ck0001650149-20230630
HW
Opportunities MP Fund
Ticker:
HOMPX
Prospectus
October 31,
2023
A
series of Series Portfolios Trust (the “Trust”)
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The
U.S. Securities and Exchange Commission has not approved or disapproved
these securities or the accuracy or adequacy of this Prospectus. Any
representation to the contrary is a criminal
offense |
Table
of Contents
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| Fund
Summary |
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| Fund
Facts |
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| Fund
Summary: |
| HW OPPORTUNITIES MP
FUND |
Investment
Objective.
The HW Opportunities MP Fund (the “Fund”) seeks capital
appreciation.
Fees and Expenses of the
Fund. This
table describes the fees and expenses that you may pay if you buy, sell and hold
shares of the Fund. Shareholders should be aware that, as shown under
“Management fees” in the table below, the Fund pays no fees under its management
and advisory agreements to the Fund’s adviser. However, Fund shares are only
offered to participants in separately managed account programs who pay fees to
program sponsors for the costs and expenses of the programs, including fees for
investment advice, custody and portfolio execution. When a program participant,
alone or with his or her program sponsor, elects to allocate assets to an
investment strategy managed or advised by the Fund’s adviser, the adviser
typically receives a fee from the program sponsor for providing such management
or advisory services to the managed account, including with respect to assets
that may be invested in the Fund. In certain cases, a program participant will
pay a fee for investment advice directly to the adviser in its capacity as
manager to the participant’s managed account.
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Shareholder
Fees
(fees
paid directly from your investment) |
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Maximum
sales charge (load) imposed on purchases (as
a % of offering price) |
None |
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Maximum
deferred sales charge (load) (as
a % of the lower of net asset value at purchase or
redemption) |
None |
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
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Management
fees(1) |
0.00% |
| Distribution
and service (Rule 12b-1) fees |
None |
| Shareholder
servicing fee |
0.00% |
| Other
expenses |
0.74% |
| Total
annual fund operating expenses |
0.74% |
| Expense
reimbursement |
-0.74% |
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Total
annual fund operating expenses after expense reimbursement(2) |
0.00% |
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(1)
Hotchkis & Wiley
Capital Management, LLC (the “Advisor”) will not charge a management fee for
advisory services to the Fund. Shareholders should be aware, however, that the
Fund is an integral part of separately managed account programs, and the Advisor
and its affiliates will be compensated directly or indirectly by separately
managed account program sponsors or program participants for managed account
advisory services.
(2)
The Advisor has agreed to reimburse 100% of the Fund’s
operating expenses (other than acquired fund fees and expenses, front-end or
contingent deferred loads, dividends and interest on short positions, taxes,
leverage interest, brokerage fees (including commissions, mark-ups and
mark-downs), annual account fees for margin accounts, expenses incurred in
connection with any merger or reorganization and extraordinary expenses) (the
“Expense Cap”). The Advisor may not recoup amounts subject to the Expense Cap in
future periods. This arrangement cannot be terminated prior to
December 31, 2024
without the Board of Trustees’ consent.
Example.
This example is intended to help you compare the
cost of investing in the Fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
Fund’s operating expenses remain the same (taking into account the Expense Cap
for the duration of the Expense Cap only). Although your
actual costs may be higher or lower, based on these assumptions, your costs
would be:
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| 1
Year |
3
Years |
5
Years |
10
Years |
| HW
Opportunities MP Fund |
$0 |
$162 |
$338 |
$849 |
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 Fund’s most recent fiscal year ended June 30, 2023, the Fund’s
portfolio turnover rate was 140% of the average value of its
portfolio.
Principal Investment
Strategy.
The Fund normally invests in equity
securities, such as common stocks and preferred stocks of any size market
capitalization, and investment grade and high yield (“junk bonds”) fixed income
securities. The Advisor selects companies that it believes have strong capital
appreciation potential. The Fund also intends to invest a significant portion of
its assets in companies in the financial sector. The Fund may invest in foreign
(non-U.S.) securities. The Fund’s investments in foreign securities may be
direct investments or in the form of American Depositary Receipts (“ADRs”) and
Global Depositary Receipts (“GDRs”). The Fund is classified as a
“non-diversified fund” under the Investment Company Act of 1940, which means
that a relatively high percentage of the Fund’s assets may be invested in a
limited number of issuers.
The
Fund seeks to invest in companies that the Advisor believes has future prospects
that are misunderstood or not fully recognized by the market. The Advisor
employs a fundamental value investing approach which seeks to exploit market
inefficiencies. To identify these investment opportunities, the Advisor employs
a disciplined, bottom-up investment process highlighted by rigorous,
internally-generated fundamental research, focusing on investment parameters
such as a company’s tangible assets and sustainable cash flow. As part of the
Advisor’s investment process, the investment team evaluates the general and
industry-specific Environmental, Social, and Governance (“ESG”) factors that the
Advisor believes to be the most financially material to a company’s short-,
medium-, and long-term enterprise value. The Advisor believes this evaluation
contributes to its overall analysis of a company’s value creation for
shareholders and future financial performance. This analysis does not
automatically result in including or excluding specific securities, but it is
used by the Advisor as an additional input in its investment
process.
With
the exception of maintaining the Fund’s status as a non-diversified fund, the
Advisor does not employ predetermined rules for sales; rather, the Advisor
evaluates each sell candidate based on the candidate’s specific risk and return
characteristics, which include: 1) relative valuation; 2) fundamental
operating trends; 3) deterioration of fundamentals; and 4) diversification
guidelines. The Advisor also may engage in active and frequent trading of the
Fund’s securities in order to achieve its investment
objective.
Principal Investment
Risks.
As with any mutual fund, the value of
the Fund’s investments, and therefore the value of its shares, may go down and
you could lose all or a portion of your investment in the Fund.
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. Many factors can affect those values. The
factors that are most likely to have a material effect on the Fund’s portfolio
as a whole are called “principal risks.” The principal risks of investing in the
Fund are described in this section.
Market
Risk.
Market risk is the risk that the market price of securities owned by the Fund
may go down, sometimes rapidly or unpredictably. Securities may decline in value
due to factors affecting securities markets generally or particular industries
represented in the securities markets. Adverse market events may also lead to
increased shareholder redemptions, which could cause the Fund to experience a
loss or difficulty in selling investments to meet such redemptions. Local,
regional or global events such as war, acts of terrorism, the spread of
infectious illness or other public health issue, recessions, or other events may
also lead to increased shareholder redemptions, which could cause the Fund to
experience a loss or difficulty in selling investments to meet such redemptions.
For example, the novel coronavirus (COVID-19), which was first reported in China
in December 2019, resulted in, among other things, stressors to healthcare
service infrastructure, country border closings, business closings, and
disruptions to supply chains and customer activity as well as the widespread
shutdown of large sections of world economies. Adverse market events, such as
the foregoing, could impair the Fund’s ability to maintain operational standards
(such as with respect to satisfying redemption requests), disrupt the operations
of the Fund’s service providers, adversely affect the value and liquidity of the
Fund’s investments, and negatively impact the Fund’s performance, and overall
prevent the Fund from implementing its investment strategies and achieving its
investment objective.
Style
Risk.
The Advisor follows an investing style that favors value investments. Value
investing style may over time go in and out of favor in certain market cycles.
At times when the value investing style is out of favor the Fund's performance
may be negatively impacted. Investors should be prepared to tolerate volatility
in Fund returns.
Equity
Securities Risk.
Equity securities, both common and preferred stocks, typically have greater
price volatility than fixed income securities. The market price of equity
securities owned by the Fund may go down, sometimes rapidly or unpredictably.
Equity securities may decline in value due to factors affecting equity
securities markets generally or particular industries
represented
by those markets. Preferred stocks are subject to the risk that the dividend on
the stock may be changed or omitted by the issuer, and that participation in the
growth of an issuer may be limited.
Capitalization
Risk.
The Fund may invest in companies of any size market capitalization. Large cap
companies as a group could fall out of favor with the market, causing the Fund
to underperform investments that focus on small or mid-cap companies. Investment
in small and mid-cap companies may involve more risk than investing in larger,
more established companies. Small and mid-cap companies may have limited product
lines or markets. They may be less financially secure than larger, more
established companies. They may depend on a small number of key personnel.
Should a product fail, or if management changes, or if there are other adverse
developments, the Fund’s investment in a small or mid-cap company may lose
substantial value. In addition, small and mid-cap companies may be particularly
affected by interest rate increases, as they may find it more difficult to
borrow money to continue or expand operations, or may have difficulty in
repaying any loans.
Fixed
Income Securities Risk.
Fixed income securities, such as bonds, involve credit risk. Credit risk is the
risk that the borrower will not make timely payments of principal and interest.
The degree of credit risk depends on the issuer’s financial condition and on the
terms of the securities. Fixed income securities are also subject to interest
rate risk.
Active
Management Risk.
The Fund is subject to management risk because it is an actively managed
investment portfolio. The Advisor invests in securities that may not necessarily
be included in the Fund’s benchmark. To the extent that the Advisor invests the
Fund’s assets in securities that are not in the Fund’s benchmark index, there is
a greater risk that the Fund’s performance will deviate from that of the
benchmark. The Advisor does not seek to replicate the performance of any
index.
Financial
Sector Risk.
The Fund intends to invest a significant portion of its assets in companies in
the financial sector, and therefore the performance of the Fund could be
negatively impacted by events affecting this sector. This sector can be
significantly affected by changes in interest rates, government regulation, the
rate of defaults on corporate, consumer and government debt, the availability
and cost of capital, and the impact of more stringent capital
requirements.
Security
Selection Risk.
The Advisor may misjudge the risk and/or return potential of a security. This
misjudgment can result in a loss or a significant deviation relative to its
benchmark.
Non-Diversification
Risk.
The Fund is non-diversified under federal securities laws, meaning the Fund can
invest a greater portion of its assets in the securities of any one issuer than
can a diversified fund. Investing in a non-diversified mutual fund involves
greater risk than investing in a diversified fund because a loss resulting from
the decline in the value of one security may represent a greater portion of the
total assets of a non-diversified fund. The Fund’s share values could fluctuate
more than those of funds holding more securities in their
portfolios.
Issuer
Risk.
The value of a security may decline for a number of reasons which directly
relate to the issuer, such as management performance, financial leverage and
reduced demand for the issuer’s goods or services.
Foreign
(Non-U.S.) Investment Risk.
The Fund may invest in foreign (non-U.S.) securities and may experience more
rapid and extreme changes in value than a fund that invests exclusively in
securities of U.S. companies. The securities markets of many foreign countries
are relatively small, with a limited number of companies representing a small
number of industries. Additionally, issuers of foreign securities are usually
not subject to the same degree of regulation as U.S. issuers and investments in
securities of foreign issuers may be subject to foreign withholding and other
taxes. To the extent that the Fund invests a significant portion of its assets
in a specific geographic region, the Fund will generally have more exposure to
regional economic risks associated with foreign investments, although the Fund
has no current intention to focus on a specific geographic region.
Adverse
political, economic or social developments, as well as U.S. and foreign
government actions such as the imposition of tariffs, economic and trade
sanctions or embargoes, could undermine the value of the Fund’s investments,
prevent the Fund from realizing the full value of its investments or prevent the
Fund from selling securities it holds.
Financial
reporting standards for companies based in foreign markets differ from those in
the U.S. Additionally, foreign securities markets generally are smaller and less
liquid than U.S. markets. To the extent that the Fund invests in non-U.S. dollar
denominated foreign securities, changes in currency exchange rates may affect
the U.S. dollar value of foreign securities or the income or gain received on
these securities.
Currency
Risk.
If the Fund invests directly in foreign (non-US) currencies or in securities
that trade in, and receive revenues in, foreign (non-US) currencies, or in
derivatives that provide exposure to foreign (non-US) currencies, it will be
subject to the risk
that
those currencies will decline in value relative to the U.S. dollar, or, in the
case of hedging positions, that the U.S. dollar will decline in value relative
to the currency being hedged. As a result, the Fund’s investments in foreign
currency-denominated securities may reduce the returns of the Fund.
Foreign
Currency Exchange Contracts Risk.
A foreign currency exchange contract involves the Fund’s purchase or sale of a
specific currency on a spot basis or at a future date at a price set at the time
of the contract. Forward contracts involve the risk that anticipated currency
movements will not be accurately predicted, causing the Fund to sustain losses
on these contracts and transaction costs. The use of futures contracts involves
the risk of imperfect correlation in movements in the price of the futures
contracts, exchange rates and the underlying hedged assets. In addition,
although forward contracts limit the risk of loss due to a decline in the value
of the hedged currencies, at the same time they limit any potential gain that
might result should the value of the currencies increase.
American
Depositary Receipts and Global Depositary Receipts Risk.
ADRs and GDRs may be subject to some of the same risks as direct investment in
foreign companies, which includes international trade, currency, political,
regulatory and diplomatic risks. In a sponsored ADR arrangement, the foreign
issuer assumes the obligation to pay some or all of the depositary’s transaction
fees. Under an unsponsored ADR arrangement, the foreign issuer assumes no
obligations and the depositary’s transaction fees are paid directly by the ADR
holders. Because unsponsored ADR arrangements are organized independently and
without the cooperation of the issuer of the underlying securities, available
information concerning the foreign issuer may not be as current as for sponsored
ADRs and voting rights with respect to the deposited securities are not passed
through. GDRs can involve currency risk since, unlike ADRs, they may not be U.S.
dollar-denominated.
Interest
Rate Risk.
Interest
rate risk is the risk that fixed income securities will decline in value because
of changes in interest rates. As nominal interest rates rise, the value of
certain fixed income securities held by the Fund is likely to decrease. Fixed
income securities with longer durations tend to be more sensitive to changes in
interest rates, usually making them more volatile than securities with shorter
durations. Interest rate changes can be sudden and unpredictable, and the Fund
may lose money as a result of movements in interest rates. Recent and potential
future changes in monetary policy made by central banks or governments are
likely to affect the level of interest rates. Rising interest rates may prompt
redemptions from the Fund, which may force the Fund to sell investments at a
time when it is not advantageous to do so, which could result in losses. The
Fund may be subject to a greater risk of rising interest rates due to the recent
period of historically low rates.
Credit
Risk.
The Fund could lose money if the issuer or guarantor of a fixed income security,
or the counterparty to a derivatives contract, or a loan of portfolio
securities, is unable or unwilling to make timely principal and/or interest
payments, or to otherwise honor its obligations.
Liquidity
Risk.
To the extent that a security is difficult to sell (whether because of a lack of
an active market or because of unusual market conditions), the Fund may either
be forced to accept a lower price for it or may have to continue to hold the
security. Either outcome could adversely affect Fund performance. The Fund’s
investments in illiquid securities may reduce the returns of the Fund because it
may be unable to sell the illiquid securities and/or the Fund may sell at a time
or price that is not advantageous in order to meet redemption requests.
Additionally, the market for certain investments may become illiquid under
adverse market or economic conditions independent of any specific adverse
changes in the conditions of a particular issuer which may be magnified in a
rising interest rate environment or other circumstances where redemptions from
fixed income mutual funds may be higher than normal, causing increased supply in
the market due to selling activity. In such cases, the Fund, due to limitations
on investments in illiquid securities and the difficulty in purchasing and
selling such securities or instruments, may be unable to meet redemption
requests in extreme conditions and may be unable to achieve its desired level of
exposure to a certain asset class or sector. To the extent that the Fund’s
principal investment strategies involve foreign (non-U.S.) securities,
derivatives or securities with substantial market and/or credit risk, the Fund
will tend to have increased exposure to liquidity risk.
Call
Risk.
Call risk is the risk that an issuer may exercise its right to redeem a fixed
income security earlier than its maturity (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.
High
Yield Risk.
The Fund’s investments in high yield securities (commonly known as “junk bonds”)
may subject the Fund to greater levels of credit, call and liquidity risk than
funds that do not invest in such securities. High yield securities are
considered
primarily
speculative with respect to the issuer’s continuing ability to make principal
and interest payments. While offering a greater potential opportunity for
capital appreciation and higher yields, high yield securities typically entail
greater potential price volatility and may be less liquid than higher-rated
securities of similar maturity. An economic downturn or period of rising
interest rates could adversely affect the market for these securities and reduce
the Fund’s ability to sell these securities (liquidity risk). If the issuer of a
security is in default with respect to interest or principal payments, the Fund
may lose its entire investment.
Credit
Ratings and Unrated Securities Risks. Rating
agencies are private services that provide ratings of the credit quality of
fixed income securities, including convertible securities. Rating agencies may
fail to make timely changes in credit ratings and an issuer’s current financial
condition may be better or worse than a rating indicates. The Fund may purchase
unrated securities (which are not rated by a rating agency and may be less
liquid) if its portfolio managers determine that the security is of comparable
quality to a rated security that the Fund may purchase. To the extent that the
Fund invests in high yield and/or unrated securities, the Fund’s success in
achieving its investment objective may depend more heavily on the portfolio
managers’ creditworthiness analysis than if the Fund invested exclusively in
higher-quality and rated securities.
ESG
Risk.
Applying ESG criteria to the investment process may exclude securities of
certain issuers for non-investment reasons and therefore the Fund may forgo some
market opportunities available to funds that do not use ESG criteria. The Fund’s
incorporation of ESG considerations may affect its exposure to certain sectors
and/or types of investments, and may adversely impact the Fund’s performance
depending on whether such sectors or investments are in or out of favor in the
market.
Large
Shareholder Risk.
To the extent that a significant portion of the Fund’s shares are held by a
limited number of shareholders or their affiliates, there is a risk that the
share trading activities of these shareholders could disrupt the Fund’s
investment strategies, which could have adverse consequences for the Fund and
other shareholders (e.g.,
by requiring the Fund to sell investments at inopportune times or causing the
Fund to maintain larger-than-expected cash positions pending acquisition of
investments).
Newer
Fund Risk.
As of the date of this Prospectus, the Fund has a limited operating history and
may not attract sufficient assets to achieve or maximize investment and
operational efficiencies.
Please
see “Investment Objective, Principal Investment Strategies and Related Risks” in
the Fund’s Prospectus or Statement of Additional Information for a more detailed
description of the risks of investing in the
Fund.
Performance
The following bar chart and table provide some indication of
the risks of investing in the Fund by showing changes in the Fund’s past
performance. The bar chart shows how the Fund’s shares have
varied for each full calendar year shown. The table below the bar chart compares
the Fund’s average annual total returns for the periods shown with that of a
broad-based securities index. The Fund’s past
performance, before and after taxes, is not necessarily an indication of how the
Fund will perform in the future and does not guarantee future
results. Updated performance information is available on the
Fund’s website at https://hwcm.onlineprospectus.net/HWCM/HOMPX
or
by calling the Fund toll-free at 888-458-1963.
Calendar Year Returns as of
December 31
The
calendar year-to-date return for the Fund as of
September 30, 2023 was
13.83%. During the
period shown in the bar chart, the best
performance for a quarter was 19.92% (for the quarter ended
March 31,
2021), and the lowest
return for a calendar quarter was -17.67% (quarter ended June 30,
2022).
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| Average Annual
Total Return as of December 31, 2022 |
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| 1
Year |
Since
Inception
(December 30,
2020) |
| Return Before
Taxes |
-5.22% |
12.67% |
| Return After
Taxes on Distributions |
-5.74% |
12.10% |
| Return After
Taxes on Distributions and Sale of Fund Shares |
-2.89% |
9.66% |
|
Russell
3000 Value Total Return
(reflects no deduction for fees, expenses or
taxes) |
-7.98% |
8.09% |
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. Actual
after-tax returns depend on an investor’s tax situation and may differ from
those shown, and after-tax returns shown are not relevant to investors who hold
their Fund shares through tax-deferred arrangements, such as 401(k) plans or
individual retirement accounts. In certain
cases, the figure representing “Return After Taxes on Distributions and Sale of
Fund Shares” may be higher than the other return figures for the same period. A
higher after-tax return results when a capital loss occurs upon redemption and
provides an assumed tax benefit to the
investor.
Management
Advisor.
Hotchkis
& Wiley Capital Management, LLC.
Portfolio
Managers.
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| Investment
team member |
Primary
title with Advisor |
Started
with the Fund |
| George
H. Davis, Jr. |
Executive
Chairman and Portfolio Manager |
2020 |
| David
Green, CFA |
Portfolio
Manager |
2020 |
Purchase
and Sale of Fund Shares.
Shares of the Fund may be purchased only by or on behalf of separately managed
account clients where the Fund’s Advisor has an agreement with the managed
account program sponsor (the “Program Sponsor”) or directly with the client, to
provide management or advisory services to the managed account.
There
are no maximum or minimum investment requirements in the Fund (although your
Program Sponsor may have certain investment requirements).
Redemption
orders are made based on instructions from your Advisor or Program Sponsor to
the broker/dealer who executes trades for the account. Shares of the Fund can be
redeemed through the broker/dealer on any day the New York Stock Exchange is
open.
Tax
Information. The
Fund’s distributions are generally taxable and will be taxed as ordinary income
or capital gains, unless you are investing through a tax-advantaged arrangement,
such as a 401(k) plan or an IRA. Such tax-advantaged arrangements may be taxed
later upon a withdrawal from those arrangements.
Payments
to Broker-Dealers and Other Financial Intermediaries. If
you purchase the Fund through a broker-dealer or other financial intermediary
(such as a bank or financial advisor), the Fund and/or its Advisor may pay the
intermediary for the sale of Fund shares and related services. These payments
may create a conflict of interest by influencing the broker-dealer or other
financial 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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| Investment
Objective, Principal Investment Strategies, and Related Risks
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Investment
Objective
The
Fund’s investment objective is capital appreciation. The investment objective is
not fundamental and may be changed by the Board without shareholder approval and
on notice to shareholders. There is no assurance that the Fund will meet its
investment objective.
Principal
Investment Strategy
The
Fund normally invests in equity securities, such as common and preferred stocks,
of any size market capitalization, and investment grade and high yield (“junk
bonds”) fixed income securities. The Advisor selects companies that it believes
have strong capital appreciation potential. In implementing the principal
investment strategy, the Fund intends to invest a significant portion of its
assets in companies in the financial sector. The Fund is classified as a
“non-diversified fund” under the Investment Company Act of 1940 (the “1940
Act”), which means that a relatively high percentage of the Fund’s assets may be
invested in a limited number of issuers when compared to a diversified
fund.
Equity
securities, such as common stock and preferred stock, represent an ownership
interest, or the right to acquire an ownership interest, in an issuer and
typically have greater price volatility than fixed income securities. Preferred
stock normally pays dividends at a specified rate and has precedence over common
stock in the event the issuer is liquidated or declares bankruptcy. The Fund may
also invest in foreign (non-U.S.) securities. The Advisor generally considers an
instrument to be economically tied to a non-U.S. country if the issuer is a
foreign government (or any political subdivision, agency, authority or
instrumentality of such government), or if the issuer is organized under the
laws of a non-U.S. country. The Fund’s investments in foreign securities may be
direct investments or in the form of American Depositary Receipts (“ADRs”) and
Global Depositary Receipts (“GDRs”). ADRs are certificates that evidence
ownership of shares of a foreign issuer and are alternatives to purchasing
directly the underlying foreign securities in their national markets and
currencies. GDRs are certificates issued by an international bank that generally
are traded and denominated in the currencies of countries other than the home
country of the issuer of the underlying shares.
ESG
Factors
As
part of the Advisor’s investment process, the investment team evaluates the
general and industry-specific Environmental, Social, and Governance (“ESG”)
factors that the Advisor believes to be the most financially material to a
company’s short-, medium-, and long-term enterprise value. The Advisor believes
this evaluation contributes to its overall analysis of a company’s value
creation for shareholders and future financial performance.
The
Advisor utilizes data from company filings, various third-party sources, as well
as information from engagement with company management, in its ESG evaluation
process. The investment team analyzes a company’s ESG factors as part of its
proprietary fundamental risk ratings process. Material ESG risks and
opportunities are reflected in these ratings, which influence investment
decisions. The weight given to any particular ESG factor may vary depending upon
a company’s industry and may change over time.
The
fundamental risk ratings, which include ESG factors, are one of many inputs
considered by the investment team in evaluating whether to buy, sell or hold the
company for the Fund’s portfolio.
Across
industries, the investment team evaluates common corporate ESG factors,
including but not limited to those listed below.
Environmental:
greenhouse gas emissions, energy management, and water management.
Social:
recruitment and management of a global, diverse, and skilled workforce,
community relations, product safety, and labor practices.
Governance:
composition and structure of the board of directors, executive management’s
compensation level and structure, competitive behavior, systematic risk
management, and business ethics.
Money
Market Investments
To
meet redemptions and when waiting to invest cash receipts, the Fund may invest
in short-term, investment grade bonds, money market mutual funds and other money
market instruments. To the extent that the Fund invests in a money market mutual
fund, there will be some duplication of expenses because the Fund would bear its
pro rata portion of such money market mutual fund’s advisory fees and
operational expenses.
Temporary
Defensive Investments
The
Fund temporarily can invest up to 100% of its assets in short-term, investment
grade bonds, money market mutual funds and other money market instruments in
response to adverse market, economic or political conditions. The Fund may not
achieve its objective using this type of investing.
Value
Investing
The
Advisor follows a value style that emphasizes owning select securities that, in
the opinion of the Advisor, offer exceptional value independent of whether those
securities are represented in the Fund’s benchmarks. The Advisor believes that
value investment strategies provide greater risk-adjusted returns than growth
investment strategies. Additionally, the Advisor believes that over the long
term, investors are better served owning low-expectation stocks that trade at
discounts to the value of their future cash flows than high-expectation stocks
that trade at premiums. The Advisor identifies these investment opportunities by
employing a disciplined, bottom-up research process that emphasizes internally
generated fundamental research whose consistent application seeks to maximize
long-term performance.
Percentage
Investment Limitations
Unless
otherwise stated, all percentage limitations on Fund investments listed in this
Prospectus will apply at the time of investment. The Fund would not violate
these limitations unless an excess or deficiency occurs or exists immediately
after and as a result of an investment.
What
are the main risks of investing in the Fund?
As
with any mutual fund, the value of the Fund’s investments, and therefore the
value of its shares, may go down and you could lose all or a portion of your
investment in the Fund. Many factors can affect those values. The factors that
are most likely to have a material effect on the Fund’s portfolio as a whole are
called “principal risks.” The principal risks of investing in the Fund, which
could adversely affect its net asset value (“NAV”), yield and total return, are
described in this section. The Fund may be subject to additional risks other
than those described below because the types of investments made by the Fund can
change over time. The Advisor cannot guarantee that the Fund will achieve its
investment objective or that the Fund’s performance will be positive for any
period of time.
Principal
Risks of Investing in the Fund
Before
investing in the Fund, you should carefully consider your own investment goals,
the amount of time you are willing to leave your money invested, and the amount
of risk you are willing to take. In addition to possibly not achieving your
investment goals, you
could lose all or a portion of your investment in the Fund.
This section provides additional information regarding the principal risks
described in the Fund Summary above. The principal risks are presented in
alphabetical order to facilitate finding particular risks and comparing them
with those of other funds. Each of the factors below could have a negative
impact on the Fund’s performance.
Active
Management Risk
The
Fund is subject to management risk because it is an actively managed investment
portfolio. The Advisor invests in securities that may not necessarily be
included in the Fund’s benchmark. To the extent that the Advisor invests the
Fund’s assets in securities that are not in the Fund’s benchmark index, there is
a greater risk that the Fund’s performance will deviate from that of the
benchmark. The Advisor does not seek to replicate the performance of any index.
The Advisor will apply investment techniques and risk analyses in making
investment decisions for the Fund, but there can be no guarantee that these
decisions will produce the desired results. Additionally, legislative,
regulatory or tax developments may affect the investment techniques available to
the portfolio managers in connection with managing the Fund and may also
adversely affect the ability of the Fund to achieve its investment
objective.
American
Depositary Receipts and Global Depositary Receipts Risk
ADRs
and GDRs may be subject to certain of the risks associated with direct
investments in the securities of foreign companies, such as currency, political,
economic and market risks, because their values depend on the performance of the
non-dollar denominated underlying foreign securities.
Certain
countries may limit the ability to convert ADRs into the underlying foreign
securities and vice versa, which may cause the securities of the foreign company
to trade at a discount or premium to the market price of the related ADR. ADRs
may be purchased through sponsored or unsponsored facilities. A sponsored
facility is established jointly by a depositary and the issuer of the underlying
security. A depositary may establish an unsponsored facility without
participation by the issuer of the deposited security. Unsponsored receipts may
involve higher expenses and may be less liquid. Holders of unsponsored ADRs
generally
bear
all the costs of such facilities, and the depositary of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the deposited
securities.
GDRs
can involve currency risk since, unlike ADRs, they may not be U.S. dollar
denominated.
A
Fund’s NAV could decline if the currency of the non-U.S. market in which the
Fund invests depreciates against the U.S. dollar, even if the value of the
Fund’s holdings, measured in the foreign currencies, increases.
Call
Risk
Call
risk is the risk that an issuer may exercise its right to redeem a fixed income
security earlier than its maturity (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.
Capitalization
Risk
The
Fund may invest in companies of any size market capitalization. Large cap
companies as a group could fall out of favor with the market, causing the Fund
to underperform investments that focus on small or mid-cap companies. Investment
in small and mid-cap companies may involve more risk than investing in larger,
more established companies. Small and mid-cap companies may have limited product
lines or markets. They may be less financially secure than larger, more
established companies. They may depend on a small number of key personnel.
Should a product fail, or if management changes, or if there are other adverse
developments, the Fund’s investment in a small or mid-cap company may lose
substantial value.
The
general risks associated with fixed income securities and equity securities are
particularly pronounced for securities issued by companies with small or
mid-sized market capitalizations. In addition, small and mid-cap companies may
be particularly affected by interest rate increases, as they may find it more
difficult to borrow money to continue or expand operations, or may have
difficulty in repaying any loans, and may have less access to capital markets
during times of market distress.
Credit
Ratings and Unrated Securities Risks
Rating
agencies are private services that provide ratings of the credit quality of
fixed income securities, including convertible securities. The Statement of
Additional Information (“SAI”) describes the various ratings assigned to fixed
income securities by Moody’s, S&P and Fitch. Ratings assigned by a rating
agency are not absolute standards of credit quality and do not evaluate market
risks. Rating agencies may fail to make timely changes in credit ratings and an
issuer’s current financial condition may be better or worse than a rating
indicates. Rating restrictions are reviewed at time of purchase. The Fund will
not necessarily sell a security when its rating is reduced below its rating at
the time of purchase or the Fund’s minimum rating requirements. The Advisor does
not rely solely on credit ratings and may develop its own analysis of issuer
credit quality. The Fund may purchase unrated securities (which are not rated by
a rating agency) if its portfolio managers determine that the security is of
comparable quality to a rated security that the Fund may purchase. Unrated
securities may be less liquid than comparable rated securities and involve the
risk that the portfolio manager may not accurately evaluate the security’s
comparative credit rating. Analysis of the creditworthiness of issuers of high
yield securities may be more complex than for issuers of higher-quality fixed
income securities. To the extent that the Fund invests in high yield and/or
unrated securities, the Fund’s success in achieving its investment objective may
depend more heavily on the portfolio managers’ creditworthiness analysis than if
the Fund invested exclusively in higher-quality and rated
securities.
Credit
Risk
The
Fund could lose money if the issuer or guarantor of a fixed income security, or
the counterparty to a derivatives contract or a loan of portfolio securities, is
unable or unwilling to make timely principal and/or interest payments, or to
otherwise honor its obligations. Securities are subject to varying degrees of
credit risk, which are often reflected in credit ratings.
Currency
Risk
If
the Fund invests directly in foreign (non-U.S.) currencies or in securities that
trade in, and receive revenues in, foreign (non-U.S.) currencies, or in
derivatives that provide exposure to foreign (non-U.S.) currencies, it will be
subject to the risk that those currencies will decline in value relative to the
U.S. dollar, or, in the case of hedging positions, that the U.S. dollar will
decline in value relative to the currency being hedged.
Currency
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 United States or abroad. As a result, the Fund’s investments
in foreign currency-denominated securities may reduce the returns of the
Fund.
Equity
Securities Risk
Equity
securities, both common and preferred stocks, have greater price volatility than
fixed income securities. The market price of equity securities owned by the Fund
may go down, sometimes rapidly or unpredictably. Equity securities may decline
in value due to factors affecting equity securities markets generally or
particular industries represented by those markets. Preferred stocks are subject
to the risk that dividend on the stock may be changed or omitted by the issuer,
and that participation in the growth of an issuer may be limited.
ESG
Risk
Incorporation
of ESG factors into a Fund's investment process may cause the Fund to make
different investments, and result in different exposures to various issuers and
industries, than funds that do not incorporate such considerations into their
strategy or investment processes. The Advisor's ESG considerations may also
result in a greater emphasis on long-term performance, which may result in the
Fund forgoing shorter-term opportunities to buy certain securities when it might
otherwise be advantageous to do so, or selling securities for ESG-related
reasons when it might not otherwise be advantageous to do so. This may affect
the Fund's performance depending on whether certain investments are in or out of
favor, and the Fund's investment performance could be different compared to
funds that do not incorporate ESG considerations.
There
are significant differences in interpretations of what it means for a company to
meet ESG criteria. The Advisor's assessment of a company may differ from that of
other funds advised by different advisers, and the Advisor's assessment of a
company's ESG factors could change over time. As a result, stocks selected by
the Advisor may not reflect the beliefs and values of any particular investor.
When evaluating an issuer, the Advisor is dependent on information or data
obtained through voluntary or third-party reporting that may be incomplete,
inaccurate, or unavailable, which could cause the Advisor to incorrectly assess
an issuer's ESG practices. Because ESG factor analysis is used as one part of
the Advisor's overall investment process, a Fund may still invest in securities
of issuers that many or all market participants view as having an unfavorable
ESG profile.
Financial
Sector Risk
The
Fund intends to invest a significant portion of its assets in companies in the
financial sector, and therefore the performance of the Fund could be negatively
impacted by events affecting this sector. This sector can be significantly
affected by changes in interest rates, government regulation, the rate of
defaults on corporate, consumer and government debt, the availability and cost
of capital, and the impact of more stringent capital requirements.
Fixed
Income Securities Risk
The
Fund will invest in fixed income securities. Fixed income securities, such as
bonds, involve credit risk. Credit risk is the risk that the borrower will not
make timely payments of principal and interest. The degree of credit risk
depends on the issuer’s financial condition and on the terms of the
securities.
Foreign
Currency Exchange Contracts Risk
A
foreign currency exchange contract involves the Fund’s purchase or sale of a
specific currency on a spot basis or at a future date at a price set at the time
of the contract. Forward foreign currency exchange contracts reduce the Fund’s
exposure to changes in the value of the currency it will deliver and increases
its exposure to changes in the value of the currency it will receive for the
duration of the contract. The projection of short-term currency market movements
is extremely difficult, and the successful execution of a short-term hedging
strategy is highly uncertain. Forward contracts involve the risk that
anticipated currency movements will not be accurately predicted, causing the
Fund to sustain losses on these contracts and transaction costs. The use of
futures contracts involves the risk of imperfect correlation in movements in the
price of the futures contracts, exchange rates and the underlying hedged assets.
In addition, although forward contracts limit the risk of loss due to a decline
in the value of the hedged currencies, at the same time they limit any potential
gain that might result should the value of the currencies increase.
Foreign
(Non-U.S.) Investment Risk
The
Fund may invest in foreign (non-U.S.) securities and may experience more rapid
and extreme changes in value than a fund that invests exclusively in securities
of U.S. companies. The securities markets of many foreign countries are
relatively small, with a limited number of companies representing a small number
of industries. Additionally, issuers of foreign securities are usually not
subject to the same degree of regulation as U.S. issuers and investments in
securities of foreign issuers may be subject to foreign withholding and other
taxes. Reporting, accounting and auditing standards of foreign countries differ,
in some cases significantly, from U.S. standards. Also, nationalization,
expropriation or confiscatory taxation, currency blockage, political
changes
or diplomatic developments could adversely affect the Fund’s investments in a
foreign country. In the event of nationalization, expropriation or other
confiscation, the Fund could lose its entire investment in foreign securities.
To the extent that the Fund invests a significant portion of its assets in a
specific geographic region, the Fund will generally have more exposure to
regional economic risks associated with foreign investments. Additionally,
adverse conditions in a certain region may adversely affect securities of other
countries with economies that appear to be unrelated. Adverse political,
economic or social developments, as well as U.S. and foreign government actions
such as the imposition of tariffs, economic and trade sanctions or embargoes,
could undermine the value of the Fund’s investments, prevent the Fund from
realizing the full value of its investments or prevent the Fund from selling
securities it holds.
Financial
reporting standards for companies based in foreign markets differ from those in
the U.S. Additionally, foreign securities markets generally are smaller and less
liquid than U.S. markets. To the extent that the Fund invests in non-U.S. dollar
denominated foreign securities, changes in currency exchange rates may affect
the U.S. dollar value of foreign securities or the income or gain received on
these securities.
High
Yield Risk
The
Fund’s investments in high yield securities (commonly known as "junk bonds”) may
subject the Fund to greater levels of credit, call and liquidity risk than funds
that do not invest in such securities. While offering a greater potential
opportunity for capital appreciation and higher yields, high yield securities
typically entail greater potential price volatility and may be less liquid than
higher-rated securities. These securities are considered primarily speculative
with respect to the issuer’s continuing ability to make principal and interest
payments. They may also be more susceptible to real or perceived adverse
economic and competitive industry conditions than higher-rated securities of
similar maturity. An economic downturn or period of rising interest rates could
adversely affect the market for these securities and reduce the Fund’s ability
to sell these securities (liquidity risk). If the issuer of a security is in
default with respect to interest or principal payments, the Fund may lose its
entire investment.
High
yield securities structured as zero-coupon bonds or pay-in-kind securities tend
to be especially volatile as they are particularly sensitive to downward pricing
pressures from rising interest rates or widening spreads and may require the
Fund to make taxable distributions of imputed income without receiving the
actual cash currency. Issuers of high yield securities may have the right to
“call” or redeem the issue prior to maturity, which may result in the Fund
having to reinvest the proceeds in other high yield securities or similar
instruments that may pay lower interest rates. The Fund may also be subject to
greater levels of liquidity risk than funds that do not invest in high yield
securities. In addition, the high yield securities in which the Fund invests may
not be listed on any exchange and a secondary market for such securities may be
comparatively illiquid relative to markets for other more liquid fixed income
securities. Consequently, transactions in high yield securities may involve
greater costs than transactions in more actively traded securities. A lack of
publicly-available information, irregular trading activity and wide bid/ask
spreads among other factors, may, in certain circumstances, make high yield debt
more difficult to sell at an advantageous time or price than other types of
securities or instruments. These factors may result in the Fund being unable to
realize full value for these securities and/or may result in the Fund not
receiving the proceeds from a sale of a high yield security for an extended
period after such sale, each of which could result in losses to the Fund.
Because of the risks involved in investing in high yield securities, an
investment in the Fund that invests in such securities should be considered
speculative.
Interest
Rate Risk
Interest
rate risk is the risk that fixed income securities will decline in value because
of changes in interest rates. As nominal interest rates rise, the value of
certain fixed income securities held by the Fund is likely to decrease. A
nominal interest rate can be described as the sum of a real interest rate and an
expected inflation rate. Fixed income securities with longer durations tend to
be more sensitive to changes in interest rates, usually making them more
volatile than securities with shorter durations. Interest rate changes can be
sudden and unpredictable, and the Fund may lose money as a result of movements
in interest rates. Recent and potential future changes in monetary policy made
by central banks or governments are likely to affect the level of interest
rates. Rising interest rates may prompt redemptions from the Fund, which may
force the Fund to sell investments at a time when it is not advantageous to do
so, which could result in losses. The Fund may be subject to a greater risk of
rising interest rates due to the recent period of historically low
rates.
Measures
such as average duration may not accurately reflect the true interest rate
sensitivity of the Fund. This is especially the case if the Fund consists of
securities with widely varying durations. Therefore, if the Fund has an average
duration that suggests a certain level of interest rate risk, the Fund may in
fact be subject to greater interest rate risk than the average would suggest.
This risk is greater to the extent the Fund uses leverage or derivatives in
connection with the management of the Fund.
Convexity
is an additional measure used to understand a security’s or Fund’s interest rate
sensitivity. Convexity measures the rate of change of duration in response to
changes in interest rates. With respect to a security’s price, a larger
convexity (positive
or
negative) may imply more dramatic price changes in response to changing interest
rates. Convexity may be positive or negative. Negative convexity implies that
interest rate increases result in increased duration, meaning increased
sensitivity in prices in response to rising interest rates. Thus, securities
with negative convexity, which may include bonds with traditional call features
and certain mortgage-backed securities, may experience greater losses in periods
of rising interest rates. Accordingly, if the Fund holds such securities, the
Fund may be subject to a greater risk of losses in periods of rising interest
rate.
Issuer
Risk
The
value of a security may decline for a number of reasons which directly relate to
the issuer, such as management performance, financial leverage and reduced
demand for the issuer’s goods or services.
Large
Shareholder Risk
To
the extent that a significant portion of the Fund’s shares are held by a limited
number of shareholders or their affiliates, there is a risk that the share
trading activities of these shareholders could disrupt the Fund’s investment
strategies, which could have adverse consequences for the Fund and other
shareholders (e.g.,
by requiring the Fund to sell investments at inopportune times or causing the
Fund to maintain larger-than-expected cash positions pending acquisition of
investments).
Liquidity
Risk
To
the extent that a security is difficult to sell (whether because of a lack of an
active market or because of unusual market conditions), the Fund may either be
forced to accept a lower price for it or may have to continue to hold the
security. Either outcome could adversely affect Fund performance. An illiquid
security is any investment that the Fund reasonably expects cannot be sold or
disposed of in current market conditions in seven calendar days without the sale
or disposition significantly changing the market value of the investment. The
Fund’s investments in illiquid securities may reduce the returns of the Fund
because it may be unable to sell the illiquid securities and/or the Fund may
sell at a time or price that is not advantageous in order to meet redemption
requests. Additionally, the market for certain investments may become illiquid
under adverse market or economic conditions independent of any specific adverse
changes in the conditions of a particular issuer. In such cases, the Fund, due
to limitations on investments in illiquid securities and the difficulty in
purchasing and selling such securities or instruments, may be unable to achieve
its desired level of exposure to a certain sector. To the extent that the Fund’s
principal investment strategies involve foreign (non-U.S.) securities,
derivatives or securities with substantial market and/or credit risk, the Fund
will tend to have increased exposure to liquidity risk. Fixed income securities
with longer durations until maturity face heightened levels of liquidity risk as
compared to fixed income securities with shorter durations until
maturity.
Liquidity
risk also refers to the risk of unusually high redemption requests or other
unusual market conditions that may make it difficult for the Fund to sell
investments within the allowable time period to meet redemptions or may be
unable to meet redemption requests in extreme conditions. Meeting such
redemption requests could require the Fund to sell securities at reduced prices
or under unfavorable conditions, which would reduce the value of the Fund. It
may also be the case that other market participants may be attempting to
liquidate fixed income holdings at the same time as the Fund, causing increased
supply in the market and contributing to liquidity risk and downward pricing
pressure.
Market
Risk
Market
risk is the risk that the market price of securities owned by the Fund may go
down, sometimes rapidly or unpredictably. Securities may decline in value due to
factors affecting securities markets generally or particular industries
represented in the securities markets. Local, regional or global events whether
real or perceived, such as war, acts of terrorism, the spread of infectious
illness or other public health issue, recessions, or other events could have a
significant impact on the Fund and its investments. 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. The value of a security
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.
Exchanges
and securities markets may close early, close late or issue trading halts on
specific securities, which may result in, among other things, the Fund being
unable to buy or sell certain securities or financial instruments at an
advantageous time or accurately price its portfolio investments. In addition,
the Fund may rely on various third-party sources to calculate its NAV. As a
result, the Fund is subject to certain operational risks associated with
reliance on service providers and service providers’ data sources. In
particular, errors or systems failures and other technological issues may
adversely impact the Fund’s calculations of its NAV, and such NAV calculation
issues may result in inaccurately calculated NAVs, delays in NAV calculation
and/or the inability to calculate NAVs over extended periods. The Fund may be
unable to recover any losses associated with such failures.
Policy
changes by the U.S. Government and/or Federal Reserve, such as raising interest
rates, also could cause increased volatility in financial markets and higher
levels of shareholder redemptions, which could have a negative impact on the
Fund. Adverse market events may also lead to increased shareholder redemptions,
which could cause the Fund to experience a loss or difficulty in selling
investments to meet such redemptions.
Natural
and environmental disasters, such as earthquakes and tsunamis, can be highly
disruptive to economies and markets, adversely impacting individual companies
and industries, securities markets, interest rates, credit ratings, inflation,
investor sentiment, and other factors affecting the value of the Fund’s
investments. Similarly, dramatic disruptions can be caused by communicable
diseases, epidemics, pandemics, plagues and other public health
crises.
Communicable
diseases, including those that result in pandemics or epidemics, may pose
significant threats to human health, and such diseases, along with any efforts
to contain their spread, may be highly disruptive to both global and local
economies and markets, with significant negative impact on individual issuers,
sectors, industries, and asset classes. Significant public health crises,
including those triggered by the transmission of a communicable disease and
efforts to contain it may result in, among other things, border closings and
other significant travel restrictions and disruptions, significant disruptions
to business operations, supply chains and customer activity, lower consumer
demand for goods and services, event cancellations and restrictions, service
cancellations, reductions and other changes, significant challenges in
healthcare service preparation and delivery, and prolonged quarantines, as well
as general concern and uncertainty. All of these disruptive effects were
present, for example, in the global pandemic linked to the outbreak of
respiratory disease caused by a novel coronavirus designated as COVID-19 that
was first reported in China in December 2019. The effects of any disease
outbreak may exacerbate other pre-existing political, social, economic, market
and financial risks. A pandemic and its effects may be short term or may last
for an extended period of time, and in either case can result in significant
market volatility, exchange trading suspensions and closures, declines in global
financial markets, higher default rates, and a substantial economic downturn or
recession. The foregoing could impair the Fund’s ability to maintain operational
standards (such as with respect to satisfying redemption requests), disrupt the
operations of the Fund’s service providers, adversely affect the value and
liquidity of the Fund’s investments, and negatively impact the Fund’s
performance, and overall prevent the Fund from implementing its investment
strategies and achieving its investment objective.
Securities
and financial markets may be susceptible to market manipulation or other
fraudulent trade practices, which could disrupt the orderly functioning of these
markets or adversely affect the values of investments traded in these markets,
including investments held by the Fund.
Newer
Fund Risk
As
of the date of this Prospectus, the Fund has a limited operating history and
there can be no assurance that the Fund will grow to or maintain an economically
viable size, in which case the Board may determine to liquidate the Fund.
Liquidation of the Fund can be initiated without shareholder approval by the
Trust’s Board of Trustees if it determines it is in the best interest of
shareholders. As a result, the timing of any Fund liquidation may not be
favorable to certain individual shareholders.
Non-Diversification
Risk
The
Fund is non-diversified under federal securities laws, meaning the Fund can
invest a greater portion of its assets in the securities of any one issuer than
can a diversified fund. Investing in a non-diversified mutual fund involves
greater risk than investing in a diversified fund because a loss resulting from
the decline in the value of one security may represent a greater portion of the
total assets of a non-diversified fund. The Fund’s share values could fluctuate
more than those of funds holding more securities in their
portfolios.
Security
Selection Risk
The
Advisor may misjudge the risk and/or return potential of a security. This
misjudgment can result in a loss or a significant deviation relative to the
Fund’s benchmark index or indices.
Style
Risk
The
Advisor follows an investing style that favors value investments. Value
investing style may over time go in and out of favor in certain market cycles.
At times when the value investing style is out of favor the Fund’s performance
may be negatively impacted. Investors should be prepared to tolerate volatility
in Fund returns.
Non-Principal
Investment Risks
In
addition to the principal investment risks described above, the Fund may also
invest or engage in, or be subject to risks associated with, the
following:
Operational
Risk
The
Fund is exposed to operational risk arising from a number of factors, including,
but not limited to, human error, processing and communication errors, errors of
the Fund's service providers, counterparties or other third parties, failed or
inadequate processes and technology or system failures. The Fund is subject to
certain operational risks associated with reliance on service providers and
service providers’ data sources, including with respect to calculation of
NAVs.
Errors
or systems failures and other technological issues may adversely impact a Fund’s
calculations of its NAV, and such NAV calculation issues may result in
inaccurately calculated NAVs, delays in NAV calculation and/or the inability to
calculate NAVs over extended periods. A Fund may be unable to recover any losses
associated with such failures.
The
Fund seeks to reduce these operational risks through controls and procedures
believed to be reasonably designed to address these risks. However, these
controls and procedures cannot address every possible risk and may not fully
mitigate the risks that they are intended to address.
Cybersecurity
Risk
Investment
companies, including the Fund, must rely in part on digital and network
technologies (collectively, “cyber networks”) to conduct their businesses. Such
cyber networks might in some circumstances be at risk of cyber-attacks or
failures. As a result, the Fund or its service providers, or the issuers of
securities in which the Fund invests, may experience disruptions in business
operations that may potentially result in financial losses, the inability of the
Fund or Fund shareholders to transact business, the inability of the Fund to
calculate a net asset value, violations of applicable privacy and other laws
(including unauthorized access to sensitive information about the Fund or its
investors), regulatory fines, penalties, reputational damage, reimbursement or
other compensation costs and/or additional compliance costs. The Fund and its
shareholders could be negatively impacted as a result. Cyber-attacks might
potentially be carried out by persons using techniques that could range from
efforts to electronically circumvent network security or overwhelm websites to
intelligence gathering and social engineering functions aimed at obtaining
information necessary to gain access.
Other
Investments
This
Prospectus does not attempt to disclose all of the various types of securities
and investment techniques that may be used by the Fund. As with other actively
managed mutual funds, investors in the Fund rely on the professional investment
judgment and skill of the Advisor and the individual portfolio managers. Please
see “Investment Strategies and Related Risks” in the SAI for additional
information about the securities and investment techniques that may be used by
the Fund and its related risks.
Investing
in the Fund does not constitute a complete investment program. You should
consider the Fund as just one part of your investment program. You should
contact your investment professional for further information regarding these
increased risks and exposures.
Each
year the Fund will send investors an annual report (along with an updated
Summary Prospectus) and a semi-annual report (or a notification of the
availability of these shareholder reports), which contain important financial
information about the Fund. To reduce expenses, the Fund will send one
annual
report,
one semi-annual report and one Summary Prospectus per household, unless you
instruct the Fund or your financial intermediary otherwise.
If
you would like further information about the Fund, including how it invests,
please see the SAI, which is available on the Fund’s website
https://hwcm.onlineprospectus.net/HWCM/HOMPX.
The
Fund’s complete unaudited portfolio holdings as of each month-end generally are
available by the last business day of the following month on the Fund’s website.
This information will, at a minimum, remain on the Fund’s website until the Fund
files a list of its holdings in regulatory filings with the Securities and
Exchange Commission for the relevant periods. A complete description of the
Fund’s policies and procedures regarding the disclosure of portfolio holdings
can be found in the SAI.
Shares
of the Fund are purchased at net asset value without a sales charge or other
fee.
The
Fund may not be available for sale in certain states. Prospective investors
should inquire as to whether the Fund is available for sale in their state of
residence. Shares of the Fund have not been registered for sale outside of the
United States.
In
compliance with the USA PATRIOT Act of 2001 (Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act), please note that the transfer agent will verify certain information on
your application as part of the Fund’s Anti-Money Laundering Program. As
requested on the 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. Mailing addresses
containing only a P.O. Box will not be accepted. Please contact the transfer
agent if you need additional assistance with your application.
If
the Fund does not have a reasonable basis for determining your identity, the
account will be rejected or you will not be allowed to perform transactions on
the account until the necessary information to confirm your identity is
received. The Fund reserves the right to close the account within five (5)
business days if such information is not received.
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| How
to Buy and Sell Shares |
Shares
of the Fund may be purchased only by or on behalf of separately managed account
clients where the Advisor has an agreement with the Program Sponsor (typically,
a registered investment adviser or broker/dealer), or directly with the client,
to provide management or advisory services to the managed account. The Fund does
not issue share certificates.
There
are no maximum or minimum investment requirements in the Fund (although your
Program Sponsor may have certain investment requirements). Purchase orders are
made based on instructions from the Advisor or Program Sponsor to the
broker/dealer who executes trades for your account. To make a purchase, your
broker/dealer must submit a purchase order to the Fund’s transfer agent, either
directly or through an appropriate clearing agency.
Redemption
orders are placed on your behalf by your Advisor or Program Sponsor with the
broker/dealer that executes trades for your managed account. Shares of the Fund
can be redeemed through the broker/dealer on any day the New York Stock Exchange
(the “NYSE”) is open. Shares of the Fund may be held only by investors
participating in an eligible managed account program and cannot be
transferred.
The
Fund reserves the right to redeem shares of any investor if the investor ceases
to be a participant in an eligible managed account program. The liquidation of
Fund shares will have tax consequences for the investor. Each investor, by
participating in a managed account program that purchases Fund shares, agrees to
the redemption of such Fund shares upon termination of its participation in such
program. Subject to applicable law, the Fund may, with prior notice, adopt other
policies from time to time requiring mandatory redemption of shares in certain
circumstances.
During
periods of substantial economic or market change, you may find telephone
redemptions difficult to implement and may encounter higher than usual call
waits. Telephone trades must be received by or prior to market close. Please
allow sufficient time to place your telephone transaction prior to market close.
Once a telephone transaction has been placed, it cannot be canceled or modified
after the close of regular trading on the NYSE (generally, 4:00 p.m., Eastern
time).
For
more information about buying and selling shares, please contact the Advisor or
your Program Sponsor.
Redemption
in Kind
The
Fund reserves the right to pay redeeming shareholders with large accounts
securities instead of cash in certain circumstances. The Fund will typically
distribute a pro rata portion of all securities or other financial assets when
redeeming in kind, subject to certain exclusions in accordance with procedures
approved by the Board of Trustees. If your shares are
redeemed
in kind, then you will incur transaction costs when you subsequently sell the
securities distributed to you. Redemptions in kind are taxable for federal
income tax purposes in the same manner as redemptions for cash.
Liquidating
Small Accounts
Because
of the high cost of maintaining smaller shareholder accounts, the Fund may
redeem the shares in your account if the value of your account falls below $500
due to redemptions you have made. You will be notified that the value of your
account is less than $500 before the Fund makes an involuntary redemption. You
will then have 60 days to make an additional investment to bring the value of
your account to at least $500 before the Fund takes any action. This involuntary
redemption does not apply to retirement plans or Uniform Gifts or Transfers to
Minors Act accounts. A redemption of your shares in the Fund will generally be
treated as a sale for federal income tax purposes, and depending on the investor
and type of account, may be subject to tax.
Unclaimed
Property
Your
mutual fund account may be transferred to your state of residence if no activity
occurs within your account during the “inactivity period” specified in your
state’s abandoned property laws. If the Fund are unable to locate a shareholder,
they will determine whether the shareholder’s account can legally be considered
abandoned. 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. Investors who are residents of
the state of Texas may designate a representative to receive legislatively
required unclaimed property due diligence notifications. Please contact the Fund
to complete a Texas Designation of Representative form.
Right
to Suspend Sales and Reject Purchase Orders
The
Fund reserves the right to suspend the offering of shares at any time, and to
reject a purchase order.
Because
the Fund is designed to be a component of separately managed accounts that also
invest, at the direction of or based on the advice of the Advisor, in individual
securities and other investments, Fund shares may be purchased or redeemed on a
frequent basis for rebalancing purposes or in order to invest new monies
(including through dividend reinvestment) or to accommodate reductions in
account size. The Fund is managed in a manner that is consistent with its role
in separately managed accounts. Because all purchase and redemption orders are
initiated by or based on the advice of the Advisor, managed account clients are
not in a position to effect purchase and redemption orders and are, therefore,
unable to directly trade in Fund shares.
Shares
of the Fund are sold at its NAV. The NAV is determined by dividing the value of
the Fund’s securities, cash and other assets, minus all liabilities, by the
number of shares outstanding (assets – liabilities / number of shares = NAV).
The NAV takes into account the expenses and fees of the Fund, including
management, administration and other fees, which are accrued daily. The Fund’s
share price is ordinarily calculated as of the scheduled close of regular
trading (generally, 4:00 p.m. Eastern Time) on each day that the New York Stock
Exchange (“NYSE”) is open for business.
All
shareholder transaction orders received in good order by U.S. Bancorp Fund
Services, LLC (the “Transfer Agent”), or an authorized financial intermediary by
the close of the NYSE, generally 4:00 p.m. Eastern Time, will be processed at
the applicable price on that day. Transaction orders received after the close of
the NYSE will receive the applicable price on the next business day. The Fund’s
NAV, however, may be calculated earlier if trading on the NYSE is restricted or
as permitted by the SEC. The Fund does not determine the NAV of its shares on
any day when the NYSE is not open for trading, such as weekends and certain
national holidays as disclosed in the SAI (even if there is sufficient trading
in its portfolio securities on such days to materially affect the NAV). In
certain cases, fair value determinations may be made as described below under
procedures as adopted by the Board.
Fair
Value Pricing
Occasionally,
market quotations are not readily available, are unreliable, or there may be
events affecting the value of foreign securities or other securities held by the
Fund that occur when regular trading on foreign exchanges is closed, but before
trading on the NYSE is closed. The Advisor has been designated by the Board as
the valuation designee for the Fund pursuant to Rule 2a-5 under the 1940 Act.
Fair value determinations are then made in good faith in accordance with
procedures adopted by the Advisor in its capacity as valuation designee.
Generally, the fair value of a portfolio security or other asset shall be the
amount that the owner of the security or asset might reasonably expect to
receive upon its current sale.
Attempts
to determine the fair value of securities introduce an element of subjectivity
to the pricing of securities. As a result, the price of a security determined
through fair valuation techniques may differ from the price quoted or published
by other sources and may not accurately reflect the market value of the security
when trading resumes. If a reliable market quotation becomes available for a
security formerly valued through fair valuation techniques, the Advisor would
compare the new market quotation to the fair value price to evaluate the
effectiveness of its fair valuation procedures. If any significant discrepancies
are found, the Advisor may adjust its fair valuation procedures.
In
the case of foreign securities, the occurrence of certain events after the close
of foreign markets, but prior to the time the Fund’s NAV is calculated (such as
a significant surge or decline in the U.S. or other markets) 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 Advisor
will value foreign securities at fair value, taking into account such events, in
calculating the NAV. 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 the NAV is calculated. The Fund’s investments in smaller or medium
capitalization companies are more likely to require a fair value determination
because they may be more thinly traded and less liquid than securities of larger
companies. It is anticipated that the Fund’s portfolio holdings will be fair
valued only if market quotations for those holdings are unavailable or
considered unreliable.
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| Dividends,
Distributions and Their Taxation |
If
you redeem your Fund shares, part of your redemption proceeds may represent your
allocable share of the distributions made by the Fund relating to that tax year.
You will be informed annually of the amount and nature of the Fund’s
distributions. If you sell your Fund shares, it is a taxable event for you. An
exchange of shares is treated as a taxable sale. Depending on the purchase price
and the sale price of the shares you sell, you may have a gain or loss on the
transaction. You are responsible for any tax liabilities generated by your
transaction. The Code limits the deductibility of capital losses in certain
circumstances.
For
federal income tax purposes, all dividends and distributions of net realized
short-term capital gains you receive from the Fund are taxable as ordinary
income or as qualified dividend income, whether reinvested in additional shares
or received in cash, unless you are exempt from taxation or entitled to a tax
deferral. Distributions of net realized long-term capital gains you receive from
the Fund, whether reinvested in additional shares or received in cash, are
taxable as a capital gain. The capital gain holding period is determined by the
length of time the Fund has held the security and not the length of time you
have held shares in the Fund. A portion, or all of a distribution, whether
reinvested in additional shares or received in cash, may consist of a return of
capital. Distributions in excess of the Fund’s earnings and profits will be
treated as a return of capital. A return of capital is not taxable to a
shareholder unless it exceeds a shareholder’s tax basis in the shares. You will
be informed annually as to the amount and nature of all dividends, capital gains
and return of capital paid during the prior year. Such capital gains and
dividends may also be subject to state or local taxes. If you are not required
to pay taxes on your income, you are generally not required to pay federal
income taxes on the amounts distributed to you.
Interest
and other income received by the Fund with respect to foreign securities may
give rise to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. If as of the close of a taxable year more than 50% of the
total assets of the Fund consist of stock or securities of foreign corporations,
the Fund intends to “pass through” to investors the amount of foreign income and
similar taxes (including withholding taxes) paid by the Fund during that taxable
year. This means that investors will be considered to have received as
additional income their respective shares of such foreign taxes, but may be
entitled to either a corresponding tax deduction in calculating taxable income,
or, subject to certain limitations, a credit in calculating federal income
tax.
The
Fund intends to pay dividends from net investment income and to distribute all
net realized capital gains at least annually. In addition, the Fund may make
additional distributions if necessary to avoid the imposition of a 4% excise tax
or other tax on undistributed income and gains. However, no assurances can be
given that distributions will be sufficient to eliminate all taxes. Please note,
however, that the objective of the Fund is the growth of capital, not the
production of distributions. You should measure the success of your investment
by the value of your investment at any given time and not by the distributions
you receive.
When
a dividend or capital gain is distributed, the Fund’s NAV decreases by the
amount of the payment. If you purchase shares shortly before a distribution, you
will be subject to income taxes on the distribution, even though the value of
your investment (plus cash received, if any) remains the same. All dividends and
capital gains distributions will automatically be reinvested in additional Fund
shares at the then prevailing NAV unless you specifically request that either
dividends or capital gains or both be
paid
in cash. If you elect to receive distributions and dividends by check and the
post office cannot deliver the check, or if the check remains uncashed for six
months, the Fund reserves the right to reinvest the distribution check in your
Fund account at the then current NAV per share and to reinvest all subsequent
distributions in shares of the Fund.
All
distributions will be paid in cash into your managed account. Distributions are
taxable whether received in cash or additional Fund shares.
The
Fund intends to qualify at all times and elect to be taxed as a RIC under the
Code. Although the Fund, as a non-diversified fund, will invest a relatively
high percentage of its assets in a limited number of issuers, in order to
qualify as a RIC for federal income tax purposes, the Fund must diversify its
holdings so that, at the end of each quarter of each taxable year (i) at least
50% of the value of its total assets is represented by cash and cash items, U.S.
government securities, the securities of other RICs and other securities, with
such other securities limited for purposes of such calculation, in respect of
any one issuer, to an amount not greater than 5% of the value of its total
assets and not more than 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its total assets is invested
in the securities of any one issuer (other than U.S. government securities or
the securities of other RICs), the securities (other than the securities of
other RICs) of any two or more issuers that it controls and that are determined
to be engaged in the same business or similar or related trades or businesses,
or the securities of one or more qualified publicly-traded
partnerships.
By
law, the Fund must withhold a percentage of your taxable distribution and
redemption proceeds if you do not provide your correct social security or
taxpayer identification number and certify that you are not subject to backup
withholding, or if the IRS instructs the Fund to do so.
Federal
law requires that mutual fund companies report their shareholders’ cost basis,
gain/loss and holding period to the IRS on the shareholders’ Consolidated Form
1099s when “covered” shares of the mutual funds are sold. Covered shares are any
fund and/or dividend reinvestment plan shares acquired on or after January 1,
2012.
The
Fund has chosen average cost as its standing (default) tax lot identification
method for all shareholders, which means this is the method the Fund will use to
determine which specific shares are deemed to be sold when there are multiple
purchases on different dates at differing NAVs, and the entire position is not
sold at one time. You may choose a method other than the Fund’s standing method
at the time of your purchase or upon sale of covered shares. The cost basis
method a shareholder elects may not be changed with respect to a redemption of
shares after the settlement date of the redemption. Fund shareholders should
consult with their tax advisers to determine the best IRS-accepted cost basis
method for their tax situation and to obtain more information about how the new
cost basis reporting rules may apply to them.
An
additional 3.8% Medicare tax is imposed on certain net investment income
(including dividends and capital gain distributions received from the Fund and
net gains from redemptions or other taxable dispositions of shares of the Fund)
of U.S. individuals, estates and trusts to the extent that such person’s
“modified adjusted gross income” (in the case of an individual) or “adjusted
gross income” (in the case of an estate or trust) exceeds a threshold
amount.
Dividends
and interest received by the Fund may give rise to withholding and other taxes
imposed by foreign countries. Tax treaties between certain countries and the
U.S. may reduce or eliminate such taxes. The Fund may be eligible to elect to
“pass through” to you foreign income taxes that it pays if more than 50% of the
value of its total assets at the close of its taxable year consists of stock or
securities of foreign corporations. If the Fund is eligible for and makes this
election, you will be required to include your share of those taxes in gross
income as a distribution from the Fund. You will then be allowed to claim a
credit (or a deduction, if you itemize deductions) for such amounts on your
federal income tax return, subject to certain limitations. Tax-exempt holders of
Fund shares, such as qualified retirement plans, will not generally benefit from
such a deduction or credit.
If
you are neither a lawful permanent resident nor a citizen of the U.S. or if you
are a foreign entity, the Fund’s ordinary income dividends (which may include
distributions of net short-term capital gains) will generally be subject to a
30% U.S. withholding tax, unless a lower treaty rate applies.
By
law, the Fund must withhold 24% of your dividends and redemption proceeds if the
taxpayer identification number or social security number you have provided is
incorrect, you fail to make certain required certifications and/or if the Fund
receives notification from the Internal Revenue Service requiring backup
withholding.
This
section summarizes some of the consequences under current federal income tax law
of an investment in the Fund. It is not a substitute for personal tax advice.
Consult your personal tax advisor about the potential tax consequences to you of
an investment in the Fund under all applicable tax laws, including federal,
state, foreign and local tax laws.
The
Management Team
The
Advisor
Hotchkis
& Wiley Capital Management, LLC, 601 South Figueroa Street, 39th Floor, Los
Angeles, California 90017-5704, is the Fund’s investment advisor. The Advisor is
a limited liability company, the primary members of which are HWCap Holdings, a
limited liability company with members who are current and former employees of
the Advisor, and Stephens-H&W, LLC, a limited liability company whose
primary member is SF Holding Corp., which is a diversified holding company. The
Advisor’s predecessor entity was organized as an investment adviser in 1980.
As
of June 30, 2023, the Advisor had approximately $30 billion in investment
company and other portfolio assets under management.
The Advisor supervises and arranges the purchase and sale of securities held in
the Fund’s portfolios. In addition to managing the Fund, the Advisor also serves
as the investment adviser to the Hotchkis & Wiley Funds, a family of funds
organized under a separate trust offering a number of separate series, or mutual
funds, in separate prospectuses and SAIs.
The
Fund does not pay advisory fees to the Advisor.
The
Advisor has agreed to reimburse the Fund for all operating expenses incurred so
that regular annual operating expenses of the Fund (excluding any acquired fund
fees and expenses, front-end or contingent deferred loads, dividends and
interest on short positions, taxes, leverage interest, brokerage fees (including
commissions, mark-ups and mark-downs), annual account fees for margin accounts,
expenses incurred in connection with any merger or reorganization and
extraordinary expenses such as litigation) will be 0.00%. The Advisor has agreed
to these expense limits through December 31, 2024. This arrangement cannot
be terminated prior to December 31, 2024 without the consent of the Fund’s Board
of Trustees.
A
discussion regarding the basis on which the Board of Trustees approved the
investment advisory agreement for the Fund is available in the Semi-Annual
Report
to shareholders dated December 31, 2022.
The
Fund, as a series of the Trust, does not hold itself out as related to any other
series of the Trust for purposes of investment and investor services, nor does
it share the same investment adviser with any other series of the
Trust.
Portfolio
Managers
The
Advisor also manages institutional separate accounts and is the sub-advisor to
other mutual funds. The investment process employed is the same for similar
accounts, including the Fund, and is team-based utilizing primarily in-house,
fundamental research. The investment research staff is organized by industry and
sector and supports all of the accounts managed in each of the Advisor’s
investment strategies. Portfolio managers for each strategy ensure that the best
thinking of the investment team is reflected in the “target portfolios.”
Investment ideas for the Fund are generated by the Advisor’s investment team.
The Advisor has identified the portfolio managers with the most significant
responsibility for the Fund’s portfolio. The list does not include all members
of the investment team.
The
investment process is team driven where each portfolio manager participates in
the investment research review and decision-making process for the
Fund.
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| Investment
Team Member |
| Primary
Role |
| Title
and Recent Biography |
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| George
H. Davis, Jr. |
|
Jointly
and primarily responsible for day-to-day management of the Fund. He
participates in the investment research review and decision-making process
and represents the Fund to current and prospective
shareholders. |
| Executive
Chairman (since 2021) and Portfolio Manager (since 2001) of Advisor;
joined Advisor’s predecessor in 1988 as an equity analyst and became
portfolio manager in 1989. |
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| David
Green, CFA |
| Jointly
and primarily responsible for day-to-day management of the Fund. He
participates in the investment research review and decision-making process
and represents the Fund to current and prospective shareholders. |
| Principal
and Portfolio Manager of Advisor (since 2001); joined Advisor’s
predecessor in 1997 as portfolio manager. |
Please
see the SAI for more information about management of the Fund, including
additional information about the portfolio managers’ compensation, other
accounts managed by the portfolio managers and the portfolio managers’ ownership
of shares of the Fund.
Additional
Information
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 SAI
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.
Financial
Highlights
The
financial highlights table below is intended to help you understand the Fund’s
financial performance since inception. Certain information reflects financial
results for a single Fund share. The total returns in the tables represent the
rate that an investor would have earned (or lost) on an investment in the Funds
(assuming reinvestment of all dividends and distributions). This information has
been audited by Cohen & Company, Ltd., the Fund’s independent registered
public accounting firm, whose report, along with the Fund’s financial
statements, are included in the Fund’s annual report, which is available upon
request.
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| HW
OPPORTUNITIES MP FUND |
| FINANCIAL
HIGHLIGHTS |
|
| Year
Ended |
| Year
Ended |
| For
the Period |
|
| June
30, 2023 |
| June
30, 2022 |
|
Inception
through
June
30, 2021(1) |
| PER
SHARE DATA: |
|
|
|
| |
| Net
asset value, beginning of period |
$ |
10.95 |
|
| $ |
12.90 |
|
| $ |
10.00 |
|
|
|
|
|
|
| |
| INVESTMENT
OPERATIONS: |
|
|
|
| |
|
Net
investment income(2) |
0.28 |
|
| 0.20 |
|
| 0.12 |
|
| Net
realized and unrealized gain (loss) on investments |
2.75 |
|
| (1.96) |
|
| 2.78 |
|
| Total
from investment operations |
3.03 |
|
| (1.76) |
|
| 2.90 |
|
|
|
|
|
|
| |
| LESS
DISTRIBUTIONS FROM: |
|
|
|
| |
| Net
investment income |
(0.13) |
|
| (0.09) |
|
| — |
|
| Net
realized gains |
(0.10) |
|
| (0.10) |
|
| — |
|
| Total
distributions |
(0.23) |
|
| (0.19) |
|
| — |
|
| Net
Asset Value, end of period |
$ |
13.75 |
|
| $ |
10.95 |
|
| $ |
12.90 |
|
|
|
|
|
|
| |
|
TOTAL
RETURN(3) |
27.92 |
% |
| -13.88 |
% |
| 29.00 |
% |
|
|
|
|
|
| |
| SUPPLEMENTAL
DATA AND RATIOS: |
|
|
|
| |
| Net
assets, end of period (in thousands) |
$ |
46,061 |
|
| $ |
29,443 |
|
| $ |
631 |
|
| Ratio
of gross expenses to average net assets: |
|
|
|
| |
|
Before
expense reimbursement(4) |
0.74 |
% |
| 1.36 |
% |
| 45.41 |
% |
|
After
expense reimbursement(4) |
0.00 |
% |
| 0.00 |
% |
| 0.00 |
% |
| Ratio
of net investment income to average net assets |
2.21 |
% |
| 1.59 |
% |
| 2.02 |
% |
|
Portfolio
Turnover Rate(3)(5) |
140 |
% |
| 96 |
% |
| 57 |
% |
(1) Inception
date of the Fund was December 30, 2020.
(2) Calculated
based on average shares outstanding during the period.
(3) Not
annualized for periods less than one year.
(4) Annualized
for periods less than one year.
(5) The
portfolio turnover disclosed is for the Fund as a whole. The numerator for the
portfolio turnover rate includes the lesser of purchases or sales (excluding
short-term investments). The denominator includes the average fair value of long
positions throughout the period.
The
Fund collects non-public information about you that the law allows or requires
it to have in order to conduct its business and properly service you. The Fund
collects financial and personal information about you (“Personal Information”)
directly (e.g., information on account applications and other forms, such as
your name, address, and social security number, and information provided to
access account information or conduct account transactions online, such as
password, account number, e-mail address, and alternate telephone number), and
indirectly (e.g., information about your transactions with us, such as
transaction amounts, account balance and account holdings).
The
Fund does not disclose any non-public personal information about its
shareholders or former shareholders other than for everyday business purposes
such as to process a transaction, service an account, respond to court orders
and legal investigations or as otherwise permitted by law. Third parties that
may receive this information include companies that provide transfer agency,
technology and administrative services to the Fund, as well as the Fund’s
investment adviser who is an affiliate of the Fund. If you maintain a
retirement/educational custodial account directly with the Fund, we may also
disclose your Personal Information to the custodian for that account for
shareholder servicing purposes. The Fund limits access to your Personal
Information provided to unaffiliated third parties to information necessary to
carry out their assigned responsibilities to the Fund. All shareholder records
will be disposed of in accordance with applicable law. The Fund maintains
physical, electronic and procedural safeguards to protect your Personal
Information and requires its third-party service providers with access to such
information to treat your Personal Information with the same high degree of
confidentiality.
In
the event that you hold shares of the Fund through a financial intermediary,
including, but not limited to, a broker-dealer, bank, or trust company, the
privacy policy of your financial intermediary would govern how your non-public
personal information would be shared with unaffiliated third
parties.
Rights
Applicable to California Residents
- Residents of California should review the privacy notice for the California
Consumer Privacy Act of 2018 (CCPA). You can obtain a copy of our CCPA notice by
contacting us at 1-800-362-8889 (toll free) or at
[email protected].
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| HW
Opportunities MP Fund |
| INFORMATION
ABOUT THE FUND |
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Advisor
Hotchkis
& Wiley Capital Management, LLC
601
South Figueroa Street, 39th Floor
Los
Angeles, California 90017-5704
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Distributor
Quasar
Distributors, LLC
111
East Kilbourn Avenue, Suite 2200
Milwaukee,
Wisconsin 53202-5300 |
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Administrator,
Fund Accountant and Transfer Agent
U.S.
Bank Global Fund Services
615
East Michigan Street, 3rd Floor
Milwaukee,
Wisconsin 53202-5207
888-458-1963
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Custodian
U.S.
Bank National Association
1555
N. Rivercenter Drive, Suite 302
Milwaukee,
Wisconsin 53212 |
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Independent
Registered Public Accounting Firm
Cohen
& Company, Ltd.
342
North Water Street, Suite 830
Milwaukee,
WI 53202
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Counsel
Goodwin
Procter LLP
1900
N Street, NW
Washington,
DC 20036
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Please
read this Prospectus before you invest in the Fund. Keep the Prospectus for
future reference. You can get additional information about the Fund
in:
–Statement
of Additional Information – tells you more about the Fund’s features and
policies, including additional risk information (incorporated by reference into,
meaning it is legally a part of this Prospectus)
–Annual
Report and Semi-Annual Reports (collectively, the “Shareholder Reports”) –
provide the most recent financial reports and portfolio listings. The annual
report contains a discussion of the market conditions and investment strategies
that affected the Fund’s performance during the Fund’s prior fiscal
year.
The
SAI and the Shareholder Reports are available free of charge on the Fund’s
website at https://hwcm.onlineprospectus.net/HWCM/HOMPX.
You can obtain a free copy of the SAI and Shareholder Reports, request other
information, or make general inquiries about the Fund by calling the Fund
(toll-free) at 888-458-1963.
Reports
and other information about the Fund are also available:
•Free
of charge from the SEC’s EDGAR database on the SEC’s Internet website at
http://www.sec.gov; or
•For
a fee, by electronic request at the following e-mail address:
[email protected].
You
should rely only on the information contained in this Prospectus when deciding
whether to invest. No one is authorized to provide you with information that is
different.
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NASDAQ:
HOMPX
CUSIP: 81752T643
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Investment
Company Act File #811-23084
HW
Opportunities MP Fund is distributed
by
Quasar Distributors, LLC
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