent Trustees** | **Independent Trustees** |
| **Name, Address and Age** | **Position(s)<br>Held with the<br>Trust** | **Term of<br>Office and**<br>**Length of Time<br>Served**<sup>(1)</sup> | **Principal<br>Occupation<br>During Past<br>Five Years** | **Number of<br>Portfolios<br>in Fund<br>Complex<br>Overseen<br>by Trustee** | **Other<br>Directorships Held<br>by Trustee During<br>the Past Five Years** |
| Richard J. Howell<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1942 | Trustee<br>Chairman of the Audit and Compliance Committee | Since 2005<br>Since 2008 | CPA; Adjunct Faculty at SMU Cox School of Business from 2004 to 2009; Consulting Services, since 2002; Audit Partner, Arthur Andersen LLP from 1974 to 2002. | 7 |  |
| Larry J. Lockwood<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1953 | Chairman of the Board of Trustees | Since 2021 | C. R. Williams Professor of Finance, Stan Block Endowed Chair in Finance, Department of Finance, Neeley School of Business, Texas Christian University since 1994. | 7 |  |
| Larry J. Lockwood<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1953 | Trustee | Since 2013 | C. R. Williams Professor of Finance, Stan Block Endowed Chair in Finance, Department of Finance, Neeley School of Business, Texas Christian University since 1994. | 7 |  |
| Steven R. Purvis<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1964 | Trustee | Since 2013 | Principal, Luther King Capital Management Corporation from 2004 to 2021, Vice President and Portfolio Manager, Luther King Capital Management Corporation from 1996 to 2021. | 7 | AZZ Incorporated |
| Mauricio Rodriguez<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1966 | Trustee | Since 2021 | Chair, Department of Finance, Neeley School of Business; Texas Christian University since<br>2002. | 7 |  |
| **Interested Trustee** | **Interested Trustee** | **Interested Trustee** | **Interested Trustee** | **Interested Trustee** | **Interested Trustee** |
| J. Luther King, Jr.<sup>(2)</sup><br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1940 | Trustee, President and Chief Executive Officer | Since 1994 | Chairman, President and Director, Luther King Capital Management Corporation since 1979. | 7 | TXO Partners, L.P. |

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<sup>&nbsp;&nbsp;&nbsp;&nbsp;</sup>

<sup>(1)</sup> Each Trustee holds office during the lifetime of the Trust until that individual resigns, retires or is otherwise removed or replaced.

<sup>(2)</sup> Mr. King is considered to be an "interested person" of the Trust (as defined in the 1940 Act) because of his affiliation with the Adviser.

In addition to the information set forth in the tables above and other relevant qualifications, experience, attributes or skills applicable to a particular Trustee, the following provides further information about the qualifications and experience of each Trustee.

*Richard J. Howell:* Mr. Howell has extensive audit and business experience as a certified public accountant, service as a partner in a global accounting firm, service as a faculty member at a private university's business school, service as a director of a publicly held corporation and multiple years of service as a Trustee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*J. Luther King, Jr.:* Mr. King has extensive experience in the investment management industry as chairman, president and director of an investment management firm, service on the board of numerous public and private corporations and foundations, and multiple years of service as a Trustee.

*Larry J. Lockwood:* Mr. Lockwood has extensive experience in finance as professor of finance at the business school of a private university and service as a chartered financial analyst, business consultant and lecturer, and multiple years of service as a Trustee.

*Steven R. Purvis:* Mr. Purvis has extensive experience as principal of an investment management firm and service as a portfolio manager, director of research and senior analyst, and multiple years of service as a Trustee.

*Mauricio Rodriguez*: Mr. Rodriguez has extensive experience in finance as professor of finance at the business school of a private university and service as a business consultant, expert witness in securities and commercial litigation, and lecturer, and multiple years of service as a Trustee.

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The table below sets forth the compensation paid by the Trust to each Trustee of the Trust during the fiscal year ended December 31, 2025:

**COMPENSATION TABLE** 

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| | | | | |
|:---|:---|:---|:---|:---|
| Name of Trustee | Aggregate<br>Compensation<br>from the Funds | Pension or<br>Retirement Benefits<br>Accrued As Part of<br>Fund Expenses | Estimated<br>Annual<br>Benefits Upon<br>Retirement | Total Compensation<br>from all Funds in the<br>Trust Complex<sup>(1)</sup> |
| <u>Interested Trustees</u> |  |  |  |  |
| J. Luther King, Jr. | $0 | $0 | $0 | $0 |
| <u>Independent Trustees</u> |  |  |  |  |
| Richard J. Howell | $80246 | $0 | $0 | $84000 |
| Larry J. Lockwood | $85977 | $0 | $0 | $90000 |
| Steven R. Purvis | $72603 | $0 | $0 | $76000 |
| Mauricio Rodriguez | $72603 | $0 | $0 | $76000 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>(1)</sup> There are currently seven series comprising the Trust, one of which is offered in a separate prospectus and SAI.

The Independent Trustees receive an annual retainer of $54,000, with the Chairman of the Board receiving an additional $14,000 retainer and the Chairman of the Audit and Compliance Committee receiving an additional $8,000 retainer. Each Independent Trustee also receives a meeting fee of $4,500 for each Board meeting attended in person and a meeting fee of $2,000 for each telephonic meeting, and is reimbursed for their reasonable out of pocket expenses incurred in attending Board meetings. For this purpose, the Board considers attendance at regular meetings held by videoconference to constitute in-person attendance at a Board meeting. Independent Trustees may also receive a meeting fee for each Board committee meeting attended in person or by telephone if so determined by the chairman of the applicable Board committee.

**Board Ownership in the Funds** 

The table below sets forth the dollar range of the value of the shares of each Fund, and the dollar range of the aggregate value of the shares of all Funds overseen by a Trustee, owned beneficially by each Trustee as of December 31, 2025. For purposes of this table, beneficial ownership is defined to mean a direct or indirect pecuniary interest. Exact dollar amounts of securities held are not listed in the table. Rather, the ranges are identified according to the following key:

<u>Key</u> 

A.&nbsp;&nbsp;&nbsp;&nbsp;None

B.&nbsp;&nbsp;&nbsp;&nbsp;$1 - $10,000

C.&nbsp;&nbsp;&nbsp;&nbsp;$10,001 - $50,000

D.&nbsp;&nbsp;&nbsp;&nbsp;$50,001 - $100,000

E.&nbsp;&nbsp;&nbsp;&nbsp;over $100,000

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| Name of Trustee | Small Cap<br>Equity Fund | Small-Mid<br>Cap Equity<br>Fund | Equity<br>Fund | Balanced<br>Fund | Fixed Income<br>Fund | International<br>Equity Fund | Aggregate Dollar Range of<br>Equity Securities in Trust<br>Complex<sup>(1)</sup> |
| Richard J. Howell<br>Independent Trustee | E | D | E | B | C | A | E |
| Larry J. Lockwood<br>Independent Trustee | A | A | A | A | A | C | C |
| Steven R. Purvis<br>Independent Trustee | E | A | A | A | A | A | E |
| Mauricio Rodriguez<br>Independent Trustee | A | A | A | A | A | A | A |
| J. Luther King, Jr.<sup>(2)</sup><br>Interested Trustee, President and <br>Chief Executive Officer | E | E | E | E | E | E | E |

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<sup>(1)</sup> There are currently seven series comprising the Trust, one of which is offered in a separate prospectus and SAI.

<sup>(2)</sup> Mr. King is a Principal of the Adviser and a participant in the Adviser's profit sharing plan, which owns shares of the Funds as indicated under "Portfolio Managers – Ownership of Securities."

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*Board Committees* 

*Audit and Compliance Committee.* The Trust has an Audit and Compliance Committee, consisting of Messrs. Howell, Lockwood, Purvis and Rodriguez. The members of the Audit and Compliance Committee are Independent Trustees. The primary responsibilities of the Audit and Compliance Committee are to make recommendations to the Board as to: the engagement or discharge of the Trust's independent registered public accounting firm (including the audit fees charged by the accounting firm); the supervision of investigations into matters relating to audits; the review with the independent registered public accounting firm of the results of audits; oversight of the Trust's compliance with legal and regulatory requirements, internal control over financial reporting and independent audits; and addressing any other matters regarding audits and compliance. The Audit and Compliance Committee met two times during the fiscal year ended December 31, 2025.

*Nominating Committee.* The Trust has a Nominating Committee, consisting of Messrs. Howell, Lockwood, Purvis and Rodriguez. The Nominating Committee is responsible for the selection and nomination for appointment of candidates to serve as Trustees of the Trust. The Nominating Committee will review shareholders' nominations to fill vacancies on the Board. Shareholders can submit recommendations in writing addressed to the attention of the chair of the Nominating Committee, 301 Commerce Street, Suite 1600, Fort Worth, Texas 76102. A shareholder's recommendation must include the following information about the nominee: (1) name; (2) date of birth; (3) education; (4) business, professional or other relevant experience and areas of expertise; (5) current business, professional or other relevant experience and areas of expertise; (6) current business and home addresses and contact information; (7) other board positions or prior experience; and (8) any knowledge and experience relating to investment companies and investment company governance. The Nominating Committee met once during the fiscal year ended December 31, 2025.

With respect to the criteria the Nominating Committee uses for selecting nominees, a successful candidate should have certain uniform characteristics, such as a very high level of integrity, appropriate experience, and a commitment to fulfill the fiduciary duties inherent in Board membership. The Nominating Committee also will consider the extent to which potential candidates possess sufficiently diverse skill sets and diversity characteristics that would contribute to the Board's overall effectiveness.

*Qualified Legal Compliance Committee.* The Trust has a Qualified Legal Compliance Committee, consisting of Messrs. Howell, Lockwood, Purvis and Rodriguez. The members of the Qualified Legal Compliance Committee are Independent Trustees. The primary responsibility of the Trust's Qualified Legal Compliance Committee is to receive, review and take appropriate action with respect to any report made or referred to the Qualified Legal Compliance Committee by an attorney of evidence of a material violation of applicable U.S. federal or state securities law, material breach of a fiduciary duty under U.S. federal or state law or a similar material violation by the Trust or by any officer, director, employee, or agent of the Trust. The Qualified Legal Compliance Committee meets as necessary, and did not meet during the fiscal year ended December 31, 2025.

The Trust does not hold annual shareholder meetings and, therefore, does not have a policy with respect to Trustees' attendance at such meetings.

**Principal Officers of the Trust** 

The officers of the Trust conduct and supervise its daily business. As of the date of this SAI, the officers of the Trust are identified in the following table, which provides information as to their year of birth and positions with the Trust, term of office with the Trust and length of time served, their principal occupations for the past five years and, for officers who also serve as Trustees, other directorships held in public companies during the past five years.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name, Address and Age** | **Position(s)<br>Held with<br>the<br>Trust** | **Term of<br>Office and<br>Length of<br>Time<br>Served**<sup>(1)</sup> | **Principal Occupation<br>During Past<br>Five Years** | **Number of<br>Portfolios<br>in Fund<br>Complex<br>Overseen<br>by Trustee/<br>Officer** | **Other<br>Directorships <br>Held by<br>Trustee/Officer<br>During the Past<br>Five Years** |
| J. Luther King, Jr.<sup>(2)</sup><br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1940 | Trustee, President and Chief Executive Officer | Since 1994 | Chairman, President and Director, Luther King Capital Management Corporation since 1979. | 7 | TXO Partners, L.P. |
| Paul W. Greenwell<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1950 | Vice President | Since 1996 | Principal, Luther King Capital Management Corporation since 1986, Vice President and Portfolio Manager, Luther King Capital Management Corporation since 1983. | Not Applicable | Not Applicable |
| Richard Lenart<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1966 | Secretary and Treasurer | Since 2006 | Luther King Capital Management Corporation since 2005. | Not Applicable | Not Applicable |
| Jacob D. Smith<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1974 | Chief Financial Officer<br>Chief Compliance Officer | &nbsp;&nbsp;&nbsp;Since 2010<br>Since 2006 | General Counsel, Luther King Capital Management Corporation since 2006; Chief Compliance Officer, Luther King Capital Management Corporation from 2006-2022; Principal, Luther King Capital Management Corporation since 2013. | Not Applicable | Not Applicable |

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<sup>(1)</sup> Each officer holds office during the lifetime of the Trust until that individual resigns, retires or is otherwise removed or replaced.

<sup>(2)</sup> Mr. King is considered to be an "interested person" of the Trust (as defined in the 1940 Act) because of his affiliation with the Adviser.

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**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 any of the Funds. A control person is one who owns beneficially or through controlled companies more than 25% of the voting securities of a company or acknowledges the existence of control. A person who controls a Fund may be able to determine the outcome of any matter submitted to a vote of shareholders. As of March 31, 2026, the following persons owned of record or are known by the Funds to own beneficially 5% or more of the outstanding shares of the Funds.

PRINCIPAL SHAREHOLDERS

**SMALL CAP EQUITY FUND** 

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| | | |
|:---|:---|:---|
| **Name and Address** | &nbsp;&nbsp;**Percent of Fund** | **Record or<br>Beneficial** |
| Charles Schwab & Co., Inc.<br>Special Custody A/C FBO Customers<br>Attn: Mutual Funds<br>211 Main St.<br>San Francisco, CA 94105-1901 | 46.98% | Record |
| National Financial Services LLC<br>For the Exclusive Benefit of its Customers<br>Attn: Mutual Funds Department, 4<sup>th</sup> Fl<br>499 Washington Blvd.<br>Jersey City, NJ 07310-1995 | 9.30% | Record |
| Muir & Co 1<br>c/o Frost Bank Trust Dept.<br>P.O. Box 2950<br>San Antonio, TX 78299-2950 | 8.07% | Record |
| Capinco c/o U.S. Bank, NA<br>1555 North RiverCenter Dr., Suite 302<br>Milwaukee, WI 53212-3958 | 7.60% | Record |
| Luther King Capital Management Corporation<br>For the Exclusive Benefit of Its Client<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 7.28% | Beneficial |
| J.P. Morgan Securities LLC<br>575 W. Washington Blvd.<br>Jersey City, NJ 07310-1616 | 5.41% | Record |
| Luther King Capital Management Corporation Profit Sharing Plan<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 5.06% | Beneficial |

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------

PRINCIPAL SHAREHOLDERS

**SMALL-MID CAP EQUITY FUND** 

---

| | | |
|:---|:---|:---|
| **Name and Address** | **Percent of Fund** | **Record or<br>Beneficial** |
| Charles Schwab & Co., Inc.<br>Special Custody A/C FBO Customers<br>Attn: Mutual Funds<br>211 Main St.<br>San Francisco, CA 94105-1901 | 48.38% | Record |
| Muir & Co 0<br>c/o Frost Bank Trust Dept.<br>P.O. Box 2950<br>San Antonio, TX 78299-2950 | 28.70% | Record |
| Luther King Capital Management Corporation Profit Sharing Plan<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 17.78% | Beneficial |
| National Financial Services LLC<br>For the Exclusive Benefit of its Customers<br>Attn: Mutual Funds Department, 4<sup>th</sup> Fl<br>499 Washington Blvd.<br>Jersey City, NJ 07310-1995 | 11.98% | Record |
| Luther King Capital Management Corporation<br>For the Exclusive Benefit of Its Client<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 6.69% | Beneficial |
| Luther King Capital Management Corporation<br>For the Exclusive Benefit of Its Client<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 5.33% | Beneficial |

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PRINCIPAL SHAREHOLDERS

**EQUITY FUND** 

---

| | | |
|:---|:---|:---|
| **Name and Address** | **Percent of Fund** | **Record or<br>Beneficial** |
| Charles Schwab & Co., Inc.<br>Special Custody A/C FBO Customers<br>Attn: Mutual Funds<br>211 Main St.<br>San Francisco, CA 94105-1901 | 65.59% | Record |
| Luther King Capital Management Corporation Profit Sharing Plan<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 13.31% | Beneficial |
| Muir & Co 1<br>c/o Frost Bank Trust Dept.<br>P.O. Box 2950<br>San Antonio, TX 78299-2950 | 8.31% | Record |

---

------

PRINCIPAL SHAREHOLDERS

**BALANCED FUND** 

---

| | | |
|:---|:---|:---|
| **Name and Address** | **Percent of Fund** | **Record or<br>Beneficial** |
| Charles Schwab & Co., Inc. <br>Special Custody A/C FBO Customers<br>Attn: Mutual Funds<br>211 Main St.<br>San Francisco, CA 94105-1901 | 82.89% | Record |
| Luther King Capital Management Corporation Profit Sharing Plan<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 13.67% | Beneficial |
| Luther King Capital Management Corporation<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 5.50% | Beneficial |

---

PRINCIPAL SHAREHOLDERS

**FIXED INCOME FUND** 

---

| | | |
|:---|:---|:---|
| **Name and Address** | **Percent of Fund** | **Record or<br>Beneficial** |
| Charles Schwab & Co., Inc.<br>Special Custody A/C FBO Customers<br>Attn: Mutual Funds<br>211 Main St.<br>San Francisco, CA 94105-1901 | 55.16% | Record |
| Muir & Co 1<br>c/o Frost Bank Trust Dept.<br>P.O. Box 2950<br>San Antonio, TX 78299-2950 | 16.07% | Record |
| J.P. Morgan Securities LLC<br>575 W. Washington Blvd.<br>Jersey City, NJ 07310-1616 | 14.10% | Record |
| Luther King Capital Management Corporation<br>For the Exclusive Benefit of Its Client<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 6.54% | Beneficial |

---

------

PRINCIPAL SHAREHOLDERS

**INTERNATIONAL EQUITY FUND** 

---

| | | |
|:---|:---|:---|
| **Name and Address** | **Percent of Fund** | **Record or<br>Beneficial** |
| Charles Schwab & Co., Inc. <br>Special Custody A/C FBO Customers<br>Attn: Mutual Funds<br>211 Main St.<br>San Francisco, CA 94105-1901 | 69.16% | Record |
| Muir & Co 0<br>c/o Frost Bank Trust Dept.<br>P.O. Box 2950<br>San Antonio, TX 78299-2950 | 24.34% | Record |
| Luther King Capital Management Corporation Profit Sharing Plan<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 8.89% | Beneficial |
| Luther King Capital Management Corporation<br>For the Exclusive Benefit of Its Client<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 8.89% | Beneficial |
| Luther King Capital Management Corporation<br>For the Exclusive Benefit of Its Client<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 7.83% | Beneficial |
| Luther King Capital Management Corporation<br>For the Exclusive Benefit of Its Client<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 6.80% | Beneficial |
| Luther King Capital Management Corporation<br>For the Exclusive Benefit of Its Client<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 6.36% | Beneficial |

---

Shareholders with a controlling interest could affect the outcome of proxy voting or the direction of management of the Funds.

**PROXY VOTING PROCEDURES** 

The Funds have delegated their authority to vote proxies to the Adviser, subject to the supervision of the Board of Trustees. The Adviser's proxy voting policies are summarized below.

**GENERAL** 

The Adviser's Chief Compliance Officer ("Adviser CCO") is responsible for monitoring the proxy voting process, including engaging and overseeing any third-party vendor retained to review, monitor, or vote proxies.

The Adviser has engaged Institutional Shareholder Services, Inc. ("ISS") as its voting delegate to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.research and make voting determinations in accordance with the policies and procedures described herein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.vote and submit proxies in a timely manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.handle other administrative functions of proxy voting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.maintain records of proxy statements received in connection with proxy votes and provide copies of such proxy statements promptly upon request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.maintain records of votes cast; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.provide recommendations with respect to proxy voting matters in general.

The Adviser has determined that, except as set forth below, proxies will be voted in accordance with the voting recommendations contained in the applicable domestic or global ISS Voting Guidelines in effect at the time of voting (as applicable, the "ISS Voting Guidelines"). The Adviser will periodically review the ISS Voting Guidelines, including any significant changes or updates thereto. In connection with such reviews, the Adviser may determine that it is not in the best interest of the Funds to vote proxies in accordance with the ISS Voting Guidelines on certain matters. In such event, the Adviser will follow the procedures below in connection with voting any such proxies contrary to the ISS Voting Guidelines.

In the event the ISS Voting Guidelines do not address how a proxy should be voted, the Adviser will vote the proxy in accordance with ISS recommendations. If ISS refrains from making any such recommendations, the Adviser will vote the proxy

------

consistent with what it believes to be in a Fund's best interest. Prior to voting any proxies in the absence of ISS recommendations, however, the Adviser CCO will determine whether any material conflict of interest may exist between the Adviser and a Fund with respect thereto. If the Adviser CCO determines that any such material conflict of interest may exist, the Adviser will follow the procedures below in connection with the voting of such proxies.

There may be circumstances under which the Adviser believes that it is in the best interest of a Fund to vote proxies in a manner inconsistent with the ISS Voting Guidelines or ISS recommendations. Prior to voting any proxies inconsistent with the ISS Voting Guidelines or ISS recommendations, however, the Adviser CCO will determine whether any material conflict of interest may exist between the Adviser and a Fund with respect thereto. If the Adviser CCO determines that any such material conflict of interest may exist, the Adviser will follow the procedures below in connection with the voting of such proxies.

The Adviser maintains records relating to the implementation of its proxy voting policies and procedures, including, but not limited to, (i) records of each vote cast, which ISS maintains on the Adviser's behalf, and (ii) documents considered or prepared by the Adviser that are material in making a decision to vote proxies on behalf of a Fund or that memorialize the basis for that decision.

**CONFLICTS OF INTEREST** 

The Adviser periodically reviews ISS' conflicts of interest policy and code of ethics, which address conflicts of interest that could arise in connection with proxy advisory services provided by ISS or its affiliates. The Adviser believes that ISS' conflicts of interest policy and code of ethics contain policies and procedures that are reasonably designed to minimize any such potential conflicts of interest.

In the event that the Adviser or the Adviser CCO determines that voting a proxy may present a material conflict of interest between the Adviser and a Fund, the Adviser will (1) in cases where ISS had made a recommendation, take no further action, in which case ISS shall vote such proxy in accordance with the ISS Voting Guidelines or ISS recommendations, as applicable, (2) disclose such conflict of interest to the Board of Trustees and obtain written direction from the Board as to how to vote the proxy, (3) suggest that the Board engage another party to determine how to vote the proxy, or (4) engage another independent third party to determine how to vote the proxy.

Notwithstanding the foregoing, the Adviser must vote proxies in what it believes to be in the best interest of the Funds when material conflicts of interest may exist with respect thereto. The Adviser believes that these policies and procedures are reasonably designed to address material conflicts of interest that may arise as to the manner in which proxies are voted.

**MORE INFORMATION** 

The actual voting records relating to portfolio securities during the most recent 12-month period ended June 30 are available without charge, upon request by calling toll-free, (800) 688-LKCM or by accessing the SEC's website at www.sec.gov.

**INVESTMENT ADVISER** 

The investment adviser of the Funds is Luther King Capital Management Corporation a Delaware corporation controlled by J. Luther King, Jr. (the "Adviser"). The Adviser's parent company is Southwest JLK Corporation, a Texas corporation of which Mr. King is the majority owner and controlling shareholder. Mr. King is a member of the Board of Trustees and President, Chief Executive Officer and Portfolio Manager of the Trust. Under an Investment Advisory Agreement (the "Agreement") with the Funds, the Adviser manages the investment and reinvestment of the Funds' assets, subject to the control and supervision of the Board of Trustees. The Adviser is responsible for making investment decisions for the Funds and for placing the Funds' purchase and sale orders. Under the Agreement, the Funds pay the Adviser an advisory fee, calculated daily and payable quarterly, equal to the annual rate set forth under "Contractual Advisory Fee" in the table below based on the Fund's average daily net assets for the quarter. However, the Adviser has contractually agreed to waive all or a portion of its advisory fees and/or reimburse the Funds through May 1, 2027 to limit the total annual operating expenses of the Funds from exceeding the respective caps as shown in the following table. This expense limitation excludes interest, taxes, brokerage commissions, indirect fees and expenses relating to investments in other investment companies, including money market funds ("Acquired Fund Fees and Expenses"), and extraordinary expenses. The fee waiver and expense reimbursement agreement may be terminated or changed only with the consent of the Board of Trustees.

The advisory fees and expense caps for the current fiscal year are as follows:

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| | | |
|:---|:---|:---|
|  | **Contractual<br>Advisory Fee** | &nbsp;&nbsp;**Cap on Total Annual<br>Operating Expenses** |
| Small Cap Equity Fund | 0.75% | 1.00% |
| Small-Mid Cap Equity Fund | 0.75% | 1.00% |
| Equity Fund | 0.70% | 0.80% |
| Balanced Fund | 0.65% | 0.80% |
| Fixed Income Fund | 0.50% | 0.50% |
| International Equity Fund | 0.90% | 1.00% |

---

As compensation for the services rendered by the Adviser under the Agreement, for the fiscal years ended December 31, 2025, 2024 and 2023, the Adviser earned and waived and/or reimbursed the amounts listed below.

------

---

| | | | |
|:---|:---|:---|:---|
|  | **Contractual<br>Advisory Fees<br>Incurred** | **Waived Fees and/or Expenses<br>Reimbursed by the Adviser** | **Net Advisory Fees<br>paid to the Adviser** |
| **Small Cap Equity Fund** |  |  |  |
| Year Ended December 31, 2023 | $1488393 | $(140774) | $1347619 |
| Year Ended December 31, 2024 | $1967460 | $(152646) | $1814814 |
| Year Ended December 31, 2025 | $2197788 | $(154883) | $2042905 |
| **Small-Mid Cap Equity Fund** |  |  |  |
| Year Ended December 31, 2023 | $144536 | $(142893) | $1643 |
| Year Ended December 31, 2024 | $256313 | $(138311) | $118002 |
| Year Ended December 31, 2025 | $306339 | $(128364) | $177975 |
| **Equity Fund** |  |  |  |
| Year Ended December 31, 2023 | $3301184 | $(941230) | $2359954 |
| Year Ended December 31, 2024 | $3619177 | $(956389) | $2662788 |
| Year Ended December 31, 2025 | $3537681 | $(942416) | $2595265 |
| **Balanced Fund** |  |  |  |
| Year Ended December 31, 2023 | $713831 | $(269008) | $444823 |
| Year Ended December 31, 2024 | $753744 | $(250912) | $502832 |
| Year Ended December 31, 2025 | $731249 | $(251746) | $479503 |
| **Fixed Income Fund** |  |  |  |
| Year Ended December 31, 2023 | $1392057 | $(868939) | $523118 |
| Year Ended December 31, 2024 | $1401125 | $(872067) | $529058 |
| Year Ended December 31, 2025 | $1398259 | $(871005) | $527254 |
| **International Equity Fund** |  |  |  |
| Year Ended December 31, 2023 | $507186 | $(233343) | $273843 |
| Year Ended December 31, 2024 | $562561 | $(237688) | $324873 |
| Year Ended December 31, 2025 | $614659 | $(249010) | $365649 |

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------

**PORTFOLIO MANAGERS** 

The portfolio managers listed below have responsibility for the day-to-day management of accounts other than the Funds. The information listed below for such other accounts is as of December 31, 2025.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Number of Other Accounts Managed<br>and Assets by Account Type** | **Number of Other Accounts Managed<br>and Assets by Account Type** | **Number of Other Accounts Managed<br>and Assets by Account Type** | **Number of Accounts and Assets for<br>which Advisory Fee is Performance<br>Based** | **Number of Accounts and Assets for<br>which Advisory Fee is Performance<br>Based** | **Number of Accounts and Assets for<br>which Advisory Fee is Performance<br>Based** |
|  | **Registered<br>Investment<br>Companies** | **Other Pooled<br>Investment<br>Vehicles** | **Other<br>Accounts** | **Registered<br>Investment<br>Companies** | **Other Pooled<br>Investment<br>Vehicles** | **Other<br>Accounts** |
| J. Luther King, Jr. | 0 | 13 | 229 | 0 | 9 | 0 |
| J. Luther King, Jr. | $0 | $4.1 billion | $6.0 billion | $0 | $2.5 billion | $0 |
| Scot C. Hollmann | 1 | $0 | 356 | 0 | 0 | 0 |
| Scot C. Hollmann | $60 million | $0 | $2.6 billion | $0 | $0 | $0 |
| Joan M. Maynard | 0 | 0 | 12 | 0 | 0 | 0 |
| Joan M. Maynard | $0 | $0 | $249 million | $0 | $0 | $0 |
| Mark L. Johnson | 0 | 0 | 158 | 0 | 0 | 0 |
| Mark L. Johnson | $0 | $0 | $622 million | $0 | $0 | $0 |
| Mason D. King | 0 | 1 | 62 | 0 | 0 | 0 |
| Mason D. King | $0 | $19 million | $309 million | $0 | $0 | $0 |
| Daniel C. Downes | 0 | 0 | 19 | 0 | 0 | 0 |
| Daniel C. Downes | $0 | $0 | $112 million | $0 | $0 | $0 |

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**Conflicts of Interest** 

The portfolio managers are responsible for managing the Funds and other separately managed accounts, including accounts for investment companies, employee benefit plans, pension plans, endowments, foundations, trusts, high net worth individuals, and pooled investment vehicles. When a portfolio manager is responsible for the management of more than one account, the potential arises for the portfolio manager to favor one account over another. The principal types of conflicts of interest that may arise are discussed below. The Adviser believes that it has established policies and procedures that are reasonably designed to mitigate these potential conflicts of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The portfolio managers are responsible for managing other accounts that may have investment objectives, guidelines, strategies, risk profiles or other considerations that may differ from those of the Funds. The portfolio managers make investment decisions for each account based on its investment objectives and guidelines, policies, and other relevant considerations. Consequently, the portfolio managers may purchase or sell securities at the same or different times for one account and not another account or the Funds. The portfolio managers may also make investment decisions on behalf of other accounts that are directly or indirectly contrary to investment decisions made on behalf of the Funds, or make investment decisions that are similar to those made for the Funds, any of which has the potential to adversely impact the Funds depending on market conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The portfolio managers may purchase or sell for their own account securities that are purchased or sold on behalf of the Funds. The portfolio managers also have a beneficial interest in pooled investment vehicles or other accounts managed by the Adviser, other than the Funds. The Adviser has implemented a code of ethics and other policies and procedures in an effort to mitigate these potential conflicts of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The portfolio managers could favor one account over another in allocating new investment opportunities of a limited nature, such as initial public offerings and private placements. The Adviser has implemented policies and procedures, including a rotational system for allocating initial public offerings, in an effort to ensure that investment opportunities of a limited nature are allocated fairly and equitably among eligible accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The portfolio managers could favor one account over another in the order in which trades for accounts are placed. If the portfolio managers determine to purchase a security for more than one account in an aggregate amount that may influence the market price of the security, accounts that purchased or sold the security first may receive a more favorable price than accounts that made subsequent transactions. In addition, the Funds and other accounts, including pooled investment vehicles, managed by the portfolio managers may participate in aggregated purchase or sale transactions. To the extent that accounts participating in aggregated trades do not receive their full allocation, a potential conflict of interest exists because the Adviser and portfolio managers have an incentive to allocate trades to accounts in which the Adviser and portfolio managers have a financial interest. The Adviser has implemented trade allocation and aggregation policies and procedures in an effort to mitigate this potential conflict of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The portfolio managers are responsible for managing other accounts and pooled investment vehicles, some of which entitle the Adviser to incentive fees and/or management fees exceeding those paid by the Funds. This compensation structure presents a potential conflict of interest because the Adviser and the portfolio managers may be incentivized to favor such accounts over the Funds.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Adviser and the portfolio managers have significant personal investments in some of the private investment funds managed by the Adviser. As a result of such investments, the Adviser and the portfolio managers may be motivated to favor these funds over the Funds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Under Section 28(e) of the Securities Exchange Act of 1934, as amended, the Adviser may pay commissions to brokers for the Funds' transactions that exceed the amount of commissions that would be charged by another broker for the same transactions, provided that the Adviser determines in good faith that the amount of commissions paid are reasonable in relation to the value of the brokerage and research services provided by such broker, either in terms of a particular transaction or the Adviser's overall responsibilities with respect to accounts for which it exercises investment discretion. Pursuant to Section 28(e), the Adviser has entered into soft dollar and commission sharing arrangements with third parties and brokers for eligible brokerage and research products and services. A potential conflict of interest may exist because the Adviser receives these brokerage and research products and services from brokers in exchange for directing commissions from the Funds' transactions, rather than paying for these products and services with its own assets. The Adviser has implemented policies and procedures governing its use of such soft dollar and commission sharing arrangements.

**Compensation** 

As an independent firm, the Adviser has full control over its compensation structure. The Adviser seeks to maintain a compensation program that is competitively positioned to attract and retain high-caliber investment professionals. Each member of the professional staff is provided a salary. They also are eligible to participate in the Adviser's profit sharing plan. The majority of compensation is derived from bonuses, which are discretionary and based on individual merit as well as success of the Adviser in any given year. Criteria for individual bonuses include, among other factors, stock selection, relationship building, investment performance, client service, and portfolio management. There is no standard formula or method for determining bonuses and the factors considered for bonuses vary by individual. Compensation is not based directly on the performance of the Funds or the net asset levels of the Funds.

**Ownership of Securities** 

As of March 31, 2026, the officers and Trustees of the Trust as a group owned approximately 5.07% of the Equity Fund, approximately 1.69% of the Small-Mid Cap Equity Fund, approximately 1.89% of the Small Cap Equity Fund, approximately 2.23% of the International Equity Fund, and less than one percent of the Balanced Fund and Fixed Income Fund.

The Adviser's employees, including officers of the Trust and portfolio managers of the Funds, are participants in the Luther King Capital Management Corporation Profit Sharing Plan ("LKCM Profit Sharing Plan"). As of March 31, 2026, the LKCM Profit Sharing Plan owned approximately 13.31% of the Equity Fund, approximately 13.67% of the Balanced Fund, approximately 3.81% of the Fixed Income Fund, approximately 17.78% of the Small-Mid Cap Equity Fund, approximately 5.06% of the Small Cap Equity Fund, and approximately 8.89% of the International Equity Fund. J. Luther King, Jr. serves as trustee of the LKCM Profit Sharing Plan.

As of March 31, 2026, the Adviser owned approximately 5.50% of the Balanced Fund, approximately 2.67% of the Small Cap Equity Fund, approximately 2.81% of the International Equity Fund, approximately 1.38% of the Equity Fund, and less than one percent of the Fixed Income Fund and the Small-Mid Cap Equity Fund. J. Luther King, Jr. controls the Adviser and is the majority shareholder of the Adviser's parent company.

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Each portfolio manager of the Funds also owned the following amounts of shares of each of the Funds as of December 31, 2025:

<u>Key</u> 

A. None

B. $1 - $10,000

C. $10,001 - $50,000

D. $50,001 - $100,000

E. $100,001 - $500,000

F. $500,001 - $1,000,000

G. Over $1,000,000

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| | | |
|:---|:---|:---|
| **Fund Name** | **Name of Portfolio Manager** | **Dollar Range of Shares Owned** |
| Small Cap Equity Fund | Mason D. King<br>J. Luther King, Jr.<br>Mark L. Johnson | E<br>G<br>A |
| Small-Mid Cap Equity Fund | Daniel C. Downes<br>J. Luther King, Jr.<br>Mason D. King | F<br>G<br>C |
| Equity Fund | J. Luther King, Jr.<br>Scot C. Hollmann<br>Mason D. King | G<br>A<br>G |
| Balanced Fund | Scot C. Hollmann<br>J. Luther King, Jr.<br>Mark L. Johnson | F<br>E<br>A |
| Fixed Income Fund | Joan M. Maynard<br>Scot C. Hollmann<br>Mark L. Johnson | C<br>D<br>A |
| International Equity Fund | Mason D. King<br>J. Luther King, Jr. | E<br>G |

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**PORTFOLIO TRANSACTIONS AND BROKERAGE** 

The Agreement authorizes the Adviser to select the brokers or dealers that will execute the purchases and sales of investment securities for the Funds and directs the Adviser to use its best efforts in seeking best execution with respect to all securities transactions for the Funds. In selecting brokers or dealers for securities transactions for the Funds, the Adviser may consider, among other things: the quality of executions and liquidity provided by the broker; the ability of the broker to maintain confidentiality of client orders and order flow; the ability of the broker to minimize market impact for client transactions; the commission rates charged by the broker in comparison to the rates of other brokers for similar transactions; the broker's provision of eligible brokerage and research services; the broker's ability to obtain timely, accurate, and cost-effective executions; the ability of the broker to accurately communicate the nature of the market for a particular security; the broker's execution policies and commitment to providing best execution; the size and volume of the broker's order flow; and the efficiency and accuracy of the broker's operations area with regard to settlement procedures.

As permitted by Section 28(e) of the Securities Exchange Act of 1934, as amended, the Adviser may cause the Funds to pay higher commission rates than the lowest available when the Adviser believes in good faith that the commissions paid are reasonable in light of the value of the brokerage or research services provided by the broker, either in terms of a particular transaction or the Adviser's overall responsibilities with respect to accounts for which it has investment discretion. These services generally include third-party and proprietary analyses and reports concerning issuers, industries, securities, general economic and market conditions and trends, portfolio strategy; third-party and proprietary analyses and reports regarding the value of securities, the advisability of purchasing or selling securities, and the availability of sellers and purchasers of securities; and services related to effecting securities transactions and performing functions incidental thereto. The Adviser may use some of these services in providing investment advisory services to all of its clients, and not all of these services may be used by the Adviser in providing investment advisory services to the Funds. During the fiscal year ended December 31, 2025, the Small Cap Equity Fund, Small-Mid Cap Equity Fund, Equity Fund and Balanced Fund directed transactions to brokers pursuant to which the brokers provided third-party or proprietary research or brokerage services to the Adviser. Pursuant to these arrangements to receive research and brokerage services, during the fiscal year ended December 31, 2025 it is estimated that the Small Cap Equity Fund paid total commissions of approximately $77,600 on transactions with a principal value of approximately $90.3 million, the Small-Mid Cap Equity Fund paid total commissions of approximately $13,100 on transactions with a principal value of approximately $24.5 million, the Equity Fund paid total commissions of approximately $35,600 on transactions with a principal value of approximately $64.9 million, and the Balanced Fund paid total commissions of approximately $4,600 on transactions with a principal value of approximately $16.5 million.

It is not the Adviser's practice to allocate brokerage or principal business on the basis of sales of shares of Funds that may be made through intermediary brokers or dealers. However, the Adviser may place orders with qualified broker-dealers who recommend the Funds or who act as agents in the purchase of shares of the Funds for their clients, without considering these factors in selecting a broker-dealer. The Adviser does not have an affiliated broker, therefore it has not engaged in any affiliated brokerage transactions.

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The aggregate amount of brokerage commissions paid by each Fund during the past three fiscal years ended December 31 is as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **2023** | **2024** | **2025** |
| Small Cap Equity Fund | $179317 | $200888 | $282459 |
| Small-Mid Cap Equity Fund | $18512 | $19697 | $25961 |
| Equity Fund | $78005 | $48944 | $83166 |
| Balanced Fund | $5324 | $9754 | $4565 |
| Fixed Income Fund | $0 | $0 | $0 |
| International Equity Fund | $39292 | $39462 | $57192 |

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Some securities considered for investment by the Funds may also be appropriate for other clients served by the Adviser. If purchases or sales of securities consistent with the investment policies of the Funds and one or more of these other clients serviced by the Adviser are considered at or about the same time, transactions in such securities may be aggregated and allocated among the Funds and such clients in accordance with the Adviser's allocation policies and procedures or in any other manner deemed fair and reasonable by the Adviser.

As of December 31, 2025, the Funds did not hold securities of their "regular brokers or dealers" (as defined in the 1940 Act) or their parent companies.

**PORTFOLIO TURNOVER** 

Although the Funds 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 or other considerations warrant such action. Portfolio turnover rate is calculated by dividing (1) the lesser of purchases or sales of long-term portfolio securities for the fiscal year by (2) the monthly average of the value of long-term portfolio securities owned during the fiscal year. A 100% turnover rate would occur if all the securities in a 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 higher transaction costs and may result in a greater number of transactions on which net taxable gains are realized. Portfolio turnover may vary significantly from year to year due to a variety of factors, including fluctuating volume of shareholder purchase and redemption orders, market conditions, investment strategy changes, and/or changes in the Adviser's investment outlook.

The Funds had the following portfolio turnover rates for the past two fiscal years ended December 31:

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| | | |
|:---|:---|:---|
|  | &nbsp;&nbsp;**2024** | &nbsp;&nbsp;**2025** |
| Small Cap Equity Fund | 29% | 40% |
| Small-Mid Cap Equity Fund | 31% | 44% |
| Equity Fund | 9% | 9% |
| Balanced Fund | 15% | 6% |
| Fixed Income Fund | 25% | 34% |
| International Equity Fund | 17% | 21% |

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**CUSTODIAN** 

As custodian of the Funds' assets, U.S. Bank, N.A. (the "Custodian"), 1555 N. RiverCenter Drive, Suite 302, Milwaukee, WI 53212, has custody of all securities and cash of the Funds, delivers and receives payment for securities sold, receives and pays for securities purchased, collects income from investments, and performs other duties, all as directed by the officers of the Trust. U.S. Bank, N.A. and Fund Services (as defined below) are affiliates.

**TRANSFER AGENT** 

U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services ("Fund Services"), 615 East Michigan Street, Milwaukee, Wisconsin, 53202 serves as transfer agent, dividend disbursing agent and shareholder servicing agent for the Funds. In such capacity, Fund Services' responsibilities include: receiving and processing all orders for purchases, exchanges and redemptions of Fund shares; responding to shareholder inquiries and instructions concerning their accounts; updating of shareholder accounts to reflect declaration and payment of dividends and other distributions; and preparing and distributing account statements and tax documents to shareholders regarding their accounts. U.S. Bank, N.A. and Fund Services are affiliates.

**ADMINISTRATOR** 

Pursuant to a Fund Administration Agreement, Fund Services provides each Fund with administrative services. The services under this Agreement are subject to the supervision of the Board of Trustees and officers of the Trust, and include day-to-day administration of matters necessary to the Funds' operations, maintenance of their records, preparation of reports, compliance testing of the Funds' activities, and preparation of periodic updates of the registration statement under federal and state laws. For administration services, Fund Services receives from each Fund a fee, calculated daily and paid monthly. U.S. Bank, N.A. and Fund Services are affiliates.

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Administration fees incurred during the past three fiscal years ended December 31 were as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **2023** | **2024** | **2025** |
| Small Cap Equity Fund | $202777 | $271601 | $398502 |
| Small-Mid Cap Equity Fund | $62321 | $67223 | $110555 |
| Equity Fund | $443684 | $497636 | $624307 |
| Balanced Fund | $119441 | $131578 | $190576 |
| Fixed Income Fund | $278270 | $289756 | $407738 |
| International Equity Fund | $68833 | $79077 | $138804 |

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Fund Services also acts as Transfer Agent, Dividend-Disbursing Agent, and Fund Accountant for the Funds.

**DISTRIBUTOR** 

Quasar Distributors, LLC (the "Distributor"), 190 Middle Street, Suite 301, Portland, ME 04101, a registered broker-dealer and member of the Financial Industry Regulatory Authority, distributes the Funds' shares. The Distributor uses its best efforts to distribute the Funds' shares, which shares are offered for sale by the Funds continuously at net asset value per share without the imposition of a sales charge. The Funds pay that portion of the compensation owed to the Distributor that is permitted under Rule 12b-1 of the 1940 Act (if the Funds currently pay any fees under their Rule 12b-1 Plans), and the Adviser pays the remaining portion of any such compensation.

**DISTRIBUTION PLAN** 

The Board has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (the "Distribution Plan"). Pursuant to the Distribution Plan, the Funds can pay up to an aggregate maximum of 0.75% per annum of each Fund's average daily net assets for the distribution and promotion of the shares of the Funds and the retention of shares by Fund shareholders. These services include, but are not limited to, the printing of Prospectuses, Statements of Additional Information, reports used for sales purposes, advertisements, expenses of preparation and printing of sales literature, other distribution-related expenses and providing services to shareholders. Although approved, the Board of Trustees has not authorized payments under the Distribution Plan at this time. As a result, the Funds did not pay any amounts in Rule 12b-1 expenses for the fiscal year ended December 31, 2025.

The Distribution Plan is regulated by Rule 12b-1 under the 1940 Act, which requires that the Board receive and review at least quarterly reports concerning the amount and purpose of expenses which are made, and that the Distribution Plan may be continued from year-to-year only if the Board, including a majority of the Independent Trustees, concludes at least annually that continuation of the Distribution Plan is reasonably likely to benefit the Trust and its shareholders.

**PAYMENTS TO FINANCIAL INTERMEDIARIES** 

A financial intermediary through which you purchase your shares may receive all or a portion of the Distribution Plan Rule 12b-1 fees, if applicable, discussed above. In addition to those payments, the Adviser makes additional cash payments to certain intermediaries in connection with the promotion and sale of shares of the Funds. The Adviser and the Funds also make payments for certain sub-transfer agency and administrative services. Payments made by the Adviser are from its own resources. The categories described below are not mutually exclusive. The same financial intermediary may receive payments under more than one or all categories.

*Revenue Sharing Payments*. The Adviser makes revenue sharing payments as incentives to certain financial intermediaries to promote and sell shares of the Funds. The benefits that the Adviser receives when it makes these payments include, among other things, placing the Funds on the financial intermediary's funds sales system. The Adviser compensates financial intermediaries differently depending typically on the level and/or type of considerations provided by the financial intermediary.

Revenue sharing payments may be calculated on sales of shares of the Funds ("Sales-Based Payments"). Such payments also may be calculated on the average daily net assets of the applicable Funds attributable to that particular financial intermediary ("Asset-Based Payments"). Sales-Based Payments primarily create incentives to make new sales of shares of the Funds and Asset-Based Payments primarily create incentives to retain previously sold shares of the Funds in shareholder accounts. The Adviser may pay a financial intermediary either or both Sales-Based Payments and Asset-Based Payments.

*Administrative and Processing Support Payments*. Firms that establish omnibus accounts and provide substantially the same services to their clients as are provided by Fund Services to direct shareholders of the Funds may receive sub-transfer agent fees for such services from the respective Fund. In an omnibus account, the Funds maintain a single account in the name of a financial intermediary such as a broker, dealer, record-keeper or other service provider and the financial intermediary maintains all of the individual shareholder accounts.

Record-keeping and shareholder services typically include: establishing and maintaining shareholder accounts and records; recording shareholder account balances and changes thereto; arranging for the wiring of funds; providing statements to shareholders; furnishing proxy materials, periodic reports of the Funds, prospectuses and other communications to current shareholders as required; transmitting shareholder transaction information; and providing information in order to assist the Funds in their compliance with federal and state securities laws. Each Fund typically would be paying these shareholder servicing fees directly if the financial intermediary did not hold all of its customer accounts in a single omnibus account with the Funds. Likewise, for many retirement plans, a third party administrator may open an omnibus account with the Funds and the administrator will then maintain all of the participant accounts. The Adviser and the Funds make payments to certain financial intermediaries for certain administrative services, including record keeping and sub-accounting shareholder accounts. The Adviser, the Distributor and the Funds also make payments to

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certain financial intermediaries in connection with client account maintenance support, statement preparation and transaction processing.

*Other Cash Payments*. From time to time, the Adviser, at its own expense, may provide additional compensation to financial intermediaries which sell or arrange for the sale of shares of the Funds. This additional compensation may be offered to the extent not prohibited by state laws or any self-regulatory agency, such as Financial Industry Regulatory Authority, Inc. Such compensation may include financial assistance to financial intermediaries that enables the Adviser to: (1) participate in and/or present at conferences or seminars for invited registered representatives and other employees, (2) participate in client entertainment, client and investor events, and other financial intermediary-sponsored events, and (3) pay expenses incurred by registered representatives and other employees in connection with client prospecting, retention and due diligence trips.

The Adviser is motivated to make the payments described above since they promote the sale of Fund shares and the retention of those investments by clients of financial intermediaries. To the extent financial intermediaries sell more shares of Funds or retain shares of Funds in their clients' accounts, the Adviser benefits from the incremental management and other fees paid to the Adviser by the Funds with respect to those assets.

In certain cases these payments could be significant to the financial intermediary. Your financial intermediary may charge you additional fees or commissions other than those disclosed in the Prospectus and this SAI. You may ask your financial intermediary about any payments it receives from the Adviser or the Funds, as well as about fees and/or commissions it charges.

**INTERESTS OF CERTAIN PERSONS** 

With the exception of the Adviser, no "interested person" of the Funds, as defined in the 1940 Act, and no Trustee of the Trust who is not an "interested person", has or had a direct or indirect financial interest in the Distribution Plan or any related agreement.

**CODE OF ETHICS** 

The Trust, Adviser and Distributor have each adopted a written Code of Ethics. These Codes of Ethics govern the personal securities transactions of trustees, directors, officers and employees who may have access to current trading information of the Funds. The Codes of Ethics permit such persons to invest in the Funds and/or other securities for their personal accounts, including securities that may be purchased or held by the Funds, subject to certain conditions. The Codes of Ethics include reporting and other obligations to monitor personal transactions and confirm that such transactions do not disadvantage the Funds.

**PURCHASE AND PRICING OF SHARES** 

**PURCHASE OF SHARES** 

The Funds will be deemed to have received a purchase or redemption order when an authorized broker or, if applicable, a broker's designee receives the order.

**Purchasing Shares with Liquid Securities.** Certain clients of the Adviser may, subject to the approval of the Trust, purchase shares of the Funds with liquid securities that are eligible for purchase by a Fund (consistent with the Fund's investment policies and restrictions) and that have a value that is readily ascertainable (and not established only by fair valuation procedures) as evidenced by a listing on the New York Stock Exchange ("NYSE") or NASDAQ. These transactions will be effected only if the Adviser intends to retain the security in the Funds as an investment. Assets so purchased by the Funds will be valued in generally the same manner as they would be valued for purposes of pricing a Fund's shares, if such assets were included in the Fund's assets at the time of purchase.

**Automatic Investment Program.** The Automatic Investment Program ("AIP") permits investors who own shares of a Fund with a value of $2,000 or more to purchase shares (minimum of $100 per transaction) at regular intervals selected by the investor. Provided the investor's financial institution allows automatic withdrawals, shares are purchased by transferring funds from an investor's checking or savings account. The financial institution must be a member of the Automatic Clearing House network. There is no charge for this service. A $25 fee will be charged if the investor's bank rejects the scheduled transaction. At the investor's option, the account designated will be debited in the specified amount, and shares will be purchased on a specified day or days of a month.

The AIP is one means by which an investor may use "dollar cost averaging" in making investments. Instead of trying to time market performance, a fixed dollar amount is invested in shares at predetermined intervals. This may help investors to reduce their average cost per share because the agreed upon fixed investment amount allows more shares to be purchased during periods of lower share prices and fewer shares during periods of higher prices. In order to be effective, dollar cost averaging should usually be followed on a sustained, consistent basis. Investors should be aware, however, that shares bought using dollar cost averaging are purchased without regard to their price on the day of investment or market trends. In addition, while investors may find dollar cost averaging to be beneficial, it will not prevent a loss if an investor ultimately redeems his or her shares at a price that is lower than their purchase price.

To establish the AIP, an investor must complete the appropriate sections of the New Account Application. Please call the Trust at 800-688-LKCM if you have questions. An investor may cancel his or her participation in this Program or change the amount of purchase at any time by notifying the Transfer Agent by telephone or in writing, five days prior to the effective date of the next transaction. The Trust may modify or terminate this privilege at any time or charge a service fee, although no such fee currently is contemplated.

**PRICING OF SHARES** 

Shares of the Funds are sold and redeemed on a continual basis at the net asset value per share next computed following acceptance of an order by a Fund. A Fund's net asset value per share for the purpose of pricing purchase and redemption orders is normally determined as of the scheduled close of normal trading (generally 4:00 p.m. Eastern Time) on each day the NYSE is scheduled to be open for trading. The NYSE is generally scheduled to be closed on the following holidays: New Year's Day, Martin

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Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

Equity securities listed or traded on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price on the exchange on which the security is primarily traded. Nasdaq Global Market securities are valued at the Nasdaq Official Closing Price. Unlisted U.S. equity securities and listed U.S. equity securities not traded on a particular valuation date are valued at the mean of the most recent quoted bid and ask price on the relevant exchanges or markets.

Equity securities listed on a foreign exchange for which market quotations are readily available are valued at the last quoted sales price on the exchange on which the security is primarily traded.

Debt securities are normally valued at the mean of the closing bid and ask price and/or by using a combination of broker quotations or evaluated prices provided by an independent pricing service. Futures and options on futures are valued at the settlement prices established each day on the principal exchange on which they are traded. Forward contracts are valued based on the forward rate using information provided by an independent pricing service. Other assets and securities for which no market or broker quotations or evaluated prices are readily available are valued in good faith at fair value using guidelines approved by the Board of Trustees.

Rule 2a-5 under the Investment Company Act (the "Valuation Rule") establishes requirements for determining fair value in good faith for purposes of the Investment Company Act, including related oversight and reporting requirements. The Valuation Rule also defines when market quotations are "readily available" for purposes of the Investment Company Act, the threshold for determining whether a security must be fair valued.

The Valuation Rule permits a Fund's board to designate the Fund's investment adviser as "valuation designee" to perform the Fund's fair value determinations subject to board oversight and certain reporting and other requirements intended to ensure that the registered investment company's board receives the information it needs to oversee the investment adviser's fair value determinations. The Board has designated the Adviser as valuation designee under the Valuation Rule to perform fair value functions in accordance with the requirements of the Valuation Rule. The Adviser may value securities at fair value in good faith pursuant to the Adviser's and the Fund's procedures. The Adviser may use prices provided by independent pricing services to assist in the fair valuation of the Fund's portfolio securities.

The policies and procedures adopted by the Funds and the Adviser authorize the Adviser to fair value a security in good faith if, among other things, the Adviser determines that (i) closing prices of foreign securities do not reflect their fair market value due to events that occur between the closing of foreign markets and the time at which a Fund calculates its NAV, (ii) trading in a security is halted and does not resume prior to the closing of the exchange or other market on which such security normally trades, or (iii) the price for such security provided by the Funds' independent pricing services appears invalid, is not readily available, or otherwise provides a valuation that in the judgment of the Adviser does not represent the fair market value of such security. Prices provided by independent pricing services may be used to assist in the fair valuation of the Funds' portfolio securities. For foreign securities held by the International Equity Fund, such fair value prices generally are based on such independent pricing services' proprietary multi-factor models that measure movements in relevant indices, market indicators and other factors between the time the relevant foreign markets have closed and the time a Fund calculates its NAV, and therefore may differ from quoted or official closing prices for such foreign securities in such foreign markets. If fair value pricing is utilized, the fair values assigned to such Fund's foreign investments may not be the quoted or published prices of the investments on their primary markets or exchanges.

An example of how each Fund calculated its total offering price per share as of December 31, 2025 is as follows:

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| | | |
|:---|:---|:---|
| | **Net Assets**  | **Net Asset Value per share** |
| **Funds** | **Shares Outstanding** | **Net Asset Value per share** |
| **Small Cap Equity Fund** | $325487904 | $21.88 |
|  | 14876586 | $21.88 |
| **Small-Mid Cap Equity Fund** | $43126256 | $11.35 |
|  | 3799679 | $11.35 |
| **Equity Fund** | $506560616 | $37.61 |
|  | 13469851 | $37.61 |
| **Balanced Fund** | $109142702 | $28.22 |
|  | 3868166 |  |
| **Fixed Income Fund** | $282170294 | $10.66 |
|  | 26479437 |  |
| **International Equity Fund** | $73942747 | $15.77 |
|  | 4688737 | $15.77 |

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**PORTFOLIO HOLDINGS INFORMATION** 

It is the policy of LKCM Funds to protect the confidentiality of portfolio holdings and prevent the selective disclosure of non-public information concerning the Funds. No information concerning the portfolio holdings of the Funds may be disclosed to any person except as provided below.

The Adviser and the Funds maintain portfolio holdings disclosure policies that govern the timing and circumstances of disclosure to shareholders and third parties of information regarding the portfolio investments held by the Funds. These portfolio holdings disclosure policies have been approved by the Board of Trustees. Disclosure of the Funds' complete holdings is required to be made quarterly within 70 days of the end of each fiscal semi-annual period in the Funds' <u>[Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/918942/000113322826003110/lf-efp22616_ncsr.htm#sopa)</u> filed with the SEC. These reports are available, free of charge, on the EDGAR database on the SEC's website at www.sec.gov and on the Funds' website at www.lkcmfunds.com. Monthly portfolio disclosures are filed quarterly with the SEC on Form N-PORT, with quarter-end disclosures being made public 60 days after the end of each fiscal quarter. These reports are available, free of charge, on the EDGAR database on the SEC's website at www.sec.gov. In addition, each Fund also makes available on the Funds' website a complete schedule of its portfolio holdings no sooner than 30 days following the end of each calendar quarter. Information contained within Fund Fact Sheets is made publicly available on the website upon completion (generally within 10-15 days after the close of the calendar quarter). In an effort to prevent parties from potentially misusing portfolio holdings information, the Funds will generally only disclose the Fund Fact Sheets and complete schedules of portfolio holdings as of the end of the most recent calendar quarter, no earlier than 10 days and 30 days after the end of the calendar quarter, respectively.

In addition, the Funds' service providers, including the administrator, custodian, legal counsel, proxy voting administrator, independent pricing service, and independent registered public accounting firm, receive portfolio holdings information in connection with their services to the Funds. The Funds' service providers have a duty to keep nonpublic information about the Funds, some of which is received on a daily basis with no lag time, confidential based on existing laws and due to the nature of their roles with the Funds. An officer of the Adviser or the Chief Compliance Officer of the Funds may distribute (or authorize the Funds' administrator to distribute) portfolio holdings to rating and ranking agencies for a legitimate business purpose on a quarterly basis. Except as noted above, this information is provided no earlier than 30 days after the end of a calendar quarter and no compensation is received by the Adviser or the Funds as consideration for such disclosure. The Funds' Chief Compliance Officer may waive certain of the requirements of this policy. The Board of Trustees and the Adviser may, on a case-by-case basis, impose additional restrictions on the dissemination of portfolio holdings information beyond those required by the Funds' policy. Notwithstanding these policies, the Funds may disclose portfolio holdings information to the extent required by applicable law.

The Funds' Chief Compliance Officer will report any violations of these policies to the Board of Trustees on a quarterly basis. In no event shall the Adviser, its affiliates or employees, or the Funds receive any direct or indirect compensation in connection with the disclosure of information about the Funds' portfolio holdings.

If the disclosure of portfolio holdings presents a conflict of interest between the shareholders and the Adviser, the Funds' principal distributor or any of their respective affiliates, then such conflict will be reported to the Board for its consideration prior to the dissemination of portfolio holdings information.

**EXCHANGES** 

Shareholders of a Fund may exchange shares of the Fund for shares of another series of the Trust.

**REDEMPTIONS IN KIND** 

The Trust has made an election with the SEC to pay in cash all redemptions requested by any shareholder of record limited in amount during any 90-day period to the lesser of (i) $250,000 or (ii) 1% of the net assets of a Fund at the beginning of such period. Such commitment is irrevocable without the prior approval of the SEC. Redemptions in excess of the above limits may be paid in whole or in part in investment securities or in cash, as the Trustees may deem advisable; however, payment will be made wholly in cash unless the Trustees believe that economic or market conditions exist which would make such a practice detrimental to the best interests of the applicable Fund. If redemptions are paid in investment securities the redeeming shareholders might incur brokerage expenses if they converted these securities to cash. Securities used to make such "in-kind" redemptions will be readily marketable. The method of valuing such securities will be the same as the method of valuing Fund securities described under "Pricing of Shares," and such valuation will be made as of the same time the redemption price is determined.

**TAXATION** 

**TAXATION OF THE FUNDS** 

The following discussion of certain federal tax matters concerning the Funds and the purchase, ownership and disposition of Fund shares is not complete and may not deal with all aspects of federal taxation that may be relevant to you in light of your particular circumstances. This discussion is based on the Internal Revenue Code of 1986, as amended (the "Code"), the regulations promulgated thereunder and judicial and administrative interpretations thereof, publicly available as of the date hereof; all these authorities are subject to change, which may be applied retroactively. You should consult your own tax advisers with regard to the federal tax consequences to you of the purchase, ownership and disposition of Fund shares, as well as the tax consequences thereof to you arising under the laws of any state, locality, foreign country or other taxing jurisdiction.

Each Fund, which is treated as a separate corporation for federal tax purposes, intends to continue to qualify annually for treatment as a "regulated investment company" under Subchapter M of Chapter 1 of Subtitle A of the Code ("RIC"). If so qualified, a Fund (but not its shareholders) will not be liable for federal income tax to the extent it distributes its net earnings and realized net gains to its shareholders on a timely basis.

To continue to qualify for treatment as a RIC for a taxable year, a Fund must distribute to its shareholders at least the sum of 90% of its investment company taxable income (consisting generally of net investment income, the excess, if any, of net short-term

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capital gain over net long-term capital loss ("net short-term capital gain") and net gains and losses from certain foreign currency transactions, if any, all determined without regard to any deduction for dividends paid) and 90% of its net exempt interest income for that year ("Distribution Requirement") and must meet several additional requirements. With respect to each Fund, these requirements include the following: (1) the Fund must derive at least 90% of its gross income for the taxable year from dividends, interest, payments with respect to securities loans and gains (without regard to losses) from the sale or other disposition of securities or foreign currencies, or other income derived with respect to its business of investing in securities or those currencies and income from qualified publicly traded partnerships ("Income Requirement"); and (2) at the close of each quarter of the Fund's taxable year, (a) at least 50% of the value of its total assets must be represented by cash and cash items, Government securities, securities of other RICs and other securities, with these other securities limited, in respect of any one issuer, to an amount that does not exceed 5% of that value and that does not represent more than 10% of the issuer's outstanding voting securities, and (b) not more than 25% of that value may be invested in (i) the securities (other than Government securities or securities of other RICs) of any one issuer, (ii) the securities (other than securities of other RICs) of two or more issuers the Fund controls (by owning 20% or more of their voting power) that are determined to be engaged in the same, similar or related trades or businesses, or (iii) interests in qualified publicly traded partnerships ("Diversification Requirements").

If a Fund fails to qualify for treatment as a RIC for any taxable year – either (1) by failing to satisfy the Distribution Requirement, even if it satisfies the Income and Diversification Requirements, or (2) by failing to satisfy the Income Requirement and/or Diversification Requirements and is unable, or determines not, to avail itself of Code provisions that enable a RIC to cure a failure to satisfy any of the Income and Diversification Requirements as long as the failure "is due to reasonable cause and not due to willful neglect" and the RIC pays a deductible tax calculated in accordance with those provisions and meets certain other requirements – then for federal tax purposes it would be treated as a regular corporation. In that case, it would be subject to federal income tax, and any distributions that it made to its shareholders would not be deductible by it and would be taxable to them as ordinary income (with no part treated as a capital gain distribution) to the extent of its earnings and profits, except for the part of those dividends that is "qualified dividend income" (described in the Prospectus), which is subject to maximum federal income tax rates of 15% and 20% for certain shareholders. That treatment would increase the cost of investing in that Fund for shareholders and would make it more economical for shareholders to invest directly in securities held by the Fund instead of investing indirectly in those securities through the Fund.

Each Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the extent it fails to distribute by the end of any calendar year substantially all of its ordinary income for that year and capital gain net income for the one-year period ending on October 31 (or December 31, if it so elects) of that year, plus certain other amounts.

Some futures contracts, foreign currency contracts, and "non-equity" options (i.e., certain listed options, such as those on a "broad-based" securities index) — except any "securities futures contract" that is not a "dealer securities futures contract" (both as defined in the Code) and any interest rate swap, currency swap, basis swap, interest rate cap, interest rate floor, commodity swap, equity swap, equity index swap, credit default swap, or similar agreement—in which the Fund invests may be subject to Code section 1256 (collectively, "Section 1256 contracts"). Any Section 1256 contract the Fund holds at the end of its taxable year must be "marked-to-market" (that is, treated as having been sold at that time for its fair market value) for federal income tax purposes, with the result that unrealized gains or losses will be treated as though they were realized. Sixty percent of any net gain or loss realized on these deemed sales, and 60% of any net realized gain or loss from any actual sales of Section 1256 contracts, will be treated as long-term capital gain or loss, and the balance will be treated as short-term capital gain or loss. Section 1256 contracts also may be marked-to-market for purposes of the Excise Tax. These rules may operate to increase the amount that a Fund must distribute to satisfy the Distribution Requirement (i.e., with respect to the portion treated as short-term capital gain), which will be taxable to its shareholders as ordinary income when distributed to them, and to increase the net capital gain the Fund recognizes, without in either case increasing the cash available to it.

Section 988 of the Internal Revenue Code also may apply to a Fund's forward currency contracts and options and futures contracts on foreign currencies. Under that section, each foreign currency gain or loss generally is computed separately and treated as ordinary income or loss. These gains or losses will increase or decrease the amount of the Fund's investment company taxable income to be distributed to its shareholders as ordinary income, rather than affecting the amount of its net capital gain. If a Fund's section 988 losses exceed its other investment company taxable income during a taxable year, the Fund would not be able to distribute any dividends, and any distributions made during that year (including those made before the losses were realized) would be characterized as a non-taxable "return of capital" to shareholders, rather than as a dividend, thereby reducing each shareholder's basis in his or her Fund shares and treating any part of such distribution exceeding that basis as gain from the disposition of those shares.

Offsetting positions a Fund enters into or holds in any actively traded option, futures or forward contract may constitute a "straddle" for federal income tax purposes. Straddles are subject to certain rules that may affect the amount, character and timing of recognition of the Fund's gains and losses with respect to positions of the straddle by requiring, among other things, that (1) losses realized on disposition of one position of a straddle be deferred to the extent of any unrealized gain in an offsetting position until the latter position is disposed of, (2) the Fund's holding period in certain straddle positions not begin until the straddle is terminated (possibly resulting in gain being treated as short-term rather than long-term capital gain), and (3) losses recognized with respect to certain straddle positions, that otherwise would constitute short-term capital losses, be treated as long-term capital losses. Applicable regulations also provide certain "wash sale" rules, which apply to transactions where a position is sold at a loss and a new offsetting position is acquired within a prescribed period, and "short sale" rules applicable to straddles. Different elections are available, which may mitigate the effects of the straddle rules, particularly with respect to "mixed straddles" (i.e., a straddle at least one, but not all, positions of which are Section 1256 contracts).

When a covered call option written (sold) by a Fund expires, it will realize a short-term capital gain equal to the amount of the premium it received for writing the option. When the Fund terminates its obligations under such an option by entering into a closing transaction, it will realize a short-term capital gain (or loss), depending on whether the cost of the closing transaction is less (or more) than the premium it received when it wrote the option. When a covered call option written by the Fund is exercised, it will be treated as having sold the underlying security, producing long-term or short-term capital gain or loss, depending on the holding period of the underlying security and whether the sum of the option price received on the exercise plus the premium received when it wrote the option is more or less than the underlying security's basis.

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If a Fund has an "appreciated financial position" – generally, an interest (including an interest through a short sale) with respect to any stock, debt instrument (other than "straight debt") or partnership interest the fair market value of which exceeds its adjusted basis – and enters into a "constructive sale" of the position, the Fund will be treated as having made an actual sale thereof, with the result that it will recognize gain at that time. A constructive sale generally consists of a short sale or an offsetting notional principal contract a Fund or a related person enters into with respect to the same or substantially identical property. In addition, if the appreciated financial position is itself a short sale or such a contract, acquisition of the underlying property or substantially identical property will be deemed a constructive sale. The foregoing will not apply, however, to any transaction by a Fund during any taxable year that would otherwise be treated as a constructive sale if the transaction is closed within 30 days after the end of that year and the Fund holds the appreciated financial position unhedged for 60 days after that closing (*i.e.,* at no time during that 60-day period is the Fund's risk of loss regarding that position reduced by reason of certain specified transactions with respect to substantially identical or related property, such as having an option to sell, being contractually obligated to sell, making a short sale or granting an option to buy substantially identical stock or securities).

Certain aspects of the tax treatment of derivative instruments are currently unclear and may be affected by changes in legislation, regulations, administrative rules, and/or other legally binding authority that could affect the treatment of income from those instruments and the character, timing of recognition and amount of the Fund's taxable income or net realized gains and distributions. If the Internal Revenue Service ("IRS") were to assert successfully that income a Fund derives from those investments does not constitute Qualifying Other Income, the Fund might cease to qualify as a RIC (with the consequences described above) or might be required to reduce its exposure to such investments.

**Investments in Foreign Securities.** Dividends and interest a Fund receives, and gains it realizes, on foreign securities may be subject to income, withholding or other taxes imposed by foreign countries and U.S. possessions that would reduce the yield and/or total return on its securities. Tax conventions between certain countries and the United States may reduce or eliminate those taxes, however, and many foreign countries do not impose taxes on capital gains in respect of investments by foreign investors.

Each Fund may invest in the stock of "passive foreign investment companies" ("PFICs"). A PFIC is any foreign corporation (with certain exceptions) that, in general, meets either of the following tests for a taxable year:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.at least 75% of its gross income is passive; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.an average of at least 50% of its assets produce, or are held for the production of, passive income.

Under certain circumstances, a Fund will be subject to federal income tax on a portion of any "excess distribution" it receives on the stock of a PFIC and of any gain on disposition of the stock (collectively, "PFIC income"), plus interest thereon, even if the Fund distributes the PFIC income as a taxable dividend to its shareholders. The balance of the PFIC income will be included in the Fund's investment company taxable income and, accordingly, will not be taxable to it to the extent it distributes that income to its shareholders. Fund distributions attributable to PFIC income will not be eligible for the 15% and 20% maximum federal income tax rates on "qualified dividend income" mentioned above.

If a Fund invests in a PFIC and elects to treat the PFIC as a "qualified electing fund" ("QEF"), then in lieu of the foregoing tax and interest obligation, the Fund would be required to include in income each taxable year its *pro rata* share of the QEF's annual ordinary earnings and net capital gain even if the QEF did not distribute those earnings and gain to the Fund. In most instances it will be very difficult, if not impossible, to make this election because of certain requirements thereof.

Each Fund may elect to "mark to market" its stock in any PFIC. "Marking-to-market," in this context, means including in gross income (and treating as ordinary income) each taxable year the excess, if any, of the fair market value of the stock over a Fund's adjusted basis therein as of the end of that year. Pursuant to the election, a Fund also may deduct (as an ordinary, not a capital, loss) the excess, if any, of its adjusted basis in PFIC stock over the fair market value thereof as of the taxable year-end, but only to the extent of any net mark-to-market gains with respect to that stock the Fund included in income for prior taxable years under the election. A Fund's adjusted basis in each PFIC's stock subject to the election would be adjusted to reflect the amounts of income included and deductions taken thereunder.

Investors should be aware that determining whether a foreign corporation is a PFIC is a fact-intensive determination that is based on various facts and circumstances and thus is subject to change, and the principles and methodology used therein are subject to interpretation. As a result, a Fund may not be able, at the time it acquires a foreign corporation's shares, to ascertain whether the corporation is a PFIC, and a foreign corporation may become a PFIC after a Fund acquires shares therein. While each Fund generally will seek to avoid investing in PFIC shares to avoid the tax consequences detailed above, there are no guarantees that it will be able to do so and it reserves the right to make such investments as a matter of its investment policy.

Gains or losses (1) from the disposition of foreign currencies, (2) on the disposition of a debt security denominated in a foreign currency that are attributable to fluctuations in the value of the foreign currency between the dates of acquisition and disposition of the security and (3) that are attributable to exchange rate fluctuations between the time a Fund accrues interest, dividends or other receivables or expenses or other liabilities denominated in a foreign currency and the time it actually collects the receivables or pays the liabilities, generally are treated as ordinary income or loss. These gains or losses will increase or decrease the amount of investment company taxable income available to a Fund for distribution to its shareholders as ordinary income, rather than increasing or decreasing the amount of its net capital gain.

For federal income tax purposes, net capital losses incurred by a Fund in a particular taxable year can be carried forward to offset net capital gains in any subsequent year until such loss carryforwards have been fully used, and such capital losses carried forward will retain their character as either short-term or long term capital losses. To the extent subsequent net capital gains are offset by such losses, they would not result in federal income tax liability to the Fund and would not be distributed as such to shareholders.

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At December 31, 2025, the capital loss carryforwards were as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **Short-Term** | **Long-Term** | **Capital Loss Carryover Utilized** |
| LKCM Fixed Income Fund | $419360 | $4643285 | $— |
| LKCM International Equity Fund | $723906 | $3378284 | $— |
| LKCM Small-Mid Cap Equity Fund | $— | $— | $194260 |

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**TAXATION OF THE SHAREHOLDERS** 

Distributions of net capital gain, if any, designated as capital gains dividends are taxable to a shareholder as long-term capital gains, regardless of how long the shareholder has held Fund shares. A distribution of an amount in excess of a Fund's current and accumulated earnings and profits will be treated by a shareholder as a return of capital which is applied against and reduces the shareholder's basis in his or her shares. To the extent that the amount of any such distribution exceeds the shareholder's basis in his or her shares, the excess will be treated by the shareholder as gain from a sale or exchange of the shares. Distributions of gains from the sale of investments that a Fund owned for one year or less will be taxable as ordinary income.

A Fund may elect to retain its net capital gain or a portion thereof for investment and be taxed at corporate rates on the amount retained. In such case, it may designate the retained amount as undistributed capital gains in a notice to its shareholders who will be treated as if each received a distribution of his pro rata share of such gain, with the result that each shareholder will (i) be required to report his pro rata share of such gain on his tax return as long-term capital gain, (ii) receive a refundable tax credit for his pro rata share of tax paid by the Fund on the gain and (iii) increase the tax basis for his shares by an amount equal to the deemed distribution less the tax credit.

If Fund shares are sold at a loss after being held for six months or less, the loss will be treated as a long-term, instead of a short-term, capital loss to the extent of any capital gain distributions received on those shares.

The Code generally allows individuals and certain non-corporate entities a deduction for 20% of qualified REIT dividends. Regulations allow a RIC to pass the character of its qualified REIT dividends through to its shareholders provided certain holding period requirements are met. As a result, individuals or other shareholders eligible for the deduction with respect to qualified REIT dividends will also be eligible to receive the benefit of this deduction with respect to qualified REIT dividends received by a Fund that are thereafter included in Fund dividends to shareholders, provided that the eligible shareholders have held their Fund shares for at least 46 days during the 91-day period beginning on the date that is 45 days before the date on which the shares become ex-dividend with respect such Fund dividend.

As noted in the Prospectus, a shareholder's basis in Fund shares that he or she acquired or acquires after December 31, 2011 ("Covered Shares"), will be determined in accordance with the Funds' default method, which is average basis, unless the shareholder affirmatively elects in writing (which may be electronic) to use a different acceptable basis determination method, such as a specific identification method. The basis determination method a Fund shareholder elects (or the default method) may not be changed with respect to a redemption (including a redemption that is part of an exchange) of Covered Shares after the settlement date of the redemption.

In addition to the requirement to report the gross proceeds from redemptions of shares, each Fund (or its administrative agent) must report to the IRS and furnish to its shareholders the basis information for Covered Shares and indicate whether they had a short-term (one year or less) or long-term (more than one year) holding period. Fund shareholders should consult with their tax advisers to determine the best IRS-accepted basis determination method for their tax situation and to obtain more information about how the basis reporting law applies to them.

If more than 50% of the value of a Fund's total assets at the close of any taxable year consists of securities of foreign corporations, it will be eligible to file an election for that year with the IRS that would enable its shareholders to benefit from any foreign tax credit or deduction available with respect to any foreign taxes it pays. Pursuant to the election, a Fund would treat those taxes as dividends paid to its shareholders and each shareholder (1) would be required to include in gross income, and treat as paid by the shareholder, the shareholder's proportionate share of those taxes, (2) would be required to treat that share of those taxes and of any dividend the Fund paid that represents income from foreign or U.S. possessions sources ("foreign-source income") as the shareholder's own income from those sources, and (3) could either use the foregoing information in calculating the foreign tax credit against the shareholder's federal income tax or, alternatively, deduct the foreign taxes deemed paid by the shareholder in computing taxable income. If a Fund makes this election for a taxable year, it will report to its shareholders shortly after that year their respective shares of the foreign taxes it paid and its foreign-source income for that year.

Individual shareholders of a Fund who, for a taxable year, have no more than $300 ($600 for married persons filing jointly) of creditable foreign taxes included on IRS Forms 1099 and all of whose foreign-source income is "qualified passive income" may elect for that year to be exempt from the extremely complicated foreign tax credit limitation for federal income tax purposes (about which shareholders may wish to consult their tax advisers), in which event they would be able to claim a foreign tax credit without having to file the detailed Form 1116 that otherwise is required. A shareholder will not be entitled to credit or deduct its portion of foreign taxes a Fund paid that is allocable to Fund shares the shareholder has not held for at least 16 days during the 31-day period beginning 15 days before the ex-distribution date for those shares. The minimum holding period will be extended if the shareholder's risk of loss with respect to those shares is reduced by reason of holding an offsetting position. No deduction for foreign taxes may be claimed by a shareholder who does not itemize deductions. A foreign shareholder may not deduct or claim a credit for foreign taxes in determining its federal income tax liability unless the Fund dividends paid to it are effectively connected with the shareholder's conduct of a U.S. trade or business.

**INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** 

Deloitte & Touche LLP serves as the Funds' independent registered public accounting firm, whose services include an audit of the Funds' financial statements and the performance of other related audit and tax services.

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**FINANCIAL STATEMENTS** 

The audited financial statements for the Funds are incorporated herein by reference to Item 7 of the Funds' <u>[Form N-](https://www.sec.gov/ix?doc=/Archives/edgar/data/918942/000113322826003110/lf-efp22616_ncsr.htm#sopa)[CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/918942/000113322826003110/lf-efp22616_ncsr.htm#sopa)</u> for the fiscal year ended December 31, 2025. A copy of the Annual and Semi-Annual Reports, and financial statements and accompanying notes, may be obtained without charge by calling the Funds at (800) 688-LKCM or by visiting www.lkcmfunds.com

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**APPENDIX A** 

**DESCRIPTION OF SECURITIES RATINGS** 

**RATINGS DEFINITIONS** 

**<u>S&P Global Ratings' Issue Credit Rating Definitions</u>**

An S&P Global Ratings 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 S&P Global Ratings' view of the obligor's capacity and willingness to meet its financial commitments as they come due, and this opinion 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 issue credit ratings are generally assigned to those obligations considered short-term in the relevant market, typically with an original maturity of no more than 365 days. Short-term issue credit ratings are also used to indicate the creditworthiness of an obligor with respect to put features on long-term obligations. S&P Global would typically assign a long-term issue credit rating to an obligation with an original maturity of greater than 365 days. However, the ratings assigned to certain instruments may diverge from these guidelines based on market practices.

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

**A-1** 

A short-term obligation rated 'A-1' is rated in the highest category by S&P Global Ratings. The obligor's capacity to meet its financial commitments 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 commitments 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 commitments 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 weaken an obligor's capacity to meet its financial commitments on the obligation.

**B** 

A short-term obligation rated 'B' is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties that could lead to the obligor's inadequate capacity to meet its financial commitments.

**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 commitments on the obligation.

**D** 

A short-term obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless S&P Global Ratings believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. A rating on an obligation is lowered to 'D' if it is subject to a distressed debt restructuring.

**SPUR (S&P Underlying Rating)** 

A SPUR is an opinion about the stand-alone capacity of an obligor 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 or obligor with the designation SPUR to distinguish them from the credit-enhanced rating that applies to the debt issue. S&P Global Ratings maintains surveillance of an issue with a published SPUR.

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**Dual Ratings** 

Dual ratings may be assigned to debt issues that have a put option or demand feature. The first component of the rating addresses the likelihood of repayment of principal and interest as due, and the second component of the rating addresses only the demand feature. The first component of the rating can relate to either a short-term or long-term transaction and accordingly use either short-term or long-term rating symbols. The second component of the rating relates to the put option and is assigned a short-term rating symbol (for example, 'AAA/A-1+' or 'A-1+/A-1'). With U.S. municipal short-term demand debt, the U.S. municipal short-term note rating symbols are used for the first component of the rating (for example, 'SP-1+/A-1+').

**S&P Global Ratings Disclaimers** 

The analyses, including ratings, of S&P Global Ratings and its affiliates (together, S&P Global Ratings) 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. S&P Global Ratings assumes no obligation to update any information following publication. Users of ratings or other analyses should not rely on them in making any investment decision. S&P Global Ratings' opinions and analyses do not address the suitability of any security. S&P Global Ratings does not act as a fiduciary or an investment advisor except where registered as such. While S&P Global Ratings has obtained information from sources it believes to be reliable, it does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Ratings and other opinions may be changed, suspended, or withdrawn at any time.

**<u>Qualifiers</u>**

S&P Global Ratings assigns qualifiers to ratings when appropriate. This section details active and inactive qualifiers.

**<u>Active Qualifiers</u>**

S&P Global Ratings uses the following qualifiers that limit the scope of a rating. The structure of the transaction can require the use of a qualifier such as a 'p' qualifier, which indicates the rating addresses the principal portion of the obligation only. A qualifier appears as a suffix and is part of the rating.

**1. Federal Deposit Insurance Limit: "L" qualifier** 

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

**2. Principal: "p" qualifier** 

This suffix 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' suffix indicates that the rating addresses the principal portion of the obligation only and that the interest is not rated.

**3. Preliminary Ratings: "prelim" qualifier** 

Preliminary ratings, with the 'prelim' suffix, may be assigned to obligors or obligations, including financial programs, in the circumstances described below. Assignment of a final rating is conditional on the receipt by S&P Global Ratings of appropriate documentation. S&P Global Ratings reserves the right not to issue a final rating. Moreover, if a final rating is issued, it may differ from the preliminary rating.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Preliminary ratings may be assigned to obligations that will likely be issued upon the obligor's emergence from bankruptcy or similar reorganization, based on late-stage reorganization plans, documentation, and discussions with the obligor. Preliminary ratings may also be assigned to the obligors. These ratings consider the anticipated general credit quality of the reorganized or post-bankruptcy issuer as well as attributes of the anticipated obligation(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Preliminary ratings may be assigned to entities that are being formed or that are in the process of being independently established when, in S&P Global Ratings' opinion, documentation is close to final. Preliminary ratings may also be assigned to the obligations of these entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Preliminary ratings may be assigned when a previously unrated entity is undergoing a well-formulated restructuring, recapitalization, significant financing, or other transformative event, generally at the point that investor or lender commitments are invited. The preliminary rating may be assigned to the entity and to its proposed obligation(s). These preliminary ratings consider the anticipated general credit quality of the obligor, as well as attributes of the anticipated obligation(s), assuming successful completion of the transformative event. Should the transformative event not occur, S&P Global Ratings would likely withdraw these preliminary ratings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;A preliminary recovery rating may be assigned to an obligation that has a preliminary issue credit rating.

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**4. Termination Structures: "t" qualifier** 

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.

**5. Counterparty Instrument Rating: "cir" qualifier** 

This symbol indicates a counterparty instrument rating (CIR), which is a forward-looking opinion about the creditworthiness of an issuer in a securitization structure with respect to a specific financial obligation to a counterparty (including interest rate swaps, currency swaps, and liquidity facilities). The CIR is determined on an ultimate payment basis; these opinions do not take into account timeliness of payment.

**<u>Inactive Qualifiers</u>**

Inactive qualifiers are no longer applied or outstanding.

**1. Contingent upon final documentation: "\*" inactive qualifier** 

This symbol indicated that the rating was contingent upon S&P Global Ratings' receipt of an executed copy of the escrow agreement or closing documentation confirming investments and cash flows. Discontinued use in August 1998.

**2. Termination of obligation to tender: "c" inactive qualifier** 

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 was lowered to below an investment-grade level and/or the issuer's bonds were deemed taxable. Discontinued use in January 2001.

**3. U.S. direct government securities: "G" inactive qualifier** 

The letter 'G' followed the rating symbol when a fund's portfolio consisted primarily of direct U.S. government securities.

**4. Interest Payment: 'i' inactive qualifier** 

This suffix was 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' suffix indicated that the rating addressed the interest portion of the obligation only. The 'i' suffix was always used in conjunction with the 'p' suffix, which addresses likelihood of receipt of principal. For example, a rated obligation could have been assigned a rating of 'AAApNRi' indicating that the principal portion was rated 'AAA' and the interest portion of the obligation was not rated.

**5. Public Information Ratings: 'pi' qualifier** 

This qualifier was used to indicate ratings that were based on an analysis of an issuer's published financial information, as well as additional information in the public domain. Such ratings did not, however, reflect in-depth meetings with an issuer's management and therefore could have been based on less comprehensive information than ratings without a 'pi' suffix. Discontinued use as of December 2014 and as of August 2015 for Lloyd's Syndicate Assessments.

**6. Provisional Ratings: "pr" inactive qualifier** 

The letters 'pr' indicate that the rating was provisional. A provisional rating assumed the successful completion of a project financed by the debt being rated and indicates that payment of debt service requirements was 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, made no comment on the likelihood of or the risk of default upon failure of such completion.

**7. Quantitative Analysis of public information: "q" inactive qualifier** 

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

**8. Extraordinary risks: "r" inactive qualifier** 

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 would not exhibit extraordinary noncredit-related risks. S&P Global Ratings 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.

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**Active Identifiers** 

S&P Global Ratings currently uses seven other identifiers. These words or symbols provide additional information but do not change the definition of a rating or our opinion about the issue's or issuer's creditworthiness. The identifiers are often required by regulation.

**1. Unsolicited: 'unsolicited' and 'u' identifier** 

The 'u' identifier and 'unsolicited' designation are assigned to credit ratings initiated by parties other than the issuer or its agents, including those initiated by S&P Global Ratings.

**2. Structured finance: "sf" identifier** 

The 'sf' identifier shall be assigned to ratings on "securitization instruments" when required to comply with an applicable law or regulatory requirement or when S&P Global Ratings believes it appropriate. The addition of the 'sf' identifier to a rating does not change that rating's definition or our opinion about the issue's creditworthiness. For detailed information on the instruments assigned the 'sf' identifier, please see the appendix for the types of instruments that carry the 'sf identifier'.

**3. Japan: 'JR' identifier** 

The 'JR' identifier is assigned to all issue and issuer ratings assigned by either S&P Global Ratings Japan or S&P Global SF Japan, each of which is a registered credit rating agency in Japan, as ratings registered under Japanese regulation. The addition of the identifier does not change the definition of that rating or our opinion about the issue's or issuer's creditworthiness.

**4. European Union: 'EU' identifier** 

S&P Global Ratings applies the 'EU' identifier to global scale ratings assigned by S&P Global Ratings Europe (SPGRE) (including through its branches), which is registered with the European Securities and Markets Authority (ESMA) and subject to EU regulation on credit rating agencies. The addition of the 'EU' identifier to a rating does not change that rating's definition or our opinion about the issue's or issuer's creditworthiness.

**5. European Endorsed: 'EE' identifier** 

S&P Global Ratings applies the 'EE' identifier to global scale ratings assigned by S&P Global Ratings affiliates established outside the European Union and endorsed by SPGRE. SPGRE is registered with ESMA and subject to EU regulation on credit rating agencies. The addition of the 'EE' identifier to a rating does not change that rating's definition or our opinion about the issue's or issuer's creditworthiness.

**6. United Kingdom: 'UK' identifier** 

S&P Global Ratings applies the 'UK' identifier to global scale ratings assigned by S&P Global Ratings UK (SPGRUK) which is registered with the UK Financial Conduct Authority (FCA) and subject to UK regulation on credit rating agencies. The addition of the 'UK' identifier to a rating does not change that rating's definition or our opinion about the issue's or issuer's creditworthiness.

**7. United Kingdom Endorsed: 'UKE' identifier** 

S&P Global Ratings applies the 'UKE' identifier to global scale ratings assigned by S&P Global Ratings' affiliates established outside the U.K. and endorsed by SPGRUK. SPGRUK is registered with the FCA and subject to UK regulation on credit rating agencies. The addition of the 'UKE' identifier to a rating does not change that rating's definition or our opinion about the issue's or issuer's creditworthiness.

**8. S&P Global SF Japan: 'XN' identifier**

S&P Global SF Japan assigns the 'XN' identifier to credit ratings assigned by S&P Global SF Japan S&P Global SF Japan is not a Nationally Recognized Statistical Rating Organization. The addition of the 'XN' identifier to a rating does not change that rating's definition or our opinion about the issue's or issuer's creditworthiness.

**9. Under criteria observation 'UCO' identifier** 

The 'UCO' identifier may (or shall, if an EU regulatory requirement) be assigned to credit ratings under review as a result of a criteria revision. The addition of the 'UCO' identifier to a rating does not change that rating's definition or our opinion about the issue's or issuer's creditworthiness.

**Local Currency and Foreign Currency Ratings** 

S&P Global Ratings' issuer credit ratings make a distinction between foreign currency ratings and local currency ratings. A foreign currency rating on an issuer can differ from the local currency rating on it when the obligor has a different capacity to meet its obligations denominated in its local currency, versus obligations denominated in a foreign currency.

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

Ratings assigned on Moody's global long-term and short-term rating scales are forward-looking opinions of the relative credit risks of financial obligations issued by non-financial corporates, financial institutions, structured finance vehicles, project finance vehicles, and public sector entities. Moody's defines credit risk as the risk that an entity may not meet its contractual financial obligations as they come due and any estimated financial loss in the event of default or impairment. The contractual financial obligations<sup>1</sup> addressed by Moody's ratings are those that call for, without regard to enforceability, the payment of an ascertainable amount, which may vary based upon standard sources of variation (e.g., floating interest rates), by an ascertainable date. Moody's rating addresses the issuer's ability to obtain cash sufficient to service the obligation, and its willingness to pay.<sup>2</sup> Moody's ratings do not address non-standard sources of variation in the amount of the principal obligation (e.g., equity indexed), absent an express statement to the contrary in a press release accompanying an initial rating.<sup>3</sup> Long-term ratings are assigned to issuers or obligations with an original maturity of eleven months or more and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment. Short-term ratings are assigned to obligations with an original maturity of thirteen months or less and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment.<sup>4, 5, 6</sup> Moody's issues ratings at the issuer level and instrument level on both the long-term scale and the short-term scale. Typically, ratings are made publicly available although private and unpublished ratings may also be assigned.<sup>7</sup>

Moody's differentiates structured finance ratings from fundamental ratings (i.e., ratings on nonfinancial corporate, financial institution, and public sector entities) on the global long-term scale by adding (sf) to all structured finance ratings.<sup>7</sup> The addition of (sf) to structured finance ratings should eliminate any presumption that such ratings and fundamental ratings at the same letter grade level will behave the same. The (sf) indicator for structured finance security ratings indicates that otherwise similarly rated structured finance and fundamental securities may have different risk characteristics. Through its current methodologies, however, Moody's aspires to achieve broad expected equivalence in structured finance and fundamental rating performance when measured over a long period of time.

1. In the case of impairments, there can be a financial loss even when contractual obligations are met. See the definition of Impairment in this publication.

2. For issuer level ratings, see the definition of Issuer Ratings in this publication. In some cases the relevant credit risk relates to a third party, in addition to, or instead of the issuer. Examples include credit-linked notes and guaranteed obligations.

3. Because the number of possible features or structures is limited only by the creativity of issuers, Moody's cannot comprehensively catalogue all the types of non-standard variation affecting financial obligations, but examples include equity indexed principal values and cash flows, prepayment penalties, and an obligation to pay an amount that is not ascertainable at the inception of the transaction.

4. For certain preferred stock and hybrid securities in which payment default events are either not defined or do not match investors' expectations for timely payment, long-term and short-term ratings reflect the likelihood of impairment (as defined below in this publication) and financial loss in the event of impairment.

5. Debts held on the balance sheets of official sector institutions – which include supranational institutions, central banks and certain government-owned or controlled banks – may not always be treated the same as debts held by private investors and lenders. When it is known that an obligation is held by official sector institutions as well as other investors, a rating (short-term or long-term) assigned to that obligation reflects only the credit risks faced by non-official sector investors.

6. Where grace periods are disproportionately long relative to the stated maturity, Moody's may choose not to rate the instrument. This is particularly relevant in the commercial paper market where maturities may be 30 days or less with a strong investor expectation of prompt payment.

7. For information on how to obtain a Moody's credit rating, including private and unpublished credit ratings, please see Moody's Investors Service Products. Please note that Moody's always reserves the right to choose not to assign or maintain a credit rating for its own business reasons.

8. Like other global scale ratings, (sf) ratings reflect both the likelihood of a default and the expected loss suffered in the event of default. Ratings are assigned based on a rating committee's assessment of a security's expected loss rate (default probability multiplied by expected loss severity), and may be subject to the constraint that the final expected loss rating assigned would not be more than a certain number of notches, typically three to five notches, above the rating that would be assigned based on an assessment of default probability alone. The magnitude of this constraint may vary with the level of the rating, the seasoning of the transaction, and the uncertainty around the assessments of expected loss and probability of default.

**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** 

Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.

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**Aa** 

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

**A** 

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

**Baa** 

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

**Ba** 

Obligations rated Ba are judged to be speculative 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 speculative 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 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. Additionally, a "(hyb)" indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance companies, and securities firms.\*

Note: For more information on long-term ratings assigned to obligations in default, please see the definition "Long-Term Credit Ratings for Defaulted or Impaired Securities" in the Other Definitions section of this publication.

\*&nbsp;&nbsp;&nbsp;&nbsp;By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may also be subject to contractually allowable write-downs of principal that could result in impairment. Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an expression of the relative credit risk associated with that security.

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

Moody's assigns ratings to long-term and short-term financial obligations. Long-term ratings are assigned to issuers or obligations with an original maturity of eleven months or more and reflect both on the likelihood of a default on contractually promised payments and the expected financial loss suffered in the event of default. Short-term ratings are assigned to obligations with an original maturity of thirteen months or less and reflect both on the likelihood of a default on contractually promised payments and the expected financial loss suffered in the event of default. Moody's employs the following designations to indicate the relative repayment ability of rated issuers:

**P-1** 

Ratings of Prime-1 reflect a superior ability to repay short-term obligations.

**P-2** 

Ratings of Prime-2 reflect a strong ability to repay short-term obligations.

**P-3** 

Ratings of Prime-3 reflect an acceptable ability to repay short-term obligations.

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**NP** 

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

The following table indicates the long-term ratings consistent with different short-term ratings when such long-term ratings exist.

**<u>SHORT-TERM VS. LONG-TERM RATINGS</u>**

![Short Term vs Long Term Ratings- Security Ratings 2025.jpg](ck0000918942-20260429_g10.jpg)

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**<u>Fitch's National Credit Ratings</u>**

National ratings express creditworthiness across the full range of the credit rating scale, using similar symbols to those used for international ratings. However, to assure differentiation between the two scales, a two- or three-letter suffix is appended to the national rating to reflect the specific nature of the national scale to the country concerned. For ease of reference, Fitch uses the suffix of (xxx) to indicate a national rating. Each country or monetary union's national rating scale is specific to that jurisdiction and is not comparable to national scales of different countries.

A "+" 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)' National Rating category, to categories below 'CCC(xxx)', or to Short-Term National Ratings other than 'F1(xxx)'.

**<u>National Relativity</u>**

National ratings are a measure of relative credit risk among issuers in a country or monetary union, except in circumstances when ratings are notched for support or at the instrument level to differentiate priority/recovery prospects relative to other local market instruments. Where national ratings are derived by notching, they reflect creditworthiness relative to the respective supporting entity's (parent or government) national rating, rather than to unsupported national ratings. National Rating Correspondence Tables often will have a notch-specific local currency ("LC") issuer default rating ("IDR") or credit opinion that relate to multiple rating options on the national scale.

**<u>LC and FC Issuer National Ratings</u>**

National ratings can be assigned to the issuer or at the specific debt instrument level. Issuer-level national ratings address the relative vulnerability to default of LC obligations (or legal tender) for local issuers within the country concerned when not notched for support. Therefore, national ratings exclude the risk that cross border investors may be unable to repatriate interest and principal repayments out of the country. Issuer-level national ratings do not incorporate transfer and convertibility risk associated with the FC obligations of a local issuer, and this is the reason the national scale rating analysis begins with an international LC rating or LC credit opinion as transfer and convertibility risk is only incorporated into FC ratings; there are some exceptions where ratings may be notched.

**<u>Issuer and Instrument-level National Ratings</u>**

Fitch assigns national ratings to specific debt instruments denominated in LC and issued where the entity or issuer is domiciled. Fitch may also assign national instrument ratings to i) foreign issuers' obligations issued in LC in the country concerned, and ii) local or foreign issuers' (legal entities or branches) obligations where repayment is in FC and a national scale rating may be required to comply with local regulation and/or local market practices often found in Central America and countries with high levels of dollarization; national ratings of FC instruments are less common.

<u>Convergence at 'C'</u> 

A 'C' level rating on both the international and national rating scales reflects that the default of an issuer is imminent. As a result, a 'C' rating on one scale is necessarily a 'C' rating on the other scale. Due to the greater differentiation across national rating scales relative to the international rating scale, there can be more rating volatility and more significant rating transition for National Ratings compared with International Ratings.

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

**F1(xxx)** 

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 or monetary union. Where the liquidity profile is particularly strong, a "+" is added to the assigned rating.

**F2(xxx)** 

Indicates a good capacity for timely payment of financial commitments relative to other issuers or obligations in the same country or monetary union. However, the margin of safety is not as great as in the case of the higher ratings.

**F3(xxx)** 

Indicates an adequate capacity for timely payment of financial commitments relative to other issuers or obligations in the same country or monetary union.

**B(xxx)** 

Indicates an uncertain capacity for timely payment of financial commitments relative to other issuers or obligations in the same country or monetary union.

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**C(xxx)** 

Indicates a highly uncertain capacity for timely payment of financial commitments relative to other issuers or obligations in the same country or monetary union.

**RD(xxx): Restricted default** 

Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Applicable to entity ratings only.

**D(xxx)** 

Indicates a broad-based default event for an entity, or the default of a short-term obligation.

**Notes:** 

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.

**LONG-TERM RATINGS** 

**<u>S&P Global</u>**

**<u>Ratings' Long-Term Issue Credit Ratings</u>**

Issue credit ratings are based, in varying degrees, on S&P Global Ratings' analysis of the following considerations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;The likelihood of payment--the capacity and willingness of the obligor to meet its financial commitments on an obligation in accordance with the terms of the obligation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;The nature and provisions of the financial obligation, and the promise we impute; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;The protection afforded by, and relative position of, the financial obligation in the event of a bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights.

An issue rating is 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 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.)

**Long-Term Issue Credit Ratings\*** 

**AAA** 

An obligation rated 'AAA' has the highest rating assigned by S&P Global Ratings. The obligor's capacity to meet its financial commitments 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 commitments 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 commitments 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 weaken the obligor's capacity to meet its financial commitments 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 exposure to adverse conditions.

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**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 that could lead to the obligor's inadequate capacity to meet its financial commitments 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 commitments on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitments 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 commitments 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 commitments on the obligation.

**CC** 

An obligation rated 'CC' is currently highly vulnerable to nonpayment. The 'CC' rating is used when a default has not yet occurred but S&P Global Ratings expects default to be a virtual certainty, regardless of the anticipated time to default.

**C** 

An obligation rated 'C' is currently highly vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared with obligations that are rated higher.

**D** 

An obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless S&P Global

Ratings believes that such payments will be made within the next five business days in the absence of a stated grace period or within the earlier of the stated grace period or the next 30 calendar days. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. A rating on an obligation is lowered to 'D' if it is subject to a distressed debt restructuring.

\*&nbsp;&nbsp;&nbsp;&nbsp;Ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories.

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

**Long-Term Obligation Ratings** 

Ratings assigned on Moody's global long-term and short-term rating scales are forward-looking opinions of the relative credit risks of financial obligations issued by non-financial corporates, financial institutions, structured finance vehicles, project finance vehicles, and public sector entities. Moody's defines credit risk as the risk that an entity may not meet its contractual financial obligations as they come due and any estimated financial loss in the event of default or impairment. The contractual financial obligations<sup>1</sup> addressed by Moody's ratings are those that call for, without regard to enforceability, the payment of an ascertainable amount, which may vary based upon standard sources of variation (e.g., floating interest rates), by an ascertainable date. Moody's rating addresses the issuer's ability to obtain cash sufficient to service the obligation, and its willingness to pay.<sup>2</sup> Moody's ratings do not address non-standard sources of variation in the amount of the principal obligation (e.g., equity indexed), absent an express statement to the contrary in a press release accompanying an initial rating.<sup>3</sup> Long-term ratings are assigned to issuers or obligations with an original maturity of eleven months or more and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment. Short-term ratings are assigned to obligations with an original maturity of thirteen months or less and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment.<sup>4, 5, 6</sup> Moody's issues ratings at the issuer level and instrument level on both the long-term scale and the short-term scale. Typically, ratings are made publicly available although private and unpublished ratings may also be assigned. <sup>7</sup>

Moody's differentiates structured finance ratings from fundamental ratings (i.e., ratings on nonfinancial corporate, financial institution, and public sector entities) on the global long-term scale by adding (sf) to all structured finance ratings.<sup>7</sup> The addition of (sf) to structured finance ratings should eliminate any presumption that such ratings and fundamental ratings at the same letter grade level will behave the same. The (sf) indicator for structured finance security ratings indicates that otherwise similarly rated structured finance and fundamental securities may have different risk characteristics. Through its current methodologies, however, Moody's

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aspires to achieve broad expected equivalence in structured finance and fundamental rating performance when measured over a long period of time.

1. In the case of impairments, there can be a financial loss even when contractual obligations are met. See the definition of Impairment in this publication.

2. For issuer level ratings, see the definition of Issuer Ratings in this publication. In some cases the relevant credit risk relates to a third party, in addition to, or instead of the issuer. Examples include credit-linked notes and guaranteed obligations.

3. Because the number of possible features or structures is limited only by the creativity of issuers, Moody's cannot comprehensively catalogue all the types of non-standard variation affecting financial obligations, but examples include equity indexed principal values and cash flows, prepayment penalties, and an obligation to pay an amount that is not ascertainable at the inception of the transaction.

4. For certain preferred stock and hybrid securities in which payment default events are either not defined or do not match investors' expectations for timely payment, long-term and short-term ratings reflect the likelihood of impairment (as defined below in this publication) and financial loss in the event of impairment.

5. Debts held on the balance sheets of official sector institutions – which include supranational institutions, central banks and certain government-owned or controlled banks – may not always be treated the same as debts held by private investors and lenders. When it is known that an obligation is held by official sector institutions as well as other investors, a rating (short-term or long-term) assigned to that obligation reflects only the credit risks faced by non-official sector investors.

6. Where grace periods are disproportionately long relative to the stated maturity, Moody's may choose not to rate the instrument. This is particularly relevant in the commercial paper market where maturities may be 30 days or less with a strong investor expectation of prompt payment.

7. For information on how to obtain a Moody's credit rating, including private and unpublished credit ratings, please see Moody's Investors Service Products. Please note that Moody's always reserves the right to choose not to assign or maintain a credit rating for its own business reasons.

8. Like other global scale ratings, (sf) ratings reflect both the likelihood of a default and the expected loss suffered in the event of default. Ratings are assigned based on a rating committee's assessment of a security's expected loss rate (default probability multiplied by expected loss severity), and may be subject to the constraint that the final expected loss rating assigned would not be more than a certain number of notches, typically three to five notches, above the rating that would be assigned based on an assessment of default probability alone. The magnitude of this constraint may vary with the level of the rating, the seasoning of the transaction, and the uncertainty around the assessments of expected loss and probability of default.

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

**Aaa** 

Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of 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 judged to be upper-medium grade and are subject to low credit risk.

**Baa** 

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

**Ba** 

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

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**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 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. Additionally, a "(hyb)" indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance companies, and securities firms.\*

Note: For more information on long-term ratings assigned to obligations in default, please see the definition "Long-Term Credit Ratings for Defaulted or Impaired Securities" in the Other Definitions section of this publication.

*\*&nbsp;&nbsp;&nbsp;&nbsp;By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may also be subject to contractually allowable write-downs of principal that could result in impairment. Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an expression of the relative credit risk associated with that security.* 

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

**AAA(xxx)** 

'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 or monetary union.

**AA(xxx)** 

'AA' National Ratings denote expectations of a very low level of default risk relative to other issuers or obligations in the same country or monetary union. The default risk inherent differs only slightly from that of the country's highest rated issuers or obligations.

**A(xxx)** 

'A' National Ratings denote expectations of a low level of default risk relative to other issuers or obligations in the same country or monetary union.

**BBB(xxx)** 

'BBB' National Ratings denote a moderate level of default risk relative to other issuers or obligations in the same country or monetary union.

**BB(xxx)** 

'BB' National Ratings denote an elevated default risk relative to other issuers or obligations in the same country or monetary union.

**B(xxx)** 

'B' National Ratings denote a significantly elevated level of default risk relative to other issuers or obligations in the same country or monetary union.

**CCC(xxx)** 

'CCC' National Ratings denote a very high level of default risk relative to other issuers or obligations in the same country or monetary union.

**CC(xxx)** 

'CC' National Ratings denote the level of default risk is among the highest relative to other issuers or obligations in the same country or monetary union.

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**C(xxx)** 

A default or default-like process has begun, or the issuer is in standstill, or for a closed funding vehicle, payment capacity is irrevocably impaired. Conditions that are indicative of a 'C' category rating for an issuer include:

&nbsp;&nbsp;&nbsp;&nbsp;• The issuer has entered into a grace or cure period following non-payment of a material financial obligation;

&nbsp;&nbsp;&nbsp;&nbsp;• The formal announcement by the issuer or their agent of a distressed debt exchange; and

&nbsp;&nbsp;&nbsp;&nbsp;• A closed financing vehicle where payment capacity is irrevocably impaired such that it is not expected to pay interest and/or principal in full during the life of the transaction, but where no payment default is imminent.

**RD(xxx): Restricted default.** 

'RD' ratings indicate an issuer that, in Fitch's opinion, has experienced an uncured payment default on a bond, loan or other material financial obligation but that has not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure and has not otherwise ceased business. This would include:

&nbsp;&nbsp;&nbsp;&nbsp;• The selective payment default on a specific class or currency of debt; or

&nbsp;&nbsp;&nbsp;&nbsp;• The uncured expiry of any applicable grace period, cure period or default forbearance period following a payment default on a bank loan, capital markets security or other material financial obligation.

**D(xxx)** 

'D' National Ratings denote an issuer that has entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure or that has otherwise ceased business.

**Notes:** 

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.

**MUNICIPAL NOTE RATINGS** 

**<u>S&P's Municipal Short-Term Note Ratings Definitions</u>**

An S&P Global Ratings U.S. municipal note rating reflects S&P Global Ratings' 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, S&P Global Ratings' analysis will review the following considerations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Amortization schedule--the larger the final maturity relative to other maturities, the more likely it will be treated as a note; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;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.

**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.

**D** 

'D' is assigned upon failure to pay the note when due, completion of a distressed debt restructuring, or the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions.

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

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

Moody's uses the global short-term 'Prime' rating scale for commercial paper issued by US municipalities and nonprofits. These commercial paper programs may be backed by external letters of credit or liquidity facilities, or by an issuer's self-liquidity. For other short-term municipal obligations, Moody's uses one of two other short-term rating scales, the Municipal Investment Grade (MIG) and Variable Municipal Investment Grade (VMIG) scales discussed below.

Moody's uses the MIG scale for US municipal cash flow notes, bond anticipation notes and certain other short-term obligations, which typically mature in three years or less.

**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>VMIG Ratings</u>**

For variable rate demand obligations (VRDOs), Moody's assigns both a long-term rating and a short-term payment obligation rating. The long-term rating addresses the issuer's ability to meet scheduled principal and interest payments. The short-term payment obligation rating addresses the ability of the issuer or the liquidity provider to meet any purchase price payment obligation resulting from optional tenders ("on demand") and/or mandatory tenders of the VRDO. The short-term payment obligation rating uses the VMIG scale. Transitions of VMIG ratings with conditional liquidity support differ from transitions of Prime ratings reflecting the risk that external liquidity support will terminate if the issuer's long-term rating drops below investment grade. Please see our methodology that discusses obligations with conditional liquidity support. For VRDOs, we typically assign a VMIG rating if the frequency of the payment obligation is less than every three years. If the frequency of the payment obligation is less than three years, but the obligation is payable only with remarketing proceeds, the VMIG short-term rating is not assigned and it is denoted as "NR". Industrial development bonds in the US where the obligor is a corporate may carry a VMIG rating that reflects Moody's view of the relative likelihood of default and loss. In these cases, liquidity assessment is based on the liquidity of the corporate obligor.

**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.

**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.

**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.

**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.

**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 a sufficiently strong short-term rating or may lack the structural or legal protections.

The following table indicates the municipal long-term ratings consistent with the highest potential MIG and VMIG short-term ratings.

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**<u>US MUNICIPAL SHORT-TERM VS. LONG-TERM RATINGS</u>**

![Short Term vs Long Term Ratings- Security Ratings 2026 Graphic.jpg](ck0000918942-20260429_g11.jpg)

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**LKCM FUNDS** 

**LKCM AQUINAS CATHOLIC EQUITY FUND (AQEIX)** 

**301 COMMERCE STREET, SUITE 1600** 

**FORT WORTH, TEXAS 76102** 

**STATEMENT OF ADDITIONAL INFORMATION** 

May 1, 2026

This Statement of Additional Information ("SAI") is not a prospectus and should be read in conjunction with the Prospectus of the LKCM Aquinas Catholic Equity Fund (the "Fund"), a series of LKCM Funds (the "Trust") dated May 1, 2026, as such Prospectus may be supplemented or revised from time to time. A copy of the Prospectus may be obtained without charge by calling the Fund at (800) 423-6369 or by visiting www.aquinasfunds.com.

The Fund's audited financial statements and accompanying notes for the year ended December 31, 2025 are <u>[incorporated herein by reference](https://www.sec.gov/ix?doc=/Archives/edgar/data/918942/000113322826003110/lf-efp22616_ncsr.htm#fha)</u> to Item 7 of the Fund's Form N-CSR for the fiscal year ended December 31, 2025. A copy of the Annual and Semi-Annual Reports, and financial statements and accompanying notes, may be obtained without charge by calling the Fund at (800) 423-6369 or by visiting www.aquinasfunds.com.

------

**TABLE OF CONTENTS** 

---

| | |
|:---|:---|
| <u>[FUND ORGANIZATION](#if9f232427a18479fba4cf8ae44098836_231)</u> | [1](#if9f232427a18479fba4cf8ae44098836_231) |
| <u>[INVESTMENT LIMITATIONS](#if9f232427a18479fba4cf8ae44098836_201)</u> | [1](#if9f232427a18479fba4cf8ae44098836_201) |
| <u>[INVESTMENT OBJECTIVES AND POLICIES](#if9f232427a18479fba4cf8ae44098836_195)</u> | [2](#if9f232427a18479fba4cf8ae44098836_195) |
| <u>[TRUSTEES AND OFFICERS OF THE LKCM FUNDS](#if9f232427a18479fba4cf8ae44098836_190)</u> | [15](#if9f232427a18479fba4cf8ae44098836_190) |
| <u>[CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS](#if9f232427a18479fba4cf8ae44098836_185)</u> | [20](#if9f232427a18479fba4cf8ae44098836_185) |
| <u>[PROXY VOTING PROCEDURES](#if9f232427a18479fba4cf8ae44098836_180)</u> | [20](#if9f232427a18479fba4cf8ae44098836_180) |
| <u>[INVESTMENT ADVISER](#if9f232427a18479fba4cf8ae44098836_175)</u> | [21](#if9f232427a18479fba4cf8ae44098836_175) |
| <u>[PORTFOLIO MANAGERS](#if9f232427a18479fba4cf8ae44098836_170)</u> | [21](#if9f232427a18479fba4cf8ae44098836_170) |
| <u>[PORTFOLIO TRANSACTIONS AND BROKERAGE](#if9f232427a18479fba4cf8ae44098836_165)</u> | [23](#if9f232427a18479fba4cf8ae44098836_165) |
| <u>[PORTFOLIO TURNOVER](#if9f232427a18479fba4cf8ae44098836_160)</u> | [23](#if9f232427a18479fba4cf8ae44098836_160) |
| <u>[CUSTODIAN](#if9f232427a18479fba4cf8ae44098836_155)</u> | [24](#if9f232427a18479fba4cf8ae44098836_155) |
| <u>[TRANSFER AGENT](#if9f232427a18479fba4cf8ae44098836_150)</u> | [24](#if9f232427a18479fba4cf8ae44098836_150) |
| <u>[ADMINISTRATOR](#if9f232427a18479fba4cf8ae44098836_145)</u> | [24](#if9f232427a18479fba4cf8ae44098836_145) |
| <u>[DISTRIBUTOR](#if9f232427a18479fba4cf8ae44098836_140)</u> | [24](#if9f232427a18479fba4cf8ae44098836_140) |
| <u>[DISTRIBUTION PLAN](#if9f232427a18479fba4cf8ae44098836_135)</u> | [24](#if9f232427a18479fba4cf8ae44098836_135) |
| <u>[PAYMENTS TO FINANCIAL INTERMEDIARIES](#if9f232427a18479fba4cf8ae44098836_130)</u> | [24](#if9f232427a18479fba4cf8ae44098836_130) |
| <u>[INTERESTS OF CERTAIN PERSONS](#if9f232427a18479fba4cf8ae44098836_125)</u> | [25](#if9f232427a18479fba4cf8ae44098836_125) |
| <u>[CODE OF ETHICS](#if9f232427a18479fba4cf8ae44098836_120)</u> | [25](#if9f232427a18479fba4cf8ae44098836_120) |
| <u>[PURCHASE AND PRICING OF SHARES](#if9f232427a18479fba4cf8ae44098836_115)</u> | [25](#if9f232427a18479fba4cf8ae44098836_115) |
| <u>[PORTFOLIO HOLDINGS INFORMATION](#if9f232427a18479fba4cf8ae44098836_110)</u> | [27](#if9f232427a18479fba4cf8ae44098836_110) |
| <u>[EXCHANGES](#if9f232427a18479fba4cf8ae44098836_105)</u> | [27](#if9f232427a18479fba4cf8ae44098836_105) |
| <u>[REDEMPTIONS IN KIND](#if9f232427a18479fba4cf8ae44098836_100)</u> | [27](#if9f232427a18479fba4cf8ae44098836_100) |
| <u>[TAXATION](#if9f232427a18479fba4cf8ae44098836_95)</u> | [27](#if9f232427a18479fba4cf8ae44098836_95) |
| <u>[TAXATION OF THE SHAREHOLDERS](#if9f232427a18479fba4cf8ae44098836_90)</u> | [29](#if9f232427a18479fba4cf8ae44098836_90) |
| <u>[INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM](#if9f232427a18479fba4cf8ae44098836_85)</u> | [30](#if9f232427a18479fba4cf8ae44098836_85) |
| <u>[FINANCIAL STATEMENTS](#if9f232427a18479fba4cf8ae44098836_80)</u> | [30](#if9f232427a18479fba4cf8ae44098836_80) |
| <u>[APPENDIX A](#if9f232427a18479fba4cf8ae44098836_7)</u> | [A-1](#if9f232427a18479fba4cf8ae44098836_7) |

---

In deciding whether to invest in the Fund, you should rely on information in this SAI and the Prospectus. The Fund has not authorized others to provide additional information in any state or jurisdiction in which such offering may not legally be made.

Luther King Capital Management Corporation (the "Adviser") serves as the investment adviser for the Fund.

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**FUND ORGANIZATION** 

**DESCRIPTION OF SHARES AND VOTING RIGHTS** 

The LKCM Funds (the "Trust") is an open-end, diversified, management investment company. The Fund is a diversified and separate series of the Trust, a Delaware statutory trust that was established by a Declaration of Trust dated February 10, 1994 (as amended, the "Declaration of Trust"). The Declaration of Trust permits the Trustees of the Trust to issue an unlimited number of shares of beneficial interest, without par value, from an unlimited number of series. Currently, the Trust offers seven series, one of which is the LKCM Aquinas Catholic Equity Fund (the "Fund"). This SAI relates only to the Fund.

Pursuant to the Declaration of Trust, the Trustees may also authorize the creation of additional series (the proceeds of which would be invested in separate, independently managed funds with distinct investment objectives and policies and share purchase, redemption and net asset valuation procedures) with such preferences, privileges, limitations and voting and dividend rights as the Trustees may determine. All consideration received by the Trust for shares of any additional series, and all assets in which such consideration is invested, would belong to that series only and would be subject to the liabilities related thereto.

When issued, the shares of the Fund are fully paid and non-assessable, have no preemptive or subscription rights and are fully transferable. There are no conversion rights. Each share of the Fund is entitled to participate equally in dividends and capital gain distributions and in the assets of the Fund in the event of liquidation. The shares of the Fund have non-cumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in the shareholder's name on the books of the Fund.

The Fund is not required, and does not intend, to hold regular annual shareholder meetings. The Fund may hold special meetings for consideration of proposals requiring shareholder approval, such as changing fundamental policies. The Trust will assist in shareholder communication in such matters to the extent required by law.

**REORGANIZATION** 

Effective as of the close of business on July 29, 2016, the LKCM Aquinas Small Cap Fund and the LKCM Aquinas Growth Fund, each a series of the Trust, were reorganized into the LKCM Aquinas Value Fund, another series of the Trust. Immediately thereafter, the LKCM Aquinas Value Fund changed its name to the LKCM Aquinas Catholic Equity Fund and the LKCM Aquinas Value Fund's investment strategies and operating expenses, including its expense limitation agreement, changed to the investment strategies and operating expenses, including the expense limitation agreement, of the LKCM Aquinas Catholic Equity Fund. Financial and other historical information presented herein for periods prior to August 1, 2016 reflects the operations of the LKCM Aquinas Value Fund, and all other information presented herein reflects the operations of the LKCM Aquinas Catholic Equity Fund.

**SHAREHOLDER AND TRUSTEE LIABILITY** 

The Declaration of Trust contains an express disclaimer of shareholder liability for acts or obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation, or instrument entered into or executed by the Trust or the Trustees, but this disclaimer may not be effective in some jurisdictions or as to certain types of claims. The Declaration of Trust further provides for indemnification out of the Trust's property of any shareholder held personally liable for the obligations of the Trust. The Declaration of Trust also provides that the Trust shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the Trust and satisfy any judgment thereon. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the Trust itself would be unable to meet its obligations.

The Declaration of Trust further provides that the Trustees will not be liable for errors of judgment or mistakes of fact or law, but nothing in the Declaration of Trust protects a Trustee against any liability to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of the office.

**INVESTMENT LIMITATIONS** 

The Fund is subject to the following restrictions, which are fundamental policies and may not be changed with respect to the Fund without the approval of a majority of the Fund's outstanding voting securities. As used herein, a "majority of the Fund's outstanding voting securities" means the lesser of: (1) at least 67% of the voting securities of the Fund present at a meeting if the holders of more than 50% of the outstanding voting securities of the Fund are present or represented by proxy, or (2) more than 50% of the outstanding voting securities of the Fund.

As a matter of fundamental policy, the Fund will not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;invest in physical commodities or contracts on physical commodities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;purchase or sell real estate, although it may purchase and sell securities of companies that deal in real estate, other than real estate limited partnerships, and may purchase and sell marketable securities that are secured by interests in real estate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;make loans except: (i) by purchasing debt securities in accordance with its investment objective and policies or entering into repurchase agreements; or (ii) by lending its portfolio securities to banks, brokers, dealers and other financial institutions, so long as such loans are not inconsistent with the Investment Company Act of 1940, as amended (the "1940 Act"), or the rules and regulations or interpretations of the Securities and Exchange Commission ("SEC") thereunder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;with respect to 75% of its assets, purchase more than 10% of any class of the outstanding voting securities of any issuer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;&nbsp;&nbsp;&nbsp;with respect to 75% of its assets, invest more than 5% of its total assets in the securities of any single issuer (other than obligations issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)&nbsp;&nbsp;&nbsp;&nbsp;borrow money, except (i) from banks and as a temporary measure for extraordinary or emergency purposes (not for leveraging or investment) or (ii) in connection with reverse repurchase agreements provided that (i) and (ii) in combination do not exceed 33 1/3% of the Fund's total assets (including the amount borrowed) less liabilities (exclusive of borrowings);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)&nbsp;&nbsp;&nbsp;&nbsp;underwrite the securities of other issuers (except to the extent that the Fund may be deemed to be an underwriter within the meaning of the Securities Act of 1933, as amended (the "Securities Act") in the disposition of restricted securities);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8)&nbsp;&nbsp;&nbsp;&nbsp;acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the Fund's total assets would be invested in securities of companies within such industry; provided, however, that there shall be no limitation on the purchase of obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)&nbsp;&nbsp;&nbsp;&nbsp;issue senior securities, except that this limitation shall not apply to: (i) evidences of indebtedness that the Fund is permitted to incur; (ii) shares of the separate classes or series of the Trust; or (iii) collateral arrangements with respect to currency-related contracts, futures contracts, options or other permitted investments, including deposits of initial and variation margin.

With the exception of fundamental investment limitation (6) above if a percentage limitation on the investment or utilization of assets as set forth above is adhered to at the time an investment is made, a later change in percentage resulting from changes in the value of the investment or the Fund's assets will not require the sale of securities.

The Fund is also subject to the following restrictions, which are non-fundamental policies and may be changed by the Board of Trustees of the Trust (the "Board of Trustees") without shareholder approval. As a matter of non-fundamental policy, the Fund will not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;purchase securities on margin, except for use of short-term credit as may be necessary for the clearance of purchases and sales of securities, but it may make margin deposits in connection with transactions in options, futures, and options on futures; or sell securities short unless, by virtue of its ownership of other securities, it has the right to obtain securities equivalent in kind and amount to the securities sold and, if the right is conditional, the sale is made upon the same conditions. Transactions in futures contracts, options and options on futures are not deemed to constitute selling securities short;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;pledge, mortgage, or hypothecate any of its assets to an extent greater than 33 1/3% of its total assets at fair market value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;invest more than an aggregate of 15% of the net assets of the Fund in securities deemed to be illiquid, including securities which are not readily marketable, the disposition of which is restricted (excluding securities that are not registered under the Securities Act but which can be sold to qualified institutional investors in accordance with Rule 144A under the Securities Act and commercial paper sold in reliance on Section 4(2) of the Securities Act), repurchase agreements having maturities of more than seven days and certain over-the-counter options;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;invest its assets in securities of any investment company, except by purchase in the open market involving only customary brokers' commissions or in connection with mergers, acquisitions of assets or consolidations, or except as may otherwise be permitted by the 1940 Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;&nbsp;&nbsp;&nbsp;write or acquire options or interests in oil, gas or other mineral exploration or development programs or leases; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)&nbsp;&nbsp;&nbsp;&nbsp;make any change in its investment policy of investing at least 80% of its net assets in equity securities without first providing the Fund's shareholders with at least 60 days' prior notice.

**INVESTMENT OBJECTIVES AND POLICIES** 

The investment objectives and policies of the Fund are described in detail in the summary prospectus under the caption "Principal Investment Strategies" and in the statutory prospectus under the caption "Additional Information Regarding the Investment Objectives and Principal Investment Strategies of the Fund." These sections provide a description of the securities in which the Fund principally may invest to achieve its investment objective, the principal strategies it may employ and the corresponding risks of such securities and strategies. The greatest risk of investing in the Fund is that its returns will fluctuate and you could lose money. Both domestic and foreign equity markets could experience volatility and turmoil.

**EQUITY RELATED SECURITIES** 

The equity securities in which the Fund may invest include American Depositary Receipts ("ADRs"), common stocks, securities convertible into common stock ("convertible securities"), preferred stocks, shares of real estate investment trusts ("REITs"), rights and warrants.

**ADRs.** ADRs are depositary receipts for foreign issuers in registered form traded in U.S. securities markets. ADRs are not considered to be foreign securities when calculating the Fund's foreign securities limitations, but such securities may be subject to many of the same risks as foreign securities. ADRs may be listed on a national securities exchange or may trade in the over-the-counter market. ADR prices are denominated in U.S. dollars; the underlying security is denominated in a foreign currency. ADRs may not be denominated in the same currency as the securities into which they may be converted. Investing in depositary receipts entails substantially the same risks as direct investment in foreign securities. There is generally less publicly available information about foreign companies and there may be less governmental regulation and supervision of foreign stock exchanges, brokers and listed companies. In addition, such companies may use different accounting and financial standards (and certain currencies may become unavailable for transfer from a foreign currency), resulting in the Fund's possible inability to convert immediately into U.S. currency proceeds realized upon the sale of portfolio securities of the affected foreign companies. The issuers of unsponsored depositary receipts generally are not obligated to disclose material information about the underlying securities to investors in the United States.

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Ownership of unsponsored depositary receipts may not entitle the Fund to the same benefits and rights as ownership of a sponsored depositary receipt or the underlying security. Please see "Foreign and Emerging Market Securities" below for a description of the risks associated with investments in foreign securities.

**Common Stocks.** Common stocks represent the residual ownership interest in the issuer and are generally subordinate to all of its other obligations, including preferred stock. Common stocks generally have voting rights. Common stocks fluctuate in price in response to many factors including historical and prospective earnings of the issuer, the value of its assets, factors affecting companies in the same industry or sector, general economic conditions, interest rates, currency exchange rates, investor perceptions and market liquidity. The price of a company's stock may also be affected by changes in financial markets that are relatively unrelated to the particular company, such as currency exchange rates or industry regulation. Companies that elect to pay dividends on their common stock generally only do so after they invest in their own business and make required payments to bondholders and on other debt and preferred stock. Therefore, the value of a company's common stock will usually be more volatile than its bonds, other debt and preferred stock. Common stock may be exchange-traded or traded over-the-counter ("OTC"). OTC stock may be less liquid than exchange-traded stock. In the event of an issuer's bankruptcy, there is a substantial risk that there will be nothing left to pay common stockholders after payments, if any, to bondholders and preferred stockholders have been made.

**Convertible Securities.** A convertible security is a bond, debenture, note, preferred stock or other security or debt obligation that entitles the holder to acquire a prescribed amount of common stock or other equity securities of the same or a different issuer within a particular period of time at a specified price or formula. A convertible security generally entitles the holder to receive interest paid or accrued until the convertible security matures or is redeemed, converted or exchanged. Before conversion, convertible securities have characteristics similar to nonconvertible debt securities, and generally have features of, and risks associated with, both equity and fixed income instruments. Convertible securities rank senior to common stock in a corporation's capital structure and, therefore, may entail less risk than the corporation's common stock, although 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. The market value of convertible securities tends to decline as interest rates increase and, conversely, to increase as interest rates decline. While convertible securities generally offer lower interest or dividend yields than non-convertible debt securities of similar quality, they do enable the investor to benefit from increases in the market price of the underlying common stock. Holders of convertible securities have a claim on the assets of the issuer prior to the common stockholders but may be subordinated to holders of similar non-convertible securities of the same issuer. A convertible security may be subject to redemption at the option of the issuer at a predetermined price. If a convertible security held by the Fund is called for redemption, the Fund would be required to permit the issuer to redeem the security and convert it to underlying common stock, or would sell the convertible security to a third party.

**Preferred Stocks.** Preferred stock generally offers a stated dividend rate payable from the corporation's earnings. These preferred stock dividends may be cumulative or non-cumulative, participating, or auction rate. If interest rates rise, the fixed dividend on preferred stocks may be less attractive, causing the price of preferred stocks to decline. Preferred stock may have mandatory sinking fund provisions, as well as call/redemption provisions prior to maturity, a negative feature when interest rates decline. The rights of preferred stocks are generally subordinate to rights associated with a corporation's debt securities. Dividends on some preferred stock may be "cumulative" if stated dividends from prior periods have not been paid. Preferred stock also generally has a preference over common stock on the distribution of a corporation's assets in the event of liquidation of the corporation, and may be "participating," which means that it may be entitled to a dividend exceeding the stated dividend in certain cases.

**Real Estate Investment Trusts**. The Fund may invest in shares of REITs. Equity REITs invest in income-producing real estate. They produce income from rental and lease payments as well as occasional sales of property. Mortgage REITs make construction, development, and long-term mortgage loans. They produce income from repayment of the loans and sales of the loan obligations. Hybrid REITs may invest in both real estate and real estate loans.

Unlike most corporations (and trusts and associations otherwise taxable as such for federal tax purposes), REITs do not have to pay federal income tax on net income and net realized gains they distribute to their shareholders if they meet certain requirements of the Internal Revenue Code of 1986, as amended. To qualify for that treatment, a REIT must, among other things, (1) distribute to its shareholders for each taxable year at least 90% of the sum of its "real estate investment trust taxable income" (which includes all net realized capital gains) and certain other income and (2) derive at least 75% of its gross income each taxable year from rents from real property, interest on mortgages secured by real property, gains from the disposition of real property or such mortgages, and certain other real estate related income. The failure of a company in which the Fund invests to qualify for treatment as a REIT under federal tax law may have an adverse impact on the Fund. REITs generally offer investors greater liquidity and diversification than direct ownership of real estate, as well as greater income potential than an investment in common stocks.

REITs are subject to real estate industry risk. These risks may include the following: declines in the value of real estate; risks related to general and local economic conditions; possible lack of availability of mortgage funds; lack of ability to access the credit or capital markets; overbuilding; extended vacancies of properties; defaults by borrowers or tenants, particularly during an economic downturn; increasing competition; increases in property taxes and operating expenses; changes in zoning laws; losses due to costs resulting from the clean-up of environmental problems; liability to third parties for damages resulting from environmental problems; casualty or condemnation losses; regulatory limitations on rents and operating expenses; changes in market and sub-market values and the appeal of properties to tenants; and changes in interest rates. In general, real estate values can be affected by a variety of factors, including supply and demand for properties, the economic health of the country as well as different regions, and the strength of specific industries that rent properties. Ultimately, an individual REIT's performance depends on the types and locations for the properties it owns and on how well the REIT manages its properties. For instance, rental income could decline because of extended vacancies, increased competition from nearby properties, tenants' failures to pay rent, or incompetent management. Property values could decrease because of overbuilding in the area, environmental liabilities, uninsured damages caused by natural disasters, a general decline in the neighborhood, losses due to casualty or condemnation, increases in property taxes, or changes in zoning laws. Any domestic REIT could be adversely affect by the failure of a REIT to qualify for federal income-tax-free "pass-through" of net income and net realized gains that are distributed to shareholders and exemption from registration as an investment company. The failure of a company to qualify for treatment as a REIT under the federal tax law likely would have an adverse impact on a Fund's after-tax performance.

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REITs are also subject to interest rate risk. REIT stock prices overall will decline over short or even long periods in an environment of rising interest rates. In general, during periods of high interest rates, REITs may lose some of their appeal for investors who may be able to obtain higher yields from other income-producing investments. Higher interest rates also mean that financing for real estate purchases and improvements may be more costly and difficult to obtain.

REITs tend to be small or medium-size companies. Because small and mid-cap stocks are typically less liquid than large-cap stocks, REIT stocks may sometimes experience greater share-price fluctuation than the stocks of larger companies. REITs are pooled investment vehicles with their own fees and expenses and the Fund will indirectly bear its proportionate share of those fees and expenses, which can be significant.

**Rights and Warrants.** Rights and warrants are options to purchase equity securities at specific prices valid for a specific period of time. Their prices do not necessarily move parallel to the prices of the underlying securities. Rights are similar to warrants but normally have a short duration and are distributed by the issuer to its shareholders. Warrants and rights have no voting rights, receive no dividends and have no rights with respect to the assets of the issuer. The percentage increase or decrease in the value of a warrant may be greater than the percentage increase or decrease in the value of the underlying equity security. The market for warrants or rights may be very limited and it may be difficult to sell them promptly at an acceptable price.

**Securities Subject to Special Situations.** The Fund may invest in equity securities for which a tender or exchange offer has been made or announced and in securities of companies for which a merger, consolidation, bankruptcy, liquidation, restructuring or reorganization proposal or other unusual event has been announced or is anticipated. The primary risk of such investments is that if the contemplated transaction is abandoned, revised, delayed or becomes subject to uncertainty, the market price of the securities may decline below the purchase price paid by a Fund. Generally, securities which are the subject of such an offer or proposal sell at a premium to their historic market price immediately prior to the announcement of the offer or may also discount what the stated or appraised value of the security would be if the contemplated transaction were approved or consummated. Such investments may be advantageous when the discount significantly overstates the risk of the contingencies involved, significantly undervalues the securities, assets or cash to be received by shareholders of the target company as a result of the contemplated transaction, or fails adequately to recognize the possibility that the offer or proposal may be replaced or superseded by an offer or proposal of greater value.

The evaluation of such contingencies requires broad knowledge and experience on the part of the Adviser which must appraise not only the value of the issuer and its component businesses as well as the assets or securities to be received as a result of the contemplated transaction but also the financial resources and business motivation of the offeror and the dynamics and business and regulatory climate when the offer or proposal is in process. It may be difficult to obtain complete financial or other information about companies involved in certain special situations and management of such companies may be addressing a situation with which it has little experience. Since such investments are ordinarily short-term in nature, they will tend to increase the turnover ratio of the Fund thereby increasing its brokerage and other transaction expenses and be more speculative. Conversely, the terms of certain special situation investments may be subject to restrictions that prevent the Fund from selling the position until the special situation is largely resolved, which may limit the Fund's ability to pursue other opportunities as they arise.

**FOREIGN AND EMERGING MARKET SECURITIES** 

**Foreign Securities.** The Fund may invest in securities of foreign issuers. The Fund's investment in a foreign issuer may subject the Fund to regulatory, political, currency, security, economic and other risks associated with that country, including tariffs, trade disputes, or the imposition of economic and other sanctions by the U.S. or another country against a particular country, as well as competition from subsidized foreign competitors with lower production costs. In certain countries, legal remedies available to investors may be more limited than those available with respect to investments in the U.S. and investors may encounter difficulties in enforcing contractual obligations. Individual foreign companies also may differ favorably or unfavorably from U.S. companies in the same industry. Investing in foreign issuers involves certain special considerations that are not typically associated with investing in securities of U.S. issuers. Since the securities of foreign issuers are frequently denominated in foreign currencies, and since the Fund may temporarily hold invested reserves in bank deposits in foreign currencies, the Fund will be affected favorably or unfavorably by changes in currency rates and in exchange control regulations, and may incur costs in connection with conversions between various currencies. Foreign currencies will fluctuate, and may decline, in value relative to the U.S. dollar and affect the Fund's investments in foreign currencies or in securities that trade in, and receive revenues in foreign currencies.

As foreign companies are not generally subject to uniform accounting, auditing and financial reporting standards and practices comparable to those applicable to domestic companies, there may be less publicly available information about certain foreign companies than about domestic companies. Securities of some foreign companies are generally less liquid and more volatile than securities of comparable domestic companies. There is generally less government supervision and regulation of stock exchanges, brokers and listed companies than in the U.S. In addition, with respect to certain foreign countries, there is the possibility of expropriation or confiscatory taxation, political or social instability, or diplomatic developments that could affect U.S. investments in those countries. Trading practices, including those involving the release of assets in advance of payment, may involve increased risks in the event of a failed trade or the insolvency of a broker-dealer, and may involve substantial delays. Additionally, trading in foreign markets generally involves higher transaction costs than trading in U.S. markets. Although the Fund will endeavor to achieve most favorable execution costs in its portfolio transactions, fixed commissions on many foreign stock exchanges are generally higher than negotiated commissions on U.S. exchanges. In addition, it is expected that the expenses for custodian arrangements of the Fund's foreign securities will be somewhat greater than the expenses for the custodian arrangements for handling U.S. securities of equal value, especially for emerging market securities. Foreign markets have different clearance and settlement procedures. In certain markets, there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. Delays in settlement could result in temporary periods when a portion of the assets of the Fund is not invested and no return is earned thereon. The inability of the Fund to make intended security purchases due to settlement problems could cause the Fund to miss attractive investment opportunities. The inability of the Fund to dispose of portfolio securities due to settlement problems could result in losses to the Fund due to subsequent declines in value of the securities or, if the Fund has entered into a contract to sell the securities, could result in possible liability to the purchaser.

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Interest rates prevailing in other countries may affect the prices of foreign securities and exchange rates for foreign currencies. Local factors, including the strength of the local economy, the demand for borrowing, the government's fiscal and monetary policies, and the international balance of payments, often affect interest rates in other countries. Individual foreign economies may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross national product, rate of inflation, capital reinvestment, resource self-sufficiency, and balance of payments position.

The Fund's income and gains from investments in non-U.S. issuers may be subject to non-U.S. withholding or other taxes, thereby reducing its income and gains. Certain foreign governments levy withholding or other taxes against dividend and interest income paid by citizens or corporations operating therein to investors from other countries. Although in some countries a portion of these taxes are recoverable, the non-recovered portion of those taxes will reduce the Fund's income received from an issuer subject thereto.

Investing in foreign securities may involve a greater risk for excessive trading due to "time-zone arbitrage." If an event occurring after the close of a foreign market, but before the time the Fund computes its current NAV, causes a change in the price of the foreign securities and such price is not reflected in the Fund's current NAV, investors may attempt to take advantage of anticipated price movements in securities held by the Fund based on such pricing discrepancies.

**Securities of European Issuers**. The Fund's performance may be affected by political, social and economic conditions in Europe, such as the growth of the economic output (the gross national product of the countries in the region), the rate of inflation, the rate at which capital is reinvested into European economies, the success of governmental actions to reduce budget deficits, the resource self-sufficiency of European countries, interest rates in European countries, monetary exchange rates between European countries, and conflict between European countries.

The Economic and Monetary Union ("EMU") of the European Union ("EU") is comprised of EU members that have adopted the euro currency. By adopting the euro as its currency, a member state relinquishes control of its own monetary policies and is subject to fiscal and monetary controls. The EMU requires Eurozone countries to comply with restrictions on interest rates, deficits, debt levels, and inflation rates, fiscal and monetary controls, and other factors. Although the EMU has adopted a common currency and central bank, there is no fiscal union; therefore, money does not automatically flow from countries with surpluses to those with deficits. These restrictions and characteristics may limit the ability of EMU member countries to implement monetary policy to address regional economic conditions and significantly impact every European country and their economic partners, including those countries that are not members of the EMU. In addition, those EU member states that are not currently in the Eurozone (Bulgaria, the Czech Republic, Denmark, Hungary, Poland, Romania, and Sweden), excluding Denmark, are required to seek to comply with convergence criteria to permit entry to the Eurozone. The economies and markets of European countries are often closely connected and interdependent, and events in one country in Europe can have an adverse impact on other European countries. Decreasing imports or exports, changes in governmental or other regulations on trade, changes in the exchange rate of the euro or other European currency, the threat of default or actual default by one or more EU member countries, or other European countries, on its sovereign debt, and/or an economic recession in one or more European countries may have a significant adverse effect on the economies of other European countries and major trading partners outside Europe.

The European financial markets have experienced and may continue to experience volatility and adverse trends due to concerns relating to economic downturns; rising government debt levels and national unemployment; the possible default of government debt in several European countries; public health crises; political unrest; economic sanctions; inflation; energy crises; the future of the euro as a common currency; and war and military conflict, such as the Russian invasion of Ukraine. These events have adversely affected the exchange rate of the euro and may continue to significantly affect European countries. Responses to financial problems by European governments, central banks, and others, including austerity measures and other reforms, may not produce the desired results, may result in social unrest and may limit future growth and economic recovery or may have unintended consequences. In order to prevent further economic deterioration, certain countries, without prior warning, can institute "capital controls." Countries may use these controls to restrict volatile movements of capital entering and exiting their country. Such controls may negatively affect the Fund's investments. In addition, one or more countries may abandon the euro and/or withdraw from the EU. The impact of these actions, especially if they occur in a disorderly fashion, could be significant and far-reaching. Many European nations are susceptible to economic risks associated with high levels of debt. Non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts, and other issuers have faced difficulties obtaining credit or refinancing existing obligations. A default or debt restructuring by any European country could adversely impact holders of that country's debt and sellers of credit default swaps linked to that country's creditworthiness, which may be located in other countries. Such a default or debt restructuring could affect exposures to other European countries and their financial companies as well. Further defaults on, or restructurings of, the debt of governments or other entities could have additional adverse effects on economies, financial markets and asset valuations around the world. In addition, issuers may face difficulties obtaining credit or refinancing existing obligations; financial institutions may require government or central bank support, or need to raise capital, and/or be impaired in their ability to extend credit. Furthermore, certain European countries have had to accept assistance from supranational agencies such as the International Monetary Fund, the European Stability Mechanism or others. The European Central Bank has also intervened to purchase Eurozone debt in an attempt to stabilize markets and reduce borrowing costs. There can be no assurance that any creditors or supranational agencies will continue to intervene or provide further assistance, and markets may react adversely to any expected reduction in the financial support provided by these creditors. Certain European countries have also developed increasingly strained relationships with the U.S., and if these relationships were to worsen, they could adversely affect European issuers that rely on the U.S. for trade.

In addition, the national politics of European countries have been unpredictable and subject to influence by disruptive political groups, ideologies, and polarizing political events such as the conflict between Israel and Hamas. Secessionist movements, as well as government or other responses to such movements, may create instability and uncertainty in a country or region. European governments may be subject to change and such countries may experience social and political unrest. Unanticipated or sudden political or social developments may result in sudden and significant investment losses. The occurrence of terrorist incidents throughout Europe and in the Middle East also could impact financial markets, as could military conflicts. For example, Houthi attacks on commercial shipping in the Red Sea and Gulf of Aden, and retaliatory action, may disrupt supply chains and cause difficulties for impacted businesses, including those that wish to ship goods through that route. The impact of these kinds of events could be significant and far-reaching and materially impact the value and liquidity of the Fund's investments. Russia's war with Ukraine has

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negatively impacted European economic activity. Additionally, Russia may continue to attempt to assert its influence in the European region through economic or even military measures. The Russia/Ukraine war and Russia's response to sanctions imposed by the U.S. and other countries are impossible to predict, but have severely impacted the performance of the economies of European and other countries, including through adverse effects to global financial and energy markets, global supply chains and global growth, and consequential inflation.

Certain countries have applied to become new member countries of the EU, and these candidate countries' accessions may become more controversial to the existing EU members. Some member states may repudiate certain candidate countries joining the EU due to concerns about the possible economic, immigration and cultural implications. Certain other countries have applied to join or, in the case of Finland and Sweden, have recently joined, the North Atlantic Treaty Organization ("NATO"). Russia is understood to oppose certain expansions, or potential expansions, of NATO and the EU, and its reaction to such developments could negatively impact European economic activity. The United Kingdom withdrew from the European Union on January 31, 2020. The United Kingdom and the European Union have reached an agreement on the terms of their future trading relationship, which principally relates to the trading of goods rather than services, including financial services. Notwithstanding this agreement, the longer-term economic, legal, and political framework between the United Kingdom and the EU may lead to ongoing political and economic uncertainty in the United Kingdom, Europe, and the global market. Investments in companies with significant operations and/or assets in the United Kingdom could be adversely impacted by past or future changes to the legal, political, and regulatory environment, whether by increased costs or impediments to the implementation of business plans. The uncertainty resulting from any further exits from the EU, or the possibility of such exits, would also be likely to cause market disruption in the EU and more broadly across the global economy, as well as introduce further legal, political, and regulatory uncertainty in Europe.

**Emerging Market Investments**. Investing in emerging markets can have more risk than investing in developed foreign markets, such as (i) low or non-existent trading volume, resulting in a lack of liquidity and increased volatility in prices for such securities, as compared to securities from more developed markets, (ii) uncertain national policies and social, political and economic instability, increasing the potential for expropriation of assets, confiscatory taxation, high rates of inflation or unfavorable diplomatic or geopolitical developments, (iii) possible fluctuations in exchange rates, differing legal systems and the existence or possible imposition of exchange controls, custodial restrictions or other non-U.S. or U.S. governmental laws or restrictions applicable to such investments, (iv) national policies that may limit the Fund's investment opportunities such as restrictions on investment in issuers or industries deemed sensitive to national interests, (v) the lack or relatively early development of legal structures governing private and foreign investments and private property, and (vi) less diverse or immature economic structures. The risks of investing in these markets may be exacerbated relative to investments in developed markets and investments in these countries may be subject to erratic and abrupt price movements. In addition, emerging markets may impose capital restrictions and thus, may adversely affect the operations of the Fund and certain emerging markets impose constraints on currency exchange and some currencies in emerging markets may have been devalued significantly against the U.S. dollar. In addition to withholding taxes on investment income, some countries in emerging markets may impose differential capital gain taxes on foreign investors. For these and other reasons, the prices of securities in emerging markets can fluctuate more significantly than the prices of securities of companies in developed markets. The less developed the country, the greater effect these risks may have on your investment in the Fund.

Emerging markets have evolved in a dynamic political and economic environment brought about by events over recent years that have reshaped political boundaries and traditional ideologies. In such a dynamic environment, there can be no assurance that these emerging markets will continue to present viable investment opportunities for the Fund. In the past, governments of countries in emerging markets have expropriated substantial amounts of private property, and most claims of the property owners have never been fully settled. There is no assurance that such expropriations will not reoccur. In such event, it is possible that the Fund could lose the entire value of its investments in the affected markets.

Some economies are less well developed and less diverse and more vulnerable to the ebb and flow of international trade, trade barriers and other protectionist or retaliatory measures. The economies of emerging market countries may be based predominately on only a few industries or may be dependent on revenues from participating commodities or on international aid or developmental assistance, may be highly vulnerable to changes in local or global trade conditions, and may suffer from extreme and volatile debt burdens or inflation rates. Many of these countries are grappling with severe inflation or recession, high levels of national debt, currency exchange problems and government instability.

Certain emerging market countries have historically experienced, and may continue to experience, high rates of inflation, high interest rates, exchange rate fluctuations, large amounts of external debt, balance of payments and trade difficulties and extreme poverty and unemployment. The issuer or governmental authority that controls the repayment of an emerging market country's debt may not be able or willing to repay the principal and/or interest when due in accordance with the terms of such debt. A debtor's willingness or ability to repay principal and interest due in a timely manner may be affected by, among other factors, its cash flow situation, and, in the case of a government debtor, the extent of its foreign reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole and the political constraints to which a government debtor may be subject. Government debtors may default on their debt and may also be dependent on expected disbursements from foreign governments, multilateral agencies and others abroad to reduce principal and interest arrearages on their debt. Holders of government debt may be requested to participate in the rescheduling of such debt and to extend further loans to government debtors. If such an event occurs, the Fund may have limited legal recourse against the issuer and/or guarantor. Remedies must, in some cases, be pursued in the courts of the defaulting party itself, and the ability of the holder of foreign government fixed income securities to obtain recourse may be subject to the political climate in the relevant country. In addition, no assurance can be given that the holders of commercial bank debt will not contest payments to the holders of other foreign government debt obligations in the event of default under their commercial bank loan agreements.

The Fund may encounter substantial difficulties in obtaining and enforcing judgments against individuals and companies located in certain emerging market countries, either individually or in combination with other shareholders. It may be difficult or impossible to obtain or enforce legislation or remedies against governments, their agencies and sponsored entities. Additionally, in certain emerging market countries, fraud, corruption and attempts at market manipulation may be more prevalent than in developed market countries. Shareholder claims that are common in the U.S. and are generally viewed as determining misconduct, including class action securities law and fraud claims, generally are difficult or impossible to pursue as a matter of law or practicality in many emerging markets.

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Also, there may be less publicly available information about issuers in emerging markets than would be available for issuers in more developed markets, and such issuers may not be subject to accounting, auditing and financial reporting standards and requirements comparable to those to which U.S. companies or issuers in more developed markets are subject. In certain countries with emerging markets, reporting standards vary widely. As a result, traditional investment measurements used in the U.S. may not be applicable. Emerging market investments may be substantially less liquid and more volatile than those of more developed markets, and securities may be held by a limited number of investors. This may adversely affect the timing and pricing of the Fund's acquisition or disposal of emerging market investments.

The laws in certain emerging market countries may be based upon or be highly influenced by religious codes or rules. The interpretation of how these laws apply to certain investments may change over time, which could have a negative impact on those investments and the Fund.

Practices in relation to settlement of securities transactions in emerging markets involve higher risks than those in developed markets, in part because the Fund may use brokers and counterparties that are less well capitalized, and custody and registration of assets in some countries may be unreliable.

Many emerging market countries have little experience with the corporate form of business organization and may not have well-developed corporation and business laws or concepts of fiduciary duty in the business context. The organizational structures of certain issuers in emerging markets may limit investor rights and recourse.

Regulatory authorities in some emerging markets currently do not provide the Public Company Accounting Oversight Board with the ability to inspect public accounting firms as required by U.S. law, including sufficient access to inspect audit work papers and practices, or otherwise do not cooperate with U.S. regulators, which potentially could expose investors to significant risks.

**FIXED INCOME SECURITIES** 

The fixed income securities in which the Fund may invest include securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities and securities issued by domestic or foreign corporations and other entities.

**Recent Fixed Income Market Events.** The Federal Reserve and certain foreign central banks have started to lower interest rates, but it is difficult to accurately predict the pace at which interest rates might change, the timing, frequency or magnitude of any such changes in interest rates, or when such changes might stop or reverse course. Additionally, various economic and political factors, such as inflation, could cause the Federal Reserve or another foreign central bank to change their approach in the future and such actions may result in an economic slowdown in the U.S. and abroad. Unexpected changes in interest rates could lead to significant market volatility or reduce liquidity in certain sectors of the market. Deteriorating economic fundamentals may, in turn, increase the risk of default or insolvency of particular issuers, negatively impact market value, cause credit spreads to widen, and reduce bank balance sheets. Any of these could cause an increase in market volatility or reduce liquidity across various markets. Additionally, high public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. There is a potential for materially increased regulation in the future, as well as higher taxes or taxes restructured to incentivize different activities. These changes, should they occur, may impose added costs on the Fund and its service providers, and affect the businesses of various portfolio companies, in ways that cannot necessarily be foreseen at the present time. Markets may react strongly to expectations about the changes in these policies, which could increase volatility, especially if the markets' expectations for changes in government policies are not borne out. Policy changes by the U.S. Government, the Federal Reserve or the central banks may expose the Fund's investments in debt securities and the fixed income markets to heightened volatility and may reduce liquidity for certain Fund investments, which could cause the value of the Fund's investments and share price to decline. To the extent that the Fund experiences high redemptions because of these policy changes, the Fund may experience increased portfolio turnover, which will increase the costs that the Fund incurs and may lower the Fund's performance, and have trouble selling investments to meet shareholder redemptions.

**Ratings.** As noted above, the Fund may invest in various fixed income securities, including fixed income securities that are rated at the time of purchase as investment grade by a nationally recognized statistical rating organization ("NRSRO"), such as S&P Global Ratings ("S&P"), Moody's Investors Service, Inc. ("Moody's"), or Fitch Ratings, Inc. ("Fitch") or of equivalent quality as determined by the Adviser. Investment grade fixed income securities include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Bonds or bank obligations rated in one of the four highest categories (such as BBB- or higher by S&P);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Short-term notes rated in one of the two highest categories (such as SP-2 or higher by S&P); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Commercial paper or short-term bank obligations rated in one of the three highest categories (such as A-3 or higher by S&P).

Investment grade fixed income securities are generally perceived to have a lower degree of credit risk. However, certain investment grade securities with lower ratings are considered medium quality and may be subject to greater credit risk than the highest rated securities. If a security's rating falls below that required at the time of purchase, the Adviser will consider what action, if any, should be taken consistent with the Fund's investment objective. Additional information concerning securities ratings is contained in Appendix A to this SAI.

**U.S. Government Agency Securities.** U.S. Government agency securities are issued or guaranteed by the U.S. Government or its agencies or instrumentalities or government sponsored enterprises. Some obligations issued by U.S. Government agencies and instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the U.S. Treasury; others by the discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality; and others only by the credit of the agency or instrumentality. U.S. Government securities bear fixed, floating or variable rates of interest. While the U.S. Government may provide financial support to certain U.S. Government-sponsored agencies or instrumentalities, no assurance can be given that it will do so, since it is not so obligated by law. U.S. Government agency obligations and repurchase agreements secured thereby are primarily subject to market risk, credit risk and interest rate risk.

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**U.S. Treasury Obligations.** U.S. Treasury obligations may differ in their interest rates, maturities, times of issuance and other characteristics, and include bills (initial maturities of one year or less), notes (initial maturities between two and ten years), and bonds (initial maturities over ten years) issued by the U.S. Treasury, Separately Traded Registered Interest and Principal component parts of such obligations known as STRIPS, which are traded independently, and Treasury inflation protected securities, whose principal value is periodically adjusted according to the rate of inflation. The prices of these securities (like all debt securities) change between issuance and maturity in response to fluctuating market interest rates. U.S. Treasury obligations are subject to credit risk and interest rate risk. The total amount of debt the Treasury is authorized to incur is subject to a statutory limit. Once the Treasury reaches the debt limit, Congress must raise, extend or otherwise modify the limit to enable the Treasury to incur additional debt to pay the obligations of the U.S. government, including principal and interest payments on certain U.S. Treasury obligations (such as Treasury bills, notes and bonds). The failure, or potential failure, to increase the statutory debt limit could: increase the risk that the U.S. government defaults on payments on certain U.S. Treasury obligations; cause the credit rating of the U.S. government to be downgraded or increase volatility in both stock and bond markets; result in higher debt servicing payments by the U.S. government; reduce prices of Treasury securities; and/or increase the costs of certain kinds of debt.

The Fund may invest in component parts of U.S. Treasury notes or bonds, namely either the principal of such Treasury obligations or one of the interest payments scheduled to be paid on such obligations. These obligations may take the form of: (1) Treasury obligations from which the interest coupons have been stripped; (2) the interest coupons that are stripped; (3) book-entries at a Federal Reserve member bank representing ownership of Treasury obligation components; or (4) receipts evidencing the component parts (principal or coupons) of Treasury obligations that have not actually been stripped. Such receipts evidence ownership of component parts of Treasury obligations (principal or coupons) purchased by a third party (typically an investment banking firm) and held on behalf of the third party in physical or book-entry form by a major commercial bank or trust company pursuant to a custody agreement with the third party. These custodial receipts are known by various names, including "Treasury Receipts," "Treasury Investment Growth Receipts" ("TIGRs") and "Certificates of Accrual on Treasury Securities" ("CATs"), and are not issued by the U.S. Treasury; therefore they are not U.S. Government securities, although the underlying bonds represented by these receipts are debt obligations of the U.S. Treasury.

**Investment Grade Fixed Income Securities.** The Fund may invest in fixed income securities of domestic or foreign issuers (corporate bonds, debentures, notes and other similar corporate debt instruments) rated as investment grade at the time of purchase by a NRSRO.

Even fixed income securities rated investment grade by a NRSRO possess some speculative characteristics. There are risks involved in applying credit ratings as a method for evaluating fixed income securities in that credit ratings evaluate the safety of principal and interest payments, not market value risk. In addition, credit ratings may not be correct and credit rating agencies may not change credit ratings on a timely basis to reflect changes in economic or company conditions that affect a security's market value. Changes in economic conditions or other circumstances may lead to a weakened capacity of the issuer to make principal and interest payments on such securities.

The Fund will rely on the judgment, analysis and experience of the Adviser in evaluating the creditworthiness of an issuer. In this evaluation, the Adviser may take into consideration, among other things, the issuer's financial resources and ability to cover its interest and fixed charges, factors relating to the issuer's industry and its sensitivity to economic conditions and trends, its operating history, the quality of the issuer's management and regulatory matters. The rate of return or return of principal on some debt obligations may be linked or indexed to the level of exchange rates between the U.S. dollar and a foreign currency or currencies.

The risk of loss due to default by the issuer is significantly greater for the holders of lower quality fixed income securities because such securities are generally unsecured and are often subordinated to other obligations of the issuer. During an economic downturn or a sustained period of rising interest rates, highly leveraged issuers of lower quality fixed income securities may experience financial stress and may not have sufficient revenues to meet their interest payment obligations. An issuer's ability to service its debt obligations may also be adversely affected by specific corporate developments, its inability to meet specific projected business forecasts, or the unavailability of additional financing.

Factors adversely affecting the market value of fixed income securities may adversely affect the net asset value of the Fund if it invests in such securities. In addition, the Fund may incur additional expenses to the extent it is required to seek recovery upon a default in the payment of principal of or interest on its portfolio holdings.

The secondary trading market for lower-quality fixed income securities is generally not as liquid as the secondary market for higher-quality fixed income securities and is very thin for some fixed income securities. The relative lack of an active secondary market may have an adverse impact on market price and the Fund's ability to dispose of particular issues when necessary to meet the Fund's liquidity needs or in response to a specific economic event such as a deterioration in the creditworthiness of the issuer. The relative lack of an active secondary market for certain securities may also make it more difficult for the Fund to obtain information for purposes of valuing the Fund's portfolio. Pricing data is generally available on many high yield issues only from a limited number of dealers and may not necessarily represent firm bids of such dealers or prices for actual sales. During such times, the ability to value the securities becomes more difficult and judgment plays a greater role in valuation because there is less reliable, objective data available.

**Variable and Floating Rate Obligations.** The interest rates payable on certain fixed income securities in which the Fund may invest are not fixed and may fluctuate based upon changes in market rates. A variable rate obligation has an interest rate which is adjusted at predesignated periods in response to changes in the market rate of interest on which the interest rate is based. Variable and floating rate obligations are generally less effective than fixed rate instruments at locking in a particular yield. Nevertheless, such obligations may fluctuate in value in response to interest rate changes if there is a delay between changes in market interest rates and the interest reset date for the obligation, or for other reasons.

The Fund may invest in floating rate debt instruments ("floaters") and engage in credit spread trades. The interest rate on a floater is a variable rate which is tied to another interest rate, such as a money-market index or Treasury bill rate. The interest rate on a floater resets periodically, typically every six months. While, because of the interest rate reset feature, floaters provide the Fund with a certain degree of protection against rises in interest rates, the Fund will participate in any declines in interest rates as well. A credit spread trade is an investment position relating to a difference in the prices or interest rates of two securities or currencies, where the

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value of the investment position is determined by movements in the difference between the prices or interest rates, as the case may be, of the respective securities or currencies.

The floating rate obligations in which the Fund invests typically have multiple reset periods during the year with each reset period applicable to a designated portion of the obligations. If the Fund does so, it will consider the shortened period to be the adjustment period of the obligations. As short-term interest rates rise, interest payable to the Fund should increase. As short-term interest rates decline, interest payable to the Fund should decrease. The amount of time that will pass before the Fund experiences the effects of changing short-term interest rates will depend on the dollar-weighted average time until the next interest rate adjustment on the Fund's portfolio of obligations.

Obligations usually have mandatory and optional prepayment provisions. Because of prepayments, the actual remaining maturity of an obligation may be considerably less than its stated maturity. If an obligation is prepaid, the Fund will have to reinvest the proceeds in other obligations or securities, which may have a lower fixed spread over its base rate. In such a case, the amount of interest paid to the Fund would likely decrease.

In the event of a change in the benchmark interest rate on an obligation, the rate payable to lenders under the obligation will, in turn, change at the next scheduled reset date. If the benchmark rate goes up, the Fund as lender would earn interest at a higher rate, but only on and after the reset date. If the benchmark rate goes down, the Fund as lender would earn interest at a lower rate, but only on and after the reset date.

Market interest rate changes may also cause the Fund's NAV to experience volatility. This is because the value of an obligation asset in the Fund is partially a function of whether it is paying what the market perceives to be a market rate of interest for the particular obligation given its individual credit and other characteristics. If market interest rates change, an obligation's value could be affected to the extent the interest rate paid on that obligation does not reset at the same time. The rates of interest paid on the obligation in which the Fund invests have a weighted average reset period that typically is less than 90 days. Therefore, the impact of the lag between a change in market interest rates and the change in the overall rate on the portfolio is expected to be minimal.

Finally, to the extent that changes in market rates of interest are reflected, not in a change to a base rate, but in a change in the spread over the base rate which is payable on obligations of the type and quality in which the Fund invests, the Fund's NAV could be adversely affected. Again, this is because the value of an obligation asset in the Fund is partially a function of whether it is paying what the market perceives to be a market rate of interest for the particular obligation given its individual credit and other characteristics. However, unlike changes in market rates of interest for which there is only a temporary lag before the portfolio reflects those changes, changes in an obligation's value based on changes in the market spread on obligations in the Fund's portfolio may be of longer duration.

**Interest Rates and Portfolio Maturity.** Interest rates on securities in which the Fund invests may adjust periodically based on a base rate plus a premium or spread over the base rate. The base rate usually is the federal funds rate, the prime rate, or other base lending rates or Reference Rates (as defined below) used by commercial lenders. The prime rate quoted by a major U.S. bank is generally the interest rate at which that bank is willing to lend U.S. dollars to its most creditworthy borrowers, although it may not be the bank's lowest available rate.

Certain variable or floating securities have coupon rates that are based on the Secured Overnight Financing Rate ("SOFR"), Euro Interbank Offered Rate and other similar types of reference rates (each, a "Reference Rate"). These Reference Rates are generally intended to represent the rate at which contributing banks may obtain short-term borrowings within certain financial markets. The elimination of a Reference Rate or any other changes or reforms to the determination or supervision of Reference Rates could have an adverse impact on the market for or value of any securities or payments linked to those Reference Rates and other financial obligations held by the Fund or on its overall financial condition or results of operations. Any substitute Reference Rate and any pricing adjustments imposed by a regulator or by counterparties or otherwise may adversely affect a Fund's performance and/or NAV. At this time, it is not possible to completely identify or predict the effect of any such changes, any establishment of alternative Reference Rates or any other reforms to Reference Rates that may be enacted in the UK or elsewhere.

**Non-Investment Grade Fixed Income Securities.** The Fund may invest up to 5% of its total assets in non-investment grade fixed income securities (commonly known as "junk bonds"). Investments in such securities are inherently speculative. The lower ratings reflect a greater possibility that adverse changes in the financial condition of the issuer or in general economic conditions, or both, or an unanticipated rise in interest rates, may impair the ability of the issuer to make payments of interest and principal. The inability (or perceived inability) of issuers to make timely payment of interest and principal would likely make the values of such securities held by the Fund more volatile and could limit the Fund's ability to sell its securities at prices approximating the values the Fund had placed on such securities. In the absence of a liquid trading market for securities held by the Fund, it may be difficult to establish a fair value of such securities. If the issuer defaults on its obligation, the value of the security would fall and the Fund's income also would decline.

Securities ratings are based largely on the issuer's historical financial condition and the rating agencies' analysis at the time of rating. Consequently, the rating assigned to any particular security is not necessarily a reflection of the issuer's current financial condition, which may be better or worse than the rating would indicate. In addition, the rating assigned to a security by an NRSRO does not reflect an assessment of the volatility of the security's market value or the liquidity of an investment in the security.

Like those of other fixed income securities, the values of non-investment grade securities generally go up and down in response to changes in interest rates. A decrease in interest rates generally will result in an increase in the value of fixed income securities. Conversely, during periods of rising interest rates, the value of the Fund's fixed income securities generally will decline. The values of non-investment grade fixed income securities often may be affected to a greater extent by changes in general economic conditions and business conditions affecting the issuers of such securities and their industries. Negative publicity or investor perceptions also may adversely affect the values of non-investment grade fixed income securities. Changes by NRSROs in their ratings of any fixed income security and changes in the ability of an issuer to make payments of interest and principal also may affect the value of these investments. Changes in the value of portfolio securities generally will not affect income derived from these securities, but will affect the Fund's net asset value.

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Issuers of lower rated securities often are highly leveraged, so that their ability to service their debt obligations during an economic downturn or during sustained periods of rising interest rates may be impaired. Such issuers may not have more traditional methods of financing available to them and may be unable to repay outstanding obligations at maturity by refinancing. The risk of loss due to default in payment of interest or repayment of principal by such issuers is significantly greater because such securities frequently are unsecured and subordinated to the prior payment of senior indebtedness.

**Mortgage Pass-Through Securities**. The Fund may invest in residential and commercial mortgage pass-through securities. Mortgage pass-through securities represent interests in pools of mortgages in which payments of both principal and interest on the securities are generally made monthly, in effect "passing through" monthly payments made by borrowers in the residential or commercial mortgage loans which underlie the securities (net of any fees paid to the issuer or guarantor of the securities). Mortgage pass-through securities differ from other forms of debt securities, which normally provide for periodic payment of interest in fixed amounts with principal payments at maturity or specified call dates. Early repayment of principal on mortgage pass-through securities (arising from prepayments of principal due to the sale of underlying property, refinancing, or foreclosure, net of fees and costs which may be incurred) may expose the Fund to a lower rate of return upon reinvestment of principal. Also, if a security subject to repayment has been purchased at a premium, in the event of prepayment, the value of the premium would be lost.

There are generally three types of mortgage pass-through securities: (1) those issued by the U.S. Government, one of its agencies or instrumentalities or a government sponsored enterprise, such as Government National Mortgage Association ("GNMA"), Fannie Mae ("FNMA"), and Federal Home Loan Mortgage Corporation ("FHLMC"); (2) those issued by private issuers that represent an interest in or are collateralized by pass-through securities issued or guaranteed by the U.S. Government or one of its agencies or instrumentalities; and (3) those issued by private issuers that represent an interest in or are collateralized by whole mortgage loans or pass-through securities without a government guarantee but may have some form of private credit enhancement.

GNMA is authorized to guarantee, with the full faith and credit of the U.S. Government, the timely payment of principal and interest on securities issued by institutions approved by GNMA (such as savings and loan institutions, commercial banks and mortgage banks), and backed by pools of FHA-insured or VA-guaranteed mortgages. Obligations of FNMA and FHLMC are not backed by the full faith and credit of the U.S. Government. In the case of obligations not backed by the full faith and credit of the U.S. Government, the Fund must look principally to the agency issuing or guaranteeing the obligation for ultimate repayment. FNMA and FHLMC may attempt to borrow from the U.S. Treasury to meet their obligations, but the U.S. Treasury is under no obligation to lend to FNMA or FHLMC.

The FHFA and the U.S. Treasury have imposed strict limits on the size of FNMA and FHLMC's mortgage portfolios. Discussions among policymakers continue, however, as to whether FNMA and FHLMC should be nationalized, privatized, restructured, or eliminated altogether. FNMA and FHLMC also are the subject of several continuing legal actions and investigations over certain accounting, disclosure or corporate governance matters, which (along with any resulting financial restatements) may continue to have an adverse effect on the guaranteeing entities. Importantly, the future of FNMA and FHLMC remains in question as the U.S. Government considers multiple options.

Under the direction of the FHFA, FNMA and FHLMC jointly developed a common securitization platform for the issuance of a uniform mortgage-backed security ("UMBS") (the "Single Security Initiative") that aligns the characteristics of FNMA and FHLMC certificates. In June 2019, under the Single Security Initiative, FNMA and FHLMC started issuing UMBS in place of their prior offerings of to-be-announced mortgage-backed securities ("TBA"). The Single Security Initiative seeks to support the overall liquidity of the TBA market by aligning the characteristics of FNMA and FHLMC certificates. The effects that the Single Security Initiative may have on the market for TBA and other mortgage-backed securities are uncertain.

Private mortgage pass-through securities are structured similarly to GNMA, FNMA, and FHLMC mortgage pass-through securities and are issued by originators of and investors in mortgage loans, including depository institutions, mortgage banks, investment banks and special purpose subsidiaries of the foregoing.

**WHEN-ISSUED SECURITIES** 

The Fund may purchase securities on a "when-issued" basis. In buying "when-issued" securities, the Fund commits to buy securities at a certain price even though the securities may not be delivered for up to 120 days. No payment or delivery is made by the Fund in a "when-issued" transaction until the Fund receives payment or delivery from the other party to the transaction. Although the Fund receives no income from the above-described securities prior to delivery, the market value of such securities is still subject to change. As a consequence, it is possible that the market price of the securities at the time of delivery may be higher or lower than the purchase price.

When the Fund purchases securities on a when-issued basis, it will maintain with its custodian cash or liquid securities having an aggregate value equal to the amount of its purchase commitment until payment is made. The purpose and effect of such maintenance is to prevent the Fund from gaining investment leverage from when-issued transactions. When-issued securities may decline or increase in value during the period from the Fund's investment commitment to the settlement of the purchase.

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**INITIAL PUBLIC OFFERINGS** 

The Fund may invest in initial public offerings ("IPOs"). By definition, IPOs have not traded publicly until the time of their offerings. Special risks associated with IPOs may include a limited number of shares available for trading, unseasoned trading, lack of investor knowledge of the company, and limited operating history, all of which may contribute to price volatility. Many IPOs are issued by undercapitalized companies of small or microcap size. Some of the companies involved in new industries may be regarded as developmental state companies, without revenues or operating income, or the near-term prospects of them. Investments in IPOs may have a magnified performance impact relative to other investments.

Pursuant to the Adviser's allocation policies and procedures, the Fund generally will be eligible to participate on a rotating basis in any applicable IPOs that may come available to eligible clients of the Adviser.

**ILLIQUID INVESTMENTS, RESTRICTED SECURITIES AND PRIVATE PLACEMENT OFFERINGS** 

**Illiquid Investments.** The SEC's liquidity risk management rule, Rule 22e-4 (the "Liquidity Rule"), defines the term "illiquid investments" to mean any investments that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less in the ordinary course of business without the sale or disposition significantly changing the market value of the investment. Under the supervision of the Board of Trustees, the Adviser determines the liquidity of the Fund's investments and, through reports from the Adviser and the Fund's administrator, the Board monitors investments in illiquid investments. Illiquid investments may include securities and other financial instruments that do not have a readily available market, repurchase agreements which have a maturity of longer than seven calendar days, restricted securities, other than certain foreign securities, restricted securities pursuant to Rule 144A under the Securities Act and commercial paper sold in reliance on Section 4(2) of the Securities Act, unless, based upon a review of the relevant market, trading and investment-specific considerations, those investments are determined not to be illiquid. The absence of a trading market can make it difficult to ascertain a market value for illiquid investments. When no market quotations are available, illiquid investments are priced at fair value as determined in good faith by the Adviser using guidelines approved by the Board of Trustees. The Fund may not acquire any illiquid investment if, immediately after the acquisition, the Fund would have invested more than 15% of its net assets in illiquid investments. If through a change in values, net assets, or other circumstances, the Fund was in a position where more than 15% of its net assets were invested in illiquid investments, the Fund would take appropriate steps to protect liquidity. If the limitation on illiquid investments is exceeded, other than by a change in market values, the condition will be reported to the Board of Trustees and, when required by the Liquidity Rule, to the SEC. Disposing of these investments may involve time-consuming negotiation and legal expenses, and it may be difficult or impossible for the Fund to sell them promptly at an acceptable price and may have to dispose of such investments over extended periods of time.

**Restricted Securities.** Restricted securities can generally be sold in privately negotiated transactions, pursuant to an exemption from registration under the Securities Act or in a registered public offering. Where registration is required, the Fund may be obligated to pay all or part of the registration expense and a considerable period may elapse between the time the Fund decides to seek registration and the time the Fund may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the Fund might obtain a less favorable price than prevailed at the time it decided to seek registration of the security.

**Private Placement Offerings**. The Fund may invest in private placement offerings. Investments in private placement offerings are made in reliance on the "private placement" exemption from registration afforded by Section 4(2) or Regulation D of the Securities Act ("Section 4(2) securities"). Section 4(2) securities are restricted as to disposition under the federal securities law and generally are sold to institutional investors such as the Fund that agree they are purchasing the securities for investment and not with an intention to distribute to the public.

**OTHER INVESTMENT COMPANIES** 

The Fund may invest in shares of other investment companies, including open-end funds, closed-end funds, business development companies, exchange-traded funds ("ETFs"), exchange-traded notes ("ETNs"), and interests in unit investment trusts. 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, and are indirectly exposed to the risks of the investments held by the other investment company. These other fees and expenses would be reflected as Acquired Fund Fees and Expenses and would be included in the Fees and Expenses Table in the Prospectus, if applicable. Investment in other investment companies may involve the payment of substantial premiums above the value of such issuer's portfolio securities or the Fund may have to sell such investments at a discount to the issuer's portfolio securities. Exchange-traded and closed-end funds may trade at premiums or discounts to their net asset values and be subject to trading halts.

Although a money market fund is designed to be a relatively low risk investment, it is not free of risk. Despite the short maturities and high credit quality of a money market fund's investments, increases in interest rates and deteriorations in the credit quality of the instruments the money market fund has purchased may reduce the money market fund's yield and can cause the price of a money market security to decrease. In addition, a money market fund is subject to the risk that the value of an investment may be eroded over time by inflation.

ETFs trade like a common stock and passive ETFs usually represent a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. If the Fund invests in ETFs, the Fund would typically purchase passive ETF shares to obtain exposure to all or a portion of the stock or bond market. As a shareholder of an ETF, the Fund would be subject to its ratable share of the ETF's expenses, including its advisory and administration expenses.

An investment in an ETF generally presents the same primary risks as an investment in a conventional mutual fund (i.e., one that is not exchange-traded) that has the same investment objective, strategies, and policies. The price of an ETF can fluctuate within a wide range, and the Fund could lose money investing in an ETF if the prices of the securities owned by the ETF go down. In addition, ETFs are subject to the following risks that do not apply to conventional funds: (1) the market price of the ETF's shares may trade at a discount or premium to their NAV; (2) an active trading market for an ETF's shares may not develop or be maintained; or (3) trading

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of an ETF's shares may be halted if the listing exchange's officials deem such action appropriate, the shares are de-listed from the exchange, or the activation of market-wide "circuit breakers" (which are tied to large decreases in stock prices) halts stock trading generally. The Fund may also invest in ETNs, which are structured debt securities. Whereas ETFs' liabilities are secured by their portfolio securities, ETNs' liabilities are unsecured general obligations of the issuer. ETFs and ETNs have expenses associated with their operation, typically including, with respect to ETFs, advisory fees.

The Fund's investment in securities of other investment companies is generally limited to (i) 3% of the total voting stock of any one investment company, (ii) 5% of the Fund's total assets with respect to any one investment company and (iii) 10% of the Fund's total assets in all investment companies in the aggregate. However, the Fund may exceed these limits when investing in shares of an ETF or other investment company, subject to the terms and conditions of an exemptive order from the SEC obtained by the ETF or other investment company that permits an investing fund, such as the Fund, to invest in the ETF or other investment company in excess of the limits described above. The Fund may also exceed these limits when investing in shares of money market funds to the extent permitted by the 1940 Act and applicable rules and regulations adopted by the SEC thereunder.

Additionally, Rule 12d1-4 under the 1940 Act permits certain types of fund of fund arrangements without an exemptive order, subject to certain conditions, including limits on control and voting of acquired funds' shares, evaluations and findings by investment advisers, fund investment agreements, and limits on most three-tier fund structures.

**SECURITIES LENDING** 

The Fund may lend securities to qualified brokers, dealers, banks and other financial institutions. Securities lending would allow the Fund to retain ownership of the securities loaned and, at the same time, to earn additional income. Since there may be delays in the recovery of loaned securities, or even a loss of rights in collateral supplied should the borrower fail financially, loans would be made only to parties deemed by the Adviser to be of good standing. In addition, they would only be made if, in the Adviser's judgment, the consideration to be earned from such loans would justify the risk. Such loans would not be made if, as a result, the aggregate of all outstanding loans of the Fund exceed one-third of the value of its total assets (including the value of all assets received as collateral for the loan). The Fund does not currently engage in securities lending activities.

**TEMPORARY INVESTMENTS** 

The temporary investments that the Fund may make include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Cash, time deposits, certificates of deposit (including marketable variable rate certificates of deposit) and bankers' acceptances issued by a commercial bank or savings and loan association. Time deposits are non-negotiable deposits maintained in a banking institution for a specified period of time at a stated interest rate. Time deposits maturing in more than seven days will not be purchased by the Fund. Certificates of deposit are negotiable short-term obligations issued by commercial banks or savings and loan associations against funds deposited in the issuing institution. Variable rate certificates of deposit are certificates of deposit on which the interest rate is periodically adjusted prior to their stated maturity based upon a specified market rate. A bankers' acceptance is a time draft drawn on a commercial bank by a borrower usually in connection with an international commercial transaction (to finance the import, export, transfer or storage of goods).

The Fund may invest in obligations of U.S. banks, foreign branches of U.S. banks (Eurodollars), and U.S. branches of foreign banks (Yankee dollars). Euro and Yankee dollar investments will involve the same risks of investing in foreign securities discussed previously. Although the Adviser carefully considers these factors when making investments, the Fund does not limit the amount of its assets that can be invested in any one type of instrument or in any foreign country in which a branch of a U.S. bank or the parent of a U.S. branch is located.

The Fund will not invest in any security issued by a commercial bank unless (i) the bank has total assets of at least $1 billion, or the equivalent in other currencies, or, in the case of a domestic bank that does not have total assets of at least $1 billion, the aggregate investment made in any one such bank is limited to $250,000 and the principal amount of such investment is insured in full by the Federal Deposit Insurance Corporation and (ii) in the case of a U.S. bank, it is a member of the Federal Deposit Insurance Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Commercial paper that at the time of purchase is rated in the highest rating category by a NRSRO or, if not rated, issued by a corporation having an outstanding unsecured debt issue that meets such rating requirement at time of purchase;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Short-term corporate obligations rated in the highest rating category by a NRSRO at time of purchase;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) U.S. Government obligations, including bills, notes, bonds and other debt securities issued by the U.S. Treasury. These are direct obligations of the U.S. Government and differ mainly in interest rates, maturities and dates of issue;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) U.S. Government agency securities issued or guaranteed by U.S. Government sponsored instrumentalities and federal agencies. These include securities issued by the Federal Home Loan Banks, Federal Land Bank, Farmers Home Administration, Farm Credit Banks, Federal Intermediate Credit Bank, Fannie Mae, Federal Financing Bank, the Tennessee Valley Authority, and others; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Repurchase agreements.

**REGULATORY AND RECENT MARKET EVENTS** 

Policy changes by the U.S. government, the U.S. Federal Reserve and/or foreign governments, and political and economic changes within the U.S. and abroad, such as inflation, changes in interest rates, recessions, changes in the U.S. presidential administration and Congress, the U.S. government's inability at times to agree on a long-term budget and deficit reduction plan, the threat or occurrence of a federal government shutdown or the occurrence of a failure to increase the federal government's debt limit, which could result in a default on the government's obligations, may affect investor and consumer confidence and may adversely

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impact financial markets and the broader economy, perhaps suddenly and to a significant degree. The severity or duration of adverse economic conditions may also be affected by policy changes made by governments or quasi-governmental organizations. Global economies and financial markets are becoming increasingly interconnected, which increases the possibility of many markets being affected by events in a single country or events affecting a single or small number of issuers.

Both U.S. and international markets have experienced significant volatility in recent years. As a result of such volatility, investment returns may fluctuate significantly, and the risks discussed herein associated with an investment in the Fund may be increased. Deteriorating economic fundamentals may increase the risk of default or insolvency of particular issuers, negatively impact market value, increase market volatility, cause credit spreads to widen, reduce bank balance sheets and cause unexpected changes in interest rates. Any of these could cause an increase in market volatility, reduce liquidity across various sectors or markets or decrease confidence in the markets.

Some countries, including the U.S., have adopted more protectionist trade policies, including trade tariffs and other trade barriers, which is a trend that appears to be continuing globally. The current political environment has intensified concerns about a global trade war. Slowing global economic growth, the rise in protectionist trade policies, inflationary pressures, changes to some major international trade and security agreements, risks associated with trade and security agreements between countries and regions, including the U.S. and other foreign nations, political or economic dysfunction within some countries or regions, including the U.S., and dramatic changes in consumer sentiment, commodity prices and currency values could affect the economies and markets of many nations, including the U.S., in ways that cannot necessarily be foreseen at the present time and may create significant market volatility. In addition, these policies, including the impact on the U.S. dollar, may decrease foreign demand for U.S. assets, which could have a negative impact on certain issuers and/or industries. Historical patterns of correlation among asset classes may break down in unanticipated ways during times of high volatility, disrupting investment programs and potentially causing losses.

The United States has imposed or threatened to impose tariffs and other trade barriers on imports of certain categories of goods from Canada, Mexico, and European countries. The United States also has imposed or threatened to impose tariffs and other trade barriers on imports of certain categories of goods from China, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. These countries have imposed or threatened to impose retaliatory tariffs on U.S. goods. If relations between the United States and these and other foreign countries do not improve or continue to deteriorate, markets and individual securities may be severely affected both regionally and globally, and the value of the Fund's investments may go down.

The Federal Reserve and certain foreign central banks have started to lower interest rates, though economic or other factors, such as inflation, could reverse or stop such changes. It is difficult to accurately predict the pace at which interest rates might change, the timing, frequency or magnitude of any such changes in interest rates, or when such changes might stop or again reverse course. Unexpected changes in interest rates could lead to significant market volatility or reduce liquidity in certain sectors of the market. Over the longer term, rising interest rates may present a greater risk than has historically been the case due to the prior period of relatively low rates and the effect of government fiscal and monetary policy initiatives and potential market reaction to those initiatives, or their alteration or cessation. It is difficult to predict the impact on various markets of significant rate changes or other significant policy changes.

Markets and market participants are increasingly reliant upon both publicly available and proprietary information data systems. Data imprecision, software or other technology malfunctions, programming inaccuracies, unauthorized use or access, the execution of ransomware and other cyberattacks, and similar circumstances may impair the performance of these systems and may have an adverse impact upon a single issuer, a group of issuers, or the market at large. In certain cases, an exchange or market may close or issue trading halts on either specific securities or even the entire market, which may result in the Fund being, among other things, unable to buy or sell certain securities or financial instruments or accurately price its investments. These fluctuations in securities prices could be a sustained trend or a drastic movement. The financial markets generally move in cycles, with periods of rising prices followed by periods of declining prices. The value of your investment may reflect these fluctuations.

Tensions, war or open conflict between nations, such as among the United States, Israel and Iran, between Russia and Ukraine, otherwise in the Middle East or in eastern Asia could affect the economies of many nations, including the United States and may contribute to increased volatility and uncertainty in the financial markets. The extent and duration of ongoing hostilities and any sanctions and related events, including the potential for cyber warfare, remain uncertain and cannot be predicted. Those events have presented and could continue to present material uncertainty and risk with respect to markets globally, including in the oil and gas markets and potentially other industries and sectors, and the performance of the Fund and its investments or operations could be negatively impacted whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries or regions directly affected. For example, the armed conflict among the United States, Israel and Iran that commenced in February 2026 has contributed to increased volatility and uncertainty in financial markets as well as significant volatility in the oil and natural gas markets, which has created widespread economic disruption.

Regulators in the U.S. have adopted a number of changes to regulations involving the markets and issuers, some of which apply to the Fund. The full effect of such regulations is not currently known and certain changes, which may be revised or rescinded, could limit the Fund's ability to pursue its investment strategies or make certain investments, may make it more costly for the Fund to operate, or adversely impact its performance. Further, advancements in technology may also adversely impact market movements and liquidity and may affect the overall performance of the Fund. For example, the advanced development and increased regulation of artificial intelligence may adversely impact market movements and liquidity. As artificial intelligence is used more widely, which can occur rapidly, the profitability and growth of certain issuers may be negatively impacted in ways that cannot be foreseen and could adversely affect the Fund's performance.

High public debt in the U.S. and other countries creates ongoing systemic and market risks and policymaking uncertainty. There is no assurance that the U.S. Congress will act to raise the nation's debt ceiling; a failure to do so could cause market turmoil and substantial investment risks that cannot now be fully predicted. Unexpected political, regulatory and diplomatic events within the U.S. and abroad may affect investor and consumer confidence and may adversely impact financial markets and the broader economy.

Certain illnesses spread rapidly and have the potential to significantly and adversely affect the global economy. The impact of epidemics and/or pandemics that may arise in the future could negatively affect the economies of many nations, individual companies

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and the global securities and commodities markets, including their liquidity, in ways that cannot necessarily be foreseen at the present time and could last for an extended period of time. China's economy, which has been sustained through debt-financed spending on housing and infrastructure, appears to be experiencing a significant slowdown and growing at a lower rate than prior years. Due to the size of China's economy, such a slowdown could impact financial markets and the broader economy.

Global climate change can have potential effects on property and security values. Certain issuers, industries and regions may be adversely affected by the impact of climate change in ways that cannot be foreseen. The impact of legislation, regulation and international accords related to climate change, including any direct or indirect consequences, may negatively impact certain issuers, industries and regions. A rise in sea levels, a change in weather patterns, including an increase in powerful storms and large wildfires, and/or a climate-driven increase in flooding could cause properties to lose value or become unmarketable altogether. Unlike previous declines in the real estate market, properties in affected zones may not ever recover their value. Regulatory changes and divestment movements tied to concerns about climate change could adversely affect the value of certain land and the viability of industries whose activities or products are seen as accelerating climate change.

**CYBERSECURITY** 

With the increased use of technologies such as the internet and the dependence on computer systems to perform necessary business functions, the Fund and its service providers and third-party fund distribution platforms may have become more susceptible to operational, information security and related risks resulting from cybersecurity incidents, including cyberattacks. A cybersecurity incident may refer to intentional or unintentional events that allow an unauthorized party to gain access to Fund assets, shareholder data, or proprietary information, or cause the Fund or Fund service providers (including, but not limited to, the Adviser, distributor, fund accountants, custodian, transfer agent, sub-advisers (if applicable), and financial intermediaries), as well as securities trading venues and their service providers, to suffer data corruption, lose operational functionality, or be the target of ransomware. A cybersecurity incident could, among other things, result in the loss or theft of shareholder data or funds, impact the Fund's ability to calculate NAV per share, cause the release of private shareholder information or confidential business information, result in violations of applicable privacy and other laws, impede trading, subject the Fund to regulatory fines or financial losses and/or cause reputational damage. A cyber attack may also result in shareholders or service providers being unable to access electronic systems (also known as "denial of services"), loss or theft of proprietary information or corporate data, physical damage to a computer or network system, or remediation costs associated with system repairs. The Fund may also incur additional compliance costs for corrective measures or cybersecurity risk management purposes, and such costs may be ongoing because threats of cyber-attacks are constantly evolving as cyber-attackers become more sophisticated and their techniques become more complex. Similar types of cybersecurity risks are also present for issuers or securities in which the Fund may invest, which could result in material adverse consequences for such issuers and may cause the Fund's investment in such companies to lose value. Furthermore, as a result of cyber-attacks, disruptions or failures, an exchange or market may close or issue trading halts on specific securities or the entire market, which may result in the Fund being, among other things, unable to buy or sell certain securities or unable to accurately price its investments. The Fund's service providers also may be negatively impacted due to operational risks arising from non-cybersecurity related factors such as processing errors and human errors, inadequate or failed internal or external processes, failures in systems and technology errors or malfunctions, changes in personnel, and errors caused by Fund service providers or counterparties.

In addition, other events or circumstances — whether foreseeable, unforeseeable, or beyond the Fund's control, such as acts of war, other conflicts, terrorism, natural disaster, widespread disease, pandemic or other public health crises may result in, among other things, quarantines and travel restrictions, workforce displacement and loss or reduction in personnel and other resources. In the above circumstances, the Fund and the Fund's service providers' operations may be significantly impacted, or even temporarily halted. The Fund's securities market counterparties or vendors may face the same or similar systems failure, cybersecurity breaches and other business disruptions risks.

Any of these results could have a substantial adverse impact on the Fund and its shareholders. For example, if a cybersecurity incident results in a denial of service, Fund shareholders could lose access to their electronic accounts and be unable to buy or sell Fund shares for an unknown period of time, and service providers could be unable to access electronic systems to perform critical duties for the Fund, such as trading, NAV calculation, shareholder accounting or fulfillment of Fund share purchases and redemptions. Cybersecurity incidents could cause the Fund or Fund service provider to incur regulatory penalties or scrutiny, reputational damage, additional compliance costs associated with corrective measures, or financial loss of a significant magnitude and could result in allegations that the Fund or Fund service provider violated privacy and other laws. Similar adverse consequences could result from cybersecurity incidents affecting issuers of securities in which the Fund invests, counterparties with which the Fund engages in transactions, governmental and other regulatory authorities, exchange and other financial market operators, banks, brokers, dealers, insurance companies, and other financial institutions and other parties. Furthermore, as a result of cyberattacks, disruptions or failures, an exchange or market may close or issue trading halts on specific securities or the entire market, which may result in the Fund being, among other things, unable to buy or sell certain securities or unable to accurately price its investments. Risk management systems and business continuity plans seek to reduce the risks associated with cybersecurity in the event there is a cybersecurity breach, but there are inherent limitations in these systems and plans, including the possibility that certain risks may not have been adequately identified or prepared for, in large part because different or unknown threats may emerge in the future. Furthermore, the Fund does not control the cybersecurity systems and plans of the issuers of securities in which the Fund invests or the Fund's third party service providers or trading counterparties or any other service providers whose operations may affect the Fund or its shareholders. The widespread use of work from home arrangements, such as during the COVID-19 pandemic, may increase operational and information security risks. Most issuers in which the Fund invests are heavily dependent on computers and other technological platforms and resources for data storage and operations, which require ready access to the internet to conduct their business. Thus, cybersecurity incidents could also affect issuers of securities in which the Fund invests, leading to significant loss of value in the securities of issuers impacted by any such cybersecurity incidents.

The use of cloud-based service providers could heighten or change these risks. In addition, remote and hybrid arrangements by the Fund, the Adviser or their service providers could increase all of the above risks, create additional data and information accessibility concerns, and make the Fund, the Adviser or their service providers susceptible to operational disruptions, any of which could adversely impact their operations.

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The Fund and its service providers, including the Adviser, may utilize artificial intelligence ("AI") technologies, including machine learning models and generative AI, to improve operational efficiency and in connection with research. In addition, counterparties used by the Fund may utilize AI in their business activities. While the Adviser may restrict certain uses of AI tools, the Fund and the Adviser are not in a position to control the use of AI in third-party products or services. The use of AI introduces numerous potential challenges and the use of AI can lead to reputational damage, legal liabilities, and competitive disadvantages, as well as negatively impact business operations, which may occur with or without mismanagement in the use of the AI. AI requires the collection and processing of substantial amounts of data, which poses risks of data inaccuracies, incompleteness, and inherent biases, and which can degrade the technology's effectiveness and reliability. Such data can include proprietary information, the use of which by AI may be unauthorized and subject to potential liability. Rapid technological advancements further complicate risk predictions, and competitors who adopt AI more swiftly may gain a competitive edge. The complexity and opacity of AI systems raise significant accountability and ethical concerns. AI has enhanced the ability of threat actors to amplify the potency, scale, and speed of cybersecurity attacks. AI's role in increasing automation raises concerns about job displacement and may lead to economic and social disruptions. The unpredictable nature of AI's impact on market dynamics complicates traditional risk assessment models, making it challenging to identify risks and opportunities using historical data. Legal and regulatory frameworks governing AI's use, particularly concerning data privacy and protection, are evolving rapidly. These changes could materially alter how AI is used, which may negatively impact the Fund.

**TRUSTEES AND OFFICERS OF THE LKCM FUNDS** 

**The Board of Trustees** 

The Trust is governed by its Board of Trustees. The Board is responsible for and oversees the overall management and operations of the Trust and the Fund, which includes the general oversight and review of the Fund's investment activities, in accordance with federal law and the law of the State of Delaware, as well as the stated policies of the Fund. The Board oversees the Trust's officers and service providers, including the Adviser, which is responsible for the management of the day-to-day operations of the Fund based on policies and agreements reviewed and approved by the Board. In carrying out these responsibilities, the Board regularly interacts with and receives reports from senior personnel of service providers, including the Adviser's personnel and the Trust's Chief Compliance Officer ("CCO"). The Board also is assisted by the Trust's independent registered public accounting firm (who reports directly to the Trust's Audit and Compliance Committee), independent counsel and other experts as appropriate, all of whom are selected by the Board. The Board met four times during the fiscal year ended December 31, 2025.

*Risk Oversight* 

Consistent with its responsibility for oversight of the Trust and the Fund, the Board oversees the management of risks relating to the administration and operation of the Trust and the Fund. The Adviser, as part of its responsibilities for the day-to-day operations of the Fund, is responsible for day-to-day risk management for the Fund. The Board, in the exercise of its reasonable business judgment, also separately considers potential risks that may impact the Fund. The Board performs this risk management oversight directly and, as to certain matters, through its committees and through the Independent Trustees. The following provides an overview of the principal, but not all, aspects of the Board's oversight of risk management for the Trust and the Fund.

In general, the Fund's risks include, among others, investment risk, credit risk, liquidity risk, valuation risk and operational risk. The Board has adopted, and periodically reviews, policies and procedures designed to address risks to the Trust and the Fund. In addition, under the general oversight of the Board, the Adviser and other service providers to the Fund has adopted a variety of policies, procedures and controls designed to address particular risks to the Fund. Different processes, procedures and controls are employed with respect to different types of risks.

The Board also oversees risk management for the Trust and the Fund through review of regular reports, presentations and other information from officers of the Trust and other persons. The Fund's CCO and senior officers of the Adviser regularly report to the Board on a range of matters, including those relating to risk management. The Board also regularly receives reports from the Adviser with respect to the Fund's investments. In addition to regular reports from the Adviser, the Board also receives reports regarding other service providers to the Trust, either directly or through the Adviser or the Fund's CCO, on a periodic or regular basis. At least annually, the Board receives a report from the Fund's CCO regarding the effectiveness of the Fund's compliance program. Also, on an annual basis, the Board receives reports, presentations and other information from the Adviser in connection with the Board's consideration of the renewal of the Trust's advisory agreement with the Adviser and the Trust's distribution plans under Rule 12b-1 under the 1940 Act.

The CCO also reports regularly to the Board on Fund valuation matters. In addition, the Audit and Compliance Committee receives regular reports from the Trust's independent registered public accounting firm on internal control and financial reporting matters. On at least a quarterly basis, the Independent Trustees meet with the Fund's CCO to discuss matters relating to the Fund's compliance program.

*Board Structure and Related Matters* 

Board members who are not "interested persons" of the Fund as defined in Section 2(a)(19) of the 1940 Act ("Independent Trustees") constitute a majority of the Board. Larry J. Lockwood, an Independent Trustee, serves as Chairman of the Board. As Chairman, Mr. Lockwood's responsibilities include: setting an agenda for each meeting of the Board; presiding at all meetings of the Board and Independent Trustees; and serving as a liaison with other Trustees, the Trust's officers and other management personnel, and counsel to the Fund. As Chairman, Mr. Lockwood also performs such other duties as the Board may from time to time determine.

The Trustees discharge their responsibilities collectively as a Board, as well as through Board committees, each of which operates pursuant to a charter approved by the Board that delineates the specific responsibilities of that committee. The Board has established three standing committees: the Audit and Compliance Committee, the Nominating Committee and the Qualified Legal Compliance Committee. The members and responsibilities of each Board committee are summarized below.

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The Board periodically evaluates its structure and composition as well as various aspects of its operations. The Board believes that its leadership structure, including its independent Chairman and Board committees, is appropriate for the Trust in light of, among other factors, the asset size and nature of the Fund, the number of Funds overseen by the Board, the arrangements for the conduct of the Fund's operations, the number of Trustees, and the Board's responsibilities. On an annual basis, the Board conducts a self-evaluation that considers, among other matters, whether the Board and its committees are functioning effectively and whether, given the size and composition of the Board and each of its committees, the Trustees are able to oversee effectively the number of Funds in the complex.

The Board holds four regularly scheduled meetings each year. The Board may hold special meetings, as needed, either in person or by telephone, to address matters arising between regular meetings. During a portion of each regular meeting, the Independent Trustees meet outside of management's presence. The Independent Trustees may hold special meetings, as needed, either in person or by telephone.

The Trustees of the Trust are identified in the tables below, which provide information as to their year of birth and positions with the Trust, term of office with the Trust and length of time served, their principal occupations for the past five years and other directorships held in public companies during the past five years.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Independent Trustees** | | | | | |
| **Name, Address and Age** | **Position(s)<br>Held with the<br>Trust** | **Term of<br>Office and**<br>**Length of Time<br>Served**<sup>(1)</sup> | **Principal<br>Occupation<br>During Past<br>Five Years** | **Number of<br>Portfolios<br>in Fund<br>Complex<br>Overseen<br>by Trustee** | **Other<br>Directorships Held<br>by Trustee During<br>the Past Five Years** |
| Richard J. Howell<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1942 | Trustee<br>Chairman of the Audit and Compliance Committee | Since 2005<br>Since 2008 | CPA; Adjunct Faculty at SMU Cox School of Business from 2004 to 2009; Consulting Services, since 2002; Audit Partner, Arthur Andersen LLP from 1974 to 2002. | 7 |  |
| Larry J. Lockwood<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1953 | Chairman of the Board of Trustees<br>Trustee | Since 2021<br>Since 2013 | C. R. Williams Professor of Finance, Stan Block Endowed Chair in Finance, Department of Finance, Neeley School of Business, Texas Christian University since 1994. | 7 |  |
| Steven R. Purvis<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1964 | Trustee | Since 2013 | Principal, Luther King Capital Management Corporation from 2004 to 2021, Vice President and Portfolio Manager, Luther King Capital Management Corporation from 1996 to 2021. | 7 | AZZ Incorporated |
| Mauricio Rodriguez<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1966 | Trustee | Since 2021 | Chair, Department of Finance, Neeley School of Business; Texas Christian University since<br>2002. | 7 |  |
| **Interested Trustee** | **Interested Trustee** | **Interested Trustee** | **Interested Trustee** | **Interested Trustee** | **Interested Trustee** |
| J. Luther King, Jr.<sup>(2)</sup><br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1940 | Trustee, President and Chief Executive Officer | Since 1994 | Chairman, President and Director, Luther King Capital Management Corporation since 1979. | 7 | TXO Partners, L.P. |

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<sup>(1)</sup> Each Trustee holds office during the lifetime of the Trust until that individual resigns, retires or is otherwise removed or replaced.

<sup>(2)</sup> Mr. King is considered to be an "interested person" of the Trust (as defined in the 1940 Act) because of his affiliation with the Adviser.

In addition to the information set forth in the tables above and other relevant qualifications, experience, attributes or skills applicable to a particular Trustee, the following provides further information about the qualifications and experience of each Trustee.

*Richard J. Howell:* Mr. Howell has extensive audit and business experience as a certified public accountant, service as a partner in a global accounting firm, service as a faculty member at a private university's business school, service as a director of a publicly held corporation and multiple years of service as a Trustee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*J. Luther King, Jr.:* Mr. King has extensive experience in the investment management industry as chairman, president and director of an investment management firm, service on the board of numerous public and private corporations and foundations, and multiple years of service as a Trustee.

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*Larry J. Lockwood:* Mr. Lockwood has extensive experience in finance as professor of finance at the business school of a private university and service as a chartered financial analyst, business consultant and lecturer, and multiple years of service as a Trustee.

*Steven R. Purvis:* Mr. Purvis has extensive experience as principal of an investment management firm and service as a portfolio manager, director of research and senior analyst, and multiple years of service as a Trustee.

*Mauricio Rodriguez*: Mr. Rodriguez has extensive experience in finance as professor of finance at the business school of a private university and service as a business consultant, expert witness in securities and commercial litigation, and lecturer, and multiple years of service as a Trustee.

The table below sets forth the compensation paid by the Trust to each Trustee of the Trust during the fiscal year ended December 31, 2025:

**COMPENSATION TABLE** 

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name of Trustee** | **Aggregate**<br>**Compensation**<br>**from the**<br>**Fund** | **Pension or**<br>**Retirement**<br>**Benefits**<br>**Accrued**<br>**As Part of**<br>**Fund**<br>**Expenses** | **Estimated**<br>**Annual**<br>**Benefits**<br>**Upon**<br>**Retirement** | **Total**<br>**Compensation**<br>**from all**<br>**Funds in the**<br>**Trust**<br>**Complex**<sup>(1)</sup> |
| <u>Interested Trustees</u> |  |  |  |  |
| J. Luther King, Jr. | $0 | $0 | $0 | $0 |
| <u>Independent Trustees</u> |  |  |  |  |
| Richard J. Howell | $3754 | $0 | $0 | $84000 |
| Larry J. Lockwood | $4023 | $0 | $0 | $90000 |
| Steven R. Purvis | $3397 | $0 | $0 | $76000 |
| Mauricio Rodriguez | $3397 | $0 | $0 | $76000 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <sup>(1)</sup> There are currently seven series comprising the Trust, six of which are offered in a separate prospectus and SAI.

The Independent Trustees receive an annual retainer of $54,000, with the Chairman of the Board receiving an additional $14,000 retainer and the Chairman of the Audit and Compliance Committee receiving an additional $8,000 retainer. Each Independent Trustee also receives a meeting fee of $4,500 for each Board meeting attended in person and a meeting fee of $2,000 for each telephonic meeting, and is reimbursed for their reasonable out of pocket expenses incurred in attending Board meetings. For this purpose, the Board considers attendance at regular meetings held by videoconference to constitute in-person attendance at a Board meeting. Independent Trustees may also receive a meeting fee for each Board committee meeting attended in person or by telephone if so determined by the chairman of the applicable Board committee.

**Board Ownership in the Fund** 

The table below sets forth the dollar range of the value of the shares of the Fund, and the dollar range of the aggregate value of the shares of all Funds overseen by a Trustee, owned beneficially by each Trustee as of December 31, 2025. For purposes of this table, beneficial ownership is defined to mean a direct or indirect pecuniary interest. Exact dollar amounts of securities held are not listed in the table. Rather, the ranges are identified according to the following key:

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| |
|:---|
| Key |
| A. None |
| B. $1 - $10,000 |
| C. $10,001 - $50,000 |
| D. $50,001 - $100,000 |
| E. over $100,000 |

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| | | |
|:---|:---|:---|
| **Name of Trustee** | **LKCM Aquinas Catholic**<br>**Equity Fund** | **Aggregate Dollar Range of**<br>**Equity Securities in**<br>**LKCM Funds Complex**<sup>(1)</sup> |
| Richard J. Howell<br>Independent Trustee | A | E |
| Larry J. Lockwood<br>Independent Trustee | A | C |
| Steven R. Purvis<br>Independent Trustee | A | E |
| Mauricio Rodriguez<br>Independent Trustee | A | A |
| J. Luther King, Jr.<br>Interested Trustee, President and Chief Executive Officer | C | E |

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<sup>(1)</sup> There are currently seven series comprising the Trust, six of which are offered in a separate prospectus and SAI.

*Board Committees* 

*Audit and Compliance Committee.* The Trust has an Audit and Compliance Committee, consisting of Messrs. Howell, Lockwood, Purvis and Rodriguez. The members of the Audit and Compliance Committee are Independent Trustees. The primary responsibilities of the Audit and Compliance Committee are to make recommendations to the Board as to: the engagement or discharge of the Trust's independent registered public accounting firm (including the audit fees charged by the accounting firm); the supervision of investigations into matters relating to audits; the review with the independent registered public accounting firm of the results of audits; oversight of the Trust's compliance with legal and regulatory requirements, internal control over financial reporting and independent audits; and addressing any other matters regarding audits and compliance. The Audit and Compliance Committee met two times during the fiscal year ended December 31, 2025.

*Nominating Committee.* The Trust has a Nominating Committee, consisting of Messrs. Howell, Lockwood, Purvis and Rodriguez. The Nominating Committee is responsible for the selection and nomination for appointment of candidates to serve as Trustees of the Trust. The Nominating Committee will review shareholders' nominations to fill vacancies on the Board. Shareholders can submit recommendations in writing addressed to the attention of the chair of the Nominating Committee, 301 Commerce Street, Suite 1600, Fort Worth, Texas 76102. A shareholder's recommendation must include the following information about the nominee: (1) name; (2) date of birth; (3) education; (4) business, professional or other relevant experience and areas of expertise; (5) current business, professional or other relevant experience and areas of expertise; (6) current business and home addresses and contact information; (7) other board positions or prior experience; and (8) any knowledge and experience relating to investment companies and investment company governance. The Nominating Committee met once during the fiscal year ended December 31, 2025.

With respect to the criteria the Nominating Committee uses for selecting nominees, a successful candidate should have certain uniform characteristics, such as a very high level of integrity, appropriate experience, and a commitment to fulfill the fiduciary duties inherent in Board membership. The Nominating Committee also will consider the extent to which potential candidates possess sufficiently diverse skill sets and diversity characteristics that would contribute to the Board's overall effectiveness.

*Qualified Legal Compliance Committee.* The Trust has a Qualified Legal Compliance Committee, consisting of Messrs. Howell, Lockwood, Purvis and Rodriguez. The members of the Qualified Legal Compliance Committee are Independent Trustees. The primary responsibility of the Trust's Qualified Legal Compliance Committee is to receive, review and take appropriate action with respect to any report made or referred to the Qualified Legal Compliance Committee by an attorney of evidence of a material violation of applicable U.S. federal or state securities law, material breach of a fiduciary duty under U.S. federal or state law or a similar material violation by the Trust or by any officer, director, employee, or agent of the Trust. The Qualified Legal Compliance Committee meets as necessary, and did not meet during the fiscal year ended December 31, 2025.

The Trust does not hold annual shareholder meetings and, therefore, does not have a policy with respect to Trustees' attendance at such meetings.

**Principal Officers of the Trust** 

The officers of the Trust conduct and supervise its daily business. As of the date of this SAI, the officers of the Trust are identified in the following table, which provides information as to their year of birth and positions with the Trust, term of office with the Trust and length of time served, their principal occupations for the past five years and, for officers who also serve as Trustees, other directorships held in public companies during the past five years.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name, Address and Age** | **Position(s) Held**<br>**with the<br>Trust** | **Term of**<br>**Office**<br>**and**<br>**Length of**<br>**Time**<br>**Served**<sup>(1)</sup> | **Principal Occupation**<br>**During Past Five Years** | **Number of**<br>**Portfolios in**<br>**Fund**<br>**Complex**<br>**Overseen by**<br>**Trustee/Officer** | **Other**<br>**Directorships**<br>**Held**<br>**by Trustee/**<br>**Officer During**<br>**the Past**<br>**Five Years** |
| J. Luther King, Jr.<sup>(2)</sup><br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1940 | Trustee, <br>President<br>and Chief Executive <br>Officer | Since 1994 | Chairman, President and Director, Luther King Capital Management Corporation since 1979. | 7 | TXO Partners, L.P. |
| Paul W. Greenwell<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1950 | Vice President | Since 1996 | Principal, Luther King Capital Management Corporation since 1986, Vice President and Portfolio Manager, Luther King Capital Management Corporation since 1983. | Not<br>Applicable | Not<br>Applicable |
| Richard Lenart<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1966 | Secretary and Treasurer | Since 2006 | Luther King Capital Management Corporation since 2005. | Not<br>Applicable | Not<br>Applicable |
| Jacob D. Smith<br>301 Commerce Street<br>Suite 1600<br>Fort Worth, Texas 76102<br>Year of Birth: 1974 | Chief Financial Officer<br>Chief Compliance Officer | Since 2010<br>Since 2006 | General Counsel, Luther King Capital Management Corporation since 2006; Chief Compliance Officer, Luther King Capital Management Corporation from 2006-2022; Principal, Luther King Capital Management Corporation since 2013. | Not<br>Applicable | Not<br>Applicable |

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<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Each officer holds office during the lifetime of the Trust until that individual resigns, retires or is otherwise removed or replaced.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp; Mr. King is considered to be an "interested person" of the Trust (as defined in the 1940 Act) because of his affiliation with the Adviser.

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**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 a company or acknowledges the existence of control. A person who controls the Fund may be able to determine the outcome of any matter submitted to a vote of shareholders. As of March 31, 2026, the following persons owned of record or are known by the Fund to own beneficially 5% or more of the outstanding shares of the Fund:

**PRINCIPAL SHAREHOLDERS** 

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| | | |
|:---|:---|:---|
| **Name and Address** | &nbsp;&nbsp;**Percent of Fund** | **Record or Beneficial** |
| Paul W. Greenwell<br>301 Commerce Street, Suite 1600<br>Fort Worth, TX 76102 | 9.11% | Beneficial |
| Charles Schwab & Co., Inc.<br>Reinvest Account<br>Attn: Mutual Funds Dept.<br>211 Main St.<br>San Francisco, CA 94105-1901 | 8.71% | Record |
| National Financial Services LLC<br>499 Washington Blvd., 4<sup>th</sup> FL<br>Jersey City, NJ 07310-2010 | 8.23% | Record |

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Shareholders with a controlling interest could affect the outcome of proxy voting or the direction of management of the Fund.

**PROXY VOTING PROCEDURES** 

The Fund has delegated its authority to vote proxies to the Adviser subject to the supervision of the Board of Trustees. The Adviser's proxy voting policies are summarized below.

**GENERAL** 

The Adviser's Chief Compliance Officer ("Adviser CCO") is responsible for monitoring the proxy voting process, including engaging and overseeing any third-party vendor retained to review, monitor, or vote proxies.

The Adviser has engaged Institutional Shareholder Services, Inc. ("ISS") as its voting delegate to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;research and make voting determinations in accordance with the policies and procedures described herein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;vote and submit proxies in a timely manner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;handle other administrative functions of proxy voting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;&nbsp;maintain records of proxy statements received in connection with proxy votes and provide copies of such proxy statements promptly upon request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;&nbsp;&nbsp;&nbsp;maintain records of votes cast; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)&nbsp;&nbsp;&nbsp;&nbsp;provide recommendations with respect to proxy voting matters in general.

The Adviser has determined that, except as set forth below, proxies will be voted in accordance with the voting recommendations contained in the applicable domestic or global ISS Voting Guidelines in effect at the time of voting (as applicable, the "ISS Voting Guidelines"). The Adviser will periodically review the ISS Voting Guidelines, including any significant changes or updates thereto. In connection with such reviews, the Adviser may determine that it is not in the best interest of the Fund to vote proxies in accordance with the ISS Voting Guidelines on certain matters. In such event, the Adviser will follow the procedures below in connection with voting any such proxies contrary to the ISS Voting Guidelines.

In the event the ISS Voting Guidelines do not address how a proxy should be voted, the Adviser will vote the proxy in accordance with ISS recommendations. If ISS refrains from making any such recommendations, the Adviser will vote the proxy consistent with what it believes to be in the Fund's best interest. Prior to voting any proxies in the absence of ISS recommendations, however, the Adviser CCO will determine whether any material conflict of interest may exist between the Adviser and the Fund with respect thereto. If the Adviser CCO determines that any such material conflict of interest may exist, the Adviser will follow the procedures below in connection with the voting of such proxies.

There may be circumstances under which the Adviser believes that it is in the best interest of the Fund to vote proxies in a manner inconsistent with the ISS Voting Guidelines or ISS recommendations. Prior to voting any proxies inconsistent with the ISS Voting Guidelines or ISS recommendations, however, the Adviser CCO will determine whether any material conflict of interest may exist between the Adviser and the Fund with respect thereto. If the Adviser CCO determines that any such material conflict of interest may exist, the Adviser will follow the procedures below in connection with the voting of such proxies.

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The Adviser maintains records relating to the implementation of its proxy voting policies and procedures, including, but not limited to, (i) records of each vote cast, which ISS maintains on the Adviser's behalf, and (ii) documents considered or prepared by the Adviser that are material in making a decision to vote proxies on behalf of the Fund or that memorialize the basis for that decision.

**CONFLICTS OF INTEREST** 

The Adviser periodically reviews ISS' conflicts of interest policy and code of ethics, which address conflicts of interest that could arise in connection with proxy advisory services provided by ISS or its affiliates. The Adviser believes that ISS' conflicts of interest policy and code of ethics contain policies and procedures that are reasonably designed to minimize any such potential conflicts of interest.

In the event that the Adviser or the Adviser CCO determines that voting a proxy may present a material conflict of interest between the Adviser and the Fund, the Adviser will (1) in cases where ISS had made a recommendation, take no further action, in which case ISS shall vote such proxy in accordance with the ISS Voting Guidelines or ISS recommendations, as applicable, (2) disclose such conflict of interest to the Board of Trustees and obtain written direction from the Board as to how to vote the proxy, (3) suggest that the Board engage another party to determine how to vote the proxy, or (4) engage another independent third party to determine how to vote the proxy.

Notwithstanding the foregoing, the Adviser must vote proxies in what it believes to be in the best interest of the Fund when material conflicts of interest may exist with respect thereto. The Adviser believes that these policies and procedures are reasonably designed to address material conflicts of interest that may arise as to the manner in which proxies are voted.

**MORE INFORMATION** 

The actual voting records relating to portfolio securities during the most recent 12-month period ended June 30 are available without charge, upon request by calling toll-free, (800) 423-6369 or by accessing the SEC's website at www.sec.gov.

**INVESTMENT ADVISER** 

The investment adviser of the Fund is Luther King Capital Management Corporation, a Delaware corporation controlled by J. Luther King, Jr. (the "Adviser"). The Adviser's parent company is Southwest JLK Corporation, a Texas corporation of which Mr. King is the majority owner and controlling shareholder. Mr. King is a member of the Board of Trustees and the President, Chief Executive Officer and Portfolio Manager of the Trust. Under an Investment Advisory Agreement (the "Agreement") with the Fund, the Adviser manages the investment and reinvestment of the Fund's assets, subject to the control and supervision of the Board of Trustees. The Adviser is responsible for making investment decisions for the Fund and for placing the Fund's purchase and sale orders. Under the Agreement, the Fund pays the Adviser an advisory fee, calculated daily and payable quarterly, equal to an annual rate of 0.90% of the Fund's average daily net assets for the quarter. However, the Adviser has contractually agreed to waive all or a portion of its advisory fees and/or reimburse the Fund through May 1, 2027 to limit the total annual operating expenses of the Fund from exceeding 1.00% of the Fund's average daily net assets. This expense limitation excludes interest, taxes, brokerage commissions, indirect fees and expenses relating to investments in other investment companies, including money market funds ("Acquired Fund Fees and Expenses"), and extraordinary expenses. The fee waiver and expense reimbursement agreement may be terminated or changed only with the consent of the Board of Trustees.

As compensation for the services rendered by the Adviser under the Agreement, for the fiscal years ended December 31, 2023, 2024 and 2025, the Adviser earned and waived and/or reimbursed the amounts for the Fund listed below.

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| | | | |
|:---|:---|:---|:---|
|  | **Contractual**<br>**Advisory**<br>**Fees**<br>**Incurred** | **Waived**<br>**Fees and/or**<br>**Expenses**<br>**Reimbursed**<br>**by the Adviser** | **Net Advisory Fees**<br>**paid to the**<br>**Adviser** |
| Year Ended December 31, 2023 | $489290 | $(287159) | $202131 |
| Year Ended December 31, 2024 | $535838 | $(277064) | $258774 |
| Year Ended December 31, 2025 | $541960 | $(280265) | $261695 |

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**PORTFOLIO MANAGERS** 

The portfolio managers listed below have responsibility for the day-to-day management of accounts other than the Fund. The information listed below for such other accounts is as of December 31, 2025.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Number of Other Accounts Managed**<br>**and Assets by Account Type** | **Number of Other Accounts Managed**<br>**and Assets by Account Type** | **Number of Other Accounts Managed**<br>**and Assets by Account Type** | **Number of Accounts and Assets for**<br>**which Advisory Fee is Performance**<br>**Based** | **Number of Accounts and Assets for**<br>**which Advisory Fee is Performance**<br>**Based** | **Number of Accounts and Assets for**<br>**which Advisory Fee is Performance**<br>**Based** |
|  | **Registered**<br>**Investment**<br>**Companies** | **Other Pooled**<br>**Investment**<br>**Vehicles** | **Other**<br>**Accounts** | **Registered**<br>**Investment**<br>**Companies** | **Other Pooled**<br>**Investment**<br>**Vehicles** | **Other**<br>**Accounts** |
| Paul Greenwell | 0 | 0 | 189 | 0 | 0 | 0 |
|  | $0 | $0 | $1.6 billion | $0 | $0 | $0 |
| Scot C. Hollmann | 3 | 0 | 356 | 0 | 0 | 0 |
|  | $899 million | $0 | $2.6 billion | $0 | $0 | $0 |

---

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**Conflicts of Interest** 

The portfolio managers are responsible for managing the Fund and other separately managed accounts, including accounts for investment companies, employee benefit plans, pension plans, endowments, foundations, trusts, high net worth individuals, and pooled investment vehicles. When a portfolio manager is responsible for the management of more than one account, the potential arises for the portfolio manager to favor one account over another. The principal types of conflicts of interest that may arise are discussed below. The Adviser believes that it has established policies and procedures that are reasonably designed to mitigate these potential conflicts of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The portfolio managers are responsible for managing other accounts that may have investment objectives, guidelines, strategies, risk profiles or other considerations that may differ from those of the Fund. The portfolio managers make investment decisions for each account based on its investment objectives and guidelines, policies, and other relevant considerations. Consequently, the portfolio managers may purchase or sell securities at the same or different times for one account and not another account or the Fund. The portfolio managers may also make investment decisions on behalf of other accounts that are directly or indirectly contrary to investment decisions made on behalf of the Fund, or make investment decisions that are similar to those made for the Fund, any of which has the potential to adversely impact the Fund depending on market conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The portfolio managers may purchase or sell for their own account securities that are purchased or sold on behalf of the Fund. The portfolio managers also have a beneficial interest in pooled investment vehicles or other accounts managed by the Adviser, other than the Fund. The Adviser has implemented a code of ethics and other policies and procedures in an effort to mitigate these potential conflicts of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The portfolio managers could favor one account over another in allocating new investment opportunities of a limited nature, such as initial public offerings and private placements. The Adviser has implemented policies and procedures, including a rotational system for allocating initial public offerings, in an effort to ensure that investment opportunities of a limited nature are allocated fairly and equitably among eligible accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The portfolio managers could favor one account over another in the order in which trades for accounts are placed. If the portfolio managers determine to purchase a security for more than one account in an aggregate amount that may influence the market price of the security, accounts that purchased or sold the security first may receive a more favorable price than accounts that made subsequent transactions. In addition, the Fund and other accounts, including pooled investment vehicles, managed by the portfolio managers may participate in aggregated purchase or sale transactions. To the extent that accounts participating in aggregated trades do not receive their full allocation, a potential conflict of interest exists because the Adviser and portfolio managers have an incentive to allocate trades to accounts in which the Adviser and portfolio managers have a financial interest. The Adviser has implemented trade allocation and aggregation policies and procedures in an effort to mitigate this potential conflict of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The portfolio managers are responsible for managing other accounts and pooled investment vehicles, some of which entitle the Adviser to incentive fees and/or management fees exceeding those paid by the Fund. This compensation structure presents a potential conflict of interest because the Adviser and the portfolio managers may be incentivized to favor such accounts over the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Adviser and the portfolio managers have significant personal investments in some of the private investment funds managed by the Adviser. As a result of such investments, the Adviser and the portfolio managers may be motivated to favor these funds over the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Under Section 28(e) of the Securities Exchange Act of 1934, as amended, the Adviser may pay commissions to brokers for the Fund's transactions that exceed the amount of commissions that would be charged by another broker for the same transactions, provided that the Adviser determines in good faith that the amount of commissions paid are reasonable in relation to the value of the brokerage and research services provided by such broker, either in terms of a particular transaction or the Adviser's overall responsibilities with respect to accounts for which it exercises investment discretion. Pursuant to Section 28(e), the Adviser has entered into soft dollar and commission sharing arrangements with third parties and brokers for eligible brokerage and research products and services. A potential conflict of interest may exist because the Adviser receives these brokerage and research products and services from brokers in exchange for directing commissions from the Fund's transactions, rather than paying for these products and services with its own assets. The Adviser has implemented policies and procedures governing its use of such soft dollar and commission sharing arrangements.

**Compensation** 

As an independent firm, the Adviser has full control over its compensation structure. The Adviser seeks to maintain a compensation program that is competitively positioned to attract and retain high-caliber investment professionals. Each member of the professional staff is provided a salary. They also are eligible to participate in the Adviser's profit sharing plan. The majority of compensation is derived from bonuses, which are discretionary and based on individual merit as well as success of the Adviser in any given year. Criteria for individual bonuses include, among other factors, stock selection, relationship building, investment performance, client service, and portfolio management. There is no standard formula or method for determining bonuses and the factors considered for bonuses vary by individual. Compensation is not based directly on the performance of the Fund or the net asset levels of the Fund.

**Ownership of Securities** 

As of March 31, 2026, the officers and Trustees of the Trust as a group owned approximately 9.37% of the Fund. Each portfolio manager of the Fund owned the following amounts of shares of the Fund as of December 31, 2025:

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<u>Key</u> 

A. None

B. $1 – $10,000

C. $10,001 – $50,000

D. $50,001 – $100,000

E. $100,001 – $500,000

F. $500,001 – $1,000,000

G. Over $1,000,000

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| | |
|:---|:---|
| **Name of Portfolio Manager** | **Dollar Range of Shares Owned** |
| Paul W. Greenwell | G |
| Scot C. Hollmann | A |

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**PORTFOLIO TRANSACTIONS AND BROKERAGE** 

The Agreement authorizes the Adviser to select the brokers or dealers that will execute the purchases and sales of investment securities for the Fund and directs the Adviser to use its best efforts in seeking best execution with respect to all securities transactions for the Fund. In selecting brokers or dealers for securities transactions for the Fund, the Adviser may consider, among other things: the quality of executions and liquidity provided by the broker; the ability of the broker to maintain confidentiality of client orders and order flow; the ability of the broker to minimize market impact for client transactions; the commission rates charged by the broker in comparison to the rates of other brokers for similar transactions; the broker's provision of eligible brokerage and research services; the broker's ability to obtain timely, accurate, and cost-effective executions; the ability of the broker to accurately communicate the nature of the market for a particular security; the broker's execution policies and commitment to providing best execution; the size and volume of the broker's order flow; and the efficiency and accuracy of the broker's operations area with regard to settlement procedures.

As permitted by Section 28(e) of the Securities Exchange Act of 1934, as amended, the Adviser may cause the Fund to pay higher commission rates than the lowest available when the Adviser believes in good faith that the commissions paid are reasonable in light of the value of the brokerage or research services provided by the broker, either in terms of a particular transaction or the Adviser's overall responsibilities with respect to accounts for which it has investment discretion. These services generally include third-party and proprietary analyses and reports concerning issuers, industries, securities, general economic and market conditions and trends, portfolio strategy; third-party and proprietary analyses and reports regarding the value of securities, the advisability of purchasing or selling securities, and the availability of sellers and purchasers of securities; and services related to effecting securities transactions and performing functions incidental thereto. The Adviser may use some of these services in providing investment advisory services to all of its clients, and not all of these services may be used by the Adviser in providing investment advisory services to the Fund. During the fiscal year ended December 31, 2025, the Fund directed transactions to brokers pursuant to which the brokers provided third-party or proprietary research or brokerage services to the Adviser. Pursuant to these arrangements to receive research and brokerage services, during the fiscal year ended December 31, 2025 it is estimated that the Fund paid total commissions of approximately $1,300 on transactions with a principal value of approximately $5.7 million.

It is not the Adviser's practice to allocate brokerage or principal business on the basis of sales of shares of the Fund that may be made through intermediary brokers or dealers. However, the Adviser may place orders with qualified broker-dealers who recommend the Fund or who act as agents in the purchase of shares of the Fund for their clients, without considering these factors in selecting a broker-dealer. The Adviser does not have an affiliated broker, therefore it has not engaged in any affiliated brokerage transactions.

The aggregate amount of brokerage commissions paid by the Fund during the fiscal years ended December 31, 2023, 2024 and 2025 was $18,524, $6,264, and $8,140, respectively.

Some securities considered for investment by the Fund may also be appropriate for other clients served by the Adviser. If purchases or sales of securities consistent with the investment policies of the Fund and one or more of these other clients serviced by the Adviser are considered at or about the same time, transactions in such securities may be aggregated and allocated among the Fund and such clients in accordance with the Adviser's allocation policies and procedures or in any other manner deemed fair and reasonable by the Adviser.

As of December 31, 2025, the Fund did not own the securities of its "regular brokers or dealers" (as defined in the 1940 Act) or their parent companies.

**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 or other considerations warrant such action. Portfolio turnover rate is calculated by dividing (1) the lesser of purchases or sales of long-term portfolio securities for the fiscal year by (2) the monthly average of the value of long-term 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 higher transaction costs and may result in a greater number of transactions on which net taxable gains are realized. Portfolio turnover may vary significantly from year to year due to a variety of factors, including fluctuating volume of shareholder purchase and redemption orders, market conditions, investment strategy changes, and/or changes in the Adviser's investment outlook.

The Fund had portfolio turnover rates of 11% and 9% for the fiscal years ended December 31, 2024 and 2025, respectively.

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**CUSTODIAN** 

As custodian of the Fund's assets, U.S. Bank, N.A. (the "Custodian"), 1555 N. RiverCenter Drive, Suite 302, Milwaukee, WI 53212, has custody of all securities and cash of the Fund, delivers and receives payment for securities sold, receives and pays for securities purchased, collects income from investments, and performs other duties, all as directed by the officers of the Trust. U.S. Bank, N.A. and Fund Services (as defined below) are affiliates.

**TRANSFER AGENT** 

U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services ("Fund Services"), 615 East Michigan Street, Milwaukee, Wisconsin, 53202 serves as transfer agent, dividend disbursing agent and shareholder servicing agent for the Fund. In such capacity, Fund Services' responsibilities include: receiving and processing all orders for purchases, exchanges and redemptions of Fund shares; responding to shareholder inquiries and instructions concerning their accounts; updating of shareholder accounts to reflect declaration and payment of dividends and other distributions; and preparing and distributing account statements and tax documents to shareholders regarding their accounts. U.S. Bank, N.A. and Fund Services are affiliates.

**ADMINISTRATOR** 

Pursuant to the Fund Administration Agreement, Fund Services provides the Fund with administrative services. The services under this Agreement are subject to the supervision of the Board of Trustees and officers of the Trust, and include day-to-day administration of matters necessary to the Fund's operations, maintenance of their records, preparation of reports, compliance testing of the Fund's activities, and preparation of periodic updates of the registration statement under federal and state laws. For administration services, Fund Services receives from the Fund a fee, calculated daily and paid monthly. U.S. Bank, N.A. and Fund Services are affiliates.

Administration fees incurred by the Fund during the fiscal years ended December 31, 2023, 2024, and 2025 were $65,851, and $75,114, and $118,457, respectively.

Fund Services also acts as Transfer Agent, Dividend-Disbursing Agent, and Fund Accountant for the Fund.

**DISTRIBUTOR** 

Quasar Distributors, LLC (the "Distributor"), 190 Middle Street, Suite 301, Portland, ME 04101, a registered broker-dealer and member of the Financial Industry Regulatory Authority, distributes the Fund's shares. The Distributor uses its best efforts to distribute the Fund's shares, which shares are offered for sale by the Fund continuously at net asset value per share without the imposition of a sales charge. The Fund pay that portion of the compensation owed to the Distributor that is permitted under Rule 12b-1 of the 1940 Act and the Distribution Plan (as defined below), and the Adviser pays the remaining portion of any such compensation.

**DISTRIBUTION PLAN** 

The Board has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (the "Distribution Plan"). Pursuant to this Distribution Plan, the Fund can pay up to an aggregate maximum of 1.00% per annum of its average daily net assets for the distribution and promotion of its shares and the retention of shares by Fund shareholders. These services include, but are not limited to, the printing of Prospectuses, Statements of Additional Information, reports used for sales purposes, advertisements, expenses of preparation and printing of sales literature, other distribution-related expenses, and providing services to shareholders. The Board of Trustees has authorized payments under the Distribution Plan at an annual rate of 0.10% of the Fund's average daily net assets.

The Distribution Plan is regulated by Rule 12b-1 under the 1940 Act, which requires that the Board receive and review at least quarterly reports concerning the amount and purpose of expenses which are made, and that the Distribution Plan may be continued from year-to-year only if the Board, including a majority of the Independent Trustees, concludes at least annually that continuation of the Distribution Plan is reasonably likely to benefit the Trust and its shareholders.

The Fund paid the following amounts in 12b-1 expenses for the fiscal year ended December 31, 2025:

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| | |
|:---|:---|
| Advertising/Marketing | $37500 |
| Printing/Postage | $0 |
| Payment to Distributor | $8446 |
| Payment to Dealers | $14434 |
| Compensation to Sales Personnel | $0 |
| Other | $0 |
| Total | $60379 |

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**PAYMENTS TO FINANCIAL INTERMEDIARIES** 

A financial intermediary through which you purchase your shares may receive all or a portion of the Distribution Plan Rule 12b-1 fees, if applicable, discussed above. In addition to those payments, the Adviser makes additional cash payments to certain intermediaries in connection with the promotion and sale of shares of the Fund. The Adviser and the Fund also make payments for certain sub-transfer agency and administrative services. Payments made by the Adviser are from its own resources. The categories described below are not mutually exclusive. The same financial intermediary may receive payments under more than one or all categories.

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*Revenue Sharing Payments*. The Adviser makes revenue sharing payments as incentives to certain financial intermediaries to promote and sell shares of the Fund. The benefits that the Adviser receives when it makes these payments include, among other things, placing the Fund on the financial intermediary's funds sales system. The Adviser compensates financial intermediaries differently depending typically on the level and/or type of considerations provided by the financial intermediary.

Revenue sharing payments may be calculated on sales of shares of the Fund ("Sales-Based Payments"). Such payments also may be calculated on the average daily net assets of the Fund attributable to that particular financial intermediary ("Asset-Based Payments"). Sales-Based Payments primarily create incentives to make new sales of shares of the Fund and Asset-Based Payments primarily create incentives to retain previously sold shares of the Fund in shareholder accounts. The Adviser may pay a financial intermediary either or both Sales-Based Payments and Asset-Based Payments.

*Administrative and Processing Support Payments*. Firms that establish omnibus accounts and provide substantially the same services to their clients as are provided by Fund Services to direct shareholders of the Fund may receive sub-transfer agent fees for such services from the Fund. In an omnibus account, the Fund maintain a single account in the name of a financial intermediary such as a broker, dealer, record-keeper or other service provider and the financial intermediary maintains all of the individual shareholder accounts.

Record-keeping and shareholder services typically include: establishing and maintaining shareholder accounts and records; recording shareholder account balances and changes thereto; arranging for the wiring of funds; providing statements to shareholders; furnishing proxy materials, periodic reports of the Fund, prospectuses and other communications to current shareholders as required; transmitting shareholder transaction information; and providing information in order to assist the Fund in its compliance with federal and state securities laws. The Fund typically would be paying these shareholder servicing fees directly if the financial intermediary did not hold all of its customer accounts in a single omnibus account with the Fund. Likewise, for many retirement plans, a third party administrator may open an omnibus account with the Fund and the administrator will then maintain all of the participant accounts. The Adviser and the Fund may make payments to certain financial intermediaries for certain administrative services, including record keeping and sub-accounting shareholder accounts. The Adviser, the Distributor and the Fund also may make payments to certain financial intermediaries in connection with client account maintenance support, statement preparation and transaction processing.

*Other Cash Payments*. From time to time, the Adviser, at its own expense, may provide additional compensation to financial intermediaries which sell or arrange for the sale of shares of the Fund. This additional compensation may be offered to the extent not prohibited by state laws or any self-regulatory agency, such as Financial Industry Regulatory Authority, Inc. Such compensation may include financial assistance to financial intermediaries that enables the Adviser to: (1) participate in and/or present at conferences or seminars for invited registered representatives and other employees, (2) participate in client entertainment, client and investor events, and other financial intermediary-sponsored events, and (3) pay expenses incurred by registered representatives and other employees in connection with client prospecting, retention and due diligence trips.

The Adviser is motivated to make the payments described above since they promote the sale of Fund shares and the retention of those investments by clients of financial intermediaries. To the extent financial intermediaries sell more shares of the Fund or retain shares of the Fund in their clients' accounts, the Adviser benefits from the incremental management and other fees paid to the Adviser by the Fund with respect to those assets.

In certain cases these payments could be significant to the financial intermediary. Your financial intermediary may charge you additional fees or commissions other than those disclosed in the Prospectus and this SAI. You may ask your financial intermediary about any payments it receives from the Adviser or the Fund, as well as about fees and/or commissions it charges.

**INTERESTS OF CERTAIN PERSONS** 

With the exception of the Adviser, no "interested person" of the Fund, as defined in the 1940 Act, and no Trustee of the Trust who is not an "interested person" has or had a direct or indirect financial interest in the Distribution Plan or any related agreement.

**CODE OF ETHICS** 

The Trust, Adviser and Distributor have each adopted a written Code of Ethics. These Codes of Ethics govern the personal securities transactions of trustees, directors, officers and employees who may have access to current trading information of the Fund. These Codes of Ethics permit such persons to invest in the Fund and/or other securities for their personal accounts, including securities that may be purchased or held by the Fund, subject to certain conditions. These Codes of Ethics include reporting and other obligations to monitor personal transactions and confirm that such transactions do not disadvantage the Fund.

**PURCHASE AND PRICING OF SHARES** 

**PURCHASE OF SHARES** 

The Fund will be deemed to have received a purchase or redemption order when an authorized broker or, if applicable, a broker's designee receives the order.

**Purchasing Shares with Liquid Securities.** Certain clients of the Adviser may, subject to the approval of the Trust, purchase shares of the Fund with liquid securities that are eligible for purchase by the Fund (consistent with the Fund's investment policies and restrictions) and that have a value that is readily ascertainable (and not established only by fair valuation procedures) as evidenced by a listing on the New York Stock Exchange ("NYSE") or NASDAQ. These transactions will be effected only if the Adviser intends to retain the security in the Fund as an investment. Assets so purchased by the Fund will be valued in generally the same manner as they would be valued for purposes of pricing the Fund's shares, if such assets were included in the Fund's assets at the time of purchase.

**Automatic Investment Program.** The Automatic Investment Program ("AIP") permits investors who own shares of the Fund with a value of $2,000 or more to purchase shares (minimum of $100 per transaction) at regular intervals selected by the investor. Provided the investor's financial institution allows automatic withdrawals, shares are purchased by transferring funds from an

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investor's checking or savings account. The financial institution must be a member of the Automatic Clearing House network. There is no charge for this service. A $25 fee will be charged if the investor's bank rejects the scheduled transaction. At the investor's option, the account designated will be debited in the specified amount, and shares will be purchased on a specified day or days of a month.

The AIP is one means by which an investor may use "dollar cost averaging" in making investments. Instead of trying to time market performance, a fixed dollar amount is invested in shares at predetermined intervals. This may help investors to reduce their average cost per share because the agreed upon fixed investment amount allows more shares to be purchased during periods of lower share prices and fewer shares during periods of higher prices. In order to be effective, dollar cost averaging should usually be followed on a sustained, consistent basis. Investors should be aware, however, that shares bought using dollar cost averaging are purchased without regard to their price on the day of investment or market trends. In addition, while investors may find dollar cost averaging to be beneficial, it will not prevent a loss if an investor ultimately redeems his or her shares at a price that is lower than their purchase price.

To establish the AIP, an investor must complete the appropriate sections of the New Account Application. Please call the Trust at 800-423-6369 if you have questions. An investor may cancel his or her participation in this Program or change the amount of purchase at any time by notifying the Transfer Agent by telephone or in writing five days prior to the effective date of the next transaction. The Trust may modify or terminate this privilege at any time or charge a service fee, although no such fee currently is contemplated.

**PRICING OF SHARES** 

Shares of the Fund are sold and redeemed on a continual basis at the net asset value per share next computed following acceptance of an order by the Fund. The Fund's net asset value per share for the purpose of pricing purchase and redemption orders is normally determined as of the scheduled close of normal trading (generally 4:00 p.m. Eastern Time) on each day the NYSE is scheduled to be open for trading. The NYSE is generally scheduled to be closed on the following holidays: New Year's Day, Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

Equity securities listed or traded on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price on the exchange on which the security is primarily traded. Nasdaq Global Market securities are valued at the Nasdaq Official Closing Price. Unlisted U.S. equity securities and listed U.S. equity securities not traded on a particular valuation date are valued at the mean of the most recent quoted bid and ask price on the relevant exchanges or markets.

Equity securities listed on a foreign exchange for which market quotations are readily available are valued at the last quoted sales price on the exchange on which the security is primarily traded.

Debt securities are normally valued at the mean of the closing bid and ask price and/or by using a combination of broker quotations or evaluated prices provided by an independent pricing service. Futures and options on futures are valued at the settlement prices established each day on the principal exchange on which they are traded. Forward contracts are valued based on the forward rate using information provided by an independent pricing service. Other assets and securities for which no market or broker quotations or evaluated prices are readily available are valued in good faith at fair value using guidelines approved by the Board of Trustees.

Rule 2a-5 under the Investment Company Act (the "Valuation Rule") establishes requirements for determining fair value in good faith for purposes of the Investment Company Act, including related oversight and reporting requirements. The Valuation Rule also defines when market quotations are "readily available" for purposes of the Investment Company Act, the threshold for determining whether a security must be fair valued.

The Valuation Rule permits the Fund's board to designate the Fund's investment adviser as "valuation designee" to perform the Fund's fair value determinations subject to board oversight and certain reporting and other requirements intended to ensure that the registered investment company's board receives the information it needs to oversee the investment adviser's fair value determinations. The Board has designated the Adviser as valuation designee under the Valuation Rule to perform fair value functions in accordance with the requirements of the Valuation Rule. The Adviser may value securities at fair value in good faith pursuant to the Adviser's and the Fund's procedures. The Adviser may use prices provided by independent pricing services to assist in the fair valuation of the Fund's portfolio securities.

The policies and procedures adopted by the Fund and the Adviser authorize the Adviser to fair value a security in good faith if, among other things, the Adviser determines that (i) closing prices of foreign securities do not reflect their fair market value due to events that occur between the closing of foreign markets and the time at which the Fund calculates its NAV, (ii) trading in a security is halted and does not resume prior to the closing of the exchange or other market on which such security normally trades, or (iii) the price for such security provided by the Fund's independent pricing services appears invalid, is not readily available, or otherwise provides a valuation that in the judgment of the Adviser does not represent the fair market value of such security. Prices provided by independent pricing services may be used to assist in the fair valuation of the Fund's portfolio securities. For foreign securities, such fair value prices generally are based on such independent pricing services' proprietary multi-factor models that measure movements in relevant indices, market indicators and other factors between the time the relevant foreign markets have closed and the time the Fund calculates its NAV, and therefore may differ from quoted or official closing prices for such foreign securities in such foreign markets. If fair value pricing is utilized, the fair values assigned to the Fund's foreign investments may not be the quoted or published prices of the investments on their primary markets or exchanges.

------

An example of how the Fund calculated its total offering price per share as of December 31, 2025 is as follows:

---

| | |
|:---|:---|
| **Net Assets**  | **Net Asset Value per share** |
| **Shares Outstanding** | |
| $59653305 | $17.72 |
| 3366428 |  |

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**PORTFOLIO HOLDINGS INFORMATION** 

It is the policy of LKCM Funds to protect the confidentiality of portfolio holdings and prevent the selective disclosure of non-public information concerning the Fund. No information concerning the portfolio holdings of the Fund may be disclosed to any person except as provided below.

The Adviser and the Fund maintain portfolio holdings disclosure policies that govern the timing and circumstances of disclosure to shareholders and third parties of information regarding the portfolio investments held by the Fund. These portfolio holdings disclosure policies have been approved by the Board of Trustees. Disclosure of the Fund's complete holdings is required to be made quarterly within 70 days of the end of each fiscal semi-annual period in the Funds' Form N-CSR filed with the SEC. These reports are available, free of charge, on the EDGAR database on the SEC's website at www.sec.gov and on the Funds' website at www.aquinasfunds.com. Monthly portfolio disclosures are filed quarterly with the SEC on Form N-PORT, with quarter-end disclosures being made public 60 days after the end of each fiscal quarter. These reports are available, free of charge, on the EDGAR database on the SEC's website at www.sec.gov. In addition, the Fund also makes available on the Fund's website a complete schedule of its portfolio holdings no sooner than 30 days following the end of each calendar quarter. Information contained within Fund Fact Sheets is made publicly available on the website upon completion (generally within 10-15 days after the close of the calendar quarter). In an effort to prevent parties from potentially misusing portfolio holdings information, the Fund will generally only disclose the Fund Fact Sheets and complete schedules of portfolio holdings as of the end of the most recent calendar quarter no earlier than 10 days and 30 days after the end of the calendar quarter, respectively.

In addition, the Fund's service providers, including the administrator, custodian, legal counsel, proxy voting administrator, independent pricing service and independent registered public accounting firm, receive portfolio holdings information in connection with their services to the Fund. The Fund's service providers have a duty to keep nonpublic information about the Fund, some of which is received on a daily basis with no lag time, confidential based on existing laws and due to the nature of their roles with the Fund. An officer of the Adviser or the Chief Compliance Officer of the Fund may distribute (or authorize the Fund's administrator to distribute) portfolio holdings to rating and ranking agencies for a legitimate business purpose on a quarterly basis. Except as noted above, this information is provided no earlier than 30 days after the end of a calendar quarter and no compensation is received by the Adviser or the Fund as consideration for such disclosure. The Fund's Chief Compliance Officer may waive certain of the requirements of this policy. The Board of Trustees and the Adviser may, on a case-by-case basis, impose additional restrictions on the dissemination of portfolio holdings information beyond those required by the Fund's policy. Notwithstanding these policies, the Fund may disclose portfolio holdings information to the extent required by applicable law.

The Fund's Chief Compliance Officer will report any violations of these policies to the Board of Trustees on a quarterly basis. In no event shall the Adviser, its affiliates or employees, or the Fund receive any direct or indirect compensation in connection with the disclosure of information about the Fund's portfolio holdings.

If the disclosure of portfolio holdings presents a conflict of interest between the shareholders and the Adviser, the Fund's principal distributor or any of their respective affiliates, then such conflict will be reported to the Board for its consideration prior to the dissemination of portfolio holdings information.

**EXCHANGES** 

Shareholders of the Fund may exchange shares of the Fund for shares of another series of the Trust.

**REDEMPTIONS IN KIND** 

The Trust has made an election with the SEC to pay in cash all redemptions requested by any shareholder of record limited in amount during any 90-day period to the lesser of (i) $250,000 or (ii) 1% of the net assets of the Fund at the beginning of such period. Such commitment is irrevocable without the prior approval of the SEC. Redemptions in excess of the above limits may be paid in whole or in part in investment securities or in cash, as the Trustees may deem advisable; however, payment will be made wholly in cash unless the Trustees believe that economic or market conditions exist which would make such a practice detrimental to the best interests of the Fund. If redemptions are paid in investment securities the redeeming shareholders might incur brokerage expenses if they converted these securities to cash. Securities used to make such "in-kind" redemptions will be readily marketable. The method of valuing such securities will be the same as the method of valuing Fund securities described under "Pricing of Shares," and such valuation will be made as of the same time the redemption price is determined.

**TAXATION** 

**TAXATION OF THE FUND** 

The following discussion of certain federal tax matters concerning the Fund and the purchase, ownership and disposition of Fund shares is not complete and may not deal with all aspects of federal taxation that may be relevant to you in light of your particular circumstances. This discussion is based on the Internal Revenue Code of 1986, as amended (the "Code"), the regulations promulgated thereunder and judicial and administrative interpretations thereof, publicly available as of the date hereof; all these authorities are subject to change, which may be applied retroactively. You should consult your own tax advisers with regard to the federal tax

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consequences to you of the purchase, ownership and disposition of Fund shares, as well as the tax consequences thereof to you arising under the laws of any state, locality, foreign country or other taxing jurisdiction.

The Fund, which is treated as a separate corporation for federal tax purposes, intends to continue to qualify annually for treatment as a "regulated investment company" under Subchapter M of Chapter 1 of Subtitle A of the Code ("RIC"). If so qualified, the Fund (but not its shareholders) will not be liable for federal income tax to the extent it distributes its net earnings and realized net gains to its shareholders on a timely basis.

To continue to qualify for treatment as a RIC for a taxable year, the Fund must distribute to its shareholders at least the sum of 90% of its investment company taxable income (consisting generally of net investment income, the excess, if any, of net short-term capital gain over net long-term capital loss ("net short-term capital gain") and net gains and losses from certain foreign currency transactions, if any, all determined without regard to any deduction for dividends paid) and 90% of its net exempt interest income for that year ("Distribution Requirement") and must meet several additional requirements. With respect to the Fund, these requirements include the following: (1) the Fund must derive at least 90% of its gross income for the taxable year from dividends, interest, payments with respect to securities loans and gains (without regard to losses) from the sale or other disposition of securities or foreign currencies, or other income derived with respect to its business of investing in securities or those currencies and income from qualified publicly traded partnerships ("Income Requirement"); and (2) at the close of each quarter of the Fund's taxable year, (a) at least 50% of the value of its total assets must be represented by cash and cash items, Government securities, securities of other RICs and other securities, with these other securities limited, in respect of any one issuer, to an amount that does not exceed 5% of that value and that does not represent more than 10% of the issuer's outstanding voting securities, and (b) not more than 25% of that value may be invested in (i) the securities (other than Government securities or securities of other RICs) of any one issuer, (ii) the securities (other than securities of other RICs) of two or more issuers the Fund controls (by owning 20% or more of their voting power) that are determined to be engaged in the same, similar or related trades or businesses or (iii) interests in qualified publicly traded partnerships ("Diversification Requirements").

If the Fund fails to qualify for treatment as a RIC for any taxable year – either (1) by failing to satisfy the Distribution Requirement, even if it satisfies the Income and Diversification Requirements, or (2) by failing to satisfy the Income Requirement and/or Diversification Requirements and is unable, or determines not, to avail itself of Code provisions that enable a RIC to cure a failure to satisfy any of the Income and Diversification Requirements as long as the failure "is due to reasonable cause and not due to willful neglect" and the RIC pays a deductible tax calculated in accordance with those provisions and meets certain other requirements – then for federal tax purposes for any taxable year, it would be treated as a regular corporation for federal tax purposes. In that case, it would be subject to federal income tax, and any distributions that it made to its shareholders would not be deductible by it and would be taxable to them as ordinary income (with no part treated as a capital gain distribution) to the extent of its earnings and profits, except for the part of those dividends that is "qualified dividend income" (described in the Prospectus), which is subject to maximum federal income tax rates of 15% and 20% for certain shareholders. That treatment would increase the cost of investing in the Fund for shareholders and would make it more economical for shareholders to invest directly in securities held by the Fund instead of investing indirectly in those securities through the Fund.

The Fund will be subject to a nondeductible 4% excise tax ("Excise Tax") to the extent it fails to distribute by the end of any calendar year substantially all of its ordinary income for that year and capital gain net income for the one-year period ending on October 31 (or December 31, if it so elects) of that year, plus certain other amounts.

If the Fund has an "appreciated financial position" – generally, an interest (including an interest through a short sale with respect to any stock, debt instrument (other than "straight debt") or partnership interest the fair market value of which exceeds its adjusted basis – and enters into a "constructive sale" of the position, the Fund will be treated as having made an actual sale thereof, with the result that it will recognize gain at that time. A constructive sale generally consists of a short sale or an offsetting notional principal contract the Fund or a related person enters into with respect to the same or substantially identical property. In addition, if the appreciated financial position is itself a short sale or such a contract, acquisition of the underlying property or substantially identical property will be deemed a constructive sale. The foregoing will not apply, however, to any transaction by the Fund during any taxable year that would otherwise be treated as a constructive sale if the transaction is closed within 30 days after the end of that year and the Fund holds the appreciated financial position unhedged for 60 days after that closing (i.e., at no time during that 60-day period is the Fund's risk of loss regarding that position reduced by reason of certain specified transactions with respect to substantially identical or related property, such as having an option to sell, being contractually obligated to sell, making a short sale or granting an option to buy substantially identical stock or securities).

**Investments in Foreign Securities**. Dividends and interest the Fund receives, and gains it realizes, on foreign securities, may be subject to income, withholding or other taxes imposed by foreign countries and U.S. possessions that would reduce the yield and/or total return on its securities. Tax conventions between certain countries and the United States may reduce or eliminate those taxes, however, and many foreign countries do not impose taxes on capital gains in respect of investments by foreign investors.

The Fund may invest in the stock of "passive foreign investment companies" ("PFICs"). A PFIC is any foreign corporation (with certain exceptions) that, in general, meets either of the following tests for a taxable year:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;at least 75% of its gross income is passive; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;an average of at least 50% of its assets produce, or are held for the production of, passive income.

Under certain circumstances, the Fund will be subject to federal income tax on a portion of any "excess distribution" it receives on the stock of a PFIC and of any gain on disposition of the stock (collectively, "PFIC income"), plus interest thereon, even if the Fund distributes the PFIC income as a taxable dividend to its shareholders. The balance of the PFIC income will be included in the Fund's investment company taxable income and, accordingly, will not be taxable to it to the extent it distributes that income to its shareholders. Fund distributions attributable to PFIC income will not be eligible for the 15% and 20% maximum federal income tax rates on "qualified dividend income" mentioned above.

If the Fund invests in a PFIC and elects to treat the PFIC as a "qualified electing fund" ("QEF"), then in lieu of the foregoing tax and interest obligation, the Fund would be required to include in income each taxable year its pro rata share of the QEF's annual

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ordinary earnings and net capital gain even if the QEF did not distribute those earnings and gain to the Fund. In most instances it will be very difficult, if not impossible, to make this election because of certain requirements thereof.

The Fund may elect to "mark to market" its stock in any PFIC. "Marking-to-market," in this context, means including in gross income (and treating as ordinary income) each taxable year the excess, if any, of the fair market value of the stock over the Fund's adjusted basis therein as of the end of that year. Pursuant to the election, the Fund also may deduct (as an ordinary, not a capital, loss) the excess, if any, of its adjusted basis in PFIC stock over the fair market value thereof as of the taxable year-end, but only to the extent of any net mark-to-market gains with respect to that stock the Fund included in income for prior taxable years under the election. The Fund's adjusted basis in each PFIC's stock subject to the election would be adjusted to reflect the amounts of income included and deductions taken thereunder.

Investors should be aware that determining whether a foreign corporation is a PFIC is a fact-intensive determination that is based on various facts and circumstances and thus is subject to change, and the principles and methodology used therein are subject to interpretation. As a result, the Fund may not be able, at the time it acquires a foreign corporation's shares, to ascertain whether the corporation is a PFIC, and a foreign corporation may become a PFIC after the Fund acquires shares therein. While the Fund generally will seek to avoid investing in PFIC shares to avoid the tax consequences detailed above, there are no guarantees that it will be able to do so and it reserves the right to make such investments as a matter of its investment policy.

Gains or losses (1) from the disposition of foreign currencies, (2) on the disposition of a debt security denominated in a foreign currency that are attributable to fluctuations in the value of the foreign currency between the dates of acquisition and disposition of the security and (3) that are attributable to exchange rate fluctuations between the time the Fund accrues interest, dividends or other receivables or expenses or other liabilities denominated in a foreign currency and the time it actually collects the receivables or pays the liabilities, generally are treated as ordinary income or loss. These gains or losses will increase or decrease the amount of investment company taxable income available to the Fund for distribution to its shareholders as ordinary income, rather than increasing or decreasing the amount of its net capital gain.

For federal income tax purposes, net capital losses incurred by the Fund in a particular taxable year can be carried forward to offset net capital gains in any subsequent year until such loss carryforwards have been fully used, and such capital losses carried forward will retain their character as either short-term or long-term capital losses. To the extent subsequent net capital gains are offset by such losses, they would not result in federal income tax liability to the Fund and would not be distributed as such to shareholders.

The Fund currently has no capital loss carryovers.

**TAXATION OF THE SHAREHOLDERS** 

Distributions of net capital gain, if any, designated as capital gains dividends are taxable to a shareholder as long-term capital gains, regardless of how long the shareholder has held Fund shares. A distribution of an amount in excess of the Fund's current and accumulated earnings and profits will be treated by a shareholder as a return of capital which is applied against and reduces the shareholder's basis in his or her shares. To the extent that the amount of any such distribution exceeds the shareholder's basis in his or her shares, the excess will be treated by the shareholder as gain from a sale or exchange of the shares. Distributions of gains from the sale of investments that the Fund owned for one year or less will be taxable as ordinary income.

The Fund may elect to retain its net capital gain or a portion thereof for investment and be taxed at corporate rates on the amount retained. In such case, it may designate the retained amount as undistributed capital gains in a notice to its shareholders who will be treated as if each received a distribution of his pro rata share of such gain, with the result that each shareholder will (i) be required to report his pro rata share of such gain on his tax return as long-term capital gain, (ii) receive a refundable tax credit for his pro rata share of tax paid by the Fund on the gain and (iii) increase the tax basis for his shares by an amount equal to the deemed distribution less the tax credit.

If Fund shares are sold at a loss after being held for six months or less, the loss will be treated as a long-term, instead of a short-term, capital loss to the extent of any capital gain distributions received on those shares.

The Code generally allows individuals and certain non-corporate entities a deduction for 20% of qualified REIT dividends. Regulations allow a RIC to pass the character of its qualified REIT dividends through to its shareholders provided certain holding period requirements are met. As a result, individuals or other shareholders eligible for the deduction with respect to qualified REIT dividends will also be eligible to receive the benefit of this deduction with respect to qualified REIT dividends received by the Fund that are thereafter included in Fund dividends to shareholders, provided that the eligible shareholders have held their Fund shares for at least 46 days during the 91-day period beginning on the date that is 45 days before the date on which the shares become ex-dividend with respect such Fund dividend.

As noted in the Prospectus, a shareholder's basis in Fund shares that he or she acquired or acquires after December 31, 2011 ("Covered Shares"), will be determined in accordance with the Fund's default method, which is average basis, unless the shareholder affirmatively elects in writing (which may be electronic) to use a different acceptable basis determination method, such as a specific identification method. The basis determination method the Fund shareholder elects (or the default method) may not be changed with respect to a redemption (including a redemption that is part of an exchange) of Covered Shares after the settlement date of the redemption.

In addition to the requirement to report the gross proceeds from redemptions of shares, the Fund (or its administrative agent) must report to the Internal Revenue Service ("IRS") and furnish to its shareholders the basis information for Covered Shares and indicate whether they had a short-term (one year or less) or long-term (more than one year) holding period. Fund shareholders should consult with their tax advisers to determine the best IRS-accepted basis determination method for their tax situation and to obtain more information about how the basis reporting law applies to them.

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**INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** 

Deloitte & Touche LLP serves as the Fund's independent registered public accounting firm, whose services include an audit of the Fund's financial statements and the performance of other related audit and tax services.

**FINANCIAL STATEMENTS** 

The audited financial statements for the Fund are incorporated herein by reference to Item 7 of the Funds' <u>[Form N-CSR](https://www.sec.gov/ix?doc=/Archives/edgar/data/918942/000113322826003110/lf-efp22616_ncsr.htm#sopa)</u> for the fiscal year ended December 31, 2025. A copy of the Annual and Semi-Annual Reports, and financial statements and accompanying notes, may be obtained without charge by calling the Fund at (800) 423-6369 or by visiting www.aquinasfunds.com.

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**APPENDIX A** 

**DESCRIPTION OF SECURITIES RATINGS** 

**RATINGS DEFINITIONS** 

**<u>S&P Global Ratings' Issue Credit Rating Definitions</u>**

An S&P Global Ratings 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 S&P Global Ratings' view of the obligor's capacity and willingness to meet its financial commitments as they come due, and this opinion 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 issue credit ratings are generally assigned to those obligations considered short-term in the relevant market, typically with an original maturity of no more than 365 days. Short-term issue credit ratings are also used to indicate the creditworthiness of an obligor with respect to put features on long-term obligations. S&P Global would typically assign a long-term issue credit rating to an obligation with an original maturity of greater than 365 days. However, the ratings assigned to certain instruments may diverge from these guidelines based on market practices.

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

**A-1** 

A short-term obligation rated 'A-1' is rated in the highest category by S&P Global Ratings. The obligor's capacity to meet its financial commitments 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 commitments 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 commitments 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 weaken an obligor's capacity to meet its financial commitments on the obligation.

**B** 

A short-term obligation rated 'B' is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties that could lead to the obligor's inadequate capacity to meet its financial commitments.

**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 commitments on the obligation.

**D** 

A short-term obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless S&P Global Ratings believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. A rating on an obligation is lowered to 'D' if it is subject to a distressed debt restructuring.

**SPUR (S&P Underlying Rating)** 

A SPUR is an opinion about the stand-alone capacity of an obligor 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 or obligor with the designation SPUR to distinguish them from the credit-enhanced rating that applies to the debt issue. S&P Global Ratings maintains surveillance of an issue with a published SPUR.

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**Dual Ratings** 

Dual ratings may be assigned to debt issues that have a put option or demand feature. The first component of the rating addresses the likelihood of repayment of principal and interest as due, and the second component of the rating addresses only the demand feature. The first component of the rating can relate to either a short-term or long-term transaction and accordingly use either short-term or long-term rating symbols. The second component of the rating relates to the put option and is assigned a short-term rating symbol (for example, 'AAA/A-1+' or 'A-1+/A-1'). With U.S. municipal short-term demand debt, the U.S. municipal short-term note rating symbols are used for the first component of the rating (for example, 'SP-1+/A-1+').

**S&P Global Ratings Disclaimers** 

The analyses, including ratings, of S&P Global Ratings and its affiliates (together, S&P Global Ratings) 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. S&P Global Ratings assumes no obligation to update any information following publication. Users of ratings or other analyses should not rely on them in making any investment decision. S&P Global Ratings' opinions and analyses do not address the suitability of any security. S&P Global Ratings does not act as a fiduciary or an investment advisor except where registered as such. While S&P Global Ratings has obtained information from sources it believes to be reliable, it does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Ratings and other opinions may be changed, suspended, or withdrawn at any time.

**Qualifiers** 

S&P Global Ratings assigns qualifiers to ratings when appropriate. This section details active and inactive qualifiers.

**Active Qualifiers** 

S&P Global Ratings uses the following qualifiers that limit the scope of a rating. The structure of the transaction can require the use of a qualifier such as a 'p' qualifier, which indicates the rating addresses the principal portion of the obligation only. A qualifier appears as a suffix and is part of the rating.

**1. Federal Deposit Insurance Limit: "L" qualifier** 

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

**2. Principal: "p" qualifier** 

This suffix 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' suffix indicates that the rating addresses the principal portion of the obligation only and that the interest is not rated.

**3. Preliminary Ratings: "prelim" qualifier** 

Preliminary ratings, with the 'prelim' suffix, may be assigned to obligors or obligations, including financial programs, in the circumstances described below. Assignment of a final rating is conditional on the receipt by S&P Global Ratings of appropriate documentation. S&P Global Ratings reserves the right not to issue a final rating. Moreover, if a final rating is issued, it may differ from the preliminary rating.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Preliminary ratings may be assigned to obligations that will likely be issued upon the obligor's emergence from bankruptcy or similar reorganization, based on late-stage reorganization plans, documentation, and discussions with the obligor. Preliminary ratings may also be assigned to the obligors. These ratings consider the anticipated general credit quality of the reorganized or post-bankruptcy issuer as well as attributes of the anticipated obligation(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Preliminary ratings may be assigned to entities that are being formed or that are in the process of being independently established when, in S&P Global Ratings' opinion, documentation is close to final. Preliminary ratings may also be assigned to the obligations of these entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Preliminary ratings may be assigned when a previously unrated entity is undergoing a well-formulated restructuring, recapitalization, significant financing, or other transformative event, generally at the point that investor or lender commitments are invited. The preliminary rating may be assigned to the entity and to its proposed obligation(s). These preliminary ratings consider the anticipated general credit quality of the obligor, as well as attributes of the anticipated obligation(s), assuming successful completion of the transformative event. Should the transformative event not occur, S&P Global Ratings would likely withdraw these preliminary ratings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;A preliminary recovery rating may be assigned to an obligation that has a preliminary issue credit rating.

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**4. Termination Structures: "t" qualifier** 

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.

**5. Counterparty Instrument Rating: "cir" qualifier** 

This symbol indicates a counterparty instrument rating (CIR), which is a forward-looking opinion about the creditworthiness of an issuer in a securitization structure with respect to a specific financial obligation to a counterparty (including interest rate swaps, currency swaps, and liquidity facilities). The CIR is determined on an ultimate payment basis; these opinions do not take into account timeliness of payment.

**Inactive Qualifiers** 

Inactive qualifiers are no longer applied or outstanding.

**1. Contingent upon final documentation: "\*" inactive qualifier** 

This symbol indicated that the rating was contingent upon S&P Global Ratings' receipt of an executed copy of the escrow agreement or closing documentation confirming investments and cash flows. Discontinued use in August 1998.

**2. Termination of obligation to tender: "c" inactive qualifier** 

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 was lowered to below an investment-grade level and/or the issuer's bonds were deemed taxable. Discontinued use in January 2001.

**3. U.S. direct government securities: "G" inactive qualifier** 

The letter 'G' followed the rating symbol when a fund's portfolio consisted primarily of direct U.S. government securities.

**4. Interest Payment: 'i' inactive qualifier** 

This suffix was 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' suffix indicated that the rating addressed the interest portion of the obligation only. The 'i' suffix was always used in conjunction with the 'p' suffix, which addresses likelihood of receipt of principal. For example, a rated obligation could have been assigned a rating of 'AAApNRi' indicating that the principal portion was rated 'AAA' and the interest portion of the obligation was not rated.

**5. Public Information Ratings: 'pi' qualifier** 

This qualifier was used to indicate ratings that were based on an analysis of an issuer's published financial information, as well as additional information in the public domain. Such ratings did not, however, reflect in-depth meetings with an issuer's management and therefore could have been based on less comprehensive information than ratings without a 'pi' suffix. Discontinued use as of December 2014 and as of August 2015 for Lloyd's Syndicate Assessments.

**6. Provisional Ratings: "pr" inactive qualifier** 

The letters 'pr' indicate that the rating was provisional. A provisional rating assumed the successful completion of a project financed by the debt being rated and indicates that payment of debt service requirements was 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, made no comment on the likelihood of or the risk of default upon failure of such completion.

**7. Quantitative Analysis of public information: "q" inactive qualifier** 

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

**8. Extraordinary risks: "r" inactive qualifier** 

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 would not exhibit extraordinary noncredit-related risks. S&P Global Ratings 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.

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**Active Identifiers** 

S&P Global Ratings currently uses seven other identifiers. These words or symbols provide additional information but do not change the definition of a rating or our opinion about the issue's or issuer's creditworthiness. The identifiers are often required by regulation.

**1. Unsolicited: 'unsolicited' and 'u' identifier** 

The 'u' identifier and 'unsolicited' designation are assigned to credit ratings initiated by parties other than the issuer or its agents, including those initiated by S&P Global Ratings.

**2. Structured finance: "sf" identifier** 

The 'sf' identifier shall be assigned to ratings on "securitization instruments" when required to comply with an applicable law or regulatory requirement or when S&P Global Ratings believes it appropriate. The addition of the 'sf' identifier to a rating does not change that rating's definition or our opinion about the issue's creditworthiness. For detailed information on the instruments assigned the 'sf' identifier, please see the appendix for the types of instruments that carry the 'sf identifier'.

**3. Japan: 'JR' identifier** 

The 'JR' identifier is assigned to all issue and issuer ratings assigned by either S&P Global Ratings Japan or S&P Global SF Japan, each of which is a registered credit rating agency in Japan, as ratings registered under Japanese regulation. The addition of the identifier does not change the definition of that rating or our opinion about the issue's or issuer's creditworthiness.

**4. European Union: 'EU' identifier** 

S&P Global Ratings applies the 'EU' identifier to global scale ratings assigned by S&P Global Ratings Europe (SPGRE) (including through its branches), which is registered with the European Securities and Markets Authority (ESMA) and subject to EU regulation on credit rating agencies. The addition of the 'EU' identifier to a rating does not change that rating's definition or our opinion about the issue's or issuer's creditworthiness.

**5. European Endorsed: 'EE' identifier** 

S&P Global Ratings applies the 'EE' identifier to global scale ratings assigned by S&P Global Ratings affiliates established outside the European Union and endorsed by SPGRE. SPGRE is registered with ESMA and subject to EU regulation on credit rating agencies. The addition of the 'EE' identifier to a rating does not change that rating's definition or our opinion about the issue's or issuer's creditworthiness.

**6. United Kingdom: 'UK' identifier** 

S&P Global Ratings applies the 'UK' identifier to global scale ratings assigned by S&P Global Ratings UK (SPGRUK) which is registered with the UK Financial Conduct Authority (FCA) and subject to UK regulation on credit rating agencies. The addition of the 'UK' identifier to a rating does not change that rating's definition or our opinion about the issue's or issuer's creditworthiness.

**7. United Kingdom Endorsed: 'UKE' identifier** 

S&P Global Ratings applies the 'UKE' identifier to global scale ratings assigned by S&P Global Ratings' affiliates established outside the U.K. and endorsed by SPGRUK. SPGRUK is registered with the FCA and subject to UK regulation on credit rating agencies. The addition of the 'UKE' identifier to a rating does not change that rating's definition or our opinion about the issue's or issuer's creditworthiness.

**8. S&P Global SF Japan: 'XN' identifier** 

S&P Global SF Japan assigns the 'XN' identifier to credit ratings assigned by S&P Global SF Japan S&P Global SF Japan is not a Nationally Recognized Statistical Rating Organization. The addition of the 'XN' identifier to a rating does not change that rating's definition or our opinion about the issue's or issuer's creditworthiness.

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**9. Under criteria observation 'UCO' identifier** 

The 'UCO' identifier may (or shall, if an EU regulatory requirement) be assigned to credit ratings under review as a result of a criteria revision. The addition of the 'UCO' identifier to a rating does not change that rating's definition or our opinion about the issue's or issuer's creditworthiness.

**Local Currency and Foreign Currency Ratings** 

S&P Global Ratings' issuer credit ratings make a distinction between foreign currency ratings and local currency ratings. A foreign currency rating on an issuer can differ from the local currency rating on it when the obligor has a different capacity to meet its obligations denominated in its local currency, versus obligations denominated in a foreign currency.

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

Ratings assigned on Moody's global long-term and short-term rating scales are forward-looking opinions of the relative credit risks of financial obligations issued by non-financial corporates, financial institutions, structured finance vehicles, project finance vehicles, and public sector entities. Moody's defines credit risk as the risk that an entity may not meet its contractual financial obligations as they come due and any estimated financial loss in the event of default or impairment. The contractual financial obligations<sup>1</sup> addressed by Moody's ratings are those that call for, without regard to enforceability, the payment of an ascertainable amount, which may vary based upon standard sources of variation (e.g., floating interest rates), by an ascertainable date. Moody's rating addresses the issuer's ability to obtain cash sufficient to service the obligation, and its willingness to pay.<sup>2</sup> Moody's ratings do not address non-standard sources of variation in the amount of the principal obligation (e.g., equity indexed), absent an express statement to the contrary in a press release accompanying an initial rating.<sup>3</sup> Long-term ratings are assigned to issuers or obligations with an original maturity of eleven months or more and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment. Short-term ratings are assigned to obligations with an original maturity of thirteen months or less and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment.<sup>4, 5, 6</sup> Moody's issues ratings at the issuer level and instrument level on both the long-term scale and the short-term scale. Typically, ratings are made publicly available although private and unpublished ratings may also be assigned.<sup>7</sup> 

Moody's differentiates structured finance ratings from fundamental ratings (i.e., ratings on nonfinancial corporate, financial institution, and public sector entities) on the global long-term scale by adding (sf) to all structured finance ratings.<sup>7</sup> The addition of (sf) to structured finance ratings should eliminate any presumption that such ratings and fundamental ratings at the same letter grade level will behave the same. The (sf) indicator for structured finance security ratings indicates that otherwise similarly rated structured finance and fundamental securities may have different risk characteristics. Through its current methodologies, however, Moody's aspires to achieve broad expected equivalence in structured finance and fundamental rating performance when measured over a long period of time.

1. In the case of impairments, there can be a financial loss even when contractual obligations are met. See the definition of Impairment in this publication.

2. For issuer level ratings, see the definition of Issuer Ratings in this publication. In some cases the relevant credit risk relates to a third party, in addition to, or instead of the issuer. Examples include credit-linked notes and guaranteed obligations.

3. Because the number of possible features or structures is limited only by the creativity of issuers, Moody's cannot comprehensively catalogue all the types of non-standard variation affecting financial obligations, but examples include equity indexed principal values and cash flows, prepayment penalties, and an obligation to pay an amount that is not ascertainable at the inception of the transaction.

4. For certain preferred stock and hybrid securities in which payment default events are either not defined or do not match investors' expectations for timely payment, long-term and short-term ratings reflect the likelihood of impairment (as defined below in this publication) and financial loss in the event of impairment.

5. Debts held on the balance sheets of official sector institutions – which include supranational institutions, central banks and certain government-owned or controlled banks – may not always be treated the same as debts held by private investors and lenders. When it is known that an obligation is held by official sector institutions as well as other investors, a rating (short-term or long-term) assigned to that obligation reflects only the credit risks faced by non-official sector investors.

6. Where grace periods are disproportionately long relative to the stated maturity, Moody's may choose not to rate the instrument. This is particularly relevant in the commercial paper market where maturities may be 30 days or less with a strong investor expectation of prompt payment.

7. For information on how to obtain a Moody's credit rating, including private and unpublished credit ratings, please see Moody's Investors Service Products. Please note that Moody's always reserves the right to choose not to assign or maintain a credit rating for its own business reasons.

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8. Like other global scale ratings, (sf) ratings reflect both the likelihood of a default and the expected loss suffered in the event of default. Ratings are assigned based on a rating committee's assessment of a security's expected loss rate (default probability multiplied by expected loss severity), and may be subject to the constraint that the final expected loss rating assigned would not be more than a certain number of notches, typically three to five notches, above the rating that would be assigned based on an assessment of default probability alone. The magnitude of this constraint may vary with the level of the rating, the seasoning of the transaction, and the uncertainty around the assessments of expected loss and probability of default.

**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** 

Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of 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 judged to be upper-medium grade and are subject to low credit risk.

**Baa** 

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

**Ba** 

Obligations rated Ba are judged to be speculative 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 speculative 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 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. Additionally, a "(hyb)" indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance companies, and securities firms.\*

Note: For more information on long-term ratings assigned to obligations in default, please see the definition "Long-Term Credit Ratings for Defaulted or Impaired Securities" in the Other Definitions section of this publication.

\*&nbsp;&nbsp;&nbsp;&nbsp;By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may also be subject to contractually allowable write-downs of principal that could result in impairment. Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an expression of the relative credit risk associated with that security.

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

Moody's assigns ratings to long-term and short-term financial obligations. Long-term ratings are assigned to issuers or obligations with an original maturity of eleven months or more and reflect both on the likelihood of a default on contractually promised payments and the expected financial loss suffered in the event of default. Short-term ratings are assigned to obligations with an original maturity of thirteen months or less and reflect both on the likelihood of a default on contractually promised payments and the expected financial loss suffered in the event of default.

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

**P-1** 

Ratings of Prime-1 reflect a superior ability to repay short-term obligations.

**P-2** 

Ratings of Prime-2 reflect a strong ability to repay short-term obligations.

**P-3** 

Ratings of Prime-3 reflect 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.

The following table indicates the long-term ratings consistent with different short-term ratings when such long-term ratings exist.

SHORT-TERM VS. LONG-TERM RATINGS

![Short Term vs Long Term Ratings- Security Ratings 2025.jpg](ck0000918942-20260429_g10.jpg)

**<u>Fitch's National Credit Ratings</u>** 

National ratings express creditworthiness across the full range of the credit rating scale, using similar symbols to those used for international ratings. However, to assure differentiation between the two scales, a two- or three-letter suffix is appended to the national rating to reflect the specific nature of the national scale to the country concerned. For ease of reference, Fitch uses the suffix of (xxx) to indicate a national rating. Each country or monetary union's national rating scale is specific to that jurisdiction and is not comparable to national scales of different countries.

A "+" 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)' National Rating category, to categories below 'CCC(xxx)', or to Short-Term National Ratings other than 'F1(xxx)'.

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**<u>National Relativity</u>** 

National ratings are a measure of relative credit risk among issuers in a country or monetary union, except in circumstances when ratings are notched for support or at the instrument level to differentiate priority/recovery prospects relative to other local market instruments. Where national ratings are derived by notching, they reflect creditworthiness relative to the respective supporting entity's (parent or government) national rating, rather than to unsupported national ratings. National Rating Correspondence Tables often will have a notch-specific local currency ("LC") issuer default rating ("IDR") or credit opinion that relate to multiple rating options on the national scale.

**<u>LC and FC Issuer National Ratings</u>** 

National ratings can be assigned to the issuer or at the specific debt instrument level. Issuer-level national ratings address the relative vulnerability to default of LC obligations (or legal tender) for local issuers within the country concerned when not notched for support. Therefore, national ratings exclude the risk that cross border investors may be unable to repatriate interest and principal repayments out of the country. Issuer-level national ratings do not incorporate transfer and convertibility risk associated with the FC obligations of a local issuer, and this is the reason the national scale rating analysis begins with an international LC rating or LC credit opinion as transfer and convertibility risk is only incorporated into FC ratings; there are some exceptions where ratings may be notched.

**<u>Issuer and Instrument-level National Ratings</u>** 

Fitch assigns national ratings to specific debt instruments denominated in LC and issued where the entity or issuer is domiciled. Fitch may also assign national instrument ratings to i) foreign issuers' obligations issued in LC in the country concerned, and ii) local or foreign issuers' (legal entities or branches) obligations where repayment is in FC and a national scale rating may be required to comply with local regulation and/or local market practices often found in Central America and countries with high levels of dollarization; national ratings of FC instruments are less common.

**<u>Convergence at 'C'</u>** 

A 'C' level rating on both the international and national rating scales reflects that the default of an issuer is imminent. As a result, a 'C' rating on one scale is necessarily a 'C' rating on the other scale. Due to the greater differentiation across national rating scales relative to the international rating scale, there can be more rating volatility and more significant rating transition for National Ratings compared with International Ratings.

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

**F1(xxx)** 

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 or monetary union. Where the liquidity profile is particularly strong, a "+" is added to the assigned rating.

**F2(xxx)** 

Indicates a good capacity for timely payment of financial commitments relative to other issuers or obligations in the same country or monetary union. However, the margin of safety is not as great as in the case of the higher ratings.

**F3(xxx)** 

Indicates an adequate capacity for timely payment of financial commitments relative to other issuers or obligations in the same country or monetary union.

**B(xxx)** 

Indicates an uncertain capacity for timely payment of financial commitments relative to other issuers or obligations in the same country or monetary union.

**C(xxx)** 

Indicates a highly uncertain capacity for timely payment of financial commitments relative to other issuers or obligations in the same country or monetary union.

**RD(xxx): Restricted default** 

Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Applicable to entity ratings only.

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**D(xxx)** 

Indicates a broad-based default event for an entity, or the default of a short-term obligation.

**Notes:** 

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.

**LONG-TERM RATINGS** 

**<u>S&P Global Ratings' Long-Term Issue Credit Ratings</u>** 

Issue credit ratings are based, in varying degrees, on S&P Global Ratings' analysis of the following considerations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;The likelihood of payment—the capacity and willingness of the obligor to meet its financial commitments on an obligation in accordance with the terms of the obligation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;The nature and provisions of the financial obligation, and the promise we impute; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;The protection afforded by, and relative position of, the financial obligation in the event of a bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights.

An issue rating is 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 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.)

**Long-Term Issue Credit Ratings\*** 

**AAA** 

An obligation rated 'AAA' has the highest rating assigned by S&P Global Ratings. The obligor's capacity to meet its financial commitments 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 commitments 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 commitments 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 weaken the obligor's capacity to meet its financial commitments 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 exposure 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 that could lead to the obligor's inadequate capacity to meet its financial commitments 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 commitments on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitments on the obligation.

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**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 commitments 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 commitments on the obligation.

**CC** 

An obligation rated 'CC' is currently highly vulnerable to nonpayment. The 'CC' rating is used when a default has not yet occurred but S&P Global Ratings expects default to be a virtual certainty, regardless of the anticipated time to default.

**C** 

An obligation rated 'C' is currently highly vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared with obligations that are rated higher.

**D** 

An obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless S&P Global Ratings believes that such payments will be made within the next five business days in the absence of a stated grace period or within the earlier of the stated grace period or the next 30 calendar days. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. A rating on an obligation is lowered to 'D' if it is subject to a distressed debt restructuring.

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

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

**Long-Term Obligation Ratings** 

Ratings assigned on Moody's global long-term and short-term rating scales are forward-looking opinions of the relative credit risks of financial obligations issued by non-financial corporates, financial institutions, structured finance vehicles, project finance vehicles, and public sector entities. Moody's defines credit risk as the risk that an entity may not meet its contractual financial obligations as they come due and any estimated financial loss in the event of default or impairment. The contractual financial obligations<sup>1</sup> addressed by Moody's ratings are those that call for, without regard to enforceability, the payment of an ascertainable amount, which may vary based upon standard sources of variation (e.g., floating interest rates), by an ascertainable date. Moody's rating addresses the issuer's ability to obtain cash sufficient to service the obligation, and its willingness to pay.<sup>2</sup> Moody's ratings do not address non-standard sources of variation in the amount of the principal obligation (e.g., equity indexed), absent an express statement to the contrary in a press release accompanying an initial rating.<sup>3</sup> Long-term ratings are assigned to issuers or obligations with an original maturity of eleven months or more and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment. Short-term ratings are assigned to obligations with an original maturity of thirteen months or less and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment.<sup>4, 5, 6</sup> Moody's issues ratings at the issuer level and instrument level on both the long-term scale and the short-term scale. Typically, ratings are made publicly available although private and unpublished ratings may also be assigned. <sup>7</sup>

Moody's differentiates structured finance ratings from fundamental ratings (i.e., ratings on nonfinancial corporate, financial institution, and public sector entities) on the global long-term scale by adding (sf) to all structured finance ratings.<sup>7</sup> The addition of (sf) to structured finance ratings should eliminate any presumption that such ratings and fundamental ratings at the same letter grade level will behave the same. The (sf) indicator for structured finance security ratings indicates that otherwise similarly rated structured finance and fundamental securities may have different risk characteristics. Through its current methodologies, however, Moody's aspires to achieve broad expected equivalence in structured finance and fundamental rating performance when measured over a long period of time.

1. In the case of impairments, there can be a financial loss even when contractual obligations are met. See the definition of Impairment in this publication.

2. For issuer level ratings, see the definition of Issuer Ratings in this publication. In some cases the relevant credit risk relates to a third party, in addition to, or instead of the issuer. Examples include credit-linked notes and guaranteed obligations.

3. Because the number of possible features or structures is limited only by the creativity of issuers, Moody's cannot comprehensively catalogue all the types of non-standard variation affecting financial obligations, but examples include equity indexed principal values and cash flows, prepayment penalties, and an obligation to pay an amount that is not ascertainable at the inception of the transaction.

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4. For certain preferred stock and hybrid securities in which payment default events are either not defined or do not match investors' expectations for timely payment, long-term and short-term ratings reflect the likelihood of impairment (as defined below in this publication) and financial loss in the event of impairment.

5. Debts held on the balance sheets of official sector institutions – which include supranational institutions, central banks and certain government-owned or controlled banks – may not always be treated the same as debts held by private investors and lenders. When it is known that an obligation is held by official sector institutions as well as other investors, a rating (short-term or long-term) assigned to that obligation reflects only the credit risks faced by non-official sector investors.

6. Where grace periods are disproportionately long relative to the stated maturity, Moody's may choose not to rate the instrument. This is particularly relevant in the commercial paper market where maturities may be 30 days or less with a strong investor expectation of prompt payment.

7. For information on how to obtain a Moody's credit rating, including private and unpublished credit ratings, please see Moody's Investors Service Products. Please note that Moody's always reserves the right to choose not to assign or maintain a credit rating for its own business reasons.

8. Like other global scale ratings, (sf) ratings reflect both the likelihood of a default and the expected loss suffered in the event of default. Ratings are assigned based on a rating committee's assessment of a security's expected loss rate (default probability multiplied by expected loss severity), and may be subject to the constraint that the final expected loss rating assigned would not be more than a certain number of notches, typically three to five notches, above the rating that would be assigned based on an assessment of default probability alone. The magnitude of this constraint may vary with the level of the rating, the seasoning of the transaction, and the uncertainty around the assessments of expected loss and probability of default.

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

**Aaa** 

Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of 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 judged to be upper-medium grade and are subject to low credit risk.

**Baa** 

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

**Ba** 

Obligations rated Ba are judged to be speculative 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 speculative 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 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

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modifier 3 indicates a ranking in the lower end of that generic rating category. Additionally, a "(hyb)" indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance companies, and securities firms.\*

Note: For more information on long-term ratings assigned to obligations in default, please see the definition "Long-Term Credit Ratings for Defaulted or Impaired Securities" in the Other Definitions section of this publication.

\*&nbsp;&nbsp;&nbsp;&nbsp;By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may also be subject to contractually allowable write-downs of principal that could result in impairment. Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an expression of the relative credit risk associated with that security.

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

**AAA(xxx)** 

'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 or monetary union.

**AA(xxx)** 

'AA' National Ratings denote expectations of a very low level of default risk relative to other issuers or obligations in the same country or monetary union. The default risk inherent differs only slightly from that of the country's highest rated issuers or obligations.

**A(xxx)** 

'A' National Ratings denote expectations of a low level of default risk relative to other issuers or obligations in the same country or monetary union.

**BBB(xxx)** 

'BBB' National Ratings denote a moderate level of default risk relative to other issuers or obligations in the same country or monetary union.

**BB(xxx)** 

'BB' National Ratings denote an elevated default risk relative to other issuers or obligations in the same country or monetary union.

**B(xxx)** 

'B' National Ratings denote a significantly elevated level of default risk relative to other issuers or obligations in the same country or monetary union.

**CCC(xxx)** 

'CCC' National Ratings denote a very high level of default risk relative to other issuers or obligations in the same country or monetary union.

**CC(xxx)** 

'CC' National Ratings denote the level of default risk is among the highest relative to other issuers or obligations in the same country or monetary union.

**C(xxx)** 

A default or default-like process has begun, or the issuer is in standstill, or for a closed funding vehicle, payment capacity is irrevocably impaired. Conditions that are indicative of a 'C' category rating for an issuer include:

&nbsp;&nbsp;&nbsp;&nbsp;• The issuer has entered into a grace or cure period following non-payment of a material financial obligation;

&nbsp;&nbsp;&nbsp;&nbsp;• The formal announcement by the issuer or their agent of a distressed debt exchange; and

&nbsp;&nbsp;&nbsp;&nbsp;• A closed financing vehicle where payment capacity is irrevocably impaired such that it is not expected to pay interest and/or principal in full during the life of the transaction, but where no payment default is imminent.

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**RD(xxx): Restricted default.** 

'RD' ratings indicate an issuer that, in Fitch's opinion, has experienced an uncured payment default on a bond, loan or other material financial obligation but that has not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure and has not otherwise ceased business. This would include:

&nbsp;&nbsp;&nbsp;&nbsp;• The selective payment default on a specific class or currency of debt; or

&nbsp;&nbsp;&nbsp;&nbsp;• The uncured expiry of any applicable grace period, cure period or default forbearance period following a payment default on a bank loan, capital markets security or other material financial obligation.

**D(xxx)** 

'D' National Ratings denote an issuer that has entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure or that has otherwise ceased business.

**Notes:** 

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.

**MUNICIPAL NOTE RATINGS** 

**<u>S&P's Municipal Short-Term Note Ratings Definitions</u>** 

An S&P Global Ratings U.S. municipal note rating reflects S&P Global Ratings' 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, S&P Global Ratings' analysis will review the following considerations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;Amortization schedule—the larger the final maturity relative to other maturities, the more likely it will be treated as a note; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•&nbsp;&nbsp;&nbsp;&nbsp;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.

**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.

**D** 

'D' is assigned upon failure to pay the note when due, completion of a distressed debt restructuring, or the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions.

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

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

Moody's uses the global short-term 'Prime' rating scale for commercial paper issued by US municipalities and nonprofits. These commercial paper programs may be backed by external letters of credit or liquidity facilities, or by an issuer's self-liquidity. For other short-term municipal obligations, Moody's uses one of two other short-term rating scales, the Municipal Investment Grade (MIG) and Variable Municipal Investment Grade (VMIG) scales discussed below.

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Moody's uses the MIG scale for US municipal cash flow notes, bond anticipation notes and certain other short-term obligations, which typically mature in three years or less.

**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>VMIG Ratings</u>** 

For variable rate demand obligations (VRDOs), Moody's assigns both a long-term rating and a short-term payment obligation rating. The long-term rating addresses the issuer's ability to meet scheduled principal and interest payments. The short-term payment obligation rating addresses the ability of the issuer or the liquidity provider to meet any purchase price payment obligation resulting from optional tenders ("on demand") and/or mandatory tenders of the VRDO. The short-term payment obligation rating uses the VMIG scale. Transitions of VMIG ratings with conditional liquidity support differ from transitions of Prime ratings reflecting the risk that external liquidity support will terminate if the issuer's long-term rating drops below investment grade. Please see our methodology that discusses obligations with conditional liquidity support. For VRDOs, we typically assign a VMIG rating if the frequency of the payment obligation is less than every three years. If the frequency of the payment obligation is less than three years, but the obligation is payable only with remarketing proceeds, the VMIG short-term rating is not assigned and it is denoted as "NR". Industrial development bonds in the US where the obligor is a corporate may carry a VMIG rating that reflects Moody's view of the relative likelihood of default and loss. In these cases, liquidity assessment is based on the liquidity of the corporate obligor.

**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.

**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.

**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.

**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 a sufficiently strong short-term rating or may lack the structural or legal protections.

The following table indicates the municipal long-term ratings consistent with the highest potential MIG and VMIG short-term ratings.

------

**<u>US MUNICIPAL SHORT-TERM VS. LONG-TERM RATINGS</u>**

![Short Term vs Long Term Ratings- Security Ratings 2026 Graphic (2).jpg](ck0000918942-20260429_g11.jpg)

------

**LKCM FUNDS** 

<u>PART C. OTHER INFORMATION</u> 

**Item 28.&nbsp;&nbsp;&nbsp;&nbsp;<u>Exhibits</u>** 

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;(a) | (1) | <u>[Certificate of Trust](https://www.sec.gov/Archives/edgar/data/918942/000089418913002382/cert-of_trust.htm)</u><sup>(8)</sup>  |
|  | (2) | <u>[Amended Agreement and Declaration of Trust](https://www.sec.gov/Archives/edgar/data/918942/000089843200000689/0000898432-00-000689-0002.txt)</u><sup>(1)</sup>  |
|  | (3) | <u>[Certificate of Designation](https://www.sec.gov/Archives/edgar/data/918942/000119312519129158/d716290dex99a3.htm)</u><sup>(12)</sup>  |
| &nbsp;&nbsp;(b) | <u>[Amended By-Laws](https://www.sec.gov/Archives/edgar/data/918942/000089843200000689/0000898432-00-000689-0003.txt)</u><sup>(1)</sup>  | <u>[Amended By-Laws](https://www.sec.gov/Archives/edgar/data/918942/000089843200000689/0000898432-00-000689-0003.txt)</u><sup>(1)</sup>  |
| &nbsp;&nbsp;(c) | Not applicable | Not applicable |
| &nbsp;&nbsp;(d) | (1) | <u>[Investment Advisory Agreement between LKCM Funds and Luther King Capital Management Corporation dated](https://www.sec.gov/Archives/edgar/data/918942/0000891804-97-000346.txt)[](https://www.sec.gov/Archives/edgar/data/918942/0000891804-97-000346.txt)[June 21, 1994](https://www.sec.gov/Archives/edgar/data/918942/0000891804-97-000346.txt)</u><sup>(2)</sup>  |
|  | (2) | <u>[Fee Schedule to the Investment Advisory Agreement between LKCM Funds and Luther King Capital Management Corporation for the LKCM Small Cap Equity Fund](https://www.sec.gov/Archives/edgar/data/918942/0000891804-97-000346.txt)</u><sup>(2)</sup> |
|  | (3) | <u>[Fee Schedule to the Investment Advisory Agreement between LKCM Funds and Luther King Capital Management Corporation for the LKCM Equity Fund](https://www.sec.gov/Archives/edgar/data/918942/0000891804-97-000346.txt)</u> <sup>(2)</sup> |
|  | (4) | <u>[Fee Schedule to the Investment Advisory Agreement between LKCM Funds and Luther King Capital Management Corporation for the LKCM Balanced Fund](https://www.sec.gov/Archives/edgar/data/918942/0000891804-98-000325.txt)</u><sup>(3)</sup> |
|  | (5) | <u>[Fee Schedule to the Investment Advisory Agreement between LKCM Funds and Luther King Capital Management Corporation for the LKCM Fixed Income Fund](https://www.sec.gov/Archives/edgar/data/918942/0000891804-98-000325.txt)</u><sup>(3)</sup>  |
|  | (6) | <u>[Fee Schedule to the Investment Advisory Agreement between LKCM Funds and Luther King Capital Management for the LKCM Aquinas Catholic Equity Fund](https://www.sec.gov/Archives/edgar/data/918942/000089843205000549/exhibit_99d.txt)</u><sup>(4)</sup> |
|  | (7) | <u>[Fee Schedule to the Investment Advisory Agreement between LKCM Funds and Luther King Capital Management for the LKCM Small-Mid Cap Equity Fund](https://www.sec.gov/Archives/edgar/data/918942/000089418911001880/fee_invadsy.htm)</u><sup>(7)</sup>  |
|  | (8) | <u>[Fee Schedule to the Investment Advisory Agreement between LKCM Funds and Luther King Capital Management for the LKCM International Equity Fund](https://www.sec.gov/Archives/edgar/data/918942/000119312519129158/d716290dex99d8.htm)</u><sup>(12)</sup> |
|  | (9) | <u>[Expense Limitation Agreement between LKCM Funds and Luther King Capital Management Corporation](exd9fundsexpensecapagreeme.htm)[–](exd9fundsexpensecapagreeme.htm)</u>**<u>[filed herewith](exd9fundsexpensecapagreeme.htm)</u>**<u>[.](exd9fundsexpensecapagreeme.htm)</u> |
| &nbsp;&nbsp;(e) | (1) | <u>[Amended and Restated Distribution Agreement between LKCM Funds, Luther King Capital Management Corporation and Quasar Distributors, LLC](https://www.sec.gov/Archives/edgar/data/918942/000089418907001186/distagmt.htm)</u><sup>(5)</sup> |
|  | (2) | <u>[Amendment to the Amended and Restated Distribution Agreement dated February 22, 2011](https://www.sec.gov/Archives/edgar/data/918942/000089418911001880/amddist_agmt.htm)</u><sup>(7)</sup>  |
|  | (3) | <u>[Amendment to the Amended and Restated Distribution Agreement dated February 26, 2019](https://www.sec.gov/Archives/edgar/data/918942/000119312519129158/d716290dex99e3.htm)</u><sup>(12)</sup>  |
|  | (4) | <u>[Novation Agreement dated March 31, 2020](https://www.sec.gov/Archives/edgar/data/918942/000168386320007103/f3917d3.htm)</u><sup>(13)</sup>  |

---

------

---

| | | | |
|:---|:---|:---|:---|
|  | (5) | <u>[Novation Agreement dated September 30, 2021](https://www.sec.gov/Archives/edgar/data/918942/000119312522131477/d328435dex99e5.htm)</u><sup>(15)</sup>  | <u>[Novation Agreement dated September 30, 2021](https://www.sec.gov/Archives/edgar/data/918942/000119312522131477/d328435dex99e5.htm)</u><sup>(15)</sup>  |
| &nbsp;&nbsp;(f) |  |  |  |
| &nbsp;&nbsp;(g) | (1) | <u>[Amended and Restated Custody Agreement between LKCM Funds and U.S. Bank National Association, dated November 17, 2009](https://www.sec.gov/Archives/edgar/data/918942/000089418910000792/custody.htm)</u><sup>(6)</sup> | <u>[Amended and Restated Custody Agreement between LKCM Funds and U.S. Bank National Association, dated November 17, 2009](https://www.sec.gov/Archives/edgar/data/918942/000089418910000792/custody.htm)</u><sup>(6)</sup> |
|  |  | (i) | <u>[Amendment to the Amended and Restated Custody Agreement dated February 22, 2011](https://www.sec.gov/Archives/edgar/data/918942/000089418911001880/amdcsty_agmt.htm)</u><sup>(7)</sup>  |
|  |  | (ii) | <u>[Amendment to the Amended and Restated Custody Agreement dated August 26, 2014](https://www.sec.gov/Archives/edgar/data/918942/000119312515156947/d907442dex99g3.htm)</u><sup>(10)</sup>  |
|  |  | (iii) | <u>[Amendment to the Amended and Restated Custody Agreement dated February 26, 2019](https://www.sec.gov/Archives/edgar/data/918942/000119312519129158/d716290dex99g4.htm)</u><sup>(12)</sup>  |
|  |  | (iv) | <u>[Amendment to the Amended and Restated Custody Agreement dated March 28, 2019](https://www.sec.gov/Archives/edgar/data/918942/000168386320007103/f3917d4.htm)</u><sup>(13)</sup>  |
| &nbsp;&nbsp;(h) | (1) | <u>[Amended and Restated Fund Administration Servicing Agreement between LKCM Funds and U.S. Bancorp Fund Services, LLC dated November 17, 2009](https://www.sec.gov/Archives/edgar/data/918942/000089418910000792/fndadmin_agmt.htm)</u><sup>(6)</sup> | <u>[Amended and Restated Fund Administration Servicing Agreement between LKCM Funds and U.S. Bancorp Fund Services, LLC dated November 17, 2009](https://www.sec.gov/Archives/edgar/data/918942/000089418910000792/fndadmin_agmt.htm)</u><sup>(6)</sup> |
|  |  | (i) | <u>[Amendment to the Amended and Restated Fund Administration Servicing Agreement dated February 22, 2011](https://www.sec.gov/Archives/edgar/data/918942/000089418911001880/amdfdadm_agmt.htm)</u><sup>(7)</sup>  |
|  |  | (ii) | <u>[Amendment to the Amended and Restated Fund Administration Servicing Agreement dated August 26, 2014](https://www.sec.gov/Archives/edgar/data/918942/000119312515156947/d907442dex99h3.htm)</u><sup>(10)</sup>  |
|  |  | (iii) | <u>[Amendment to the Amended and Restated Fund Administration Servicing Agreement dated February 26, 2019](https://www.sec.gov/Archives/edgar/data/918942/000119312519129158/d716290dex99h4.htm)</u><sup>(12)</sup>  |
|  |  | (iv) | <u>[Data Service Provider Addendum to the Administration Agreement dated May 13, 2022](https://www.sec.gov/Archives/edgar/data/918942/000119312523125718/d314330dex99h1iv.htm)</u><sup>(16)</sup> |
|  | (2) | <u>[Amended and Restated Fund Accounting Servicing Agreement between LKCM Funds and U.S. Bancorp Fund Services, LLC dated November 17, 2009](https://www.sec.gov/Archives/edgar/data/918942/000089418910000792/fndacct_agmt.htm)</u><sup>(6)</sup>  | <u>[Amended and Restated Fund Accounting Servicing Agreement between LKCM Funds and U.S. Bancorp Fund Services, LLC dated November 17, 2009](https://www.sec.gov/Archives/edgar/data/918942/000089418910000792/fndacct_agmt.htm)</u><sup>(6)</sup>  |
|  |  | (i) | <u>[Amendment to the Amended and Restated Fund Accounting Servicing Agreement dated February 22, 2011](https://www.sec.gov/Archives/edgar/data/918942/000089418911001880/amdfdacct_agmt.htm)</u><sup>(7)</sup>  |
|  |  | (ii) | <u>[Amendment to the Amended and Restated Fund Accounting Servicing Agreement dated August 26, 2014](https://www.sec.gov/Archives/edgar/data/918942/000119312515156947/d907442dex99h6.htm)</u><sup>(10)</sup>  |
|  |  | (iii) | <u>[Amendment to the Amended and Restated Fund Accounting Servicing Agreement dated February 26, 2019](https://www.sec.gov/Archives/edgar/data/918942/000119312519129158/d716290dex99h8.htm)</u><sup>(12)</sup> |
|  | (3) | <u>[Amended and Restated Transfer Agent Servicing Agreement between LKCM Funds and U.S. Bancorp Fund Services, LLC dated November 17, 2009](https://www.sec.gov/Archives/edgar/data/918942/000089418910000792/ta_agmt.htm)</u><sup>(6)</sup>  | <u>[Amended and Restated Transfer Agent Servicing Agreement between LKCM Funds and U.S. Bancorp Fund Services, LLC dated November 17, 2009](https://www.sec.gov/Archives/edgar/data/918942/000089418910000792/ta_agmt.htm)</u><sup>(6)</sup>  |
|  |  | (i) | <u>[Amendment to the Amended and Restated Transfer Agent Servicing Agreement dated February 22, 2011](https://www.sec.gov/Archives/edgar/data/918942/000089418911001880/amdta_agmt.htm)</u><sup>(7)</sup>  |
|  |  | (ii) | <u>[Amendment to the Amended and Restated Transfer Agent Servicing Agreement dated August 26, 2014](https://www.sec.gov/Archives/edgar/data/918942/000119312515156947/d907442dex99h9.htm)</u><sup>(10)</sup>  |
|  |  | (iii) | <u>[Amendment to the Amended and Restated Transfer Agent Servicing Agreement dated February 26, 2019](https://www.sec.gov/Archives/edgar/data/918942/000119312519129158/d716290dex99h12.htm)</u><sup>(12)</sup>  |
| &nbsp;&nbsp;(i) | <u>[Opinion](exilkcmlegalityofsharesopi.htm)[and Consent](exilkcmlegalityofsharesopi.htm)[of Counsel –](exilkcmlegalityofsharesopi.htm)</u>**<u>[filed herewith](exilkcmlegalityofsharesopi.htm)</u>**<u>[.](exilkcmlegalityofsharesopi.htm)</u> | <u>[Opinion](exilkcmlegalityofsharesopi.htm)[and Consent](exilkcmlegalityofsharesopi.htm)[of Counsel –](exilkcmlegalityofsharesopi.htm)</u>**<u>[filed herewith](exilkcmlegalityofsharesopi.htm)</u>**<u>[.](exilkcmlegalityofsharesopi.htm)</u> | <u>[Opinion](exilkcmlegalityofsharesopi.htm)[and Consent](exilkcmlegalityofsharesopi.htm)[of Counsel –](exilkcmlegalityofsharesopi.htm)</u>**<u>[filed herewith](exilkcmlegalityofsharesopi.htm)</u>**<u>[.](exilkcmlegalityofsharesopi.htm)</u> |
| &nbsp;&nbsp;(j) | <u>[Consent of Independent Registered Public Accounting Firm](exjconsentofauditor2026.htm)[–](exjconsentofauditor2026.htm)</u>**<u>[filed herewith](exjconsentofauditor2026.htm)</u>**<u>[.](exjconsentofauditor2026.htm)</u> | <u>[Consent of Independent Registered Public Accounting Firm](exjconsentofauditor2026.htm)[–](exjconsentofauditor2026.htm)</u>**<u>[filed herewith](exjconsentofauditor2026.htm)</u>**<u>[.](exjconsentofauditor2026.htm)</u> | <u>[Consent of Independent Registered Public Accounting Firm](exjconsentofauditor2026.htm)[–](exjconsentofauditor2026.htm)</u>**<u>[filed herewith](exjconsentofauditor2026.htm)</u>**<u>[.](exjconsentofauditor2026.htm)</u> |

---

------

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;(k) |  |  |
| &nbsp;&nbsp;(l) | <u>[Purchase Agreement dated June 6, 1994](https://www.sec.gov/Archives/edgar/data/918942/0000891804-97-000346.txt)</u><sup>(2)</sup>  | <u>[Purchase Agreement dated June 6, 1994](https://www.sec.gov/Archives/edgar/data/918942/0000891804-97-000346.txt)</u><sup>(2)</sup>  |
| &nbsp;&nbsp;(m) | (1) | <u>[Distribution Plan](https://www.sec.gov/Archives/edgar/data/918942/000119312519129158/d716290dex99m2.htm)</u><sup>(12)</sup>  |
|  | (2) | <u>[Distribution Plan for LKCM Aquinas Catholic Equity Fund dated February 26, 2019](https://www.sec.gov/Archives/edgar/data/918942/000119312519129158/d716290dex99m3.htm)</u><sup>(12)</sup>  |
| &nbsp;&nbsp;(n) | Not applicable | Not applicable |
| &nbsp;&nbsp;(o) | Reserved | Reserved |
| &nbsp;&nbsp;(p) | <u>[Code of Ethics of Luther King Capital Management Corporation and LKCM Funds](https://www.sec.gov/Archives/edgar/data/918942/000089418924002787/exhpcodeofethics.htm)</u> <sup>(17)</sup> | <u>[Code of Ethics of Luther King Capital Management Corporation and LKCM Funds](https://www.sec.gov/Archives/edgar/data/918942/000089418924002787/exhpcodeofethics.htm)</u> <sup>(17)</sup> |
| &nbsp;&nbsp;Other Exhibits | &nbsp;&nbsp;Other Exhibits | &nbsp;&nbsp;Other Exhibits |
| (1) <u>[Power of Attorney for Messrs. Howell, King, Lockwood and Purvis](https://www.sec.gov/Archives/edgar/data/918942/000089418913002382/poa.htm)</u><sup>(8)</sup> <br>(2) <u>[Power of Attorney for Mr. Rodriguez](https://www.sec.gov/Archives/edgar/data/918942/000119312521140594/d116534dex992.htm)</u><sup>(14)</sup>  | (1) <u>[Power of Attorney for Messrs. Howell, King, Lockwood and Purvis](https://www.sec.gov/Archives/edgar/data/918942/000089418913002382/poa.htm)</u><sup>(8)</sup> <br>(2) <u>[Power of Attorney for Mr. Rodriguez](https://www.sec.gov/Archives/edgar/data/918942/000119312521140594/d116534dex992.htm)</u><sup>(14)</sup>  | (1) <u>[Power of Attorney for Messrs. Howell, King, Lockwood and Purvis](https://www.sec.gov/Archives/edgar/data/918942/000089418913002382/poa.htm)</u><sup>(8)</sup> <br>(2) <u>[Power of Attorney for Mr. Rodriguez](https://www.sec.gov/Archives/edgar/data/918942/000119312521140594/d116534dex992.htm)</u><sup>(14)</sup>  |

---

(1) Incorporated by reference from Post-Effective Amendment No. 14 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on September 29, 2000.

(2) Incorporated by reference from Post-Effective Amendment No. 6 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on October 15, 1997.

(3) Incorporated by reference from Post-Effective Amendment No. 8 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on February 27, 1998.

(4) Incorporated by reference from Post-Effective Amendment No. 25 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on July 8, 2005.

(5) Incorporated by reference from Post-Effective Amendment No. 27 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on April 27, 2007.

(6) Incorporated by reference from Post-Effective Amendment No. 30 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on February 26, 2010.

(7) Incorporated by reference from Post-Effective Amendment No. 33 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on April 29, 2011.

(8) Incorporated by reference from Post-Effective Amendment No. 37 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on April 29, 2013.

(9) Incorporated by reference from Post-Effective Amendment No. 39 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on April 29, 2014.

(10) Incorporated by reference from Post-Effective Amendment No. 41 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on April 29, 2015.

(11) Incorporated by reference from Post-Effective Amendment No. 48 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on April 30, 2018.

(12) Incorporated by reference from Post-Effective Amendment No. 51 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on April 30, 2019.

(13) Incorporated by reference from Post-Effective Amendment No. 53 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on April 29, 2020.

(14) Incorporated by reference from Post-Effective Amendment No. 55 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on April 29, 2021.

(15) Incorporated by reference from Post-Effective Amendment No. 56 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on April 29, 2022.

(16) Incorporated by reference from Post-Effective Amendment No. 57 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on April 29, 2023.

(17) Incorporated by reference from Post-Effective Amendment No. 58 to the Registration Statement on Form N-1A of the Trust (File No. 033-75116), filed previously via EDGAR on April 29, 2024.

------

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**Item 29.&nbsp;&nbsp;&nbsp;&nbsp;<u>Persons Controlled by or Under Common Control with Registrant</u>** 

Registrant is not controlled by or under common control with any person.

**Item 30.&nbsp;&nbsp;&nbsp;&nbsp;<u>Indemnification</u>** 

*Article VI of the Amended Agreement and Declaration of Trust of the Registrant provides that:* 

Section 6.1 TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE. All persons extending credit to, contracting with or having any claim against the Trust shall look only to the assets of the Sub-Trust with which such person dealt for payment under such credit, contract or claim; and neither the Shareholders of any Sub-Trust nor the Trustees, nor any of the Trust's officers, employees or agents, whether past, present or future, nor any other Sub-Trust nor the Trustees, nor any of the Trust's officers, employees or agents, whether past, present or future, nor any other Sub-Trust shall be personally liable therefor. Every note, bond, contract, instrument, certificate, or undertaking and every act or thing whatsoever executed or done by or on behalf of the Trust, any Sub-Trust or the Trustees or any of them in connection with the Trust shall be conclusively deemed to have been executed or done only by or for the Trust (or the Sub-Trust) or the Trustees and not personally. The Trustees and the Trust's officers, employees and agents shall not be liable to the Trust or the Shareholders; provided however, that nothing in this Amended Declaration of Trust shall protect any Trustee or officer, employee or agent against any liability to the Trust or the Shareholders to which such Trustee or officer, employee or agent would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee or of such officer, employee or agent.

Every note, bond, contract, instrument, certificate, or undertaking made or issued by the Trustees or by any officers or officer shall give notice that the same was executed or made by or on behalf of the Trust or by them as Trustees or Trustee or as officers or officer and not individually and that the obligations of such instrument are not binding upon any of them or the Shareholders individually but are binding only upon the assets and property of the Trust, or the particular Sub-Trust in question, as the case may be, but the omission thereof shall not operate to bind any Trustees or Trustee or officers or officer or Shareholders or Shareholder individually or otherwise invalidate any such note, bond, contract, instrument, certificate, or undertaking.

Section 6.2 TRUSTEE'S GOOD FAITH ACTION; EXPERT ADVICE; NO BOND OR SURETY. The exercise by the Trustees of their powers and discretion hereunder shall be binding upon everyone interested. A Trustee shall be liable to the Trust and the Shareholders for his own willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee, and for nothing else, and shall not be liable for errors of judgment or mistakes of fact or law. Subject to the foregoing, (a) the Trustees shall not be responsible or liable in any event for any neglect or wrongdoing of any officer, agent, employee, consultant, adviser, administrator, distributor or principal underwriter, custodian or transfer, dividend disbursing, Shareholder servicing or accounting agent of the Trust, nor shall any Trustee be responsible for the act or omission of any other Trustee; (b) the Trustees may take advice of counsel or other experts with respect to the meaning and operation of this Amended Declaration of Trust and their duties as Trustees, and shall be under no liability for any act or omission in accordance with such advice or for failing to follow such advice; and (c) in discharging their duties, the Trustees, when acting in good faith, shall be entitled to rely upon the books of account of the Trust and upon written reports made to the Trustees by any officer appointed by them, any

------

independent public accountant, and (with respect to the subject matter of the contract involved) any officer, partner, or responsible employee of a Contracting Party appointed by the Trustees pursuant to Section 3.3. The Trustees as such shall not be required to give any bond or surety or any other security for the performance of their duties. To the extent that, at law or in equity, a Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to a shareholder any such Trustee acting under this Amended Declaration of Trust shall not be liable to the Trust or to any such Shareholder for the Trustee's good faith reliance on the provisions of this Amended Declaration of Trust. The provisions of this Amended Declaration of Trust, to the extent that they restrict the duties and liabilities of a Trustee otherwise existing at law or in equity, are agreed by the Shareholders to replace such other duties and liabilities of such Trustee.

Section 6.3 INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder (or former Shareholder) of any Sub- Trust of the Trust shall be charged or held to be personally liable for any obligation or liability of the Trust solely by reason of being or having been a Shareholder and not because of such Shareholder's acts or omissions or for some other reason, the Trust on behalf of said Sub-Trust (upon proper and timely request by the Shareholder) shall assume the defense against such charge and satisfy any judgment thereon, and, to the fullest extent permitted by law, the Shareholder or former Shareholder (or his heirs, executors, administrators, or other legal representatives or in the case of a corporation or other entity, its corporate or other general successor) shall be entitled out of the assets of said Sub-Trust estate to be held harmless from and indemnified against all loss and expense arising from such liability.

Section 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. To the fullest extent permitted by law, the Trust shall indemnify (from the assets of the Sub-Trust or Sub-Trusts in question) each of its Trustees and officers (including persons who serve at the Trust's request as directors, officers, or trustees of another organization in which the Trust has any interest as a shareholder, creditor or otherwise) (hereinafter referred to as a "Covered Person") against all liabilities including but not limited to amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and expenses, including reasonable accountants' and counsel fees, incurred by any Covered Person in connection with the defense or disposition of any action, suit, or other proceeding, whether civil or criminal, before any court or administrative or legislative body, in which such Covered Person may be or may have been involved as a party or otherwise or with which such person may be or may have been threatened, while in office or thereafter by reason of any alleged act or omission as a Trustee or officer or, by reason of being or having been such a Trustee or officer, director or trustee, except with respect to any matter as to which it has been determined that such Covered Person had acted with willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such Covered Person's office (such conduct referred to hereafter as "Disabling Conduct"). A determination that the Covered Person is entitled to indemnification may be made by (i) a final decision on the merits by a court or other body before whom the proceeding was brought that the person to be indemnified was not liable by reason of Disabling Conduct, (ii) dismissal of a court action or an administrative proceeding against a Covered Person for insufficiency of evidence of Disabling Conduct, or (iii) a reasonable determination based upon a review of the facts, that the Covered Person was not liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum of Trustees who are neither "Interested persons" of the Trust as defined in section 2(a)(19) of the 1940 Act nor parties to the proceeding, or (b) an independent legal counsel in a written opinion. Expenses, including accountants' and counsel fees so incurred by any such Covered Person (but excluding amounts paid in satisfaction of judgments, in compromise, or as fines or penalties), may be paid from time to time from funds attributable to the Sub-Trust in question in advance of the final disposition of any such action, suit, or proceeding, provided that the Covered Person shall have undertaken to repay the amounts so paid to the Sub-Trust in question if it is ultimately determined that indemnification of such expenses is not authorized under this Article VI and (i) the Covered Person shall have provided security for such undertaking, (ii) the Trust shall be insured against losses arising by person of any lawful advances, or (iii) a majority of a quorum of the disinterested Trustees who are not a party to the proceeding, or an independent legal counsel in a written opinion, shall have determined, based on a review of readily available facts (as opposed to a full trial-type inquiry), that there is reason to believe that the Covered Person ultimately will be found entitled to indemnification.

Section 6.5 COMPROMISE PAYMENT. As to any matter disposed of by a compromise payment by any such Covered Person referred to in Section 6.4, pursuant to a consent decree or otherwise, no such indemnification either for said payment or for any other

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expenses shall be provided unless such indemnification shall be approved (a) by a majority of the disinterested Trustees who are not parties to the proceeding or (b) by an independent legal counsel in a written opinion. Approval by the Trustees pursuant to clause (a) or by independent legal counsel pursuant to clause (b) shall not prevent the recovery from any Covered Person of any amount paid to such Covered Person in accordance with any of such clauses as indemnification if such Covered Person is subsequently adjudicated by a court of competent jurisdiction to have been liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of such Covered Person's office.

Section 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The night of indemnification provided by this Article VI shall not be exclusive of or affect any other rights to which any such Covered Person may be entitled. As used in this Article VI, "Covered Person" shall include such person's heirs, executors, and administrators; an "Interested Covered Person" is one against whom the action, suits, or other proceeding in question or another action, suit, or other proceeding on the same or similar grounds is then or has been pending or threatened; and a "disinterested" person is a person against whom none of such actions, suits or other proceedings or another action suit or other proceeding on the same or similar grounds is then or has been pending or threatened. Nothing contained in this Article shall affect any rights to indemnification to which personnel of the Trust, other than Trustees and officers, and other persons may be entitled by contract or otherwise under law, nor the power of the Trust to purchase and maintain liability insurance on behalf of any such person.

Section 6.7 LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person dealing with the Trustees shall be bound to make any inquiry concerning the validity of any transaction made or to be made by the Trustees or to see to the application of any payments made or property transferred to the Trust or upon its order.

Section 6.8 DISCRETION. Whenever in this Amended Declaration of Trust the Trustees are permitted or required to make a decision (a) in their "sole discretion," "sole and absolute discretion," "full discretion," or "discretion," or under a similar grant of authority or latitude, the Trustees shall be entitled to consider only such interests and factors as they desire, whether reasonable or unreasonable, and may consider their own interests, and shall have no duty or obligation to give any consideration to any interests of or factors affecting the Trust or the Shareholders, or (b) in their "good faith" or under another express standard, the Trustees shall act under such express standard and shall not be subject to any other or different standards imposed by this Amended Declaration of Trust or by law or any other agreement contemplated herein. Each Shareholder and Trustee hereby agrees that any standard of care or duty imposed in this Amended Declaration of Trust or any other agreement contemplated herein or under the Act or any other applicable law, rule or regulation shall be modified, waived, or limited in each case as required to permit the Trustees to act under this Amended Declaration of Trust or any other agreement contemplated herein and to make any decision pursuant to the authority prescribed in this Amended Declaration of Trust.

*Numbered Paragraph 10 of the Investment Advisory Agreement between the Registrant and Luther King Capital Management Corporation provides that:* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>LIABILITY OF ADVISER</u>**.** The Adviser shall not be liable for any error of judgment or mistake of law or for any loss suffered by any Fund in connection with the matters to which this Agreement relates, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the Investment Company Act) or a loss resulting from willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement.

*Numbered Paragraph 5 of the Amended and Restated Fund Administration Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, LLC provides that:* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Standard of Care; Indemnification; Limitation of Liability</u> 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. USBFS shall exercise reasonable care in the performance of its duties under this Agreement. USBFS shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with its duties under this Agreement, including losses resulting from mechanical breakdowns or the failure of communication or power supplies beyond USBFS's control, except a loss arising out of or relating to USBFS's refusal or failure to comply with the terms of this Agreement or from its bad faith, negligence, or willful misconduct in the performance of its duties under this Agreement. Notwithstanding any other provision of this Agreement, if USBFS has exercised reasonable care in the performance of its duties under this Agreement, the Trust shall indemnify and hold harmless USBFS from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable attorneys' fees) that USBFS may sustain or incur or that may be asserted against USBFS by any person arising out of any action taken or omitted to be taken by it in performing the services hereunder (i) in accordance with the foregoing standards, or (ii) in reliance upon any written or oral instruction provided to USBFS by any duly authorized officer of the Trust, as approved by the Board of Trustees of the Trust, except for any and all claims, demands, losses, expenses, and liabilities arising out of or relating to USBFS's refusal or failure to comply with the terms of this Agreement or from its bad faith, negligence or willful misconduct in the performance of its duties under this Agreement. This indemnity shall be a continuing obligation of the Trust, its successors and assigns, notwithstanding the termination of this Agreement. As used in this paragraph, the term "USBFS" shall include USBFS's directors, officers and employees.

USBFS shall indemnify and hold the Trust harmless from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable attorneys' fees) that the Trust may sustain or incur or that may be asserted against the Trust by any person arising out of any action taken or omitted to be taken by USBFS as a result of USBFS's refusal or failure to comply with the terms of this Agreement, or from its bad faith, negligence, or willful misconduct in the performance of its duties under this Agreement. This indemnity shall be a continuing obligation of USBFS, its successors and assigns, notwithstanding the termination of this Agreement. As used in this paragraph, the term "Trust" shall include the Trust's directors, officers and employees.

Neither party to this Agreement shall be liable to the other party for consequential, special or punitive damages under any provision of this Agreement.

In the event of a mechanical breakdown or failure of communication or power supplies beyond its control, USBFS shall take all reasonable steps to minimize service interruptions for any period that such interruption continues. USBFS will make every reasonable effort to restore any lost or damaged data and correct any errors resulting from such a breakdown at the expense of USBFS. USBFS agrees that it shall, at all times, have reasonable contingency plans with appropriate parties, making reasonable provision for emergency use of electrical data processing equipment to the extent appropriate equipment is available. Representatives of the Trust shall be entitled to inspect USBFS's premises and operating capabilities at any time during regular business hours of USBFS, upon reasonable notice to USBFS. Moreover, USBFS shall provide the Trust, at such times as the Trust may reasonably require, copies of reports rendered by independent accountants on the internal controls and procedures of USBFS relating to the services provided by USBFS under this Agreement.

Notwithstanding the above, USBFS reserves the right to reprocess and correct administrative errors at its own expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. In order that the indemnification provisions contained in this section shall apply, it is understood that if in any case the indemnitor may be asked to indemnify or hold the indemnitee harmless, the indemnitor shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that the indemnitee will use all reasonable care to notify the indemnitor promptly concerning any situation that presents or appears likely to present the probability of a claim for indemnification. The indemnitor shall have the option to defend the indemnitee against any claim that may be the subject of this indemnification. In the event that the indemnitor so elects, it will so notify the indemnitee and thereupon the indemnitor shall take over complete defense of the claim, and the indemnitee shall in such situation initiate no further legal or other expenses for which it shall

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seek indemnification under this section. The indemnitee shall in no case confess any claim or make any compromise in any case in which the indemnitor will be asked to indemnify the indemnitee except with the indemnitor's prior written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The indemnity and defense provisions set forth in this Section 5 shall indefinitely survive the termination and/or assignment of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. If USBFS is acting in another capacity for the Trust pursuant to a separate agreement, nothing herein shall be deemed to relieve USBFS of any of its obligations in such other capacity.

*Numbered Paragraph 9 of the Amended and Restated Fund Accounting Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, LLC provides that:* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Standard of Care; Indemnification; Limitation of Liability</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. USBFS shall exercise reasonable care in the performance of its duties under this Agreement. Neither USBFS nor its suppliers shall be liable for any error of judgment or mistake of law or for any loss suffered by the Trust or any third party in connection with its duties under this Agreement, including losses resulting from mechanical breakdowns or the failure of communication or power supplies beyond USBFS's control, except a loss arising out of or relating to USBFS's refusal or failure to comply with the terms of this Agreement or from its bad faith, negligence, or willful misconduct in the performance of its duties under this Agreement. Notwithstanding any other provision of this Agreement, if USBFS has exercised reasonable care in the performance of its duties under this Agreement, the Trust shall indemnify and hold harmless USBFS and its suppliers from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable attorneys' fees) that USBFS or its suppliers may sustain or incur or that may be asserted against USBFS or its suppliers by any person arising out of or related to (X) any action taken or omitted to be taken by it in performing the services hereunder (i) in accordance with the foregoing standards, or (ii) in reliance upon any written or oral instruction provided to USBFS by any duly authorized officer of the Trust, as approved by the Board of Trustees of the Trust, or (Y) the Data, or any information, service, report, analysis or publication derived therefrom, except for any and all claims, demands, losses, expenses, and liabilities arising out of or relating to USBFS's refusal or failure to comply with the terms of this Agreement or from its bad faith, negligence or willful misconduct in the performance of its duties under this Agreement. This indemnity shall be a continuing obligation of the Trust, its successors and assigns, notwithstanding the termination of this Agreement. As used in this paragraph, the term "USBFS" shall include USBFS's directors, officers and employees.

The Trust acknowledges that the Data are intended for use as an aid to institutional investors, registered brokers or professionals of similar sophistication in making informed judgments concerning securities. The Trust accepts responsibility for, and acknowledges it exercises its own independent judgment in, its selection of the Data, its selection of the use or intended use of such, and any results obtained. Nothing contained herein shall be deemed to be a waiver of any rights existing under applicable law for the protection of investors.

USBFS shall indemnify and hold the Trust harmless from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable attorneys' fees) that the Trust may sustain or incur or that may be asserted against the Trust by any person arising out of any action taken or omitted to be taken by USBFS as a result of USBFS's refusal or failure to comply with the terms of this Agreement, or from its bad faith, negligence, or willful misconduct in the performance of its duties under this Agreement. This indemnity shall be a continuing obligation of USBFS, its successors and assigns, notwithstanding the termination of this Agreement. As used in this paragraph, the term "Trust" shall include the Trust's directors, officers and employees.

In the event of a mechanical breakdown or failure of communication or power supplies beyond its control, USBFS shall take all reasonable steps to minimize service interruptions for any period that such interruption continues. USBFS will make every reasonable effort to restore any lost or damaged data and correct any errors resulting from such a breakdown at the expense of USBFS. USBFS

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agrees that it shall, at all times, have reasonable contingency plans with appropriate parties, making reasonable provision for emergency use of electrical data processing equipment to the extent appropriate equipment is available. Representatives of the Trust shall be entitled to inspect USBFS's premises and operating capabilities at any time during regular business hours of USBFS, upon reasonable notice to USBFS. Moreover, USBFS shall provide the Trust, at such times as the Trust may reasonably require, copies of reports rendered by independent accountants on the internal controls and procedures of USBFS relating to the services provided by USBFS under this Agreement.

Notwithstanding the above, USBFS reserves the right to reprocess and correct administrative errors at its own expense.

In no case shall either party be liable to the other for (i) any special, indirect or consequential damages, loss of profits or goodwill (even if advised of the possibility of such); (ii) any delay by reason of circumstances beyond its control, including acts of civil or military authority, national emergencies, labor difficulties, fire, mechanical breakdown, flood or catastrophe, acts of God, insurrection, war, riots, or failure beyond its control of transportation or power supply; or (iii) any claim that arose more than one year prior to the institution of suit therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. In order that the indemnification provisions contained in this section shall apply, it is understood that if in any case the indemnitor may be asked to indemnify or hold the indemnitee harmless, the indemnitor shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that the indemnitee will use all reasonable care to notify the indemnitor promptly concerning any situation that presents or appears likely to present the probability of a claim for indemnification. The indemnitor shall have the option to defend the indemnitee against any claim that may be the subject of this indemnification. In the event that the indemnitor so elects, it will so notify the indemnitee and thereupon the indemnitor shall take over complete defense of the claim, and the indemnitee shall in such situation initiate no further legal or other expenses for which it shall seek indemnification under this section. The indemnitee shall in no case confess any claim or make any compromise in any case in which the indemnitor will be asked to indemnify the indemnitee except with the indemnitor's prior written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The indemnity and defense provisions set forth in this Section 9 shall indefinitely survive the termination and/or assignment of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. If USBFS is acting in another capacity for the Trust pursuant to a separate agreement, nothing herein shall be deemed to relieve USBFS of any of its obligations in such other capacity.

*Numbered Paragraph 8 of the Amended and Restated Transfer Agent Servicing Agreement between the Registrant and U.S. Bancorp Fund Services, LLC provides that:* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Standard of Care; Indemnification; Limitation of Liability</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. USBFS shall exercise reasonable care in the performance of its duties under this Agreement. USBFS shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with its duties under this Agreement, including losses resulting from mechanical breakdowns or the failure of communication or power supplies beyond USBFS's control, except a loss arising out of or relating to USBFS's refusal or failure to comply with the terms of this Agreement or from its bad faith, negligence, or willful misconduct in the performance of its duties under this Agreement. Notwithstanding any other provision of this Agreement, if USBFS has exercised reasonable care in the performance of its duties under this Agreement, the Trust shall indemnify and hold harmless USBFS from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable attorneys' fees) that USBFS may sustain or incur or that may be asserted against USBFS by any person arising out of any action taken or omitted to be taken by it in performing the services hereunder (i) in accordance with the foregoing standards, or (ii) in reliance upon any written or oral instruction provided to USBFS by any duly authorized officer of the Trust, as approved by the Board of Trustees of the Trust (the "Board of Trustees"), except for any and all claims, demands, losses, expenses, and liabilities arising out of or relating to USBFS's refusal or failure to comply with the terms of this Agreement or from its bad faith, negligence or willful misconduct in the performance of its duties under this Agreement. This indemnity shall be a continuing

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obligation of the Trust, its successors and assigns, notwithstanding the termination of this Agreement. As used in this paragraph, the term "USBFS" shall include USBFS's directors, officers and employees.

USBFS shall indemnify and hold the Trust harmless from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable attorneys' fees) that the Trust may sustain or incur or that may be asserted against the Trust by any person arising out of any action taken or omitted to be taken by USBFS as a result of USBFS's refusal or failure to comply with the terms of this Agreement, or from its bad faith, negligence, or willful misconduct in the performance of its duties under this Agreement. This indemnity shall be a continuing obligation of USBFS, its successors and assigns, notwithstanding the termination of this Agreement. As used in this paragraph, the term "Trust" shall include the Trust's directors, officers and employees.

Neither party to this Agreement shall be liable to the other party for consequential, special or punitive damages under any provision of this Agreement.

In the event of a mechanical breakdown or failure of communication or power supplies beyond its control, USBFS shall take all reasonable steps to minimize service interruptions for any period that such interruption continues. USBFS will make every reasonable effort to restore any lost or damaged data and correct any errors resulting from such a breakdown at the expense of USBFS. USBFS agrees that it shall, at all times, have reasonable contingency plans with appropriate parties, making reasonable provision for emergency use of electrical data processing equipment to the extent appropriate equipment is available. Representatives of the Trust shall be entitled to inspect USBFS's premises and operating capabilities at any time during regular business hours of USBFS, upon reasonable notice to USBFS. Moreover, USBFS shall provide the Trust, at such times as the Trust may reasonably require, copies of reports rendered by independent accountants on the internal controls and procedures of USBFS relating to the services provided by USBFS under this Agreement.

Notwithstanding the above, USBFS reserves the right to reprocess and correct administrative errors at its own expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. In order that the indemnification provisions contained in this section shall apply, it is understood that if in any case the indemnitor may be asked to indemnify or hold the indemnitee harmless, the indemnitor shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that the indemnitee will use all reasonable care to notify the indemnitor promptly concerning any situation that presents or appears likely to present the probability of a claim for indemnification. The indemnitor shall have the option to defend the indemnitee against any claim that may be the subject of this indemnification. In the event that the indemnitor so elects, it will so notify the indemnitee and thereupon the indemnitor shall take over complete defense of the claim, and the indemnitee shall in such situation initiate no further legal or other expenses for which it shall seek indemnification under this section. The indemnitee shall in no case confess any claim or make any compromise in any case in which the indemnitor will be asked to indemnify the indemnitee except with the indemnitor's prior written consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The indemnity and defense provisions set forth in this Section 6 shall indefinitely survive the termination and/or assignment of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. If USBFS is acting in another capacity for the Trust pursuant to a separate agreement, nothing herein shall be deemed to relieve USBFS of any of its obligations in such other capacity.

*Article X of the Amended and Restated Custody Agreement between the Registrant and U.S. Bank, National Association. provides that:* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.01 <u>Indemnification by Trust</u>. The Trust shall indemnify and hold harmless the Custodian, any Sub-Custodian and any nominee thereof (each, an "Indemnified Party" and collectively, the "Indemnified Parties") from and against any and all claims, demands, losses, expenses and liabilities of any and every nature (including reasonable attorneys' fees) that an Indemnified Party may sustain or incur or that may be asserted against an Indemnified Party by any person arising directly or indirectly (i) from the fact that

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Securities are registered in the name of any such nominee, (ii) from any action taken or omitted to be taken by the Custodian or such Sub-Custodian (a) at the request or direction of or in reliance on the advice of the Trust, or (b) upon Proper Instructions, or (iii) from the performance of its obligations under this Agreement or any sub-custody agreement, provided that neither the Custodian nor any such Sub-Custodian shall be indemnified and held harmless from and against any such claim, demand, loss, expense or liability arising out of or relating to its refusal or failure to comply with the terms of this Agreement (or any sub-custody agreement), or from its bad faith, negligence or willful misconduct in the performance of its duties under this Agreement (or any sub-custody agreement). This indemnity shall be a continuing obligation of the Trust, its successors and assigns, notwithstanding the termination of this Agreement. As used in this paragraph, the terms "Custodian" and "Sub-Custodian" shall include their respective directors, officers and employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.02 <u>Indemnification by Custodian</u>. The Custodian shall indemnify and hold harmless the Trust from and against any and all claims, demands, losses, expenses, and liabilities of any and every nature (including reasonable attorneys' fees) that the Trust may sustain or incur or that may be asserted against the Trust by any person arising directly or indirectly out of any action taken or omitted to be taken by an Indemnified Party as a result of the Indemnified Party's refusal or failure to comply with the terms of this Agreement (or any sub-custody agreement), or from its bad faith, negligence or willful misconduct in the performance of its duties under this Agreement (or any sub-custody agreement). This indemnity shall be a continuing obligation of the Custodian, its successors and assigns, notwithstanding the termination of this Agreement. As used in this paragraph, the term "Trust" shall include the Trust's trustees, officers and employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.03 <u>Security</u>. If the Custodian advances cash or Securities to a Fund for any purpose, either at the Trust's request or as otherwise contemplated in this Agreement, or in the event that the Custodian or its nominee incurs, in connection with its performance under this Agreement, any claim, demand, loss, expense or liability (including reasonable attorneys' fees) (except such as may arise from its or its nominee's bad faith, negligence or willful misconduct), then, in any such event, any property at any time held for the account of such Fund shall be security therefor, and should such Fund fail promptly to repay or indemnify the Custodian, the Custodian shall be entitled to utilize available cash of such Fund and to dispose of other assets of such Fund to the extent necessary to obtain reimbursement or indemnification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.04 <u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Neither party to this Agreement shall be liable to the other party for consequential, special or punitive damages under any provision of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The indemnity provisions of this Article shall indefinitely survive the termination and/or assignment of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In order that the indemnification provisions contained in this Article X shall apply, it is understood that if in any case the indemnitor may be asked to indemnify or hold the indemnitee harmless, the indemnitor shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that the indemnitee will use all reasonable care to notify the indemnitor promptly concerning any situation that presents or appears likely to present the probability of a claim for indemnification. The indemnitor shall have the option to defend the indemnitee against any claim that may be the subject of this indemnification. In the event that the indemnitor so elects, it will so notify the indemnitee and thereupon the indemnitor shall take over complete defense of the claim, and the indemnitee shall in such situation initiate no further legal or other expenses for which it shall seek indemnification under this Article X. The indemnitee shall in no case confess any claim or make any compromise in any case in which the indemnitor will be asked to indemnify the indemnitee except with the indemnitor's prior written consent.

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*Numbered Paragraph 6 of the Amended and Restated Distribution Agreement between the Registrant and Quasar Distributors, LLC provides that:* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Indemnification</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Trust shall indemnify, defend and hold the Distributor, and each of its present or former members, officers, employees, representatives and any person who controls or previously controlled the Distributor within the meaning of Section 15 of the 1933 Act, free and harmless from and against any and all losses, claims, demands, liabilities, damages and expenses (including the costs of investigating and defending any alleged losses, claims, demands, liabilities, damages or expenses and any reasonable counsel fee incurred in connection therewith) which the Distributor, each of its present and former members, officers, employees or representatives or any such controlling person, may incur under the 1933 Act, the 1934 Act, any other statute (including Blue Sky laws) or any rule or regulation thereunder, or under common law or otherwise, arising out of or based upon any untrue statement, or alleged untrue statement of a material fact contained in the Registration Statement or any Prospectus, as from time to time amended or supplemented, or in any annual or interim report to shareholders, or in any advertisement or sales literature, or arising out of or based upon any omission, or alleged omission, to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or based upon the Trust's failure to comply with this Agreement or applicable law; provided, however, that the Trust's obligation to indemnify the Distributor and any of the foregoing indemnitees shall not be deemed to cover any losses, claims, demands, liabilities, damages or expenses arising out of any untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, Prospectus, annual or interim report, or any such advertisement or sales literature in reliance upon and in conformity with information relating to the Distributor and furnished to the Trust or its counsel by the Distributor in writing and acknowledging the purpose of its use for the purpose of, and used in, the preparation thereof. The Trust's agreement to indemnify the Distributor, and any of the foregoing indemnitees, as the case may be, with respect to any action, is expressly conditioned upon the Trust being notified of such action brought against the Distributor, or any of the foregoing indemnitees, within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon the Distributor, or such person, unless the failure to give notice does not prejudice the Trust. Such notification shall be given by letter or by telegram addressed to the Trust's President, but the failure so to notify the Trust of any such action shall not relieve the Trust from any liability which the Trust may have to the person against whom such action is brought by reason of any such untrue, or alleged untrue, statement or omission, or alleged omission, otherwise than on account of the Trust's indemnity agreement contained in this Section 6(A).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The Trust shall be entitled to participate at its own expense in the defense or, if it so elects, to assume the defense of any suit brought to enforce any such loss, claim, demand, liability, damage or expense, but if the Trust elects to assume the defense, such defense shall be conducted by counsel chosen by the Trust and approved by the Distributor, which approval shall not be unreasonably withheld. In the event the Trust elects to assume the defense of any such suit and retain such counsel, the indemnified defendant or defendants in such suit shall bear the fees and expenses of any additional counsel retained by them. If the Trust does not elect to assume the defense of any such suit, or in case the Distributor does not, in the exercise of reasonable judgment, approve of counsel chosen by the Trust or, if under prevailing law or legal codes of ethics, the same counsel cannot effectively represent the interests of both the Trust and the Distributor, and each of its present or former members, officers, employees, representatives or any controlling person, the Trust will reimburse the indemnified person or persons named as defendant or defendants in such suit, for the fees and expenses of any counsel retained by Distributor and them. The Trust's indemnification agreement contained in Sections 6(A) and 6(B) shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Distributor, and each of its present or former members, officers, employees, representatives or any controlling person, and shall survive the delivery of any Shares and the termination of this Agreement. This agreement of indemnity will inure exclusively to the Distributor's benefit, to the benefit of each of its present or former members, officers, employees, representatives or to the benefit of any controlling persons and their successors. The Trust agrees promptly to notify the Distributor of the commencement of any litigation or proceedings against the Trust or any of its officers or directors in connection with the issue and sale of any of the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The Distributor shall indemnify, defend and hold the Trust, and each of its present or former trustees, officers, employees, representatives, and any person who controls or previously controlled the Trust within the meaning of Section 15 of the 1933 Act, free

------

and harmless from and against any and all losses, claims, demands, liabilities, damages and expenses (including the costs of investigation or defending any alleged losses, claims, demands, liabilities, damages or expenses, and any reasonable counsel fee incurred in connection therewith) which the Trust, and each of its present or former trustees, officers, employees, representatives, or any such controlling person, may incur under the 1933 Act, the 1934 Act, any other statute (including Blue Sky laws) or any rule or regulation thereunder, or under common law or otherwise, arising out of or based upon any untrue or alleged untrue, statement of a material fact contained in the Trust's Registration Statement or any Prospectus, as from time to time amended or supplemented, or arising out of or based upon Distributor's failure to comply with this Agreement or applicable law, or the omission, or alleged omission, to state therein a material fact required to be stated therein or necessary to make the statement not misleading, but only if such statement or omissions was made in reliance upon, and in conformity with, written information relating to the Distributor and furnished to the Trust or its counsel by the Distributor for the purpose of, and used in, the preparation thereof. The Distributor's agreement to indemnify the Trust, and any of the foregoing indemnitees, is expressly conditioned upon the Distributor's being notified of any action brought against the Trust, and any of the foregoing indemnitees, such notification to be given by letter or telegram addressed to the Distributor's President, within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon the Trust or such person unless the failure to give notice does not prejudice the Distributor, but the failure so to notify the Distributor shall not relieve the Distributor from any liability which the Distributor may have to the person against whom such action is brought by reason of any such untrue, or alleged untrue, statement or omission, otherwise than on account of the Distributor's indemnity agreement contained in this Section 6(C).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. The Distributor shall be entitled to participate at its own expense in the defense or, if it so elects, to assume the defense of any suit brought to enforce any such loss, claim, demand, liability, damage or expense, but if the Distributor elects to assume the defense, such defense shall be conducted by counsel chosen by the Distributor and approved by the Trust, which approval shall not be unreasonably withheld. In the event the Distributor elects to assume the defense of any such suit and retain such counsel, the indemnified defendant or defendants in such suit shall bear the fees and expenses of any additional counsel retained by them. If the Distributor does not elect to assume the defense of any such suit, or in case the Trust does not, in the exercise of reasonable judgment, approve of counsel chosen by the Distributor or, if under prevailing law or legal codes of ethics, the same counsel cannot effectively represent the interests of both the Trust and the Distributor, and each of its present or former members, officers, employees, representatives or any controlling person, the Distributor will reimburse the indemnified person or persons named as defendant or defendants in such suit, for the fees and expenses of any counsel retained by the Trust and them. The Distributor's indemnification agreement contained in Sections 6(C) and (D) shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Trust, and each of its present or former directors, officers, employees, representatives or any controlling person, and shall survive the delivery of any Shares and the termination of this Agreement. This Agreement of indemnity will inure exclusively to the Trust's benefit, to the benefit of each of its present or former directors, officers, employees or representatives or to the benefit of any controlling persons and their successors. The Distributor agrees promptly to notify the Trust of the commencement of any litigation or proceedings against the Distributor or any of its officers or directors in connection with the issue and sale of any of the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. No person shall be obligated to provide indemnification under this Section 6 if such indemnification would be impermissible under the 1940 Act, the 1933 Act, the 1934 Act or the rules of the NASD; <u>provided</u>, <u>however</u>, in such event indemnification shall be provided under this Section 6 to the maximum extent so permissible, by law or regulation.

*Registrant hereby also makes the undertaking consistent with Rule 484 under the Securities Act of 1933, as amended.* 

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provision, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or

------

proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

**Item 31.&nbsp;&nbsp;&nbsp;&nbsp;<u>Business and Other Connections of Investment Adviser</u>** 

Any other business, profession, vocation, or employment of a substantial nature in which Luther King Capital Management Corporation, the adviser to the Funds, or its directors, officers or partners is or has been engaged in during the past two years is incorporated by reference to its Form ADV filed with the SEC (SEC File No. 801-14458).

**Item 32.&nbsp;&nbsp;&nbsp;&nbsp;<u>Principal Underwriter.</u>** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Quasar Distributors, LLC, the Registrant's principal underwriter, acts as principal underwriter for the following investment companies:

1. Abacus FCF ETF Trust

2. Advisor Managed Portfolios

3. Antares Private Credit Fund

4. Capital Advisors Growth Fund, Series of Advisors Series Trust

5. Chase Growth Fund, Series of Advisors Series Trust

6. Davidson Multi-Cap Equity Fund, Series of Advisors Series Trust

7. Edgar Lomax Value Fund, Series of Advisors Series Trust

8. Huber Large Cap Value Fund, Series of Advisors Series Trust

9. Huber Mid Cap Value Fund, Series of Advisors Series Trust

10. Huber Select Large Cap Value Fund, Series of Advisors Series Trust

11. Huber Small Cap Value Fund, Series of Advisors Series Trust

12. Logan Capital Broad Innovative Growth ETF, Series of Advisors Series Trust

13. Medalist Partners MBS Total Return Fund, Series of Advisors Series Trust

14. Medalist Partners Short Duration Fund, Series of Advisors Series Trust

15. O'Shaughnessy Market Leaders Value Fund, Series of Advisors Series Trust

16. PIA BBB Bond Fund, Series of Advisors Series Trust

17. PIA High Yield (MACS) Fund, Series of Advisors Series Trust

18. PIA High Yield Fund, Series of Advisors Series Trust

19. PIA MBS Bond Fund, Series of Advisors Series Trust

20. PIA Short-Term Securities Fund, Series of Advisors Series Trust

21. Poplar Forest Cornerstone Fund, Series of Advisors Series Trust

22. Poplar Forest Partners Fund, Series of Advisors Series Trust

23. Pzena Emerging Markets Value Fund, Series of Advisors Series Trust

24. Pzena International Small Cap Value Fund, Series of Advisors Series Trust

25. Pzena International Value ETF, Series of Advisors Series Trust

26. Pzena International Value Fund, Series of Advisors Series Trust

27. Pzena Mid Cap Value Fund, Series of Advisors Series Trust

28. Pzena Small Cap Value Fund, Series of Advisors Series Trust

29. Pzena U.S. Large Cap Value ETF, Series of Advisors Series Trust

30. Vox populi ETF, Series of Advisors Series Trust

31. Scharf ETF, Series of Advisors Series Trust

------

32. Scharf Global Opportunity ETF, Series of Advisors Series Trust

33. Scharf Multi-Asset Opportunity Fund, Series of Advisors Series Trust

34. Shenkman Capital Floating Rate High Income Fund, Series of Advisors Series Trust

35. Shenkman Capital Short Duration High Income Fund, Series of Advisors Series Trust

36. The Aegis Funds

37. Allied Asset Advisors Funds

38. Angel Oak Funds Trust

39. Angel Oak Strategic Credit Fund

40. Brookfield Infrastructure Income Fund Inc.

41. Brookfield Investment Funds

42. Buffalo Funds

43. RJ Eagle GCM Dividend Select Income ETF, Series of Carillon Series Trust

44. RJ Eagle Municipal Income ETF, Series of Carillon Series Trust

45. RJ Eagle Vertical Income ETF, Series of Carillon Series Trust

46. DoubleLine Funds Trust

47. AAM Bahl & Gaynor Small/Mid Cap Income Growth ETF, Series of ETF Series Solutions

48. AAM Brentview Dividend Growth ETF, Series of ETF Series Solutions

49. AAM Crescent CLO ETF, Series of ETF Series Solutions

50. AAM Low Duration Preferred and Income Securities ETF, Series of ETF Series Solutions

51. AAM S&P 500 High Dividend Value ETF, Series of ETF Series Solutions

52. AAM Sawgrass U.S. Large Cap Quality Growth ETF, Series of ETF Series Solutions

53. AAM Sawgrass U.S. Small Cap Quality Growth ETF, Series of ETF Series Solutions

54. AAM SLC Low Duration Income ETF, Series of ETF Series Solutions

55. AAM Todd International Intrinsic Value ETF, Series of ETF Series Solutions

56. AAM Transformers ETF, Series of ETF Series Solutions

57. Acquirers Small and Micro Deep Value ETF, Series of ETF Series Solutions

58. Aptus April Buffer, Series of ETF Series Solutions

59. Aptus Collared Investment Opportunity ETF, Series of ETF Series Solutions

60. Aptus Deferred Income ETF, Series of ETF Series Solutions

61. Aptus Defined Risk ETF, Series of ETF Series Solutions

62. Aptus Drawdown Managed Equity ETF, Series of ETF Series Solutions

63. Aptus Enhanced Yield ETF, Series of ETF Series Solutions

64. Aptus International Enhanced Yield ETF, Series of ETF Series Solutions

65. Aptus January Buffer ETF, Series of ETF Series Solutions

66. Aptus July Buffer ETF, Series of ETF Series Solutions

67. Aptus Laddered Buffer ETF, Series of ETF Series Solutions

68. Aptus Large Cap Enhanced Yield ETF, Series of ETF Series Solutions

69. Aptus Large Cap Upside ETF, Series of ETF Series Solutions

70. Aptus October Buffer ETF, Series of ETF Series Solutions

71. Bahl & Gaynor Dividend ETF, Series of ETF Series Solutions

72. Bahl & Gaynor Income Growth ETF, Series of ETF Series Solutions

73. Bahl & Gaynor Small Cap Dividend ETF, Series of ETF Series Solutions

74. BTD Capital Fund, Series of ETF Series Solutions

75. Carbon Strategy ETF, Series of ETF Series Solutions

76. ClearShares OCIO ETF, Series of ETF Series Solutions

77. ClearShares Piton Intermediate Fixed Income Fund, Series of ETF Series Solutions

------

78. ClearShares Ultra-Short Maturity ETF, Series of ETF Series Solutions

79. Colterpoint Net Lease Real Estate ETF, Series of ETF Series Solutions

80. Distillate International Fundamental Stability & Value ETF, Series of ETF Series Solutions

81. Distillate Small/Mid Cash Flow ETF, Series of ETF Series Solutions

82. Distillate U.S. Fundamental Stability & Value ETF, Series of ETF Series Solutions

83. ETFB Green SRI REITs ETF, Series of ETF Series Solutions

84. Hoya Capital High Dividend Yield ETF, Series of ETF Series Solutions

85. Hoya Capital Housing ETF, Series of ETF Series Solutions

86. LHA Market State Tactical Beta ETF, Series of ETF Series Solutions

87. LHA Market State Tactical Q ETF, Series of ETF Series Solutions

88. LHA Risk-Managed Income ETF, Series of ETF Series Solutions

89. McElhenny Sheffield Managed Risk ETF, Series of ETF Series Solutions

90. Opus Small Cap Value ETF, Series of ETF Series Solutions

91. The Acquirers Fund, Series of ETF Series Solutions

92. The Brinsmere Fund - Conservative ETF, Series of ETF Series Solutions

93. The Brinsmere Fund - Growth ETF, Series of ETF Series Solutions

94. U.S. Global GO GOLD and Precious Metal Miners ETF, Series of ETF Series Solutions

95. U.S. Global JETS ETF, Series of ETF Series Solutions

96. U.S. Global Sea to Sky Cargo ETF, Series of ETF Series Solutions

97. U.S. Global Technology and Aerospace & Defense ETF, Series of ETF Series Solutions

98. US Vegan Climate ETF, Series of ETF Series Solutions

99. First American Funds Trust

100. FundX Investment Trust

101. The Glenmede Fund, Inc.

102. The GoodHaven Funds Trust

103. Harding, Loevner Funds, Inc.

104. Hennessy Funds Trust

105. Horizon Funds

106. Hotchkis & Wiley Funds

107. Intrepid Capital Management Funds Trust

108. Jacob Funds Inc.

109. The Jensen Quality Growth Fund Inc.

110. Kirr, Marbach Partners Funds, Inc.

111. Core Alternative ETF, Series of Listed Funds Trust

112. Optimized Equity Income ETF, Series of Listed Funds Trust

113. Wahed Dow Jones Islamic World ETF, Series of Listed Funds Trust

114. Wahed FTSE USA Shariah ETF, Series of Listed Funds Trust

115. LKCM Funds

116. LoCorr Investment Trust

117. MainGate Trust

118. ATAC Rotation Fund, Series of Managed Portfolio Series

119. Kensington Active Advantage Fund, Series of Managed Portfolio Series

120. Kensington Credit Opportunities ETF, Series of Managed Portfolio Series

121. Kensington Defender Fund, Series of Managed Portfolio Series

122. Kensington Dynamic Allocation Fund, Series of Managed Portfolio Series

123. Kensington Hedged Premium Income ETF, Series of Managed Portfolio Series

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124. Kensington Managed Income Fund, Series of Managed Portfolio Series

125. LK Balanced Fund, Series of Managed Portfolio Series

126. Leuthold Core ETF, Series of Managed Portfolio Series

127. Leuthold Core Investment Fund, Series of Managed Portfolio Series

128. Leuthold Global Fund, Series of Managed Portfolio Series

129. Leuthold Grizzly Short Fund, Series of Managed Portfolio Series

130. Leuthold Select Industries ETF, Series of Managed Portfolio Series

131. Muhlenkamp Fund, Series of Managed Portfolio Series

132. Nuance Concentrated Value Fund, Series of Managed Portfolio Series

133. Nuance Mid Cap Value Fund, Series of Managed Portfolio Series

134. Olstein All Cap Value Fund, Series of Managed Portfolio Series

135. Olstein Strategic Opportunities Fund, Series of Managed Portfolio Series

136. Port Street Quality Growth Fund, Series of Managed Portfolio Series

137. Reinhart Genesis PMV Fund, Series of Managed Portfolio Series

138. Reinhart International PMV Fund, Series of Managed Portfolio Series

139. Reinhart Mid Cap PMV Fund, Series of Managed Portfolio Series

140. Tremblant Global ETF, Series of Managed Portfolio Series

141. Greenspring Income Opportunities Fund, Series of Manager Directed Portfolios

142. Hood River Emerging Markets Fund, Series of Manager Directed Portfolios

143. Hood River International Opportunity Fund, Series of Manager Directed Portfolios

144. Hood River New Opportunities Fund, Series of Manager Directed Portfolios

145. Hood River Small-Cap Growth Fund, Series of Manager Directed Portfolios

146. SanJac Alpha Core Plus Bond ETF, Series of Manager Directed Portfolios

147. SanJac Alpha Low Duration ETF, Series of Manager Directed Portfolios

148. SWP Growth & Income ETF, Series of Manager Directed Portfolios

149. Vert Global Sustainable Real Estate ETF, Series of Manager Directed Portfolios

150. Mason Capital Fund Trust

151. Matrix Advisors Funds Trust

152. Monetta Trust

153. Nicholas Equity Income Fund, Inc.

154. Nicholas Fund, Inc.

155. Nicholas II, Inc.

156. Nicholas Limited Edition, Inc.

157. Oaktree Asset-Backed Income Fund Inc.

158. Oaktree Diversified Income Fund Inc.

159. Permanent Portfolio Family of Funds

160. Procure ETF Trust II

161. Professionally Managed Portfolios

162. Provident Mutual Funds, Inc.

163. Abbey Capital Futures Strategy Fund, Series of The RBB Fund, Inc.

164. Abbey Capital Multi-Asset Fund, Series of The RBB Fund, Inc.

165. Adara Smaller Companies Fund, Series of The RBB Fund, Inc.

166. Aquarius International Fund, Series of The RBB Fund, Inc.

167. Boston Partners All Cap Value Fund, Series of The RBB Fund, Inc.

168. Boston Partners Global Equity Fund, Series of The RBB Fund, Inc.

169. Boston Partners Long/Short Equity Fund, Series of The RBB Fund, Inc.

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170. Boston Partners Long/Short Research Fund, Series of The RBB Fund, Inc.

171. Boston Partners Small Cap Value Fund II, Series of The RBB Fund, Inc.

172. Campbell Systematic Macro Fund, Series of The RBB Fund, Inc.

173. F/m 10-Year Investment Grade Corporate Bond ETF, Series of The RBB Fund, Inc.

174. F/m 2-Year Investment Grade Corporate Bond ETF, Series of The RBB Fund, Inc.

175. F/m 3-Year Investment Grade Corporate Bond ETF, Series of The RBB Fund, Inc.

176. F/m Callable Tax-Free Municipal ETF, Series of The RBB Fund, Inc.

177. F/m Compoundr High Yield Bond ETF, Series of The RBB Fund, Inc.

178. F/m Compoundr U.S. Aggregate Bond ETF, Series of The RBB Fund, Inc.

179. F/m Emerald Life Sciences Innovation ETF, Series of The RBB Fund, Inc.

180. F/m Emerald Special Situations ETF, Series of The RBB Fund, Inc.

181. F/m High Yield 100 ETF, Series of The RBB Fund, Inc.

182. F/m Investments Large Cap Focused Fund Series of The RBB Fund, Inc.

183. F/m Opportunistic Income ETF, Series of The RBB Fund, Inc.

184. F/m Ultrashort Treasury Inflation-Protected Security (TIPS) ETF Series of The RBB Fund, Inc.

185. F/m US Treasury 10 Year Note ETF, Series of The RBB Fund, Inc.

186. F/m US Treasury 12 Month Bill ETF, Series of The RBB Fund, Inc.

187. F/m US Treasury 2 Year Note ETF, Series of The RBB Fund, Inc.

188. F/m US Treasury 20 Year Bond ETF, Series of The RBB Fund, Inc.

189. F/m US Treasury 3 Month Bill ETF, Series of The RBB Fund, Inc.

190. F/m US Treasury 3 Year Note ETF, Series of The RBB Fund, Inc.

191. F/m US Treasury 30 Year Bond ETF, Series of The RBB Fund, Inc.

192. F/m US Treasury 5 Year Note ETF, Series of The RBB Fund, Inc.

193. F/m US Treasury 6 Month Bill ETF, Series of The RBB Fund, Inc.

194. F/m US Treasury 7 Year Note ETF, Series of The RBB Fund, Inc.

195. Motley Fool 100 Index ETF, Series of The RBB Fund, Inc.

196. Motley Fool Capital Efficiency 100 Index ETF, Series of The RBB Fund, Inc.

197. Motley Fool Global Opportunities ETF, Series of The RBB Fund, Inc.

198. Motley Fool Innovative Growth Factor ETF, Series of The RBB Fund, Inc.

199. Motley Fool Mid-Cap Growth ETF, Series of The RBB Fund, Inc.

200. Motley Fool Momentum Factor ETF, Series of The RBB Fund, Inc.

201. Motley Fool Next Index ETF, Series of The RBB Fund, Inc.

202. Motley Fool Small-Cap Growth ETF, Series of The RBB Fund, Inc.

203. Motley Fool Value Factor ETF, Series of The RBB Fund, Inc.

204. MUFG Japan Small Cap Active ETF, Series of The RBB Fund, Inc.

205. Oakhurst Fixed Income Fund, Series of The RBB Fund, Inc.

206. SGI Dynamic Tactical ETF, Series of The RBB Fund, Inc.

207. SGI Enhanced Core ETF, Series of The RBB Fund, Inc.

208. SGI Enhanced Global Income ETF, Series of The RBB Fund, Inc.

209. SGI Enhanced Market Leaders ETF, Series of The RBB Fund, Inc.

210. SGI Global Equity Fund, Series of The RBB Fund, Inc.

211. SGI Peak Growth Fund, Series of The RBB Fund, Inc.

212. SGI Prudent Growth Fund, Series of The RBB Fund, Inc.

213. SGI Small Cap Core Fund, Series of The RBB Fund, Inc.

214. SGI U.S. Large Cap Core ETF, Series of The RBB Fund, Inc.

215. SGI U.S. Large Cap Equity Fund, Series of The RBB Fund, Inc.

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216. WPG Partners Select Small Cap Value Fund, Series of The RBB Fund, Inc.

217. WPG Partners Small Cap Value Diversified Fund, Series of The RBB Fund, Inc.

218. The RBB Fund Trust

219. RBC Funds Trust

220. Rockefeller Municipal Opportunities Fund

221. SEG Partners Long/Short Equity Fund

222. Series Portfolios Trust

223. Thompson IM Funds, Inc.

224. Tortoise Capital Series Trust

225. Bright Rock Mid Cap Growth Fund, Series of Trust for Professional Managers

226. Bright Rock Quality Large Cap Fund, Series of Trust for Professional Managers

227. CrossingBridge Low Duration High Income Fund, Series of Trust for Professional Managers

228. CrossingBridge Nordic High Income Bond Fund, Series of Trust for Professional Managers

229. CrossingBridge Responsible Credit Fund, Series of Trust for Professional Managers

230. CrossingBridge Ultra-Short Duration Fund, Series of Trust for Professional Managers

231. RiverPark Strategic Income Fund, Series of Trust for Professional Managers

232. Dearborn Partners Rising Dividend Fund, Series of Trust for Professional Managers

233. Jensen Global Quality Growth Fund, Series of Trust for Professional Managers

234. Jensen Quality MidCap Fund, Series of Trust for Professional Managers

235. Rockefeller Climate Solutions Fund, Series of Trust for Professional Managers

236. Rockefeller US Small Cap Core Fund, Series of Trust for Professional Managers

237. Wall Street EWM Funds Trust

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The following are the Officers and Manager of the Distributor, the Registrant's underwriter. The Distributor's main business address is 190 Middle Street, Suite 301, Portland, ME 04101.

---

| | | | |
|:---|:---|:---|:---|
| <u>Name</u> | <u>Address</u> | <u>Position with Underwriter</u> | <u>Position with Registrant</u> |
| Teresa Cowan | 190 Middle Street, Suite 301, Portland, ME 04101 | President/Manager |  |
| Chris Lanza | 190 Middle Street, Suite 301, Portland, ME 04101 | Vice President |  |
| Kate Macchia | 190 Middle Street, Suite 301, Portland, ME 04101 | Vice President |  |
| Susan L. LaFond | 190 Middle Street, Suite 301, Portland, ME 04101 | Vice President and Chief Compliance Officer and Treasurer |  |
| Gabriel E. Edelman | 190 Middle Street, Suite 301, Portland, ME 04101 | Secretary |  |
| Weston Sommers | 190 Middle Street, Suite 301, Portland, ME 04101 | Financial and Operations Principal and Chief Financial Officer |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) Not applicable.

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**Item 33.&nbsp;&nbsp;&nbsp;&nbsp;<u>Location of Accounts and Records</u>** 

The books, accounts and other documents required by Section 31(a) under the Investment Company Act of 1940, as amended, and the rules promulgated thereunder will be maintained at the offices of:

Luther King Capital Management Corporation, 301 Commerce Street, Suite 1600, Fort Worth, Texas 76102 (records relating to its function as investment adviser of the LKCM Funds)

U.S. Bancorp Fund Services, LLC, 615 East Michigan Street, Milwaukee, Wisconsin 53202 (records relating to its function as administrator, transfer agent and dividend disbursing agent)

U.S. Bank, N.A., 1555 North RiverCenter Drive, Suite 302, Milwaukee, Wisconsin, 53212 (records relating to its function as custodian)

Quasar Distributors, LLC, 190 Middle Street, Suite 301, Portland, ME 04101 (records relating to its function as distributor)

**Item 34.&nbsp;&nbsp;&nbsp;&nbsp;<u>Management Services</u>** 

All management-related service contracts entered into by Registrant are discussed in Parts A and B of this Registration Statement.

**Item 35.&nbsp;&nbsp;&nbsp;&nbsp;<u>Undertakings</u>** 

Not applicable.

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**SIGNATURES** 

Pursuant to the requirements of the Securities Act of 1933, as amended (the "1933 Act"), and the Investment Company Act of 1940, as amended, the Registrant certifies that it meets all of the requirements for the effectiveness of this Post-Effective Amendment to the Registration Statement under Rule 485(b) under the 1933 Act and has duly caused this Post-Effective Amendment to the Registration Statement on Form N-1A to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Fort Worth and State of Texas on April 29, 2026.

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| | |
|:---|:---|
| By: | /s/ J. Luther King, Jr. |
|  | J. Luther King, Jr.<br>President |

---

Pursuant to the requirements of the 1933 Act, this Post-Effective Amendment to the Registration Statement of the Registrant as it relates to the LKCM Funds has been signed below by the following persons in the capacities and on the date(s) indicated.

---

| | | |
|:---|:---|:---|
| **Name** | &nbsp;&nbsp;**Title** | &nbsp;&nbsp;**Date** |
| /s/ J. Luther King, Jr. | Trustee, President and Chief | April 29, 2026&nbsp;&nbsp;&nbsp;&nbsp; |
| J. Luther King, Jr. | Executive Officer |  |
| Larry J. Lockwood\* | Chairman and Trustee | April 29, 2026 |
| Larry J. Lockwood |  |  |
| Richard J. Howell\* | Trustee | April 29, 2026 |
| Richard J. Howell |  |  |
| Mauricio Rodriguez\* | Trustee | April 29, 2026 |
| Mauricio Rodriguez |  |  |
| Steven R. Purvis\* | Trustee | April 29, 2026 |
| Steven R. Purvis |  |  |
| /s/ Jacob D. Smith | Chief Financial Officer and Principal Accounting Officer | April 29, 2026 |
| Jacob D. Smith |  |  |

---

---

| | |
|:---|:---|
| \* | /s/ Jacob D. Smith |
|  | Jacob D. Smith |

---

Attorney-in-fact pursuant to Powers of Attorney previously filed and <u>[incorporated herein](https://www.sec.gov/Archives/edgar/data/918942/000089418913002382/poa.htm)</u> <u>[by reference.](https://www.sec.gov/Archives/edgar/data/918942/000119312521140594/d116534dex992.htm)</u>

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**INDEX TO EXHIBITS** 

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| | |
|:---|:---|
| **Exhibit No.** | &nbsp;&nbsp;**Description of Exhibit** |
| &nbsp;&nbsp;(d)(9) | [Expense Limitation Agreement between LKCM Funds and Luther King Capital Management Corporation](exd9fundsexpensecapagreeme.htm) |
| &nbsp;&nbsp;(i) | <u>[Opinion](exilkcmlegalityofsharesopi.htm)[and Co](exilkcmlegalityofsharesopi.htm)[nsent](exilkcmlegalityofsharesopi.htm)[of Counsel](exilkcmlegalityofsharesopi.htm)</u> |
| &nbsp;&nbsp;(j) | <u>[Consent of Independent Registered Public Accounting Firm](exjconsentofauditor2026.htm)</u> |

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## Ex-99.(D)(9)

February 24, 2026

Luther King Capital Management Corporation

301 Commerce Street

Suite 1600

Fort Worth, Texas 76102

Ladies and Gentlemen:

&nbsp;&nbsp;&nbsp;&nbsp;LKCM Funds, a Delaware statutory trust ("<u>Trust</u>"), offers multiple series of shares of beneficial interest for sale to the public. Each series has unique fees and expenses. Each series is listed in <u>Attachment A</u>.

&nbsp;&nbsp;&nbsp;&nbsp;As investment adviser to the Trust, Luther King Capital Management Corporation ("<u>LKCM</u>") agrees to waive its fees and/or reimburse expenses of a series to the extent that a series' annual operating expenses for its fiscal year exceed the limitations ("<u>Expense Limitations</u>") set forth in <u>Attachment A</u>. These Expense Limitations will be in effect for a 12-month period coinciding with the effectiveness of each applicable series' prospectus ("<u>Expense Limitation Period</u>"). For purposes of this Agreement, annual operating expenses shall not include interest, taxes, brokerage commissions, indirect fees and expenses related to investments in other investment companies, including money market funds, and extraordinary expenses.

&nbsp;&nbsp;&nbsp;&nbsp;This agreement may be terminated or changed by the Trust's Board of Trustees without the approval of Trust shareholders. LKCM agrees that it shall look only to the assets of an applicable series for performance of this agreement and for any claims for payment. No other series, the Trust or its trustees, officers, employees, agents or shareholders shall be personally liable for performance by a series under this agreement.

&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, except insofar as the Investment Company Act of 1940, as amended, or other federal laws and regulations may be controlling. Any amendment to this agreement shall be in writing signed by the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Very truly yours,

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| | |
|:---|:---|
| LKCM FUNDS | LKCM FUNDS |
| By: | /s/ Jacob D. Smith |
|  | Jacob D. Smith, Chief Financial Officer and |
|  | Chief Compliance Officer |

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| | |
|:---|:---|
| <u>Agreed and Accepted</u>: | <u>Agreed and Accepted</u>: |
| LUTHER KING CAPITAL MANAGEMENT CORPORATION | LUTHER KING CAPITAL MANAGEMENT CORPORATION |
| By: | /s/ J. Luther King, Jr |
|  | J. Luther King, Jr., President |

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**<u>ATTACHMENT A</u>**

Expense Limitation

(as a percentage of average daily net assets)

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| | | |
|:---|:---|:---|
| **Fund** | **Expense Limitation** | **Expense Limitation Period Ends** |
| LKCM Small Cap Equity Fund | 1.00% | May 1, 2027 |
| LKCM Small-Mid Cap Equity Fund  | 1.00% | May 1, 2027 |
| LKCM Equity Fund  | 0.80% | May 1, 2027 |
| LKCM Balanced Fund  | 0.80% | May 1, 2027 |
| LKCM Fixed Income Fund  | 0.50% | May 1, 2027 |
| LKCM Aquinas Catholic Equity Fund | 1.00% | May 1, 2027 |
| LKCM International Equity Fund | 1.00% | May 1, 2027 |

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## Ex-99.(I)

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;![image_0a.jpg](image_0a.jpg) | **K&L GATES LLP**<br>1601 K STREET, N.W.<br>WASHINGTON, DC 20006<br>T +1 202 778 9000 F +1 202 778 9100 klgates.com |

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April 29, 2026

LKCM Funds<br>301 Commerce Street, Suite 1600<br>Fort Worth, Texas 76102

Ladies and Gentlemen:

We have acted as counsel to LKCM Funds, a Delaware statutory trust (the "<u>Trust</u>"), in connection with Post-Effective Amendment No. 60 (the "<u>Post-Effective Amendment</u>") to the Trust's registration statement on Form N-1A (File Nos. 033-75116; 811-08352) (the "<u>Registration Statement</u>"), to be filed with the U.S. Securities and Exchange Commission (the "<u>Commission</u>") on or about April 29, 2026, registering an indefinite number of shares of beneficial interest in LKCM Small Cap Equity Fund, LKCM Small-Mid Cap Equity Fund, LKCM Equity Fund, LKCM Balanced Fund, LKCM Fixed Income Fund, LKCM International Equity Fund and LKCM Aquinas Catholic Equity Fund (the "<u>Funds</u>"), each a series of the Trust, (the "<u>Shares</u>") under the Securities Act of 1933, as amended (the "<u>Securities Act</u>").

This opinion letter is being delivered at your request in accordance with the requirements of paragraph 29 of Schedule A of the Securities Act and Item 28(i) of Form N-1A under the Securities Act and the Investment Company Act of 1940, as amended (the "<u>Investment Company Act</u>").

For purposes of this opinion letter, we have examined originals or copies, certified or otherwise identified to our satisfaction, of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;the prospectuses and statements of additional information (collectively, the "<u>Prospectus</u>") filed as part of the Post-Effective Amendment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;the Trust's certificate of trust, governing instrument, and bylaws in effect on the date of this opinion letter; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;the resolutions adopted by the trustees of the Trust relating to the Post-Effective Amendment, the establishment and designation of the Funds and the Shares, and the authorization for issuance and sale of the Shares.

We also have examined and relied on certificates of public officials and, as to certain matters of fact that are material to our opinions, we have relied on a certificate of an officer of the Trust. We have not independently established any of the facts on which we have so relied.

For purposes of this opinion letter, we have assumed the accuracy and completeness of each document submitted to us, the genuineness of all signatures on original documents, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents

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submitted to us as facsimile, electronic, certified, conformed, or photostatic copies thereof, and the due execution and delivery of all documents where due execution and delivery are prerequisites to the effectiveness thereof. We have further assumed the legal capacity of natural persons, that persons identified to us as officers of the Trust are actually serving in such capacity, and that the representations of officers of the Trust are correct as to matters of fact. We have not independently verified any of these assumptions.

The opinions expressed in this opinion letter are based on the facts in existence and the laws in effect on the date hereof and are limited to the Delaware Statutory Trust Act and the provisions of the Investment Company Act that are applicable to equity securities issued by registered open-end investment companies. We are not opining on, and we assume no responsibility for, the applicability to or effect on any of the matters covered herein of any other laws.

Based upon and subject to the foregoing, it is our opinion that (1) the Shares to be issued pursuant to the Post-Effective Amendment, when issued and paid for by the purchasers upon the terms described in the Post-Effective Amendment and the Prospectus, will be validly issued, and (2) such purchasers will have no obligation to make any further payments for the purchase of the Shares or contributions to the Trust solely by reason of their ownership of the Shares.

This opinion is rendered solely in connection with the filing of the Post-Effective Amendment and supersedes any previous opinions of this firm in connection with the issuance of Shares. We hereby consent to the filing of this opinion with the Commission in connection with the Post-Effective Amendment. In giving this consent, we do not thereby admit that we are experts with respect to any part of the Registration Statement or Prospectus within the meaning of the term "expert" as used in Section 11 of the Securities Act or the rules and regulations promulgated thereunder by the Commission, nor do we admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder.

Very truly yours,

/s/ K&L Gates LLP

## Ex-99.(J)

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the incorporation by reference in this Post-Eﬀective Amendment to Registration Statement No. 033-75116 on Form N-1A of our reports dated February 27, 2026 relating to the ﬁnancial statements and ﬁnancial highlights of the LKCM Small Cap Equity Fund, LKCM Small-Mid Cap Equity Fund, LKCM Equity Fund, LKCM Balanced Fund, LKCM Fixed Income Fund, LKCM International Equity Fund, and LKCM Aquinas Catholic Equity Fund, each a series of LKCM Funds, appearing in Form N-CSR of LKCM Funds for the year ended December 31, 2025, and to the references to us under the headings "Financial Highlights" in each Prospectus and "Independent Registered Public Accounting Firm" in each Statement of Additional Information, which are part of such Registration Statement.

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| |
|:---|
| /s/ Deloitte & Touche LLP |
| Milwaukee, Wisconsin |
| April 28, 2026 |

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