Total |
|---|
| Ambrus Tax-Conscious National Bond Fund
|
| AMBRUS
TAX-CONSCIOUS NATIONAL BOND FUND
|
| Investment
Objective
|
Ambrus
Tax-Conscious National Bond Fund (the “Fund”) seeks to maximize total return net of federal taxes.
|
| Fees
and Expenses
|
This
table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.
|
| Annual Fund
Operating Expenses(expenses that you pay each year as a percentage of the value of your investment):
|
|
|
| Example
|
This
Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The
Example assumes that you invest $10,000 in Investor Class shares and Institutional Class shares of 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. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
|
|
|
| Portfolio
Turnover
|
The
Fund pays transaction costs 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.
The Fund’s portfolio turnover rate is only shown once the Fund has completed its first fiscal period of operations.
|
| Summary
of Principal Investment Strategies
|
The
Fund seeks the most attractive risk-adjusted returns from all fixed income asset types on an after-tax basis by primarily investing
in tax-exempt municipal bonds. The Fund may also invest in government-related bonds, taxable municipal bonds, corporate bonds,
preferred stocks, and other fixed income securities on an after-tax relative value basis.
Under
normal circumstances, the Fund will invest at least 80% of its net assets (plus any borrowings made for investment purposes) in fixed
income securities and other related instruments with similar economic characteristics. At least 50% of the Fund’s assets will be invested
in tax-exempt municipal securities. This is a non-fundamental investment policy that may be changed by the Fund upon 60 days’ prior
notice to shareholders. Municipal securities are securities issued by or on behalf of states, territories and possessions of the United
States, including the District of Columbia, and their respective authorities, political subdivisions, agencies and instrumentalities
and other groups with the authority to act for the municipalities, the interest on which, if any, is exempt from federal income tax but
may be subject to the federal alternative minimum tax for individuals. Municipal securities may have fixed, variable or floating interest
rates and may include, but are not limited to, variable rate demand obligations, short-term municipal notes, municipal bonds, tax exempt
commercial paper, zero-coupon securities, private activity and industrial development bonds, tax anticipation notes, participations in
pools of municipal securities, municipal mortgage-backed and asset-backed securities, auction rate securities and restricted securities.
Municipal securities may also include instruments evidencing direct ownership of interest payments or principal payments, or both, on
municipal securities, such as tender option bonds and participation interests in all or part of specific holdings of municipal obligations,
provided that the applicable issuer has disclosed or otherwise confirmed that the interest payable on the securities is exempt from federal
income tax. Additionally, municipal securities include all other instruments that directly or indirectly provide economic exposure to
income which is derived from municipalities.
The
Fund may also invest in a full range of U.S. treasury bonds, U.S. agency bonds, commercial paper, certificates of deposit, money markets,
corporate bonds, taxable municipal bonds, mortgage backed / asset backed securities, preferred stocks, convertible bonds, other bank
capital securities, loans, and other taxable fixed income securities should these securities feature a superior risk-adjusted after-tax
yield than tax-exempt municipal bonds. The Fund will invest in both bullet bonds (a non-callable debt instrument whose entire face value
is paid at once on the maturity date, rather than amortized over its lifetime), as well as callable/puttable bonds. The Fund will invest
in bonds with all coupon types, including fixed coupon bonds, zero coupon bonds, step-up/step-down coupon bonds, floating coupon bonds,
and fixed-to-float bonds, inflation-linked securities. The Fund has broad flexibility to invest in a wide variety of debt securities
and instruments of any maturity and will not be managed to a target duration or average weighted maturity.
The
Fund will primarily invest in securities rated investment grade or higher. The Fund’s investment grade investments will, at the
time of investment, carry a long-term rating of Baa3 or BBB– or higher by any of Moody’s Investors Service Inc. (“Moody’s”)
or Standard & Poor’s Corporation (“S&P”), or Fitch Ratings Inc. (“Fitch”), respectively. The Fund
may invest up to 25% of its holdings in below investment grade or nonrated securities (commonly known as “high yield securities”
or “junk bonds”). The Adviser relies on its own analysis of credit quality and risks associated with individual bonds, as
well as rating agencies and third-party research. The Fund seeks to purchase investments that are undervalued or offer attractive after-tax
yield relative to their credit characteristics. If ratings agencies assign different ratings to the same security, the Adviser will use
the highest rating as the credit rating for that security.
In
managing the Fund, the Adviser will consider its outlook for interest rates and the economy, credit risk, call risk, and other
security selection techniques. The Adviser’s analysis for determining which securities to purchase will include comparisons
of after-tax yield across security types and maturity, roll yield, credit spread duration, and more. The proportion of the Fund’s
assets allocated in securities with certain characteristics (such as bond type, credit rating, sector, maturity, callability,
coupon structure, and more) will vary depending on relative value across issues and the Adviser’s outlook for the economy.
The
Fund will not target a specific duration or maturity for the municipal bonds and other securities in which it invests, and the average
portfolio duration will vary depending on market conditions, relative value of various securities of different durations, and economic
outlook. The average duration for the Fund will vary within plus or minus 25% of the duration of the Bloomberg Municipal Inter-Short
(1-10 Year) Index, which was 3.36 years at August 29, 2022. There is no limit on the maturity or duration of any individual security
in which the Fund may invest.
The
Fund may invest up to 20% of its net assets in securities of other investment companies, including closed-end funds, exchange-traded
funds, and mutual funds. Money market funds may exceed 20% of net assets. The Fund may invest up to 15% of its holdings in securities
that have not been registered for public sale, but that are eligible for purchase and sale pursuant to Rule 144A under the 1933
Act.
|
| Summary
of Principal Risks
|
The
Fund is subject to the principal risks summarized below. These risks could adversely affect the Fund’s net asset value (“NAV”),
yield and total return. It is possible to lose money by investing in the Fund. The Fund may not be a suitable investment for all
investors.
| ● | Interest
Rate Risk: The risk of market losses attributable to changes in interest rates. With
fixed rate securities, a rise in interest rates typically causes a fall in values. The yield
earned by the Fund will vary with changes in interest rates. The longer the average maturity
of the Fund’s investment portfolio, the greater the fluctuation in value. |
| ● | Call
Risk: The risk that an issuer may exercise its right to redeem a fixed income security
earlier than expected (a call). Issuers may call outstanding securities prior to their maturity
for a number of reasons (e.g., declining interest rates, changes in credit spreads and improvements
in the issuer’s credit quality). If an issuer calls a security that the Fund has invested
in, the Fund may not recoup the full amount of its initial investment and may be forced to
reinvest in lower-yielding securities, securities with greater credit risks or securities
with other, less favorable features. |
| ● | Credit
Risk: The risk that the issuer of a security, or the counterparty to a contract,
will default or otherwise become unable to honor a financial obligation (such as the
payment of interest or principal on a debt security). |
| ● | Geographic
Concentration Risk: From time to time, the Fund may invest a substantial amount of
its assets in issuers located in certain geographic areas. If the Fund concentrates its
investments in this manner, it assumes the risk that economic, political and social conditions
in such geographic regions will have a significant impact on its investment performance. |
| ● | High
Yield Securities Risk: High yield securities (also known as junk bonds) are
generally considered more risky than investment grade, fixed income securities. The total
return and yield of high yield securities can be expected to fluctuate more than the
total return and yield of higher quality securities. High yield securities are regarded
as predominantly speculative with respect to the issuer’s continuing ability to
meet principal and interest payments. Successful investment in high yield securities
involves greater investment risk and is highly dependent on the Adviser’s credit
analysis and market analysis. |
| ● | Liquidity
Risk: The risk that certain securities may be difficult or impossible to sell at
the time and the price that the seller would like. |
| ● | Management
Risk: As with any managed fund, the Adviser may not be successful in selecting the
best performing securities or investment techniques, and the Fund’s performance
may lag behind that of similar funds. The Adviser may also miss out on an investment
opportunity because the assets necessary to take advantage of the opportunity are tied
up in less advantageous investments. The Adviser may also miss out on an investment opportunity
because the assets necessary to take advantage of the opportunity are tied up in less
advantageous investments. |
| ● | Market
Risk: The risk that the market value of a security may fluctuate, sometimes rapidly
and unpredictably. Securities may decline in value due to factors affecting securities
markets generally or particular industries represented in the securities markets. The
value of a security may decline due to general market conditions which are not specifically
related to a particular company, such as real or perceived adverse economic conditions,
changes in the general outlook for corporate earnings, changes in interest or currency
rates or adverse investor sentiment generally. They may also decline due to factors which
affect a particular industry or industries, such as labor shortages or increased production
costs and competitive conditions within an industry. During a general downturn in the
securities markets, multiple asset classes may decline in value simultaneously. Markets
may additionally be impacted by negative external and/or direct and indirect economic
factors such as pandemics, natural disasters, global trade policies and political unrest
or uncertainties. The adverse impact of any one or more of these events on market value
of fund investments could be significant and cause losses. |
| ● | Municipal
Securities Risk: The amount of public information available about municipal securities
is generally less than that for corporate equities or bonds, and the investment performance
of the Fund may therefore be more dependent on the analytical abilities of the Adviser
than that of an equity fund or taxable bond fund. |
| ● | New
Adviser Risk: The Adviser has not previously managed a U.S.-registered mutual fund.
Mutual funds and their advisers are subject to restrictions and limitations imposed by
the 1940 Act, and the Internal Revenue Code that do not apply to the Adviser’s
management of other types of individual and institutional accounts. As a result, investors
do not have a long-term track record from which to judge the Adviser and the Adviser
may not achieve the intended result in managing the Fund. |
| ● | No
History of Operations: The Fund is a newly formed mutual fund and has no history
of operations. |
| ● | Other
Investment Companies Risk: The Fund may invest in other investment companies, including
closed-end funds, exchange-traded funds, and mutual funds, pursuit to the investment
limitations outlined in this document. These securities are subject to similar risks
as described above and more. Shareholders in the Fund could be subject to duplicative
expenses to the extent that the Fund invests in other investment companies. |
| ● | Prepayment
Risk: The risk that a debt security may be paid off and proceeds invested earlier
than anticipated. Depending on market conditions, the new investments may or may not
carry the same interest rate. |
| ● | Private
Placement Risk: Private placements involves securities not registered under the 1933
Act. In addition to the general risks associated with fixed income securities, such securities
(including “144a” securities) may be subject to restrictions on resale, transaction
costs for such securities may be higher than comparable securities, and there may be
no liquid secondary market for such securities. |
| ● | Rating
Agency Risk: Investment grade debt securities may be downgraded by a major rating
agency to below investment grade status, which would increase the risk of holding these
securities. In addition, a rating may become stale in that it fails to reflect changes
to an issuer’s financial condition. Ratings represent the rating agency’s
opinion regarding the quality of the security and are not a guarantee of quality. Rating
agencies may fail to make timely credit ratings in response to subsequent events. In
addition, ratings agencies are subject to an inherent conflict of interest because they
are often compensated by the same issuers whose securities they grade. |
| ● | U.S.
Government Agencies Securities Risk: Certain U.S. Government agency securities
are backed by the right of the issuer to borrow from the U.S. Treasury while others are
supported only by the credit of the issuer or instrumentality. While the U.S. Government
is able to provide financial support to U.S. Government-sponsored agencies or instrumentalities,
no assurance can be given that it will always do so. Such securities are neither issued
nor guaranteed by the U.S. Treasury. |
| ● | Valuation
Risk: The risk that the Fund has valued certain of its securities at a higher price
than it can sell them. |
|
| Performance
Information
|
The
Fund’s performance is only shown in the Fund summary when the Fund has had a full calendar year of operations.
|
| Ambrus Core Bond Fund
|
| AMBRUS
CORE BOND FUND
|
| Investment
Objective
|
Ambrus
Core Bond Fund (the “Fund”) seeks to maximize total return, current income, and long-term capital appreciation.
|
| Fees
and Expenses
|
This
table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.
|
| Annual Fund
Operating Expenses (expenses that you pay each year as a percentage of the value of your investment):
|
|
|
| Example
|
This
Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example
assumes that you invest $10,000 in Investor Class shares and Institutional Class shares of 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. Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
|
|
|
| Portfolio
Turnover
|
The
Fund pays transaction costs 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. The Fund’s portfolio
turnover rate is only shown once the Fund has completed its first fiscal period of operations.
|
| Summary
of Principal Investment Strategies
|
The
Fund seeks the most attractive risk-adjusted returns from all fixed income asset types, with an emphasis on U.S. government and corporate
bonds. The Fund primarily invests in government-related bonds, corporate bonds, taxable municipal bonds, preferred stocks, and other
fixed income securities on a relative value basis.
Under
normal circumstances, the Fund will invest at least 80% of its net assets (plus any borrowings made for investment purposes) in fixed
income securities and other related instruments with similar economic characteristics. This is a non-fundamental investment policy that
may be changed by the Fund upon 60 days’ prior notice to shareholders. The Fund will invest in a full range of U.S. treasury bonds,
U.S. agency bonds, commercial paper, certificates of deposit, money markets, corporate bonds, taxable municipal bonds, mortgage backed/asset
backed securities, preferred stocks, convertible bonds, other bank capital securities, loans, and other taxable fixed income securities.
The Fund will invest in both bullet bonds (a non-callable debt instrument whose entire face value is paid at once on the maturity date,
rather than amortized over its lifetime), as well as callable/puttable bonds. The Fund will invest in bonds with all coupon types, including
fixed coupon bonds, zero coupon bonds, step-up/step-down coupon bonds, floating coupon bonds, fixed-to-float bonds, and inflation-linked
securities. The asset allocation and security selection of the Fund will be determined primarily via relative value across asset classes
and securities, as well as based on the manager’s top-down view of macroeconomic variables and bottom-up view of individual security
fundamentals.
The
Fund will primarily invest in securities rated investment grade or higher. The Fund’s investment grade investments will, at the
time of investment, carry a long-term rating of Baa3 or BBB– or higher by any of Moody’s Investors Service Inc. (“Moody’s”)
or Standard & Poor’s Corporation (“S&P”), or Fitch Ratings Inc. (“Fitch”), respectively. The Fund
may invest up to 25% of its holdings in below investment grade or nonrated securities (commonly known as “high yield securities”
or “junk bonds”). The Adviser relies on its own analysis of credit quality and risks associated with individual bonds, as
well as rating agencies and third-party research. The Fund seeks to purchase investments that are undervalued relative to their credit
characteristics. If ratings agencies assign different ratings to the same security, the Adviser will use the highest rating as the credit
rating for that security.
In
managing the Fund, the Adviser will consider its outlook for interest rates and the economy, credit risk, call risk, and other security
selection techniques. The Adviser’s analysis for determining which securities to purchase will include comparisons of total return
across security types and maturity, roll yield, credit spread duration, and more. The proportion of the Fund’s assets allocated
in securities with certain characteristics (such as bond type, credit rating, sector, maturity, callability, coupon structure, and more)
will vary depending on relative value across issues and the Adviser’s outlook for the economy.
The
Fund will not target a specific duration or maturity for the municipal bonds and other securities in which it invests, and the average
portfolio duration will vary depending on market conditions, relative value of various securities of different durations, and economic
outlook. The average duration for the Fund will vary within plus or minus 25% of the duration of the Bloomberg Intermediate Government
Credit Bond Index, which was 3.90 years at August 29, 2022. There is no limit on the maturity or duration of any individual security
in which the Fund may invest.
The
Fund may invest up to 20% of its net assets in securities of other investment companies, including closed-end funds, exchange-traded
funds, and mutual funds. Money market funds may exceed 20% of net assets. The Fund may invest up to 15% of its holdings in securities
that have not been registered for public sale, but that are eligible for purchase and sale pursuant to Rule 144A under the 1933 Act.
|
| Summary
of Principal Risks
|
The
Fund is subject to the principal risks summarized below. These risks could adversely affect the Fund’s net asset value (“NAV”),
yield and total return. It is possible to lose money by investing in the Fund. The Fund may not be a suitable investment for all investors.
| ● | Interest
Rate Risk: The risk of market losses attributable to changes in interest rates. With
fixed rate securities, a rise in interest rates typically causes a fall in values. The yield
earned by the Fund will vary with changes in interest rates. The longer the average maturity
of the Fund’s investment portfolio, the greater the fluctuation in value. |
| ● | Credit
Risk: The risk that the issuer of a security, or the counterparty to a contract, will
default or otherwise become unable to honor a financial obligation (such as the payment of
interest or principal on a debt security). |
| ● | Market
Risk: The risk that the market value of a security may fluctuate, sometimes rapidly and
unpredictably. Securities may decline in value due to factors affecting securities markets
generally or particular industries represented in the securities markets. The value of a
security may decline due to general market conditions which are not specifically related
to a particular company, such as real or perceived adverse economic conditions, changes in
the general outlook for corporate earnings, changes in interest or currency rates or adverse
investor sentiment generally. They may also decline due to factors which affect a particular
industry or industries, such as labor shortages or increased production costs and competitive
conditions within an industry. During a general downturn in the securities markets, multiple
asset classes may decline in value simultaneously. Markets may additionally be impacted by
negative external and/or direct and indirect economic factors such as pandemics, natural
disasters, global trade policies and political unrest or uncertainties. The adverse impact
of any one or more of these events on market value of fund investments could be significant
and cause losses. |
| ● | Geographic
Concentration Risk: From time to time, the Fund may invest a substantial amount of its
assets in issuers located in certain geographic areas. If the Fund concentrates its investments
in this manner, it assumes the risk that economic, political and social conditions in such
geographic regions will have a significant impact on its investment performance. |
| ● | High
Yield Securities Risk: High yield securities (also known as junk bonds) are generally
considered more risky than investment grade, fixed income securities. The total return and
yield of high yield securities can be expected to fluctuate more than the total return and
yield of higher quality securities. High yield securities are regarded as predominantly speculative
with respect to the issuer’s continuing ability to meet principal and interest payments.
Successful investment in high yield securities involves greater investment risk and is highly
dependent on the Adviser’s credit analysis and market analysis. |
| ● | Liquidity
Risk: The risk that certain securities may be difficult or impossible to sell at the
time and the price that the seller would like. |
| ● | Management
Risk: As with any managed fund, the Adviser may not be successful in selecting the best
performing securities or investment techniques, and the Fund’s performance may lag
behind that of similar funds. The Adviser may also miss out on an investment opportunity
because the assets necessary to take advantage of the opportunity are tied up in less advantageous
investments. The Adviser may also miss out on an investment opportunity because the assets
necessary to take advantage of the opportunity are tied up in less advantageous investments. |
| ● | Municipal
Securities Risk: The amount of public information available about municipal securities
is generally less than that for corporate equities or bonds, and the investment performance
of the Fund may therefore be more dependent on the analytical abilities of the Adviser than
that of an equity fund or taxable bond fund. |
| ● | New
Adviser Risk: The Adviser has not previously managed a U.S.-registered mutual fund. Mutual
funds and their advisers are subject to restrictions and limitations imposed by the 1940
Act, and the Internal Revenue Code that do not apply to the Adviser’s management of
other types of individual and institutional accounts. As a result, investors do not have
a long-term track record from which to judge the Adviser and the Adviser may not achieve
the intended result in managing the Fund. |
| ● | No
History of Operations: The Fund is a newly formed mutual fund and has no history of operations. |
| ● | Other
Investment Companies Risk: The Fund may invest in other investment companies, including
closed-end funds, exchange-traded funds, and mutual funds, pursuit to the investment limitations
outlined in this document. These securities are subject to similar risks as described above
and more. Shareholders in the Fund could be subject to duplicative expenses to the extent
that the Fund invests in other investment companies. |
| ● | Prepayment
Risk: The risk that a debt security may be paid off and proceeds invested earlier than
anticipated. Depending on market conditions, the new investments may or may not carry the
same interest rate. |
| ● | Private
Placement Risk: Private placements involves securities not registered under the 1933
Act. In addition to the general risks associated with fixed income securities, such securities
(including “144a” securities) may be subject to restrictions on resale, transaction
costs for such securities may be higher than comparable securities, and there may be no liquid
secondary market for such securities. |
| ● | Rating
Agency Risk: Investment grade debt securities may be downgraded by a major rating agency
to below investment grade status, which would increase the risk of holding these securities.
In addition, a rating may become stale in that it fails to reflect changes to an issuer’s
financial condition. Ratings represent the rating agency’s opinion regarding the quality
of the security and are not a guarantee of quality. Rating agencies may fail to make timely
credit ratings in response to subsequent events. In addition, ratings agencies are subject
to an inherent conflict of interest because they are often compensated by the same issuers
whose securities they grade. |
| ● | U.S.
Government Agencies Securities Risk: Certain U.S. Government agency securities are
backed by the right of the issuer to borrow from the U.S. Treasury while others are supported
only by the credit of the issuer or instrumentality. While the U.S. Government is able to
provide financial support to U.S. Government-sponsored agencies or instrumentalities, no
assurance can be given that it will always do so. Such securities are neither issued nor
guaranteed by the U.S. Treasury. |
| ● | Valuation
Risk: The risk that the Fund has valued certain of its securities at a higher price than
it can sell them. |
|
| Performance
Information
|
The
Fund’s performance is only shown in the Fund summary when the Fund has had a full calendar year of operations.
|
| Ambrus Tax-Conscious California Bond Fund
|
| AMBRUS
TAX-CONSCIOUS CALIFORNIA BOND FUND
|
| Investment
Objective
|
Ambrus
Tax-Conscious California Bond Fund (the “Fund”) seeks to maximize total return net of federal and California state
taxes.
|
| Fees
and Expenses
|
This
table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.
|
| Annual Fund
Operating Expenses (expenses that you pay each year as a percentage of the value of your investment):
|
|
|
| Example
|
This
Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The
Example assumes that you invest $10,000 in Investor Class shares and Institutional Class shares of 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. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
|
|
|
| Portfolio
Turnover
|
The
Fund pays transaction costs 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.
The Fund’s portfolio turnover rate is only shown once the Fund has completed its first fiscal period of operations.
|
| Summary
of Principal Investment Strategies
|
The
Fund seeks the most attractive risk-adjusted returns from all fixed income asset types on an after-tax basis. The Fund primarily
invests in California municipal bonds; however, non-California municipal bonds, government-related bonds, taxable municipal bonds,
corporate bonds, preferred stocks, and other fixed income securities may also be considered on an after-tax relative value basis.
Under
normal circumstances, the Fund will invest at least 80% of its net assets (plus any borrowings made for investment purposes) in
fixed income securities and other related instruments with similar economic characteristics. At least 50% of the Fund’s
assets will be invested in municipal securities, issued by or on behalf of the State of California and its political subdivisions,
financing authorities and their agencies, that carry interest payments that are exempt from federal and California state income
taxes. This is a non-fundamental investment policy that may be changed by the Fund upon 60 days’ prior notice to shareholders.
The
Fund may also invest in municipal securities outside of California, including issuers across all U.S. states and territories, state and
local governments, government agencies, and other entities should these securities feature a superior risk-adjusted after-tax yield than
California tax-exempt municipal bonds. The Fund will also invest in a full range of U.S. treasury bonds, U.S. agency bonds, commercial
paper, certificates of deposit, money markets, corporate bonds, taxable municipal bonds, mortgage backed/asset backed securities, preferred
stocks, convertible bonds, other bank capital securities, loans, and other taxable fixed income securities should these securities feature
a superior risk-adjusted after-tax yield than California tax-exempt municipal bonds. The Fund will invest in both bullet bonds (a non-callable
debt instrument whose entire face value is paid at once on the maturity date, rather than amortized over its lifetime), as well as callable/puttable
bonds. The Fund will invest in bonds with all coupon types, including fixed coupon bonds, zero coupon bonds, step-up/step-down coupon
bonds, floating coupon bonds, and fixed-to-float bonds, inflation-linked securities. The Fund has broad flexibility to invest in a wide
variety of debt securities and instruments of any maturity and will not be managed to a target duration or average weighted maturity.
The
Fund will primarily invest in securities rated investment grade or higher. The Fund’s investment grade investments will, at the
time of investment, carry a long-term rating of Baa3 or BBB– or higher by any of Moody’s Investors Service Inc. (“Moody’s”)
or Standard & Poor’s Corporation (“S&P”), or Fitch Ratings Inc. (“Fitch”), respectively. The Fund
may invest up to 25% of its holdings in below investment grade or nonrated securities (commonly known as “high yield securities”
or “junk bonds”). The Adviser relies on its own analysis of credit quality and risks associated with individual bonds, as
well as rating agencies and third-party research. The Fund seeks to purchase investments that are undervalued or offer attractive after-tax
yield relative to their credit characteristics. If ratings agencies assign different ratings to the same security, the Adviser will use
the highest rating as the credit rating for that security.
In
managing the Fund, the Adviser will consider its outlook for interest rates and the economy, credit risk, call risk, and other
security selection techniques. The Adviser’s analysis for determining which securities to purchase will include comparisons
of after-tax yield across security types and maturity, roll yield, credit spread duration, and more. The proportion of the Fund’s
assets allocated in securities with certain characteristics (such as issuer, state, bond type, credit rating, sector, maturity,
callability, coupon structure, and more) will vary depending on relative value across securities and the Adviser’s outlook
for the economy.
The
Fund will not target a specific duration or maturity for the municipal bonds and other securities in which it invests, and the average
portfolio duration will vary depending on market conditions, relative value of various securities of different durations, and economic
outlook. The average duration for the Fund will vary within plus or minus 25% of the duration of the Bloomberg California Municipal Inter-Short
(1-10 Year) Index, which was 3.40 years at August 29, 2022. There is no limit on the maturity or duration of any individual security
in which the Fund may invest.
The
Fund may invest up to 20% of its net assets in securities of other investment companies, including closed-end funds, exchange-traded
funds, and mutual funds. Money market funds may exceed 20% of net assets. The Fund may invest up to 15% of its holdings in securities
that have not been registered for public sale, but that are eligible for purchase and sale pursuant to Rule 144A under the 1933
Act.
|
| Summary
of Principal Risks
|
The
Fund is subject to the principal risks summarized below. These risks could adversely affect the Fund’s net asset value (“NAV”),
yield and total return. It is possible to lose money by investing in the Fund. The Fund may not be a suitable investment for all
investors.
| ● | Interest
Rate Risk: The risk of market losses attributable to changes in interest rates. With
fixed rate securities, a rise in interest rates typically causes a fall in values. The yield
earned by the Fund will vary with changes in interest rates. The longer the average maturity
of the Fund’s investment portfolio, the greater the fluctuation in value. |
| ● | California
Investment Risk: The Fund’s performance will be affected by the fiscal and economic
health of the State of California, its political subdivisions, municipalities, agencies and
authorities and political and regulatory developments affecting California municipal issuers.
Given the Fund may invest more heavily in securities issued by California and its municipalities,
the Fund is more vulnerable to the credit risk and unfavorable developments in California
than are funds that invest in municipal securities of many states. Unfavorable developments
in any economic sector may have far-reaching ramifications on the overall California municipal
market. |
| ● | Call
Risk: The risk that an issuer may exercise its right to redeem a fixed income security
earlier than expected (a call). Issuers may call outstanding securities prior to their maturity
for a number of reasons (e.g., declining interest rates, changes in credit spreads and improvements
in the issuer’s credit quality). If an issuer calls a security that the Fund has invested
in, the Fund may not recoup the full amount of its initial investment and may be forced to
reinvest in lower-yielding securities, securities with greater credit risks or securities
with other, less favorable features. |
| ● | Credit
Risk: The risk that the issuer of a security, or the counterparty to a contract,
will default or otherwise become unable to honor a financial obligation (such as the
payment of interest or principal on a debt security). |
| ● | Geographic
Concentration Risk: From time to time, the Fund may invest a substantial amount of
its assets in issuers located in California. If the Fund concentrates its investments
in this manner, it assumes the risk that economic, political and social conditions in
that geographic region will have a significant impact on its investment performance. |
| ● | High
Yield Securities Risk: High yield securities (also known as junk bonds) are
generally considered more risky than investment grade, fixed income securities. The total
return and yield of high yield securities can be expected to fluctuate more than the
total return and yield of higher quality securities. High yield securities are regarded
as predominantly speculative with respect to the issuer’s continuing ability to
meet principal and interest payments. Successful investment in high yield securities
involves greater investment risk and is highly dependent on the Adviser’s credit
analysis and market analysis. |
| ● | Liquidity
Risk: The risk that certain securities may be difficult or impossible to sell at
the time and the price that the seller would like. |
| ● | Management
Risk: As with any managed fund, the Adviser may not be successful in selecting the
best performing securities or investment techniques, and the Fund’s performance
may lag behind that of similar funds. The Adviser may also miss out on an investment
opportunity because the assets necessary to take advantage of the opportunity are tied
up in less advantageous investments. The Adviser may also miss out on an investment opportunity
because the assets necessary to take advantage of the opportunity are tied up in less
advantageous investments. |
| ● | Market
Risk: The risk that the market value of a security may fluctuate, sometimes rapidly
and unpredictably. Securities may decline in value due to factors affecting securities
markets generally or particular industries represented in the securities markets. The
value of a security may decline due to general market conditions which are not specifically
related to a particular company, such as real or perceived adverse economic conditions,
changes in the general outlook for corporate earnings, changes in interest or currency
rates or adverse investor sentiment generally. They may also decline due to factors which
affect a particular industry or industries, such as labor shortages or increased production
costs and competitive conditions within an industry. During a general downturn in the
securities markets, multiple asset classes may decline in value simultaneously. Markets
may additionally be impacted by negative external and/or direct and indirect economic
factors such as pandemics, natural disasters, global trade policies and political unrest
or uncertainties. The adverse impact of any one or more of these events on market value
of fund investments could be significant and cause losses. |
| ● | Municipal
Securities Risk: The amount of public information available about municipal securities
is generally less than that for corporate equities or bonds, and the investment performance
of the Fund may therefore be more dependent on the analytical abilities of the Adviser
than that of an equity fund or taxable bond fund. The Fund invests significantly in municipal
obligations of issuers located in California. The values of shares of the Fund therefore
will be affected by economic and political developments in California. |
| ● | New
Adviser Risk: The Adviser has not previously managed a U.S.-registered mutual fund.
Mutual funds and their advisers are subject to restrictions and limitations imposed by
the 1940 Act, and the Internal Revenue Code that do not apply to the Adviser’s
management of other types of individual and institutional accounts. As a result, investors
do not have a long-term track record from which to judge the Adviser and the Adviser
may not achieve the intended result in managing the Fund. |
| ● | No
History of Operations: The Fund is a newly formed mutual fund and has no history
of operations. |
| ● | Other
Investment Companies Risk: The Fund may invest in other investment companies, including
closed-end funds, exchange-traded funds, and mutual funds, pursuit to the investment
limitations outlined in this document. These securities are subject to similar risks
as described above and more. Shareholders in the Fund could be subject to duplicative
expenses to the extent that the Fund invests in other investment companies. |
| ● | Prepayment
Risk: The risk that a debt security may be paid off and proceeds invested earlier
than anticipated. Depending on market conditions, the new investments may or may not
carry the same interest rate. |
| ● | Private
Placement Risk: Private placements involves securities not registered under the 1933
Act. In addition to the general risks associated with fixed income securities, such securities
(including “144a” securities) may be subject to restrictions on resale, transaction
costs for such securities may be higher than comparable securities, and there may be
no liquid secondary market for such securities. |
| ● | Rating
Agency Risk: Investment grade debt securities may be downgraded by a major rating
agency to below investment grade status, which would increase the risk of holding these
securities. In addition, a rating may become stale in that it fails to reflect changes
to an issuer’s financial condition. Ratings represent the rating agency’s
opinion regarding the quality of the security and are not a guarantee of quality. Rating
agencies may fail to make timely credit ratings in response to subsequent events. In
addition, ratings agencies are subject to an inherent conflict of interest because they
are often compensated by the same issuers whose securities they grade. |
| ● | U.S.
Government Agencies Securities Risk: Certain U.S. Government agency securities
are backed by the right of the issuer to borrow from the U.S. Treasury while others are
supported only by the credit of the issuer or instrumentality. While the U.S. Government
is able to provide financial support to U.S. Government-sponsored agencies or instrumentalities,
no assurance can be given that it will always do so. Such securities are neither issued
nor guaranteed by the U.S. Treasury. |
| ● | Valuation
Risk: The risk that the Fund has valued certain of its securities at a higher price
than it can sell them. |
|
| Performance
Information
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The
Fund’s performance is only shown in the Fund summary when the Fund has had a full calendar year of operations.
|