Semper
MBS Total Return Fund
Class
A |
SEMOX |
Institutional
Class |
SEMMX |
Investor
Class |
SEMPX |
Semper
Short Duration Fund
Institutional
Class |
SEMIX |
Investor
Class |
SEMRX |
(Each
a “Fund,” together the “Funds”)
Each
a series of Advisors Series Trust (the “Trust”)
Prospectus
March
30, 2019
Beginning
on January 1, 2021, as permitted by regulations adopted by the Securities and
Exchange Commission, paper copies of the Funds’ shareholder reports will no
longer be sent by mail, unless you specifically request paper copies of the
reports from the Funds or from your financial intermediary, such as a
broker-dealer or bank. Instead, the reports will be made available on a website,
and you will be notified by mail each time a report is posted and provided with
a website link to access the report.
If
you already elected to receive shareholder reports electronically, you will not
be affected by this change and you need not take any action. You may elect to
receive shareholder reports and other communications from the Funds or your
financial intermediary electronically through the Funds’ website.
You
may elect to receive all future reports in paper free of charge. You can inform
the Funds or your financial intermediary that you wish to continue receiving
paper copies of your shareholder reports. Your election to receive reports in
paper will apply to all funds held with the fund complex and may apply to all
Funds held through your financial intermediary.
The
U.S. Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
|
1 |
|
1 |
|
9
|
|
17
|
|
26
|
|
26
|
|
27
|
|
38
|
|
39
|
|
40
|
|
41
|
|
41
|
|
43
|
|
45
|
|
51
|
|
53
|
SEMPER MBS TOTAL RETURN FUND
(the “Total Return Fund” or the “Fund”)
Investment
Objectives
The
Total Return Fund seeks to provide a high level of risk-adjusted current income
and capital appreciation.
Fees
and Expenses of the Fund
This
table describes the fees and expenses that you may pay if you buy and hold
shares of the Total Return Fund. You may qualify for sales charge
discounts if you and your family invest, or agree to invest in the future, at
least $100,000 in the Fund’s Class A shares. Certain financial
intermediaries also may offer variations in Fund sales charges to their
customers as described in Schedule A to the statutory Prospectus. More
information about these and other discounts is available from your financial
professional and in the “More About Class A Shares” section on page 51 of the
Fund’s statutory Prospectus and the “Breakpoints/Volume Discounts and Sales
Charge Waivers” section on page 27 of the Fund’s Statement of Additional
Information (“SAI”), and Schedule A to the statutory Prospectus.
|
Class
A |
Institutional
Class |
Investor
Class |
SHAREHOLDER
FEES (fees
paid directly from your investment)
|
Maximum
Sales Charge (Load) Imposed on Purchases (as a percentage of offering
price)
|
2.00% |
None |
None |
Maximum
Deferred Sales Charge (Load) (as a percentage of the lower of cost or
market value at the time of redemption on investments of more than $1
million redeemed within 18 months)
|
0.50% |
None |
None |
ANNUAL
FUND OPERATING EXPENSES (expenses that you pay each year as a
percentage of the value of your investment)
|
Management
Fees |
0.56%
|
0.56%
|
0.56%
|
Distribution
and Service (Rule 12b-1) Fees |
0.25% |
None |
0.25%
|
Other
Expenses |
0.20%
|
0.20%
|
0.20%
|
Total
Annual Fund Operating Expenses |
1.01% |
0.76% |
1.01% |
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. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
|
1
Year |
3
Years |
5
Years |
10
Years |
Class
A |
$301
|
$515
|
$747
|
$1,412
|
Institutional
Class |
$78
|
$243
|
$422
|
$942
|
Investor
Class |
$103
|
$322
|
$558
|
$1,236
|
Portfolio
Turnover. The Total Return Fund pays transaction costs, such as
commissions, when it buys and sells securities (or “turns over” its
portfolio). A higher portfolio turnover rate may indicate higher
transaction costs and may result in higher taxes when Fund shares are held in a
taxable account. These costs, which are not reflected in annual fund
operating expenses or in the Example, affect the Fund’s performance.
During the most recent fiscal year, the Fund’s portfolio turnover rate was 137%
of the average value of its portfolio.
Principal
Investment Strategies
Under
normal market conditions, the Total Return Fund invests at least 80% of its net
assets (plus any borrowings for investment purposes) in mortgage-backed
securities (“MBS”). MBS refers to a type of fixed income instrument that
represents an interest in a pool of mortgages, including residential MBS
(“RMBS”) and commercial MBS (“CMBS”), and includes securities issued by
government sponsored entities (“agency MBS”). MBS, including RMBS and
CMBS, include fixed and variable rate securities with underlying fixed or
variable rate mortgage loans and securities issued by private entities
(“non-agency MBS”). The weighted average maturity of the Fund’s MBS
investments will generally range from between 1 and 10 years and the Fund may
invest without limit in MBS that are rated below investment grade (i.e.,
“high yield” or “junk” ratings). The Adviser considers securities to be of
investment grade quality if they are rated BBB (or comparable) or higher by a
nationally recognized credit rating organization including Standard & Poor’s
Ratings Services (“S&P”) and Moody’s Investors Service, Inc. (“Moody’s”), or
if unrated, determined by the Adviser to be of comparable quality.
As part of the Fund’s agency RMBS investments, the Fund may invest in credit
risk transfer securities. Credit risk transfer securities are fixed- or
floating-rate unsecured general obligations issued from time to time by Freddie
Mac, Fannie Mae or other government sponsored entities. The
Fund may also invest in asset-backed securities. The Fund may also invest
without limit in Rule 144A securities, may invest up to 50% of its total assets
in when-issued securities, and may invest up to 10% of its total assets in other
investment companies, including exchange-traded funds (“ETFs”).
The
Total Return Fund may sell securities short with respect to 100% of its total
assets. A short sale is the sale by the Fund of a security which it does
not own in anticipation of purchasing the same security in the future at a lower
price to close the short position. In general, the Adviser will sell
securities short in conjunction with long positions with similar characteristics
for the purposes of managing certain risks (primarily interest rate and/or yield
spread risk) or for capturing differences in value between two securities, and
not for the purpose of forecasting the market’s direction. In many
instances, the Fund will utilize forward-settling sales of agency RMBS where the
underlying pools of mortgage loans are To Be Announced (“TBA”) securities for
these short selling activities.
The
Total Return Fund may employ hedging strategies to manage interest rate, credit
spread and other risks. Accordingly, the Fund may invest without limit in
options, futures and swaps (including interest rate swaps, credit default swaps,
total return swaps and swaptions) and TBA securities. The Fund may also
utilize leverage (i.e.,
borrow against a line of credit) as part of the portfolio management process,
subject to the limits of the Investment Company Act of 1940, as amended (the
“1940 Act”).
The
Adviser selects the Total Return Fund’s investments based on quantitative
analysis, including bottom-up, loan-level credit analysis and structural
stress-testing, as well as top-down macro qualitative analysis, including
outlook for the economy, interest rates and real estate fundamentals. The
Fund’s annual portfolio turnover rate will generally be 100% or
greater.
Principal
Investment Risks
Losing
all or a portion of your money on your investment is a risk of investing in the
Total Return Fund. The following risks could affect the value of your
investment:
· |
Market
and Regulatory Risk. Events in the financial markets and
economy may cause volatility and uncertainty and adversely impact the
Fund’s performance. Market events may affect a single issuer, industry,
sector, or the market as a whole. Traditionally liquid investments may
experience periods of diminished liquidity. Governmental and regulatory
actions, including tax law changes, may also impair portfolio management
and have unexpected or adverse consequences on particular markets,
strategies, or investments. |
· |
Management Risk. The Total Return
Fund is an actively managed portfolio. The Adviser’s management
practices and investment strategies might not work to produce the desired
results.
|
· |
Fixed-Income
Securities Risk. Fixed-income (debt) securities are generally
subject to the following risks:
|
o |
Credit
Risk. The Fund’s investments are subject to the risk that
issuers and/or counterparties will fail to make payments when due or
default completely. Prices of the Fund’s investments may be adversely
affected if any of the issuers or counterparties it is invested in are
subject to an actual or perceived deterioration in their credit quality.
Credit spreads may increase, which may reduce the market values of the
Fund’s securities. Credit spread risk is the risk that economic and market
conditions or any actual or perceived credit deterioration may lead to an
increase in the credit spreads (i.e., the difference in yield between two
securities of similar maturity but different credit quality) and a decline
in price of the issuer’s securities.
|
o |
Extension
Risk. If interest rates rise, repayments of principal on
certain fixed-income securities may occur at a slower-than-expected rate
and, as a result, the expected maturity of such securities could lengthen
which could cause their value to decline.
|
o |
Interest
Rate Risk. The value of the Fund’s investments in
fixed-income securities will change based on changes in interest
rates. If interest rates increase, the value of these investments
generally declines. Securities with greater interest rate
sensitivity and longer maturities generally are subject to greater
fluctuations in value. Given that the Federal Reserve has begun to
raise interest rates, the Fund may face a heightened level of interest
rate risk.
|
o |
Prepayment
Risk. Issuers of securities held by the Total Return Fund may
be able to prepay principal due on these securities, particularly during
periods of declining interest rates. Securities subject to
prepayment risk generally offer less potential for gains when interest
rates decline, and may offer a greater potential for loss when interest
rates rise. When securities are prepaid, the Total Return Fund may
have to reinvest in securities with a lower yield. Prepayment risk
is a major risk of MBS.
|
· |
Risks
Associated with Mortgage-Backed and Other Asset-Backed Securities.
In addition to the risks associated with other fixed income
securities, mortgage-backed and asset-backed securities are subject to
certain other risks. The value of these securities will be influenced by
the factors affecting the housing market or the other assets underlying
such securities. As a result, during periods of declining asset values,
difficult or frozen credit markets, significant changes in interest rates,
or deteriorating economic conditions, mortgage-backed and asset-backed
securities may decline in value, face valuation difficulties, become more
volatile and/or become illiquid. The liquidity of these assets may change
over time.
|
· |
Residential
Mortgage-Backed Securities Risk. RMBS are subject to the
risks generally associated with mortgage-backed securities. RMBS may
not be backed by the full faith and credit of the U.S. Government and are
subject to risk of default on the underlying mortgages. RMBS issued
by non-government entities may offer higher yields than those issued by
government entities, but also may be subject to greater volatility than
government issues. Delinquencies and defaults by borrowers in
payments on the underlying mortgages, and the related losses, are affected
by general economic conditions, the borrower’s equity in the mortgaged
property and the borrower’s financial
circumstances. |
● |
Credit Risk Transfer Securities
Risk. Credit risk transfer securities are unguaranteed and
unsecured debt securities issued by the government sponsored entity and
therefore are not directly linked to or backed by the underlying mortgage
loans. As a result, in the event that a government sponsored entity fails
to pay principal or interest on its credit risk transfer securities or
goes through a bankruptcy, insolvency or similar proceeding, holders of
such credit risk transfer securities have no direct recourse to the
underlying mortgage loans and will generally receive recovery on par with
other unsecured note holders in such a scenario. The risks associated with
an investment in credit risk transfer securities are different than the
risks associated with an investment in mortgage-backed securities issued
by Fannie Mae and Freddie Mac, or other government sponsored entities or
issued by a private issuer, because some or all of the mortgage default or
credit risk associated with the underlying mortgage loans is transferred
to investors. As a result, investors in these securities could lose some
or all of their investment in these securities if the underlying mortgage
loans default. |
● |
Commercial Mortgage-Backed Securities
Risk. CMBS are subject to the risks generally associated with
mortgage-backed securities. CMBS may not be backed by the full faith
and credit of the U.S. Government and are subject to risk of default on
the underlying mortgages. CMBS issued by non-government entities may
offer higher yields than those issued by government entities, but also may
be subject to greater volatility than government issues. CMBS react
differently to changes in interest rates than other bonds and the prices
of CMBS may reflect adverse economic and market conditions. Small
movements in interest rates (both increases and decreases) may quickly and
significantly reduce the value of
CMBS. |
● |
Concentration Risk. To the extent
the Fund may concentrate its investments in a particular industry or
sector; the Fund’s shares may be more volatile and fluctuate more than
shares of a fund investing in a broader range of
securities. |
· |
Privately
Issued Mortgage-Related Securities Risk. MBS issued or
guaranteed by private issuers is also known as “non-agency MBS”.
Privately issued mortgage-backed securities generally offer a higher rate
of interest (but greater credit risk) than securities issued by U.S.
Government issuers, as there are no direct or indirect governmental
guarantees of payment. The degree of risks will depend significantly
on the ability of borrowers to make payments on the underlying mortgages
and the seniority of the security held by the Fund with respect to such
payments. The market for privately-issued mortgage-backed securities
is smaller and less liquid than the market for mortgage-backed securities
issued by U.S. government issuers.
|
· |
Sub-Prime
Mortgage Risk. The risk that an issuer of a sub-prime
mortgage security will default on its payments of interest or principal on
a security when due is more pronounced in the case of sub-prime mortgage
instruments than more highly ranked securities. Because of this
increased risk, these securities may also be less liquid and subject to
more pronounced declines in value than more highly rated instruments in
times of market stress.
|
· |
U.S.
Government Securities Risk. The Fund may invest in securities
issued or guaranteed by the U.S. government or its agencies and
instrumentalities (such as securities issued by the Government National
Mortgage Association (Ginnie Mae), the Federal National Mortgage
Association (Fannie Mae), or the Federal Home Loan Mortgage Corporation
(Freddie Mac)). U.S. government securities are subject to market risk,
interest rate risk and credit risk. Securities, such as those issued or
guaranteed by Ginnie Mae or the U.S. Treasury, that are backed by the full
faith and credit of the United States are guaranteed only as to the timely
payment of interest and principal when held to maturity and the market
prices for such securities will fluctuate. Notwithstanding that these
securities are backed by the full faith and credit of the United States,
circumstances could arise that would prevent the payment of interest or
principal. This would result in losses to the Fund. Securities issued or
guaranteed by U.S. government-related organizations, such as Fannie Mae
and Freddie Mac, are not backed by the full faith and credit of the U.S.
government and no assurance can be given that the U.S. government will
provide financial support. Therefore, U.S. government-related
organizations may not have the funds to meet their payment obligations in
the future.
|
· |
Risks
Associated with Real Estate and Regulatory Actions. The
securities that the Fund owns are dependent on real estate prices.
If real estate experiences a significant price decline, this could
adversely affect the prices of the securities the Fund owns. Any
adverse regulatory action could impact the prices of the securities the
Fund owns.
|
· |
Rule
144A Securities Risk. The market for Rule 144A securities
typically is less active than the market for publicly-traded
securities. Rule 144A securities carry the risk that the liquidity
of these securities may become impaired, making it more difficult for the
Fund to sell these securities.
|
· |
High
Yield Risk. Fixed income securities that are rated below investment
grade (i.e.,
“junk bonds”) are subject to additional risk factors due to the
speculative nature of the securities, such as increased possibility of
default liquidation of the security, and changes in value based on public
perception of the issuer.
|
· |
Derivatives
Risk. Derivatives, including options, futures, and swaps, may
be riskier than other types of investments and may increase the volatility
of the Fund. Derivatives may be sensitive to changes in economic and
market conditions and may create leverage, which could result in losses
that significantly exceed the Fund’s original investment. Derivatives may
not perform as expected, so the Fund may not realize the intended
benefits. In addition, given their complexity, derivatives expose the Fund
to risks of mispricing or improper valuation.
|
· |
Counterparty Risk. Counterparty
risk arises upon entering into borrowing arrangements or derivative
transactions and is the risk from the potential inability of
counterparties to meet the terms of their
contracts. |
· |
Repurchase
Agreement Risk. The counterparty to the repurchase agreement
that sells the securities may default on its obligation to repurchase
them. In this circumstance, the Fund may lose money because: it may
not be able to sell the securities at the agreed-upon time and price, the
securities may lose value before they can be sold, the selling institution
may default or declare bankruptcy or the Fund may have difficulty
exercising rights to the collateral.
|
· |
Leverage
Risk. Leverage can increase the investment returns of the
Fund if the securities purchased increase in value in an amount exceeding
the cost of the borrowing. However, if the securities decrease
in value, the Fund will suffer a greater loss than would have resulted
without the use of leverage.
|
· |
Short
Sales Risk. A short sale will be successful if the price of
the shorted security decreases. However, if the underlying security
goes up in price during the period in which the short position is
outstanding, the Fund will realize a loss. The risk on a short sale
is unlimited because the Fund must buy the shorted security at the higher
price to complete the transaction. Therefore, short sales may be
subject to greater risks than investments in long positions.
|
· |
TBA
Securities Risk. In a TBA transaction, a seller agrees to deliver a
security at a future date, but does not specify the particular security to
be delivered. Instead, the seller agrees to accept any security that
meets specified terms. The principal risks of TBA transactions are
increased interest rate risk and increased overall investment
exposure.
|
· |
Liquidity
Risk. Liquidity risk exists when particular investments are
difficult to purchase or sell. The Fund’s investments in illiquid
securities may reduce the returns of the Fund because it may be difficult
to sell the illiquid securities at an advantageous time or price or
achieve its desired level of exposure to a certain sector.
Liquidity risk may be the result of, among other things, the reduced
number and capacity of traditional market participants to make a market in
fixed-income securities or the lack of an active market. Liquid
investments may become illiquid or less liquid after purchase by the Fund,
particularly during periods of market turmoil. Illiquid and relatively
less liquid investments may be harder to value, especially in changing
markets.
|
· |
Investment
Company Risk. When the Fund invests in an ETF or mutual
fund, it will bear additional expenses based on its pro rata share of the
ETF’s or mutual fund’s operating expenses, including the potential
duplication of management fees. The risk of owning an ETF or
mutual fund generally reflects the risks of owning the underlying
securities the ETF or mutual fund holds. The Fund also will
incur brokerage costs when it purchases ETFs.
|
· |
When-Issued
Securities Risk. The price or yield obtained in a
when-issued transaction may be less favorable than the price or yield
available in the market when the securities delivery takes place, or that
failure of a party to a transaction to consummate the trade may result in
a loss to the Fund or missing an opportunity to obtain a price considered
advantageous.
|
· |
Portfolio
Turnover Risk. A high portfolio turnover rate (100% or more)
has the potential to result in the realization and distribution to
shareholders of higher capital gains, which may subject you to a higher
tax liability. A high portfolio turnover rate also leads to higher
transactions costs. |
Performance
The
following performance information provides some indication of the risks of
investing in the Total Return Fund. The bar chart shows the annual return
for the Fund’s Institutional Class shares from year to year and does not reflect
the sales charges applicable to Class A shares. If sales charges were
included, the returns would be lower than those shown in the bar chart.
The table shows how the Fund’s Institutional Class, Investor Class and Class A
(reflecting the sales charges) average annual returns for the one-year,
five-year and since inception periods compare to that of a broad measure of
market performance. The Fund’s past performance (before and after taxes)
is not necessarily an indication of how the Fund will perform in the
future. Updated performance information is available on the Fund’s website
at semperfunds.com/funds/total_return/performance.html or by calling the Fund
toll-free at 1-855-736-7799 (855-SEM-PRXX).
Calendar
Year
Total Returns as of December 31 – Institutional Class
During
the period shown on the bar chart, the Total Return Fund’s highest total return
for a quarter was 2.95% (quarter ended June 30, 2014) and the lowest total
return for a quarter was -1.10% (quarter ended March 31, 2016).
Average
Annual Total Returns
(For
the periods ended December 31, 2018) |
1
Year |
5
Years |
Since
Inception
(7/22/2013) |
Institutional
Class |
|
|
|
Return
Before Taxes |
3.89%
|
5.37%
|
6.54%
|
Return
After Taxes on Distributions |
1.46%
|
2.82%
|
4.05%
|
Return
After Taxes on Distributions and Sale of Fund Shares |
2.29%
|
2.95%
|
3.90%
|
Investor
Class |
|
|
|
Return
Before Taxes |
3.72%
|
5.12%
|
6.29%
|
Class
A(1) |
|
|
|
Return
Before Taxes |
1.62%
|
4.72%
|
5.92%
|
Bloomberg Barclays U.S. MBS
Index
(reflects no deduction for fees, expenses or taxes) |
0.99%
|
2.53%
|
2.42%
|
(1) The
Institutional Class and Investor Class incepted on July 22, 2013, and Class A
incepted on December 18, 2015. Class A performance for the period from
July 22, 2013 to December 18, 2015, reflects the performance of the
Institutional Class, adjusted to reflect Class A fees and expenses.
The
after-tax returns were 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 are not
relevant to investors who hold shares of the Total Return Fund through
tax-deferred arrangements, such as 401(k) plans or individual retirement
accounts (“IRAs”). After-tax returns are shown only for the Institutional
Class; after-tax returns for the Investor Class and Class A will vary to the
extent they have different expenses.
The Return After Taxes on Distributions and Sale of Fund Shares is higher than
other return figures when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor.
Management
Investment
Adviser. Semper Capital Management, L.P. is the Total Return Fund’s
investment adviser.
Portfolio
Managers. Mr. Thomas Mandel, CFA, Senior Managing Director and Mr.
Neil Aggarwal, Head of Trading and Portfolio Manager, are the portfolio managers
primarily responsible for the day-to-day management of the Fund. Mr.
Mandel has managed the Fund since January 2015 and Mr. Aggarwal has managed the
Fund since November 2018.
Purchase
and Sale of Fund Shares
You
may purchase, exchange, or redeem Total Return Fund shares on any business day
by written request via mail (Semper MBS Total Return Fund, c/o U.S. Bank Global
Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701), by telephone at
1-855-736-7799 (855-SEM-PRXX), online, or through a financial
intermediary. You may also purchase or redeem Fund shares by wire
transfer. Online, investors may also view their accounts, view their
transaction history, and perform maintenance changes to their accounts.
Investors who wish to purchase, exchange, or redeem Fund shares through a
financial intermediary should contact the financial intermediary directly.
The minimum initial and subsequent investment amounts are shown
below.
|
Class
A |
Institutional
Class |
Investor
Class |
|
Minimum |
Minimum |
Minimum |
Minimum |
Minimum |
Minimum |
|
Initial |
Subsequent |
Initial |
Subsequent |
Initial |
Subsequent |
|
Investment |
Investment |
Investment |
Investment |
Investment |
Investment |
Regular
Accounts |
$1,000 |
$100 |
$1,000,000 |
$1,000 |
$2,500 |
$1,000 |
Retirement
Accounts |
$1,000 |
$100 |
$1,000,000 |
$1,000 |
$2,500 |
$1,000 |
Tax
Information
The
Total Return Fund’s distributions are taxable, and will be taxed as ordinary
income or capital gains, unless you are investing through a tax-deferred
arrangement, such as a 401(k) plan or an IRA. Distributions on investments
made through tax-deferred arrangements may be taxed later upon withdrawal of
assets from those accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase the Total Return Fund through a broker-dealer or other financial
intermediary, the Fund and/or the Adviser 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.
SUMMARY
SECTION
SEMPER
SHORT DURATION FUND (the
“Short Duration Fund” or the “Fund”)
Investment
Objectives
The
Short Duration Fund seeks to provide a high level of current income that is
consistent with preservation of capital.
Fees
and Expenses of the Fund
This
table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
|
Institutional
Class |
Investor
Class |
SHAREHOLDER
FEES (fees
paid directly from your investment) |
None |
None |
ANNUAL
FUND OPERATING EXPENSES (expenses
that you pay each year as a percentage of the value of your
investment) |
Management
Fees |
0.35% |
0.35% |
Distribution
and Service (Rule 12b-1) Fees |
None |
0.25% |
Other
Expenses |
0.48%
|
0.48%
|
Total
Annual Fund Operating Expenses |
0.83%
|
1.08%
|
Less:
Fee Waiver and Expense Reimbursement |
-0.22%
|
-0.22%
|
Total
Annual Fund Operating Expenses After Fee Waiver and Expense
Reimbursement(1)(2)
|
0.61% |
0.86% |
(1) |
Total
Annual Fund Operating Expenses After Fee Waiver and Expense Reimbursement
do not correlate to the Ratio of Expenses to Average Net Assets Before Fee
Waiver and Expense Reimbursement in the Financial Highlights section of
the statutory prospectus, which reflects the actual operating expenses of
the Short Duration Fund and does not include 0.01% that is attributed to
acquired fund fees and expenses (“AFFE”).
|
(2) |
Semper
Capital Management, L.P. (the “Adviser”) has contractually agreed to waive
a portion or all of its management fees and pay Fund expenses to ensure
that Total Annual Fund Operating Expenses After Fee Waiver and Expense
Reimbursement (excluding AFFE, taxes, interest expense, dividends on
securities sold short and extraordinary expenses) do not exceed 0.60% of
average daily net assets for Institutional Class shares and 0.85% of
average daily net assets for Investor Class shares (the “Expense
Caps”). The Expense Caps will remain in effect through at least
March 29, 2020 and may be terminated only by the Trust’s Board of
Trustees (the “Board”). The Adviser may request recoupment of
previously waived fees and paid expenses from the Fund for three years
from the date they were paid, subject to the Expense
Caps. |
Example.
This Example is intended to help you compare the cost of investing in the
Short Duration 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
Caps only in the first year). Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
|
1
Year |
3
Years |
5
Years |
10
Years |
Institutional
Class |
$62
|
$243
|
$439
|
$1,005
|
Investor
Class |
$88
|
$322
|
$574
|
$1,297
|
Portfolio
Turnover.
The Short Duration Fund pays transaction costs, such as commissions, when it
buys and sells securities (or “turns over” its portfolio). A higher
portfolio turnover rate may indicate higher transaction costs and may result in
higher taxes when Fund shares are held in a taxable account. These costs,
which are not reflected in annual fund operating expenses or in the Example,
affect the Fund’s performance. During the most recent fiscal year,
the Fund’s portfolio turnover rate was 158% of the average value of its
portfolio.
Principal
Investment Strategies
Under
normal market conditions, the Short Duration Fund invests primarily in
investment-grade debt securities of domestic entities. The
Adviser considers securities to be of investment grade quality if they are rated
BBB (or comparable) or higher by a nationally recognized credit rating
organization including Standard & Poor’s Ratings Services (“S&P”) and
Moody’s Investors Service, Inc. (“Moody’s”), or if unrated, determined by
the Adviser to be of comparable quality. The Fund may hold securities
that, after being purchased, are downgraded to non-investment grade and would no
longer qualify for initial investment. Under normal circumstances, the
Fund expects to maintain a weighted average portfolio duration of up to three
(3) years. The Fund defines duration as effective duration which is the
interest rate sensitivity of projected cash flows from Fund securities, adjusted
for amortization, prepayments, and expected calls and puts. This means
that a debt security’s price would be expected to decrease by approximately 3%
with a 1% increase in interest rates. The Fund believes that effective
duration provides the most accurate estimation of the Fund's interest rate
sensitivity.
The
Short Duration Fund may invest in asset-backed securities (“ABS”), including
mortgage-backed securities (“MBS”). MBS refers to a type of fixed income
instrument that represents an interest in a pool of mortgages, including
residential MBS (“RMBS”), commercial MBS (“CMBS”) and securities issued by
government sponsored entities (“agency MBS”). MBS, including CMBS and
RMBS, include fixed and variable rate securities with underlying fixed or
variable rate mortgage loans and securities issued by private entities
(“non-agency MBS”). As part of the Fund's agency RMBS investments, the
Fund may invest in credit risk transfer securities. Credit risk transfer
securities are fixed- or floating-rate unsecured general obligations issued from
time to time by Freddie Mac, Fannie Mae or other government sponsored
entities.
Debt
securities may include all fixed-income securities (both fixed and floating-rate
securities), Rule 144A securities, U.S. Government securities, municipal
securities, collateralized loan obligations (“CLOs”), special purpose entities
(such as asset-backed or mortgage-backed security issuers), zero coupon
securities, money market securities, repurchase agreements and private
asset-backed loan participations. Certain asset-backed and mortgage-backed
securities are issued with stated maturities of 15 to 40 years; however, their
effective durations are generally under 3 years. U.S. Government
securities include U.S. Treasury bills, notes and other obligations that are
issued by or guaranteed as to interest and principal by the U.S. Government or
by agencies or instrumentalities of the U.S. Government. The Fund may also
invest in high yield instruments that are rated below investment grade (i.e.,
“high yield” or “junk” ratings). The Fund may also invest up to 10% of its
total assets in other investment companies, including exchange-traded funds
(“ETFs”).
The
Short Duration Fund may sell securities short with respect to 25% of its total
assets. A short sale is the sale by the Short Duration Fund of a security
which it does not own in anticipation of purchasing the same security in the
future at a lower price to close the short position. The Adviser will
primarily sell securities short for the purposes of managing certain risks
(primarily interest rate and/or yield spread risk) associated with its long
positions or for capturing differences in value between two securities, and not
for the purpose of forecasting the market’s direction. As a result, short
sales will primarily be used for hedging purposes, not for speculative
purposes. In many instances, the Fund will utilize forward-settling sales
of agency RMBS where the underlying pools of mortgage loans are To Be Announced
(“TBA”) securities for these short selling activities.
The
Adviser will allocate the Short Duration Fund’s assets across different market
sectors and different maturities based on its view of the relative value of each
sector or maturity. The Short Duration Fund may purchase and sell
securities for a variety of reasons, such as to adjust the portfolio's average
maturity, duration, or credit quality or to shift assets into and out of higher
yielding or lower yielding securities or different sectors.
Principal
Investment Risks
Losing all
or a portion of your money on your investment is a risk of investing in the
Short Duration Fund. The following additional risks could affect the value
of your investment:
· |
Market
and Regulatory Risk. Events
in the financial markets and economy may cause volatility and uncertainty
and adversely impact the Fund’s performance. Market events may affect a
single issuer, industry, sector, or the market as a whole. Traditionally
liquid investments may experience periods of diminished liquidity.
Governmental and regulatory actions, including tax law changes, may also
impair portfolio management and have unexpected or adverse consequences on
particular markets, strategies, or investments.
|
· |
Management
Risk. The Fund is an actively managed portfolio. The
Adviser’s management practices and investment strategies might not work to
produce the desired results.
|
· |
Fixed-Income
Securities Risk. Fixed-income (debt) securities are generally
subject to the following risks:
|
o |
Credit
Risk. The Fund’s investments are subject to the risk that
issuers and/or counterparties will fail to make payments when due or
default completely. Prices of the Fund’s investments may be
adversely affected if any of the issuers or counterparties it is invested
in are subject to an actual or perceived deterioration in their credit
quality. Credit spreads may increase, which may reduce the market values
of the Fund’s securities. Credit spread risk is the risk that
economic and market conditions or any actual or perceived credit
deterioration may lead to an increase in the credit spreads (i.e., the
difference in yield between two securities of similar maturity but
different credit quality) and a decline in price of the issuer’s
securities.
|
o |
Extension
Risk. If interest rates rise, repayments of principal on
certain fixed-income securities may occur at a slower-than-expected rate
and, as a result, the expected maturity of such securities could lengthen
which could cause their value to decline.
|
o |
Interest
Rate Risk. The value of the Fund’s investments in
fixed-income securities will change based on changes in interest
rates. If interest rates increase, the value of these investments
generally declines. Securities with greater interest rate
sensitivity and longer maturities generally are subject to greater
fluctuations in value. Given that the Federal Reserve has begun to
raise interest rates, the Fund may face a heightened level of interest
rate risk.
|
o |
Prepayment
Risk. Issuers of securities held by the Fund may be able to
prepay principal due on these securities, particularly during periods of
declining interest rates. Securities subject to prepayment risk
generally offer less potential for gains when interest rates decline, and
may offer a greater potential for loss when interest rates rise.
When securities are prepaid, the Short Duration Fund may have to reinvest
in securities with a lower yield.
|
· |
Risks
Associated with Mortgage-Backed and Other Asset-Backed Securities.
In addition to the risks associated with other fixed income
securities, mortgage-backed and asset-backed securities are subject to
certain other risks. The value of these securities will be influenced by
the factors affecting the housing market or the other assets underlying
such securities. As a result, during periods of declining asset values,
difficult or frozen credit markets, significant changes in interest rates,
or deteriorating economic conditions, mortgage- backed and asset-backed
securities may decline in value, face valuation difficulties, become more
volatile and/or become illiquid.
The liquidity of these assets may change over time.
|
● |
Residential Mortgage-Backed Securities
Risk. RMBS are subject to the risks generally associated with
mortgage-backed securities. RMBS may not be backed by the full faith
and credit of the U.S. Government and are subject to risk of default on
the underlying mortgages. RMBS issued by non-government entities may
offer higher yields than those issued by government entities, but also may
be subject to greater volatility than government issues.
Delinquencies and defaults by borrowers in payments on the underlying
mortgages, and the related losses, are affected by general economic
conditions, the borrower’s equity in the mortgaged property and the
borrower’s financial circumstances. |
● |
Credit Risk Transfer Securities
Risk. Credit risk transfer securities are unguaranteed and
unsecured debt securities issued by the government sponsored entity and
therefore are not directly linked to or backed by the underlying mortgage
loans. As a result, in the event that a government sponsored entity fails
to pay principal or interest on its credit risk transfer securities or
goes through a bankruptcy, insolvency or similar proceeding, holders of
such credit risk transfer securities have no direct recourse to the
underlying mortgage loans and will generally receive recovery on par with
other unsecured note holders in such a scenario. The risks associated with
an investment in credit risk transfer securities are different than the
risks associated with an investment in mortgage-backed securities issued
by Fannie Mae and Freddie Mac, or other government sponsored entities or
issued by a private issuer, because some or all of the mortgage default or
credit risk associated with the underlying mortgage loans is transferred
to investors. As a result, investors in these securities could lose some
or all of their investment in these securities if the underlying mortgage
loans default. |
· |
Commercial
Mortgage-Backed Securities Risk. CMBS are subject to the
risks generally associated with mortgage-backed securities. CMBS may
not be backed by the full faith and credit of the U.S. Government and are
subject to risk of default on the underlying mortgages. CMBS issued
by non-government entities may offer higher yields than those issued by
government entities, but also may be subject to greater volatility than
government issues. CMBS react differently to changes in interest
rates than other bonds and the prices of CMBS may reflect adverse economic
and market conditions. Small movements in interest rates (both
increases and decreases) may quickly and significantly reduce the value of
CMBS.
|
· |
Privately
Issued Mortgage-Related Securities Risk. MBS issued or
guaranteed by private issuers is also known as “non-agency MBS”.
Privately issued mortgage-backed securities generally offer a higher rate
of interest (but greater credit risk) than securities issued by U.S.
Government issuers, as there are no direct or indirect governmental
guarantees of payment. The degree of risks will depend significantly
on the ability of borrowers to make payments on the underlying mortgages
and the seniority of the security held by the Fund with respect to such
payments. The market for privately-issued mortgage-backed securities
is smaller and less liquid than the market for mortgage-backed securities
issued by U.S. government issuers.
|
· |
Sub-Prime
Mortgage Risk. The risk that an issuer of a sub-prime
mortgage security will default on its payments of interest or principal on
a security when due is more pronounced in the case of sub-prime mortgage
instruments than more highly ranked securities. Because of this
increased risk, these securities may also be less liquid and subject to
more pronounced declines in value than more highly rated instruments in
times of market stress.
|
· |
Risks
Associated with Real Estate and Regulatory Actions. The
securities that the Fund owns are dependent on real estate prices.
If real estate experiences a significant price decline, this could
adversely affect the prices of the securities the Fund owns. Any
adverse regulatory action could impact the prices of the securities the
Fund owns. |
● |
Rule 144A Securities Risk. The
market for Rule 144A securities typically is less active than the market
for publicly-traded securities. Rule 144A securities carry the risk
that the liquidity of these securities may become impaired, making it more
difficult for the Fund to sell these
securities. |
● |
Collateralized Loan Obligation
Risk. Collateralized loan obligations are generally subject
to credit, interest rate, valuation, liquidity, prepayment and extension
risks. These securities also are subject to risk of default on the
underlying asset, particularly during periods of economic downturn.
The market value of collateralized loan obligations may be affected by,
among other things, changes in the market value of the underlying assets
held by the CLO, changes in the distributions on the underlying assets,
defaults and recoveries on the underlying assets, capital gains and losses
on the underlying assets, prepayments on underlying assets and the
availability, prices and interest rates of underlying assets.
|
· |
High
Yield Risk. Fixed income securities that are rated below investment
grade (i.e.,
“junk bonds”) are subject to additional risk factors due to the
speculative nature of the securities, such as increased possibility of
default liquidation of the security, and changes in value based on public
perception of the issuer.
|
· |
Derivatives
Risk. Derivatives, including options, futures, and swaps, may
be riskier than other types of investments and may increase the volatility
of the Fund. Derivatives may be sensitive to changes in economic and
market conditions and may create leverage, which could result in losses
that significantly exceed the Fund’s original investment. Derivatives may
not perform as expected, so the Fund may not realize the intended
benefits. In addition, given their complexity, derivatives expose the Fund
to risks of mispricing or improper valuation.
|
· |
Counterparty
Risk. Counterparty risk arises upon entering into borrowing
arrangements or derivative transactions and is the risk from the potential
inability of counterparties to meet the terms of their
contracts.
|
· |
Leverage
Risk. Leverage is the practice of borrowing money to purchase
securities. Leverage can increase the investment returns of the
Fund if the securities purchased increase in value in an amount exceeding
the cost of the borrowing. However, if the securities decrease
in value, the Fund will suffer a greater loss than would have resulted
without the use of leverage.
|
· |
TBA
Securities Risk. In a TBA transaction, a seller agrees to deliver a
security at a future date, but does not specify the particular security to
be delivered. Instead, the seller agrees to accept any security that
meets specified terms. The principal risks of TBA transactions are
increased interest rate risk and increased overall investment
exposure.
|
· |
Liquidity
Risk. Liquidity risk exists when particular investments are
difficult to purchase or sell. The Fund’s investments in illiquid
securities may reduce the returns of the Fund because it may be difficult
to sell the illiquid securities at an advantageous time or price or
achieve its desired level of exposure to a certain sector. Liquidity risk
may be the result of, among other things, the reduced number and capacity
of traditional market participants to make a market in fixed-income
securities or the lack of an active market. Liquid investments may become
illiquid or less liquid after purchase by the Short Duration Fund,
particularly during periods of market turmoil. Illiquid and relatively
less liquid investments may be harder to value, especially in changing
markets.
|
· |
Investment
Company Risk. When the Fund invests in an ETF or mutual
fund, it will bear additional expenses based on its pro rata share of the
ETF’s or mutual fund’s operating expenses, including the potential
duplication of management fees. The risk of owning an ETF or
mutual fund generally reflects the risks of owning the underlying
securities the ETF or mutual fund holds. The Fund also will
incur brokerage costs when it purchases ETFs.
|
· |
When-Issued
Securities Risk. The price or yield obtained in a
when-issued transaction may be less favorable than the price or yield
available in the market when the securities delivery takes place, or that
failure of a party to a transaction to consummate the trade may result in
a loss to the Fund or missing an opportunity to obtain a price considered
advantageous. |
· |
Portfolio Turnover Risk. A high
portfolio turnover rate (100% or more) has the potential to result in the
realization and distribution to shareholders of higher capital gains,
which may subject you to a higher tax liability. A high portfolio
turnover rate also leads to higher transactions
costs. |
· |
Repurchase
Agreement Risk. Repurchase agreement risk is the risk the
counterparty to the repurchase agreement that sells the securities may
default on its obligation to repurchase them. In this circumstance,
the Fund may lose money because: it may not be able to sell the securities
at the agreed-upon time and price, the securities may lose value before
they can be sold, the selling institution may default or declare
bankruptcy or the Fund may have difficulty exercising rights to the
collateral.
|
· |
Municipal
Securities Risk. The amount of public information available
about municipal securities is generally less than that for corporate
securities. Special factors, such as legislative changes, and
economic and business developments, may adversely affect the yield and/or
value of the Fund’s investments in municipal securities. Other
factors include the general conditions of the municipal securities market,
the size of the particular offering, the maturity of the obligation, and
the rating of the issue. Changes in economic, business or political
conditions relating to a particular municipal project, municipality, or
state in which the Fund invests may have an impact on the Fund’s share
price.
|
· |
U.S.
Government Securities Risk. The Fund may invest in securities
issued or guaranteed by the U.S. government or its agencies and
instrumentalities (such as securities issued by the Government National
Mortgage Association (Ginnie Mae), the Federal National Mortgage
Association (Fannie Mae), or the Federal Home Loan Mortgage Corporation
(Freddie Mac)). U.S. government securities are subject to market risk,
interest rate risk and credit risk. Securities, such as those issued or
guaranteed by Ginnie Mae or the U.S. Treasury, that are backed by the full
faith and credit of the United States are guaranteed only as to the timely
payment of interest and principal when held to maturity and the market
prices for such securities will fluctuate. Notwithstanding that these
securities are backed by the full faith and credit of the United States,
circumstances could arise that would prevent the payment of interest or
principal. This would result in losses to the Fund. Securities issued or
guaranteed by U.S. government-related organizations, such as Fannie Mae
and Freddie Mac, are not backed by the full faith and credit of the U.S.
government and no assurance can be given that the U.S. government will
provide financial support. Therefore, U.S. government-related
organizations may not have the funds to meet their payment obligations in
the future.
|
· |
Short
Sales Risk. A short sale will be successful if the price of
the shorted security decreases. However, if the underlying security
goes up in price during the period in which the short position is
outstanding, the Fund will realize a loss. The risk on a short sale
is unlimited because the Fund must buy the shorted security at the higher
price to complete the transaction. Therefore, short sales may be
subject to greater risks than investments in long
positions. |
Performance
The Short
Duration Fund was organized on March 28, 2014 to acquire the assets and
liabilities of the Semper Short Duration Fund, a series of Forum Funds (the
“Predecessor Fund”), in exchange for shares of the Fund. Accordingly, the
Fund is the successor to the Predecessor Fund, and the following performance
information shown prior to March 28, 2014, is that of the Predecessor
Fund. The Fund has an investment objective, strategies and policies
substantially similar to the Predecessor Fund, which was also advised by the
Adviser. The following information provides some indication of the risks
of investing in the Fund by showing changes in the Fund’s performance from year
to year. The bar chart shows changes in the Institutional Class’
performance from year to year. The table shows how the Fund’s
Institutional Class and Investor Class average annual returns for the one-year,
five-year and since inception periods compare with those of broad measures of
market performance. The Fund’s past performance, before and after taxes,
is not necessarily an indication of how the Fund will perform in the future.
Updated performance information is available at
semperfunds.com/funds/short_duration/performance.html or by calling the Fund
toll-free at 1-855-736-7799 (855-SEM-PRXX).
Calendar
Year
Total Returns as of December 31 – Institutional Class
During the
period of time shown in the bar chart, the Fund’s highest return for a calendar
quarter was 1.41% (quarter ended March 31, 2012) and the lowest return for a
calendar quarter was -0.94% (quarter ended June 30, 2013).
Average
Annual Total Returns
(For
the periods ended December 31, 2018) |
1
Year |
5
Years |
Since
Inception
(12/23/2010) |
Institutional
Class |
|
|
|
Return
Before Taxes |
2.33%
|
2.28%
|
2.49%
|
Return
After Taxes on Distributions |
1.12%
|
1.00%
|
1.38%
|
Return
After Taxes on Distributions and Sale of Fund Shares |
1.37%
|
1.16%
|
1.43%
|
Investor
Class |
|
|
|
Return
Before Taxes |
2.05%
|
2.01%
|
2.22%
|
Bloomberg
Barclays 1-3 Year Government Index
(reflects
no deduction for fees, expenses or taxes) |
1.58%
|
0.82%
|
0.84%
|
Bloomberg
Barclays 1-3 U.S. Treasury Index
(reflects
no deduction for fees, expenses or taxes) |
1.56%
|
0.81%
|
0.82%
|
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. After-tax returns shown are not relevant to investors
who hold their Short Duration Fund shares through tax-deferred arrangements,
such as 401(k) plans or individual retirement accounts (“IRAs”). The
after-tax returns are shown only for the Institutional Class; the after-tax
returns for the Investor Class will vary to the extent it has different
expenses.
The Return After Taxes on Distributions and Sale of Fund Shares is higher than
other return figures when a capital loss occurs upon redemption and provides an
assumed tax deduction that benefits the investor.
Management
Investment
Adviser. Semper Capital Management, L.P. is the Short Duration
Fund’s investment adviser.
Portfolio
Manager. Mr. Thomas Mandel, CFA, Senior Managing Director is the
portfolio manager primarily responsible for the day-to-day management of the
Short Duration Fund. Mr. Mandel has served as the Fund’s portfolio manager
since inception in 2010.
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Short Duration Fund shares on any business day
by written request via mail (Semper Short Duration Fund, c/o U.S. Bank Global
Fund Services, P.O. Box 701, Milwaukee, WI 53201-0701), by telephone at
1-855-736-7799 (855-SEM-PRXX), online, or through a financial
intermediary. You may also purchase or redeem Fund shares by wire
transfer. Online, investors may also view their accounts, view their
transaction history, and perform maintenance changes to their accounts.
Investors who wish to purchase, exchange or redeem Fund shares through a
financial intermediary should contact the financial intermediary directly.
The minimum initial and subsequent investment amounts are shown
below.
|
Institutional
Class |
Investor
Class |
|
Minimum |
Minimum |
Minimum |
Minimum |
|
Initial |
Subsequent |
Initial |
Subsequent |
|
Investment |
Investment |
Investment |
Investment |
Regular
Accounts |
$1,000,000 |
$1,000 |
$2,500 |
$1,000 |
Retirement
Accounts |
$1,000,000 |
$1,000 |
$2,500 |
$1,000 |
Tax
Information
The Short
Duration Fund’s distributions are taxable, and will be taxed as ordinary income
or capital gains, unless you are investing through a tax-deferred arrangement,
such as a 401(k) plan or an IRA. Distributions on investments made through
tax-deferred arrangements may be taxed later upon withdrawal of assets from
those accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If you
purchase the Short Duration Fund through a broker-dealer or other financial
intermediary, the Fund and/or the Adviser 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.
PRINCIPAL
INVESTMENT STRATEGIES AND RELATED RISKS
Investment
Objective
The
Total Return Fund seeks to provide a high level of risk-adjusted current income
and capital appreciation. The Short Duration Fund seeks to provide a high
level of current income that is consistent with preservation of capital.
Each Fund’s investment objective is not fundamental and may be changed without
shareholder approval. Each Fund will provide 60 days’ advance notice of
any change in the Fund’s investment objective.
Principal
Investment Strategies
Total
Return Fund
Under
normal market conditions, the Total Return Fund invests at least 80% of its net
assets (plus any borrowings for investment purposes) in MBS. MBS refers to
a type of fixed income instrument that represents an interest in a pool of
mortgages, including RMBS and CMBS, and includes securities issued by government
sponsored entities (agency MBS). MBS include fixed and variable rate
securities with underlying fixed or variable rate mortgage loans and securities
issued by private entities (non-agency MBS). MBS also include
pass-throughs (a security created when one or more mortgage holders form a pool
of mortgages and sells shares or participation certificates in the pool),
reverse mortgages, collateralized mortgage obligations, real estate mortgage
investment conduits (“REMICs”), re-REMICs (which are REMICs that have been
resecuritized), real estate related asset-backed securities, real estate related
municipal bonds (including Housing Authority bonds) and derivative MBS, such as
interest-only, principal-only, inverse floaters and synthetic mortgage
instruments. The weighted average maturity of the Fund’s MBS investments
will generally range from between 1 and 10 years and the Fund may invest without
limit in MBS that are rated below investment grade (i.e.,
“high yield” or “junk”
ratings). The Adviser considers securities to be of investment grade
quality if they are rated BBB (or comparable) or higher by a nationally
recognized credit rating organization including S&P and
Moody’s. As part of the Fund’s agency RMBS investments, the Fund
may invest in credit risk transfer securities. Credit risk transfer
securities are fixed- or floating-rate unsecured general obligations issued from
time to time by Freddie Mac, Fannie Mae or other government sponsored entities.
The
Fund may also invest in asset-backed securities. The Fund may also invest
without limit in Rule 144A securities, may invest up to 50% of its total assets
in when-issued securities, and may invest up to 10% of its total assets in other
investment companies, including ETFs.
The
Total Return Fund may sell securities short with respect to 100% of its total
assets. A short sale is the sale by the Fund of a security which it does
not own in anticipation of purchasing the same security in the future at a lower
price to close the short position. In general, the Adviser will sell
securities short in conjunction with long positions with similar characteristics
for the purposes of managing certain risks (primarily interest rate and/or yield
spread risk) or for capturing differences in value between two securities, and
not for the purpose of forecasting the market’s direction. In many
instances, the Fund will utilize forward-settling sales of agency RMBS where the
underlying pools of mortgage loans are TBA securities for these short selling
activities.
The
Total Return Fund may employ hedging strategies to manage interest rate, credit
spread and other risks. Accordingly, the Fund may invest without limit in
options, futures and swaps (including interest rate swaps, credit default swaps,
total return swaps and swaptions) and TBA securities. The Fund may also
utilize leverage (i.e.,
borrow against a line of credit) as part of the portfolio management process,
subject to the limits of the 1940 Act.
The
Adviser’s investment selection process combines top down macro quantitative
analysis including economic and interest rate analysis; bottom-up quantitative
cash flow analyses for pools of loans securitizing deals with U.S. government or
government agency credit quality; and both cash flow analyses and credit
analyses for securities without government credit support. The Adviser’s
cash flow analyses evaluate a range of quantitative cash flow valuations across
different interest rate and economic scenarios, including stress cases.
The Adviser’s credit analyses include a mortgage loan-level evaluation,
utilizing both proprietary and third-party systems to generate a range of cash
flow outcomes adjusted for potential voluntary and involuntary loan defaults and
loan loss severities. This methodology incorporates a four step process in
which the Adviser (i) divides the credit-sensitive MBS market into sectors and
tracks their loss-adjusted yields, (ii) screens a large number of offerings
based on loss-adjusted yields analysis, (iii) analyzes purchase candidates using
the Adviser’s proprietary loan-level loss model, and (iv) monitors default,
severity, and prepayment performance versus expectations.
The
Adviser will seek to sell/replace existing securities with new securities
offering better relative value and performance expectations. Separately,
the Adviser will sell securities that have reached their price/valuation
targets. The Adviser may also sell securities as necessary to ensure that
the Fund’s overall characteristics are in line with the Adviser’s current
investment outlook. The Fund’s annual portfolio turnover rate will
generally be 100% or greater.
Short
Duration Fund
Under
normal market conditions, the Short Duration Fund invests primarily in
investment-grade debt securities of domestic entities. The Adviser
considers securities to be of investment grade quality if they are rated BBB (or
comparable) or higher by a nationally recognized credit rating organization
including S&P and Moody’s, or if unrated, determined by the Adviser to be of
comparable quality. The Fund may hold securities that, after being
purchased, are downgraded to non-investment grade and would no longer qualify
for initial investment. Under normal circumstances, the Fund expects to
maintain a weighted average portfolio duration of up to three (3) years.
The Fund defines duration as effective duration which is the interest rate
sensitivity of projected cash flows from Fund securities, adjusted for
amortization, prepayments, and expected calls and puts. Duration is a
measure of a debt security’s price sensitivity. Higher duration
indicates bonds that are more sensitive to interest rate changes – the higher
the duration, the more the bond’s price will drop as interest rates go
up. Bonds with shorter duration are less sensitive to interest rate
changes. For example, a duration of three years means that a debt
security’s price would be expected to decrease by approximately 3% with a 1%
increase in interest rates. Duration takes into account a debt security’s
cash flows over time including the possibility that a debt security might be
prepaid by the issuer or redeemed by the holder prior to its stated maturity
date. In contrast, maturity measures only the time until final
payment is due. The Fund believes that effective duration provides the
most accurate estimation of the Fund's interest rate sensitivity.
Debt
securities may include all fixed-income securities (both fixed and floating-rate
securities), Rule 144A securities, U.S. Government securities, municipal
securities, CLOs, special purpose entities (such as asset-backed or
mortgage-backed security issuers), zero coupon securities, money market
securities, repurchase agreements and
private asset-backed loan participations. Certain asset-backed and
mortgage-backed securities are issued with stated maturities of 15 to 40 years;
however, their effective durations are generally under three (3) years.
The
Short Duration Fund will invest in both agency and non-agency mortgage-backed
securities. In addition, the Short Duration Fund's may invest in prime,
Alt-A and sub-prime mortgage-backed securities. The Fund may also invest in high
yield instruments that are rated below investment grade (i.e.,
“high yield” or “junk” ratings). The Fund may also invest up to 10% of its
total assets in other investment companies, including ETFs.
The
Short Duration Fund may invest in asset-backed securities (“ABS”), including
mortgage-backed securities (“MBS”). MBS refers to a type of fixed income
instrument that represents an interest in a pool of mortgages, including
residential MBS (“RMBS”), commercial MBS (“CMBS”) and securities issued by
government sponsored entities (agency MBS). MBS, including CMBS and RMBS,
include fixed and variable rate securities with underlying fixed or variable
rate mortgage loans and securities issued by private entities (non-agency
MBS). As part of the Fund's agency RMBS investments, the Fund may invest
in credit risk transfer securities. Credit risk transfer securities are fixed-
or floating-rate unsecured general obligations issued from time to time by
Freddie Mac, Fannie Mae or other government sponsored entities.
The
Short Duration Fund may sell securities short with respect to 25% of its total
assets. A short sale is the sale by the Short Duration Fund of a security
which it does not own in anticipation of purchasing the same security in the
future at a lower price to close the short position. The Adviser will
primarily sell securities short for the purposes of managing certain risks
(primarily interest rate and/or yield spread risk) associated with its long
positions or
for capturing differences in value between two securities, and not for the
purpose of forecasting the market’s direction. As a result, short sales
will primarily be used for hedging purposes, not for speculative purposes.
In many instances, the Fund will utilize forward-settling sales of agency RMBS
where the underlying pools of mortgage loans are TBA securities for these short
selling activities.
The Short
Duration Fund may invest in securities that pay interest on a variable or
floating rate basis including:
· |
U.S.
Government securities such as U.S. Treasury bills, notes and other
obligations that are issued by or guaranteed as to interest and principal
by the U.S. Government or by agencies or instrumentalities of the U.S.
Government. U.S. Government securities also include the
mortgage-related securities issued by: (1) the Government National
Mortgage Association and the Small Business Association, which are
supported by the full faith and credit of the U.S. Government; and (2)
Fannie Mae and Freddie Mac, which are not supported by the full faith and
credit of the U.S. Government.
|
· |
U.S.
dollar-denominated obligations consisting of U.S. issuers including
corporate bonds, notes, commercial paper, mortgage-backed and other
asset-backed securities (meeting the stated final maturity, liquidity, and
quality guidelines). Mortgage related securities and other
asset-backed securities are generally participations in a pool of assets
whose payment is derived from the payments generated by the underlying
assets. Payments on the asset-backed security generally consist of
interest and/ or principal.
|
· |
Debt
securities issued by states or local governments and their agencies,
authorities and other government-sponsored enterprises.
|
· |
Bank
certificates of deposit, fixed time deposits and bankers’
acceptances.
|
· |
Repurchase
agreements, which are agreements to buy securities at one price, with a
simultaneous agreement to sell back the securities at a future date at an
agreed-upon price. The Fund may invest in repurchase agreements on
debt securities. |
The
Adviser will allocate the Short Duration Fund’s assets across different market
sectors and different maturities based on its view of the relative value of each
sector or maturity. The Fund may purchase and sell securities for a
variety of reasons, such as to adjust the portfolio's average maturity,
duration, or credit quality or to shift assets into and out of higher yielding
or lower yielding securities or different sectors.
Investment
Strategy Applicable for Both Funds
Temporary
Defensive Investment Strategies
For
temporary defensive purposes in response to adverse market, economic, political
or other conditions, the Adviser may invest up to 100% of the Funds’ total
assets in high-quality, short-term debt securities and money market
instruments. These short-term debt securities and money market
instruments include shares of other mutual funds, commercial paper, certificates
of deposit, bankers’ acceptances, U.S. Government securities and repurchase
agreements. Taking a temporary defensive position may result in the
Funds not achieving their investment objective. Furthermore, to the
extent that the Funds invest in money market mutual funds for its cash position,
there will be some duplication of expenses because the Funds would bear its pro
rata portion of such money market funds’ management fees and operational
expenses.
Principal
Investment Risks Applicable to Both Funds
Market
and Regulatory Risk. Events
in the financial markets and economy may cause volatility and uncertainty and
adversely affect performance. Such adverse effect on performance could include a
decline in the value and liquidity of securities held by a Fund, unusually high
and unanticipated levels of redemptions, an increase in portfolio turnover, a
decrease in NAV, and an increase in Fund expenses. It may also be unusually
difficult to identify both investment risks and opportunities, in which case
investment goals may not be met. Market events may affect a single issuer,
industry, sector, or the market as a whole. In addition, because of
interdependencies between markets, events in one market may adversely impact
markets or issuers in which a Fund invests in unforeseen ways. Traditionally
liquid investments may experience periods of diminished liquidity. During
a general downturn in the financial markets, multiple asset classes may decline
in value and a Fund may lose value, regardless of the individual results of the
securities and other instruments in which the Fund invests. It is impossible to
predict whether or for how long such market events will continue, particularly
if they are unprecedented, unforeseen or widespread events or conditions.
Therefore , it is important to understand that the value of your investment may
fall, sometimes sharply and for extended periods, and you could lose money.
Governmental and regulatory actions, including tax law changes, may also impair
portfolio management and have unexpected or adverse consequences on particular
markets, strategies, or investments.
Management
Risk. The Funds are actively managed portfolios. The
Adviser’s management practices and investment strategies might not work to
produce the desired results.
Fixed
Income Securities Risk. Fixed income securities are generally
subject to the following risks:
· |
Credit
Risk. The issuers of the bonds and other debt securities held
by the Funds may be unwilling or unable to make interest or principal
payments. Even if these issuers are able to make interest or
principal payments, they may suffer adverse changes in financial condition
that would lower the credit quality of the security, leading to greater
volatility in the price of the security. If
an issuer does not make interest or principal payments on a security when
those payments are due (i.e., defaults), it potentially can reduce a
Fund’s income or ability to recover amounts due and may reduce the value
of the debt security, sometimes dramatically.
|
· |
Extension
Risk. If interest rates rise, repayments of principal on certain
fixed-income securities may occur at a slower-than-expected rate and, as a
result, the expected maturity of such securities could lengthen which
could cause their value to decline.
|
· |
Interest
Rate Risk. Fixed income securities’ prices generally rise
when interest rates decline and decline when interest rates rise.
The longer the duration of a bond, the more a change in interest rates
affects the bond’s price. Short-term and long-term interest rates
may not move the same amount and may not move in the same direction.
Substantial redemptions from bond and other income funds may worsen that
impact. Other types of securities also may be adversely affected
from an increase in interest rates.
|
· |
Prepayment
Risk. Issuers of securities held by the Funds may be able to
prepay principal due on these securities, particularly during periods of
declining interest rates. Securities subject to prepayment risk
generally offer less potential for gains when interest rates decline, and
may offer a greater potential for loss when interest rates rise.
Rising interest rates may cause prepayments to occur at a slower than
expected rate thereby increasing the duration of the security and making
the security more sensitive to interest rate
changes. |
Mortgage-Related
and Other Asset-Backed Securities Risk. Asset-backed,
mortgage-related and mortgage-backed securities are subject to certain other
risks in addition to those of other fixed income securities. The value of
these securities will be influenced by the factors affecting the housing market
and the assets underlying such securities. As a result, during periods of
difficult or frozen credit markets, swings in interest rates, or deteriorating
economic conditions, mortgage-related and asset-backed securities may decline in
value, face valuation difficulties, become more volatile and/or become
illiquid.
The liquidity of these assets may change over time.
Residential
Mortgage-Backed Securities Risks. RMBS may not be backed by the
full faith and credit of the U.S. Government and are subject to risk of default
on the underlying mortgages. RMBS issued by non-government entities may
offer higher yields than those issued by government entities, but also may be
subject to greater volatility than government issues. Credit risk on RMBS
arises from losses due to delinquencies and defaults by borrowers in payments on
the underlying mortgages. The rate of delinquencies and defaults on RMBS
and the amount of the resulting losses depend on a number of factors, including
general economic conditions, particularly those in the area where the related
mortgaged property is located, the level of the borrower’s equity in the
mortgaged property and the individual financial circumstances of the
borrower. The risks associated with RMBS are greater for those in the
Alt-A first lien mortgage sectors than those in the prime first lien mortgage
sectors, but the risks exist for all RMBS. In the recent past, delinquency
and defaults on residential mortgage loans have increased significantly and may
continue to increase. Residential property values in many geographical
areas have declined, and the continued decline (or lack of increase) in those
values may result in additional increases in delinquencies and defaults on
residential mortgages.
Credit Risk Transfer Securities Risk.
Credit risk transfer securities are unguaranteed and unsecured debt securities
issued by the government sponsored entity and therefore are not directly linked
to or backed by the underlying mortgage loans. As a result, in the event that a
government sponsored entity fails to pay principal or interest on its credit
risk transfer securities or goes through a bankruptcy, insolvency or similar
proceeding, holders of such credit risk transfer securities have no direct
recourse to the underlying mortgage loans and will generally receive recovery on
par with other unsecured note holders in such a scenario. The risks associated
with an investment in credit risk transfer securities are different than the
risks associated with an investment in mortgage-backed securities issued by
Fannie Mae and Freddie Mac, or other government sponsored entities or issued by
a private issuer, because some or all of the mortgage default or credit risk
associated with the underlying mortgage loans is transferred to investors. As a
result, investors in these securities could lose some or all of their investment
in these securities if the underlying mortgage loans default.
Commercial
Mortgage-Backed Securities Risks. CMBS include securities that
reflect an interest in, and are secured by, mortgage loans on commercial real
property. CMBS are subject to many of the risks of investing in the real
estate securing the underlying mortgage loans. These risks reflect the
effects of local and other economic conditions on real estate markets, the
ability of tenants to make loan payments, and the ability of a property to
attract and retain tenants. CMBS may be less liquid and exhibit greater
price volatility than other types of mortgage- or asset-backed securities.
The commercial mortgage loans that underlie CMBS have certain distinct risk
characteristics. Commercial mortgage loans generally lack standardized
terms, which may complicate their structure, tend to have shorter maturities
than residential mortgage loans and may not be fully amortizing.
Commercial properties themselves tend to be unique and are more difficult to
value than single-family residential properties. In addition, commercial
properties, particularly industrial and warehouse properties, are subject to
environmental risks and the burdens and costs of compliance with environmental
laws and regulations.
Counterparty
Risk. Counterparty risk arises upon entering into borrowing
arrangements or derivative transactions and is the risk from the potential
inability of counterparties to meet the terms of their contracts. If the
counterparty defaults, a Fund’s losses will generally consist of the net amount
of contractual payments that it has not yet received, though a Fund’s maximum
risk due to counterparty credit risk could extend to the notional amount of the
contract should the underlying asset on which the contract is written have no
offsetting market value. The “notional value” is generally defined as the
value of the derivative’s underlying assets at the spot price. A Fund
could be exposed to increased leverage risk should it finance derivative
transactions without holding cash or cash equivalents equal to the notional
value of its derivative positions.
Government
Securities Risk. Investments in U.S. Government securities which
may be backed by the U.S. Department of the Treasury or the full faith and
credit of the U.S. may include U.S. Treasury bills, Treasury Inflation-Protected
Securities, notes and bonds. These securities are guaranteed only as to
the timely payment of interest and principal when held to maturity. The
market prices for such securities are not guaranteed and will fluctuate.
Not all U.S. Government obligations are backed by the full faith and credit of
the U.S. Department of the Treasury. Certain U.S. Government agency
securities are backed by the right of the issuer to borrow from the U.S.
Department of the Treasury, or are supported only by the credit of the issuing
agency or instrumentality (such as Fannie Mae and Freddie Mac), and in some
cases there may be some risk of default by the issuer. In addition,
because many types of U.S. Government obligations trade actively outside the
United States, their prices may rise and fall as changes in global economic
conditions affect the demand for these securities.
Short
Sales Risk. A short sale is the sale by a Fund of a security which
it does not own in anticipation of
purchasi
ng the same security in the future at a lower price to close the short
position. A short sale will be successful if the price of the shorted
security decreases. However, if the underlying security goes up in price
during the period in which the short position is outstanding, a Fund will
realize a loss. The risk on a short sale is unlimited because a Fund must
buy the shorted security at the higher price to complete the transaction.
Therefore, short sales may be subject to greater risks than investments in long
positions.
Privately
Issued Mortgage-Related Securities Risk . MBS issued or guaranteed
by private issuers is also known as “non-agency MBS”. Private issuers
include commercial banks, savings associations, mortgage companies, investment
banking firms, finance companies and special purpose finance entities (called
special purpose vehicles or SPVs) and other entities that acquire and package
mortgage loans for resale as mortgage-related securities. Privately issued
mortgage-backed securities generally offer a higher rate of interest (but
greater credit risk) than securities issued by U.S. Government issuers, as there
are no direct or indirect governmental guarantees of payment. The degree
of risks will depend significantly on the ability of borrowers to make payments
on the underlying mortgages and the seniority of the security held by a Fund
with respect to such payments. Mortgage-related securities that are issued
by private issuers are not subject to the underwriting requirements for the
underlying mortgages that are applicable to those mortgage-related securities
that have a government or government-sponsored entity guarantee. As a
result, the mortgage loans underlying private mortgage-related securities may,
and frequently do, have less favorable collateral, credit risk or other
underwriting characteristics than government or government-sponsored
mortgage-related securities and have wider variances in a number of terms
including interest rate, term, size, purpose, and borrower
characteristics. Privately issued pools more frequently include second
mortgages, high loan-to-value mortgages and manufactured housing loans.
The coupon rates and maturities of the underlying mortgage loans in a
private-label mortgage-related securities pool may vary to a greater extent than
those included in a government guaranteed pool, and the pool may include
subprime mortgage loans. Subprime loans refer to loans made to borrowers
with weakened credit histories or with a lower capacity to make timely payments
on their loans. For these reasons, the loans underlying these securities
have had in many cases higher default rates than those loans that meet
government underwriting requirements. The performance of private label
mortgage-backed securities, issued by private institutions, is based on the
financial health of those institutions.
Sub-Prime
Mortgage Risk. There is a risk that an issuer of a sub-prime
mortgage security will not make payments on the security when due. The
sub-prime mortgage securities in which a Fund will invest are typically
interests in pools of mortgages, a significant portion of which are mortgages
issued to “sub-prime” or “Alt A” borrowers. Mortgage loans to Alt A
borrowers are underwritten using standards that are more liberal than those for
prime borrowers, such as high loan-to-value ratios and less documentation of
borrower income or assets, but not as liberal as those for sub-prime
borrowers. Sub-prime borrowers typically have weakened credit histories
that include payment delinquencies, and possibly more severe problems such as
charge-offs, judgments and bankruptcies. They may also display reduced
repayment capacity as measured by credit scores, debt-to-income ratios, or other
criteria that may encompass borrowers with incomplete credit histories.
Sub-prime loans are loans to borrowers displaying one or more of these
characteristics at the time of origination or purchase. Loans to sub-prime
or Alt A borrowers have a higher risk of default than loans to prime
borrowers. If a significant portion of the loans in a sub-prime mortgage
security in which a Fund has invested are in default, the value of that security
will decrease and the sub-prime mortgage security may itself default on its
payment obligations to a Fund.
Risks
Associated with Real Estate and Regulatory Actions. The securities
that the Funds own are dependent on real estate prices. If real estate
experiences a significant price decline, this could adversely affect the prices
of the securities a Fund owns. In particular, events related to the U.S.
housing market in recent years have had a severe negative impact on the value of
some MBS and resulted in an increased risk associated with investments in these
securities. Default rates on mortgages underlying many MBS have increased,
which has resulted in depressed valuations for the investments. Liquidity
has also sometimes been impaired. Also , FNMA and FHLMC are subject to
government supervision and regulation but these securities are not insured or
guaranteed by the U.S. Government. Any adverse regulatory action could
impact the prices of the securities a Fund owns.
Rule
144A Securities Risk. The market for Rule 144A securities typically
is less active than the market for public securities. Rule 144A securities
carry the risk that the trading market may not continue and a Fund might be
unable to dispose of these securities promptly or at reasonable prices and might
thereby experience difficulty satisfying redemption requirements.
High
Yield Risk. Fixed-income
securities receiving below investment grade ratings (i.e.,
“junk bonds”) may have speculative characteristics, and, compared to
higher-grade securities, may have a weakened capacity to make principal and
interest payments due to adverse economic conditions or other circumstances.
High-yield, high risk, and lower-rated securities are subject to additional risk
factors due to the speculative nature of these securities, such as increased
possibility of default, decreased liquidity, and fluctuations in value due to
public perception of the issuer of such securities. These securities are almost
always uncollateralized and subordinate to other debt that an issuer may have
outstanding. In addition, both individual high-yield securities and the entire
high-yield bond market can experience sharp price swings due to a variety of
factors, including changes in economic forecasts, stock market activity, large
sustained sales by major investors, or, a higher profile
default.
Derivatives
Risk. The Funds’ use of derivative instruments involves risks
greater than the risks associated with investing directly in the securities in
which they primarily invest. Derivatives involve the risk of improper
valuation, the risk of ambiguous documentation and the risk that changes in the
value of the derivative may not correlate perfectly with the underlying
security. Derivatives are also subject to market risk, interest rate risk,
credit risk, counterparty risk and liquidity risk. The Funds could lose
more than the principal amount that it invests in derivative securities.
Also, suitable derivative transactions may not be available in all circumstances
and there can be no assurance that the Funds will engage in these transactions
to reduce exposure to other risks when that would be beneficial. In
addition, the Funds’ use of derivatives may increase the taxes payable by
shareholders.
Leverage
Risk. Leverage can increase the investment returns of the Funds if
the securities purchased increase in value in an amount exceeding the cost of
the borrowing. Accordingly, any event that adversely affects the
value of an investment, either directly or indirectly, would be magnified to the
extent that leverage is used. The cumulative effect of the use of
leverage, directly or indirectly, in a market that moves adversely to the
investments of the entity employing leverage could result in a loss to the Funds
that would be greater than if leverage were not employed. Additionally,
any leverage obtained, if terminated on short notice by the lender, could result
in the Funds being forced to unwind positions quickly and at prices below what
the Funds deems to be fair value for the positions.
TBA
Securities Risk. As with other delayed delivery transactions, a seller
agrees to issue a TBA security at a future date. However, the seller does
not specify the particular securities to be delivered. Instead, a Fund
agrees to accept any security that meets specified terms. For example, in
a TBA mortgage-backed transaction, a Fund and the seller would agree upon the
issuer, interest rate and terms of the underlying mortgages. The seller
would not identify the specific underlying mortgages until it issues the
security. TBA mortgage-backed securities increase interest rate risk
because the underlying mortgages may be less favorable than anticipated by the
Funds.
Liquidity
Risk. A security or investment is considered illiquid if it is not
reasonably expected to be sold or disposed of in current market conditions in
seven calendar days or less without the sale or disposition significantly
changing the market value of the security. Low or lack of trading volume
may make it difficult to sell
securities held by the Funds at quoted market prices. The Funds’
investments may at any given time consist of significant amounts of securities
that are thinly traded or for which no market exists. For example, the
investments held by the Funds may not be liquid in all circumstances so that, in
volatile markets, the Adviser may not be able to close out a position without
incurring a loss. The foregoing risks may be accentuated when a Fund is
required to liquidate positions to meet withdrawal requests. High yield
securities generally trade only in the over-the-counter market rather than on an
organized exchange and may be more difficult to purchase or sell at a fair
price, which could have a negative impact on a Fund’s
performance.
Investment
Company Risk. If the Funds invest in shares of another mutual fund,
shareholders will indirectly bear fees and expenses charged by the underlying
mutual funds in which the Funds invest in addition to a Fund’s direct fees and
expenses. The Funds also will incur brokerage costs when it purchases
ETFs. Furthermore, investments in other mutual funds could affect the
timing, amount and character of distributions to shareholders and therefore may
increase the amount of taxes payable by investors in the Funds.
When-Issued
Securities Risk. When-issued involve the risk that the price
or yield obtained in a transaction (and therefore the value of a security) may
be less favorable than the price or yield (and therefore the value of a
security) available in the market when the securities delivery takes
place. In addition, when the Funds engage in when-issued
transactions, they rely on the other party to consummate the
trade. Failure of such party to do so may result in the Funds
incurring a loss or missing an opportunity to obtain a price considered
advantageous.
Portfolio
Turnover Risk. A high portfolio turnover rate (100% or more) has
the potential to result in the realization and distribution to shareholders of
higher capital gains. This may subject you to a higher tax
liability. Distributions to shareholders of short-term capital gains are
taxed as ordinary income under Federal tax laws. A high portfolio turnover rate
also leads to higher transactions costs, which could negatively affect a Fund’s
performance.
Repurchase
Agreement Risk. Repurchase agreements are transactions in which a
Fund purchases securities or other obligations from a bank or securities dealer
(or its affiliates) and simultaneously commits to resell them to the
counterparty at an agreed-upon date or upon demand at a price reflecting a
market rate of interest unrelated to the coupon rate or maturity of the
purchased obligation. The Funds maintain custody of the underlying
obligations prior to their repurchase. The obligation of the counterparty
to pay the repurchase price on the date agreed to or upon demand is, in effect,
secured by such obligations.
Repurchase
agreements carry certain risks not associated with direct investments in
securities, including a possible decline in the market value of the underlying
obligations. If their value becomes less than the repurchase price, plus
any agreed-upon additional amount, the counterparty must provide additional
collateral so that at all times the collateral is at least equal to the
repurchase price plus any agreed-upon additional amount. The difference
between the total amounts to be received upon repurchase of the obligations and
the price that was paid by a Fund upon acquisition is accrued as interest and
included in its net investment income.
Principal
Investment Risk Applicable to the Total Return Fund
Concentration
Risk. The Total Return Fund may concentrate its investments within
one industry or sector or among a broad range of industries or sectors. To
the extent that the Fund focuses on one or more sectors or industries, they may
be subject to the risks affecting that sector or industry more than would a more
broadly diversified fund. Furthermore, each industry or sector possesses
particular risks that may not affect other industries or sectors. The
Adviser’s judgment about which sectors or industries offer the greatest
potential for long-term financial reward will change over time.
Principal
Investment Risks Applicable to the Short Duration Fund
Municipal
Securities Risk. The amount of public information available about
municipal securities is generally less than that for corporate securities.
Special factors, such as legislative changes, and economic and business
developments, may adversely affect the yield and/or value of the Short Duration
Fund’s investments in municipal securities. The municipal securities
market also could be significantly affected by adverse political changes, as
well as uncertainties in the municipal securities market related to taxation or
the rights of security holders. Other factors include the general
conditions of the municipal securities market, the size of the particular
offering, the maturity of the obligation, and the rating of the issue.
Changes in economic, business or political conditions relating to a particular
municipal project, municipality, or state in which the Fund’s invests may have
an impact on the Fund’s share price. Municipal securities backed by
current or anticipated revenues from a specific project or specific asset may be
adversely impacted by declines in revenue collection from the project or
asset.
Collateralized Loan Obligations Risk. The
risks of an investment in a CLO depends largely on the type of the underlying
collateral and the class of the CLO in which the Short Duration Fund
invests. Some CLOs have credit ratings but are typically issued in various
classes with various priorities. Normally, CLOs are privately offered and
sold (that is, they are not registered under the securities laws) and may be
characterized by the Fund as illiquid securities; however, an active dealer
market may exist for CLOs that qualify as Rule 144A securities. In
addition to the normal interest rate, default and other risks of fixed-income
securities, CLOs carry additional risks, including the possibility that
distributions from collateral securities will not be adequate to make interest
or other payments, the quality of the collateral may decline in value or
default, the Fund may invest in CLOs that are subordinate to other classes,
values may be volatile, and disputes with the issuer may produce unexpected
investment results.
PORTFOLIO
HOLDINGS INFORMATION
A
description of the Funds’ policies and procedures with respect to the disclosure
of the Funds’ portfolio securities is available in the Funds’ SAI.
Currently, disclosure of each Fund’s holdings is required to be made quarterly
within 60 days of the end of each fiscal quarter in the annual report and
semi-annual report to Fund shareholders and in the quarterly holdings report on
Form N-Q. Lists of the Funds’ sector allocations as of the most recent
month end are available on the Funds’ website approximately five to ten business
days after the month end. The annual and semi-annual reports are available
by contacting the Funds, c/o U.S. Bank Global Fund Services, P.O. Box 701,
Milwaukee, Wisconsin 53201-0701, or calling 1-855-736-7799 (855-SEM-PRXX), on
each Fund’s website at http://www.semperfunds.com/index.html,
and on the U.S. Securities and Exchange Commission’s (“SEC”) website at www.sec.gov.
A complete description of the Funds’ policies and procedures with respect to the
disclosure of the Funds’ portfolio holdings is available in the
SAI.
Investment
Adviser
Semper
Capital Management, L.P. is the Funds’ investment adviser and is located at 52
Vanderbilt Avenue, Suite 401, New York, NY 10017, is an independent investment
management firm specializing in residential and commercial mortgage-backed
securities. The Adviser offers institutional and high net worth investors
access to multiple securitized debt-centric investment platforms, ranging from
private absolute return to public index-based strategies and has been an
SEC-registered investment advisor since 1992.
The
Adviser is responsible for the day-to-day management of the Funds in accordance
with each Fund’s investment objectives and policies. The Adviser also
furnishes the Funds with office space and certain administrative services and
provides most of the personnel needed to fulfill its obligations under its
advisory agreement. For its services, the Total Return Fund pays the
Adviser a monthly management fee that is calculated at the annual rate of 0.60%
of its average daily net assets, and the Short Duration Fund pays the Adviser a
monthly management fee that is calculated at the annual rate of 0.35% of its
average daily net assets. Prior to a special meeting of shareholders held
on March 22, 2018, the management fee for the Total Return Fund was 0.45% of the
Fund's average daily net assets. For the fiscal year ended November 30,
2018, the Adviser received a management fee of 0.56% of the Total Return Fund’s
average daily net assets, and received a management fee of 0.13% of the Short
Duration Fund ’s average daily net assets, after waivers.
D
iscussions regarding the basis of the Board’s approval of the investment
advisory agreement s for the Total Return Fund and Short Duration Fund are
available in the Funds’ semi-annual report to shareholders for the period ended
May 31, 2018.
The Funds
do not hold themselves out as related to any other series of the Trust for
purposes of investment and investor services, nor do they share the same
investment adviser with any other series.
Portfolio
Managers
Thomas
Mandel, CFA, Senior Managing Director (Both Funds)
Mr.
Mandel co-founded the Adviser in 1992. He has 30 years of experience,
including serving as Chief Investment Officer from 1992-2005. Prior to
founding the Adviser, Tom was a Principal and Portfolio Manager at 1838
Investment Advisors and previously held positions with Century Institutional
Advisors and Chase Investors Management Corporation. He holds a B.S. and
an M.B.A. degree from the University of Pennsylvania’s Wharton
School.
Neil
Aggarwal, Portfolio Manager, Head of Trading (Total Return Fund)
Mr.
Aggarwal is Head of Trading at the Adviser with primary responsibility as a
portfolio manager for the Total Return Fund and managing the firm's Absolute
Return strategy. Prior to joining the Adviser in 2017, Mr. Aggarwal was
the Mortgage Credit Sector Head and Senior Trader at BlueCrest Capital
Management, LLP ("BlueCrest"). Prior to BlueCrest, Mr. Aggarwal was Senior
Vice President in Mortgages at Jefferies & Company. Mr. Aggarwal
earned a B.S. with honors from the University of Maryland.
The SAI
provides additional information about the portfolio manager’s compensation,
other accounts managed by the portfolio manager and his ownership of securities
in the Funds.
Fund
Expenses
Each
Fund is responsible for its own operating expenses. However, the Adviser
has contractually agreed to waive all or a portion of its management fees and
pay Fund expenses, through at least March 29, 2020, in order to limit each
Fund’s aggregate annual operating expenses (excluding AFFE, interest expense,
dividends on securities sold short, taxes and extraordinary expenses) to the
amounts listed below:
|
Class
A |
Institutional
Class |
Investor
Class |
Total
Return Fund |
1.15% |
0.90% |
1.15% |
Short
Duration Fund |
N/A |
0.60% |
0.85% |
The
term of the Funds’ operating expenses limitation agreement is indefinite, and it
can only be terminated by the Board. The Adviser may request recoupment of
previously waived fees and paid expenses in any subsequent month in the
three-year period from the date of the management fee reduction and expense
payment if the aggregate amount actually paid by the Fund toward the operating
expenses for such fiscal year (taking into account the reimbursement) will not
cause the Fund to exceed the lesser of: (1) the expense limitation in place at
the time of the management fee reduction and expense payment; or (2) the expense
limitation in place at the time of the reimbursement. Any such recoupment
is contingent upon the subsequent review and approval of the recouped amounts by
the Board.
Description
of Share Classes
The
Trust has adopted a multiple class plan that allows each Fund to offer one or
more classes of shares. The Total Return Fund has registered three classes
of shares – Class A shares, Institutional Class shares and Investor Class
shares. The Short Duration Fund has registered two classes of shares –
Institutional Class shares and Investor Class shares. The different
classes of shares represent investments in the same portfolio of securities, but
the classes are subject to different expenses as outlined below and may have
different share prices:
· |
Class
A shares are charged a front-end sales load. The Class A
shares are also charged a 0.25% Rule 12b-1 distribution and servicing
fee. Class A shares do not have a contingent deferred sales charge
(“CDSC”) except that a redemption within 18 months of purchase of
investments of $1 million or more on which no front-end sales charge
is paid are subject to a 0.50% CDSC based on the lower of cost or market
value at the time of redemption. During the 18-month period, shares
will age monthly on the anniversary date of each
purchase. |
|
|
· |
Institutional Class
shares have no Rule 12b-1 distribution and service fee and have a
higher minimum initial investment than Class A shares and Investor Class
shares. |
|
|
· |
Investor Class
shares are charged a 0.25% Rule 12b-1 distribution and service
fee. |
More
About Class A Shares (Total Return Fund only)
A
financial intermediary may offer Fund shares subject to variations in or
elimination of the Fund sales charges (“variations”), provided such variations
are described in this Prospectus. All variations described in Schedule A
are applied by, and the responsibility of, the identified financial
intermediary. Sales charge variations may apply to purchases, sales,
exchanges and reinvestments of Fund shares and a shareholder transacting in Fund
shares through an intermediary identified on Schedule A should read the terms
and conditions of Schedule A carefully. For the variations applicable to
shares offered through a Morgan Stanley Wealth Management transactional
brokerage account, please see Schedule A. A variation that is specific to
a particular financial intermediary is not applicable to shares held directly
with the Fund or through another intermediary. Please consult your financial
intermediary with respect to any variations listed on Schedule A.
Class
A shares of the Total Return Fund are retail shares that require that you pay a
sales charge when you invest in the Fund unless you qualify for a reduction or
waiver of the sales charge. Class A shares are also subject to Rule 12b-1
fees (or distribution and servicing fees) described earlier of 0.25% of average
daily net assets, which are assessed against the shares of the
Fund.
If
you purchase Class A shares of the Total Return Fund, you will pay the public
offering price (“POP”) which is the net asset value (“NAV”) next determined
after your order is received plus a sales charge (shown in percentages below)
depending on the amount of your investment. Since sales charges are
reduced for Class A share purchases above certain dollar amounts, known as
“breakpoint thresholds,” the POP is lower for these purchases. The dollar
amount of the sales charge is the difference between the POP of the shares
purchased (based on the applicable sales charge in the table below) and the NAV
of those shares. Because of rounding in the calculation of the POP, the
actual sales charge you pay may be more or less than that calculated using the
percentages shown below. The sales charge is calculated as
follows:
Investment
Amount |
Sales Charge
as a %
of
Offering Price(1) |
Sales
Charge as a
%
of Net Amount
Invested |
Dealer
Reallowance |
Less
than $100,000 |
2.00% |
2.04% |
2.00% |
$100,000
but less than $250,000 |
1.60% |
1.63% |
1.60% |
$250,000
but less than $500,000 |
1.15% |
1.16% |
1.15% |
$500,000
but less than $1 million |
0.90% |
0.91% |
0.90% |
$1
million or more (2) |
None |
None |
0.50%(3) |
(1) |
Offering
price includes the front-end sales load. The sales charge you pay
may differ slightly from the amount set forth above because of rounding
that occurs in the calculation used to determine your sales
charge. |
(2) |
Class
A shares that are purchased at NAV in amounts of $1 million or more may be
assessed a 0.50% CDSC if they are redeemed within 18 months from the date
of purchase. The CDSC will be applied on the lesser of the original
purchase price or the current value of the shares being redeemed.
Increases in the value of your shares or shares acquired through
reinvestment of dividends or distributions are not subject to a
CDSC. |
(3) |
The
Adviser intends to pay a commission to financial advisors who place an
order for a single purchaser based on a shareholder’s cumulative
purchases. For purchases over $1 million, such commissions are paid
at the rate of 0.50% of the total purchase
amount. |
Quasar
Distributors, LLC, the (“Distributor”) will receive all initial sales charges
for the purchase of Class A shares of the Total Return Fund without a dealer of
record.
Class
A Sales Charge Reductions and Waivers (Total Return Fund only)
You
may be able to reduce the sales charge on Class A shares of the Total Return
Fund based on the type of transaction, the combined market value of your
accounts or intended investment, and for certain groups or classes of
shareholders. If you believe you are eligible for any of the following
reductions or waivers, it is up to you to ask the selling agent or shareholder
servicing agent for the reduction and to provide appropriate proof of
eligibility. The programs described below and others are explained in
greater detail in the SAI.
Reinvested
Distributions: You pay no sales charges on Class A shares you buy
with reinvested distributions from Class A distributions from the Total Return
Fund.
Account
Reinstatement: You pay no sales charges on Class A shares you
purchase with the proceeds of a redemption of Class A shares of the Total Return
Fund within 120 days of the date of the redemption. You must provide
instruction at the time of purchase of your intent to exercise this
privilege.
Letter
of Intent (“LOI”): By signing an LOI, you pay a lower sales charge
now in exchange for promising to invest an amount within the next 13 months
sufficient to meet one of the above breakpoint thresholds. The investment
must satisfy the initial purchase agreement. Reinvested distributions do
not count as purchases made during this period. The Total Return Fund will
hold in escrow shares equal to approximately 2% of the amount of shares you
indicate in the LOI. If you do not invest the amount specified in the LOI
before the expiration date, the Fund’s transfer agent, U.S. Bancorp Fund
Services, LLC (the “Transfer Agent”) will redeem a sufficient amount of escrowed
shares to pay the difference between the reduced sales load you paid and the
sales load you would have paid based on the total amount actually invested in
Class A shares as of the expiration date. Otherwise, the Transfer
Agent will release the escrowed shares when you have invested the agreed
amount. Any shares purchased within 90 days of the date you sign the
LOI may be used as credit toward completion, but the reduced sales charge will
only apply to new purchases made on or after that date.
Rights
of Accumulation (“ROA”): You may combine the value at the current
NAV of Class A shares of the Total Return Fund with a new purchase of Class A
shares of the Fund to reduce the sales charge on the new purchase. The
sales charge for the new shares will be figured at the rate in the table above
that applies to the combined value of your currently owned shares and the amount
of the new investment. ROA allows you to combine the value of your account
with the value of other eligible accounts for purposes of meeting the breakpoint
thresholds above.
You
may aggregate your eligible accounts with the eligible accounts of members of
your immediate family to obtain a breakpoint discount. The types of
eligible accounts that may be aggregated to obtain the breakpoint discounts
described above include individual accounts, joint accounts and certain
IRAs.
For
the purpose of obtaining a breakpoint discount, members of your “immediate
family” include your spouse, child, stepchild, parent, sibling, grandchild and
grandparent, in each case including in-law and adoptive relationships. In
addition, a fiduciary can count all shares purchased for a trust, estate or
other fiduciary account (including one or more employee benefit plans of the
same employer) that has multiple accounts. Only those accounts held at the
transfer agent or the financial intermediary at which you are making your
current purchase may be used to qualify for a sales charge reduction based on
ROA.
Certain
groups or classes of shareholders: If you fall into any of the following
categories, you can buy Class A shares at NAV without a sales
charge:
· |
Current
and retired employees, directors/trustees and officers
of: |
o |
The
Adviser and its affiliates; and |
o |
Family
members (spouse, domestic partner, parents, grandparents, children,
grandchildren and siblings (including step and in-law)) of any of the
above.
|
· |
Any
trust, pension, profit sharing or other benefit plan for current
employees, directors/trustees and officers of the Adviser and its
affiliates.
|
o |
Broker-dealers
who act as selling agents for the Funds/Trust;
and |
o |
Family
members (spouse, domestic partner, parents, grandparents, children,
grandchildren and siblings (including step and in-law)) of any of the
above.
|
· |
Purchases
for the benefit of the clients of brokers, dealers, and registered
investment advisers if such brokers, dealers, or investment advisers have
entered into an agreement with the Distributor providing specifically for
the purchase of Class A shares in connection with special investment
products, such as wrap accounts or similar fee-based programs.
Investors may be charged a fee when effecting transactions in Class A
shares through a broker or agent that offers these special investment
products.
|
· |
Purchases
by retirement plans that are maintained on retirement platforms sponsored
by financial intermediary firms, provided the financial intermediary firms
have entered into a Class A NAV agreement with respect to such retirement
platforms.
|
· |
Waiver
of Class A sales charge for financial intermediaries who have entered into
an agreement with the Distributor to offer shares to self-directed
investment brokerage accounts that may or may not charge a transaction fee
to its customers.
|
· |
Purchases
resulting from the reinvestment of a
distribution. |
To
receive a reduction or waiver of your Class A initial sales charge, you must
inform your financial intermediary or the Adviser at the time you purchase
shares that you qualify for such a reduction. If you do not inform your
financial intermediary or the Adviser that you are eligible for a reduction, you
may not receive the sales charge discount to which you are otherwise
entitled. In order to determine your eligibility to receive a sales charge
discount, it may be necessary for you to provide to your financial intermediary
or the Adviser, information and records (including account statements) of all
relevant accounts invested in the Total Return Fund. Sales charge waivers
may not be available through certain financial intermediaries, due to the
policies, procedures, trading platforms and/or systems of the financial
intermediaries. You may need to invest directly through the Adviser in
order to receive the sales charge waivers described herein.
The
Trust also reserves the right to enter into agreements that reduce or eliminate
sales charges for other groups or classes of shareholders, including for Fund
shares included in other investment plans such as “wrap accounts.” If you
own Fund shares as part of another account or package, such as an IRA or a sweep
account, you should read the terms and conditions that apply for that
account. Those terms and conditions may supersede the terms and conditions
discussed here. Contact your broker or financial intermediary for further
information.
Sales
load information is not separately posted on the Adviser’s website (www.semperfunds.com)
because a copy of this Prospectus containing such information is already
available for review, free of charge, on the website.
A
financial intermediary may impose different sales load discounts. Sales
load discount and waiver variations specific to certain financial intermediaries
are described in Schedule A to this Prospectus.
Pricing
of Fund Shares
Shares
of the Funds are sold at NAV per share, plus any applicable sales charges, which
is calculated as of the close of regular trading (generally, 4:00 p.m.,
Eastern Time) on each day that the New York Stock Exchange (“NYSE”) is open for
unrestricted business. However, each Fund’s NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the SEC. The NYSE
is closed on weekends and most national holidays, including New Year’s Day,
Martin Luther King, Jr. Day, Washington’s Birthday/Presidents’ Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. The NAV will not be calculated on days when the NYSE is closed for
trading.
Purchase
and redemption requests are priced based on the next NAV per share calculated
after receipt of such requests. The NAV is the value of a Fund’s
securities, cash and other assets, minus all expenses and liabilities (assets –
liabilities = NAV). NAV per share is determined by dividing NAV by the
number of shares outstanding (NAV/ # of shares = NAV per share). The NAV
takes into account the expenses and fees of a Fund including management and
administration fees, which are accrued daily.
In
calculating the NAV, portfolio securities are valued using current market values
or official closing prices, if available. Each security owned by a Fund
that is listed on a securities exchange is valued at its last sale price on that
exchange on the date as of which assets are valued. Where the security is
listed on more than one exchange, each Fund will use the price of the exchange
that it generally considers to be the principal exchange on which the security
is traded.
When
market quotations are not readily available, a security or other asset is valued
at its fair value as determined under procedures approved by the Board.
These fair value procedures will also be used to price a security when corporate
events, events in the securities market and/or world events cause the Adviser to
believe that a security’s last sale price may not reflect its actual market
value. The intended effect of using fair value pricing procedures is to
ensure that the Funds are accurately priced. The Board will regularly
evaluate whether the Funds’ fair valuation pricing procedures continue to be
appropriate in light of the specific circumstances of each Fund and the quality
of prices obtained through their application by the Trust’s valuation
committee.
How
to Purchase Fund Shares
You
may purchase shares of the Funds by check, by wire transfer, via electronic
funds transfer through the Automated Clearing House (“ACH”) network, online at
http://www.semperfunds.com/invest.html
by clicking “Open an account online” or through a financial intermediary which
includes banks, trust companies, securities brokers and dealers authorized by
the Funds to receive purchase orders. Please use the appropriate account
application when purchasing by mail or wire. If you have any questions or
need further information about how to purchase shares of the Funds, you may call
a customer service representative of the Funds toll-free at 1-855-736-7799
(855-SEM-PRXX). The Funds reserve the right to reject any purchase
order. For example, a purchase order may be refused if, in the Adviser’s
opinion, it is so large that it would disrupt the management of the Funds.
Orders may also be rejected from persons believed by the Funds to be “market
timers.”
All
purchase checks must be in U.S. dollars drawn on a domestic financial
institution. The Funds will not accept payment in cash or money
orders. To prevent check fraud, the Funds will not accept third party
checks, U.S. Treasury checks, credit card checks, traveler’s checks or starter
checks for the purchase of shares. The Funds are unable to accept
post-dated checks or any conditional order or payment.
To
buy shares of the Funds, complete an account application and send it together
with your check for the amount you wish to invest in the Funds to the address
below. To make additional investments once you have opened your account,
write your account number on the check and send it together with the Invest by
Mail form from your most recent confirmation statement received from the Funds’
Transfer Agent. If you do not have the Invest by Mail form, include the
Fund name, your name, address, and account number on a separate piece of paper
along with your check. If your payment is returned for any reason, your
purchase will be canceled and a $25 fee will be assessed against your account by
the Transfer Agent. You may also be responsible for any loss sustained by
the Funds.
Purchases
In-Kind. In addition to cash purchases, Fund shares may be
purchased by tendering payment in-kind in the form of shares of stock, bonds or
other securities. Any securities used to buy Fund shares must be readily
marketable, their acquisition consistent with a Fund’s investment objective and
otherwise acceptable to the Adviser and the Board. For further
information, you may call a customer service representative of the Funds
toll-free at 1-855-736-7799 (855-SEM-PRXX).
In
compliance with the USA PATRIOT Act of 2001, please note that the Transfer Agent
will verify certain information on your account application as part of the
Trust’s Anti-Money Laundering Program. As requested on the account application,
you must supply your full name, date of birth, social security number and
permanent street address. If you are opening the account in the name of a
legal entity (e.g., partnership, limited liability company, business trust,
corporation, etc.), you must also supply the identity of the beneficial
owners. Mailing addresses containing only a P. O. Box will not be
accepted. Please contact the Transfer Agent at 1-855-736-7799
(855-SEM-PRXX) if you need additional assistance when completing your account
application.
If
the Transfer Agent does not have a reasonable belief of the identity of an
investor, the account application will be rejected or the investor will not be
allowed to perform a transaction on the account until such information is
received. The Funds may also reserve the right to close the account within
five business days if clarifying information/documentation is not
received.
Shares
of the Funds have not been registered for sale outside of the United
States. The Adviser generally does not sell shares to investors residing
outside of the United States, even if they are United States citizens or lawful
permanent residents, except to investors with United States military APO or FPO
addresses.
Purchasing
Shares by Mail
Please
complete the account application and mail it with your check, payable to the
Semper
Funds, to the Transfer Agent at the following address:
Semper
Funds
[Name
of Semper Fund]
c/o
U.S. Bank Global Fund Services
P.O. Box
701
Milwaukee,
Wisconsin 53201-0701
You
may not send an account application via overnight delivery to a United States
Postal Service post office box. The Funds do not consider the U.S. Postal
Service or other independent delivery services to be their agents.
Therefore, a deposit in the mail or with such services, or receipt at U.S.
Bancorp Fund Services, LLC’s post office box, of purchase orders or redemption
requests does not constitute receipt by the Transfer Agent. Receipt of purchase
orders or redemption requests is based on when the order is received at the
Transfer Agent’s office. If you wish to use an overnight delivery service, send
your account application and check to the Transfer Agent at the following
address:
Semper
Funds
[Name
of Semper Fund]
c/o
U.S. Bank Global Fund Services
615
East Michigan Street, 3rd Floor
Milwaukee,
Wisconsin 53202
Purchasing
Shares by Telephone
If
you have been authorized to perform telephone transactions (either by completing
the required portion of your account application or by subsequent arrangement in
writing with a Fund), and your account has been open for 7 business days, you
may purchase additional shares by calling the Funds toll-free at 1-855-736-7799
(855-SEM-PRXX). You may not make your initial purchase of the Fund shares
by telephone. Telephone orders will be accepted via electronic funds
transfer from your pre-designated bank account through the ACH network.
You must have banking information established on your account prior to making a
telephone purchase. Only bank accounts held at domestic institutions that
are ACH members may be used for telephone transactions. If your order is
received prior to 4:00 p.m., Eastern Time, shares will be purchased at the NAV,
plus any applicable sales charges, next calculated. For security reasons,
requests by telephone may be recorded. Once a telephone transaction has
been requested, it cannot be canceled or modified after the close of regular
trading on the NYSE (generally, 4:00 p.m., Eastern Time).
Purchasing
Shares by Wire
If
you are making your initial investment in the Funds, before wiring funds, the
Transfer Agent must have previously received a completed account application
before you can send in your wire purchase. You can mail or overnight
deliver your account application to the Transfer Agent at the above
address. Upon receipt of your completed account application, the Transfer
Agent will establish an account on your behalf. Once your account is
established, you may instruct your bank to send the wire. Your bank must
include the name of the Fund, your name and your account number so that monies
can be correctly applied. Your bank should transmit immediately available
funds by wire to:
U.S.
Bank National Association
777
East Wisconsin Avenue
Milwaukee,
Wisconsin 53202
ABA
#075000022
Credit:
U.S. Bancorp Fund Services, LLC
A/C#112-952-137
FFC:
Semper MBS Total Return Fund
Semper
Short Duration Fund
Shareholder
Registration
Shareholder
Account Number
If
you are making a subsequent purchase, your bank should wire funds as indicated
above. Before each wire purchase, you should be sure to notify the
Transfer Agent. It
is essential that your bank include complete information about your account in
all wire transactions. If you have questions about how to invest by
wire, you may call the Transfer Agent at 1-855-736-7799 (855-SEM-PRXX).
Your bank may charge you a fee for sending a wire payment to the
Funds.
Wired
funds must be received prior to 4:00 p.m., Eastern Time, to be eligible for same
day pricing. Neither the Fund nor U.S. Bank N.A. is responsible for the
consequences of delays resulting from the banking or Federal Reserve wire system
or from incomplete wiring instructions.
Internet
You
may open a regular or IRA account online or purchase additional shares in an
existing account online by logging into the Funds’ website at http://www.semperfunds.com/index.html
by clicking “Investor Log-In” then “Register Now” and setting a user ID and
PIN. To open a new account, click on “Establish a New Account.” This
option enables you to purchase shares by having the purchase amount deducted
from your bank account by electronic funds transfer through the ACH
network. Please ensure that your Funds account is set up with bank account
instructions and that your bank is an ACH member. If you did not open your
account online but would like to make additional purchases via the internet, you
must have provided a voided check or savings deposit slip with your application
to establish your bank account instructions in order to complete Internet
transactions.
Automatic
Investment Plan
Once your
account has been opened with the initial minimum investment, you may make
additional purchases of shares at regular intervals through the Automatic
Investment Plan (“AIP”). The AIP provides a convenient method to have
monies deducted from your bank account, for investment into the Funds, on a
monthly or quarterly basis. In order to participate in the AIP, each
purchase must be in the amount of $1,000 or more, and your financial institution
must be a member of the ACH network. If your bank rejects your payment,
the Transfer Agent will charge a $25 fee to your account. To begin
participating in the AIP, please complete the Automatic Investment Plan section
on the account application or call the Transfer Agent at 1-855-736-7799
(855-SEM-PRXX) for instructions. Any request to change or terminate your
AIP should be submitted to the Transfer Agent at least five calendar days prior
to the automatic investment date.
Retirement
Accounts
The
Funds offer prototype documents for a variety of retirement accounts for
individuals and small businesses. Please call 1-855-736-7799
(855-SEM-PRXX) for information on:
· |
Individual
Retirement Plans, including Traditional IRAs and Roth
IRAs. |
· |
Small
Business Retirement Plans, including Simple IRAs and SEP
IRAs. |
There
may be special distribution requirements for a retirement account, such as
required distributions or mandatory Federal income tax withholdings. For
more information, call the number listed above. You may be charged a $15
annual account maintenance fee for each retirement account up to a maximum of
$30 annually and a $25 fee for transferring assets to another custodian or for
closing a retirement account. Fees charged by institutions may
vary.
Purchasing
and Selling Shares through a Broker
You
may buy and sell shares of the Funds through certain brokers and financial
intermediaries (and their agents) (collectively, “Brokers”) that have made
arrangements with the Funds to sell their shares. When you place your
order with such a Broker, your order is treated as if you had placed it directly
with the Transfer Agent, and you will pay or receive the applicable price next
calculated by the Funds. Brokers may be authorized by the Funds’ principal
underwriter to designate other brokers and financial intermediaries to accept
orders on a Funds’ behalf. An order is deemed to be received when a Fund,
a Broker or, if applicable, a Broker’s authorized designee accepts the
order. The Broker holds your shares in an omnibus account in the Broker’s
name, and the Broker maintains your individual ownership records. The
Adviser may pay the Broker for maintaining these records as well as providing
other shareholder services. The Broker may charge you a fee for handling
your order. The Broker is responsible for processing your order correctly
and promptly, keeping you advised regarding the status of your individual
account, confirming your transactions and ensuring that you receive copies of
the Funds’ Prospectus.
How
to Sell Fund Shares
You
may sell (redeem) your Fund shares on any day the Funds and the NYSE are open
for business either directly to the Funds or through your financial
intermediary.
As discussed below, you may receive proceeds of your sale in a check,
ACH, or federal wire transfer. The Funds typically expect that they will
take one to three days following the receipt of your redemption request to pay
out redemption proceeds once your redemption request has been received in good
order. However, while not expected, payment of redemption proceeds may
take up to seven days if an earlier payment could adversely affect a Fund. If
you did not purchase your shares with a federal wire payment, the Funds may
delay payment of your redemption proceeds for up to 15 calendar days from
purchase or until your purchase amount has cleared, whichever occurs
first.
The
Funds typically expect that a Fund will hold cash or cash equivalents to meet
redemption requests. The Funds may also use the proceeds from the sale of
portfolio securities to meet redemption requests if consistent with the
management of the Fund. These redemption methods will be used regularly and may
also be used in unusual market conditions.
The
Funds reserve the right to redeem in-kind as described under “Redemption
‘In-Kind” below. Redemptions in-kind are typically used to meet redemption
requests that represent a large percentage of a Fund’s net assets in order to
minimize the effect of large redemptions on the Fund and its remaining
shareholders. Redemptions in-kind are typically only used in unusual market
conditions. The
Funds also have in place lines of credit that may be used to meet redemption
requests during unusual market conditions.
In
Writing
You
may redeem your shares by simply sending a written request to the Transfer
Agent. You should provide your account number and state whether you want
all or some of your shares redeemed. The letter should be signed by all of
the shareholders whose names appear on the account registration and include a
signature guarantee(s), if necessary. You should send your redemption
request to:
Regular
Mail |
Overnight
Express Mail |
Semper
Funds |
Semper
Funds |
[Name
of Semper Fund] |
[Name
of Semper Fund] |
c/o
U.S. Bank Global Fund Services |
c/o
U.S. Bank Global Fund Services |
P.O.
Box 701 |
615
East Michigan Street, 3rd Floor |
Milwaukee,
Wisconsin 53201-0701 |
Milwaukee,
Wisconsin 53202 |
NOTE: |
The
Funds do not consider the U.S. Postal Service or other independent
delivery services to be their agents. Therefore, a deposit in the
mail or with such services, or receipt at U.S. Bank Global Fund Services’
post office box, of purchase orders or redemption requests does not
constitute receipt by the Transfer Agent.
Receipt of purchase orders or redemption requests is based on when
the order is received at the Transfer Agent’s
office. |
By
Telephone
If
you complete the appropriate portion of the account application, you may redeem
your shares, up to $50,000, by calling the Transfer Agent at 1-855-736-7799
(855-SEM-PRXX) before the close of trading on the NYSE (which is generally
4:00 p.m., Eastern Time). Redemption proceeds can be sent by check to
the address of record or via ACH to a previously established bank account.
If you request, redemption proceeds will be wired on the next business day to
the bank account you designated on the account application. The minimum
amount that may be wired is $1,000. A wire fee of $15 will be deducted
from your redemption proceeds for complete redemptions and redemptions for a
specific number of shares. In the case of a partial redemption, the fee
will be deducted from the remaining account balance. Telephone redemptions
cannot be made if you notified the Transfer Agent of a change of address within
15 calendar days before the redemption request.
The
Transfer Agent employs certain procedures designed to confirm that instructions
communicated by telephone are genuine. Such procedures may include, but
are not limited to, requiring some form of personal identification prior to
acting upon telephonic instructions, providing written confirmation of all such
transactions, and/or recording all telephonic instructions. Assuming
procedures such as the above have been followed, neither the Transfer Agent nor
the Fund will be liable for any losses, cost, or expense for acting upon
telephone instructions that are believed to be genuine. If an account has
more than one owner or authorized person, the Fund will accept telephone
instructions from any one owner or authorized person.
You
may request telephone redemption privileges after your account is opened by
calling the Transfer Agent at 1-855-736-7799 (855-SEM-PRXX) for instructions.
Shares held in IRA or other retirement plan accounts may be redeemed by
telephone. Investors will be asked whether or not to withhold taxes from any
distribution.
You
may encounter higher than usual call wait times during periods of high market
activity. Please allow sufficient time to ensure that you will be able to
complete your telephone transaction prior to market close. If you are
unable to contact the Funds by telephone, you may mail your redemption request
in writing to the address noted above. Once a telephone transaction has
been accepted, it may not be canceled or modified after the close of regular
trading on the NYSE (generally, 4:00 p.m., Eastern Time).
By
Internet
If
your account is set up to perform online transactions, you may redeem your
regular account Fund shares through the Funds’ website at http://www.semperfunds.com/index.html
by clicking “Investor Log-In”. You may redeem up to $50,000.
Proceeds from an online redemption can be sent via check to the address of
record or can be sent to you by wire or ACH to the previously established bank
account. Only bank accounts held at domestic financial institutions that
are ACH members can be used for transactions through the Funds’
website.
Systematic
Withdrawal Plan
As
another convenience, you may redeem your shares through the Systematic
Withdrawal Plan (“SWP”). Under the SWP, shareholders or their financial
intermediaries may request that a payment drawn in a predetermined amount be
sent to them on a monthly, quarterly or annual basis. In order to
participate in the SWP, your account balance must be at least $5,000 and each
withdrawal amount must be for a minimum of $100. If you elect this method
of redemption, the Funds will send a check directly to your address of record or
will send the payment directly to your bank account via electronic funds
transfer through the ACH network. For payment through the ACH network,
your bank must be an ACH member and your bank account information must be
previously established on your account. The SWP may be terminated at any
time by the Funds. You may also elect to terminate your participation in
the SWP by communicating in writing or by telephone to the Transfer Agent no
later than five days before the next scheduled withdrawal at the addresses shown
above or at 1-855-736-7799 (855-SEM-PRXX).
A
withdrawal under the SWP involves a redemption of shares and may result in a
gain or loss for federal income tax purposes. In addition, if the amount
withdrawn exceeds the dividends credited to your account, the account ultimately
may be depleted. To establish a SWP, an investor must complete the
appropriate sections of the account application. For additional
information on the SWP, please call the Transfer Agent at 1-855-736-7799
(855-SEM-PRXX).
Redemption
“In-Kind”
The
Funds reserve the right to pay redemption proceeds to you in whole or in part by
a distribution of securities from a Fund’s portfolio (a “redemption
in-kind”). It is not expected that the Funds would do so except during
unusual market conditions. A redemption, whether in cash or in-kind, is a
taxable event for you. If a Fund pays your redemption proceeds by a
distribution of securities, you could incur brokerage or other charges in
converting the securities to cash and will bear any market risks associated with
such securities until they are converted into cash.
Signature
Guarantees
Signature
guarantees, from either a Medallion program member or non-Medallion Program
Member, will generally be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants in the
New York Stock Exchange Medallion Signature Program and the Securities Transfer
Agents Medallion Program. A
notary public is not an acceptable signature guarantor.
A
signature guarantee is required in the following situations:
· |
When
ownership is being changed on your account;
|
· |
When
redemption proceeds are payable or sent to any person, address or bank
account not on record;
|
· |
When
redemption is received by the transfer agent and the account address has
changed within the last 15 calendar days; and
|
· |
For
all redemptions in excess of $50,000 from any shareholder
account. |
Non-financial
transactions, including establishing or modifying certain services on an
account, may require a signature guarantee, signature verification from a
Signature Validation Program member or other acceptable form of authentication
from a financial institution source.
In
addition to the situations described above, the Funds and/or the Transfer Agent
may require a signature guarantee or signature validation program stamp in other
instances based on the facts and circumstances.
Other
Information about Redemptions
The
Funds may redeem the shares in your account if the value of your account is less
than $1,000 as a result of redemptions you have made. This does not apply
to retirement plan accounts. You will be notified that the value of your
account is less than $1,000 before the Funds make an involuntary
redemption. You will then have 30 days in which to make an additional
investment to bring the value of your account to at least $1,000 before the Fund
takes any action.
Shareholders
who have an IRA or other retirement plan must indicate on their written
redemption request whether or not to withhold federal income tax. Redemption
requests failing to indicate an election not to have tax withheld will generally
be subject to 10% withholding.
How
to Exchange Fund Shares
You
may exchange your Fund shares on any day the Funds and NYSE are open for
business either directly with the Funds or through your financial
intermediary.
Exchange
Privilege
As a
shareholder, you have the privilege of exchanging shares of one Semper Fund for
shares of the other Semper Fund in the Trust. However, you should note the
following:
· |
Exchanges
may only be made between like share classes;
|
· |
You
may only exchange between accounts that are registered in the same name,
address, and taxpayer identification number;
|
· |
Before
exchanging into another Semper Fund, read a description of the Fund in
this Prospectus;
|
· |
Exchanges
are considered a sale and purchase of Fund shares for tax purposes and may
be taxed as short-term or long-term capital gain or loss depending on the
period shares are held, subject to certain limitations on the
deductibility of losses;
|
· |
The
Funds reserve the right to refuse exchange purchases by any person or
group if, in the Adviser’s judgment, a Fund would be unable to invest the
money effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely
affected;
|
· |
If
you did not decline telephone options on your account application, you can
make a telephone request to exchange your shares for an additional $5
fee;
|
· |
The
minimum exchange amount between existing accounts invested in the Semper
Funds is the $1,000; and
|
· |
The
Funds may modify, restrict or terminate the exchange privilege at any
time. |
You
may make exchanges of your shares between the Semper Funds by telephone at
1‑855‑736‑7799 (855-SEM-PRXX), by accessing your Fund account using the
internet at http://www.semperfunds.com/index.html, in writing by sending a
written request to the Semper Funds, or through your financial
intermediary.
DIVIDENDS
AND DISTRIBUTIONS
The
Funds accrue both net investment income and dividends, daily. The Funds will
make distributions of dividends, if any, from net investment income on a monthly
basis. The Funds will make distributions of capital gains, if any, on an
annual basis. A Fund may make an additional payment of dividends or
distributions of capital gains if it deems it desirable at any other time of the
year.
All
distributions will be reinvested in Fund shares unless you choose one of the
following options: (1) receive dividends in cash while reinvesting capital
gain distributions in additional Fund shares; (2) reinvest dividends in
additional Fund shares and receive capital gains in cash; or (3) receive
all distributions in cash. Distributions are taxable whether reinvested in
additional shares or received in cash.
If
you elect to receive distributions in cash and the U.S. Postal Service cannot
deliver the check, or if a check remains outstanding for six months, the Funds
reserve the right to reinvest the distribution check in your account, at a
Fund’s current NAV per share, and to reinvest all subsequent
distributions. If you wish to change your distribution option, notify the
Transfer Agent in writing or by telephone at least five (5) days in advance of
the payment date for the distribution.
Any
dividend or capital gain distribution paid by the Funds has the effect of
reducing the NAV per share on the ex-dividend date by the amount of the dividend
or capital gain distribution. You should note that a dividend or capital
gain distribution paid on shares purchased shortly before that dividend or
capital gain distribution was declared will be subject to income taxes even
though the dividend or capital gain distribution represents, in an economic
sense, a partial return of capital to you.
TOOLS
TO COMBAT FREQUENT TRANSACTIONS
The
Board has adopted policies and procedures to prevent frequent transactions in
the Funds. The Funds discourage excessive, short-term trading and other
abusive trading practices that may disrupt portfolio management strategies and
harm the Funds’ performance. The Funds take steps to reduce the frequency and
effect of these activities in the Funds. These steps include monitoring
trading practices and using fair value pricing. Although these efforts
(which are described in more detail below) are designed to discourage abusive
trading practices, these tools cannot eliminate the possibility that such
activity may occur. Further, while the Funds make efforts to identify and
restrict frequent trading, the Funds receive purchase and sale orders through
financial intermediaries and cannot always know or detect frequent trading that
may be facilitated by the use of intermediaries or the use of group or omnibus
accounts by those intermediaries. Each Fund seeks to exercise its judgment
in implementing these tools to the best of its abilities in a manner that the
Funds believe is consistent with shareholder interests.
Monitoring
Trading Practices. The Funds monitor selected trades in an effort
to detect excessive short-term trading activities. If, as a result of this
monitoring, a Fund believes that a shareholder has engaged in excessive
short-term trading, it may, in its discretion, ask the shareholder to stop such
activities or refuse to process purchases in the shareholder’s accounts.
In making such judgments, each Fund seeks to act in a manner that it believes is
consistent with the best interests of shareholders. Due to the complexity
and subjectivity involved in identifying abusive trading activity and the volume
of shareholder transactions a Fund handles, there can be no assurance that a
Fund’s efforts will identify all trades or trading practices that may be
considered abusive. In addition, the Funds’ ability to monitor trades that
are placed by individual shareholders within group or omnibus accounts
maintained by financial intermediaries is limited because the Funds do not have
simultaneous access to the underlying shareholder account
information.
In
compliance with Rule 22c-2 of the 1940 Act, the Funds’ distributor, on behalf of
the Funds, has entered into written agreements with each of the Funds’ financial
intermediaries, under which the intermediary must, upon request, provide the
Funds with certain shareholder and identity trading information so that each
Fund can enforce its market timing policies.
Fair
Value Pricing. Each
Fund employs fair value pricing selectively to ensure greater accuracy in its
daily NAV and to prevent dilution by frequent traders or market timers who seek
to take advantage of temporary market anomalies. The Board has developed
procedures which utilize fair value pricing when reliable market quotations are
not readily available or the Funds’ pricing service does not provide a valuation
(or provides a valuation that in the judgment of the Adviser to the Funds does
not represent the security’s fair value), or when, in the judgment of the
Adviser, events have rendered the market value unreliable. Valuing
securities at fair value involves reliance on judgment. Fair value
determinations are made in good faith in accordance with procedures adopted by
the Board and are reviewed annually by the Board. There can be no
assurance that a Fund will obtain the fair value assigned to a security if it
were to sell the security at approximately the time at which a Fund determines
its NAV per share.
Fair
value pricing may be applied to non-U.S. securities. The trading hours for
most non-U.S. securities end prior to the close of the NYSE, the time that each
Fund’s NAV is calculated. The occurrence of certain events after the close
of non-U.S. markets, but prior to the close of the NYSE (such as a significant
surge or decline in the U.S. market) often will result in an adjustment to the
trading prices of non-U.S. securities when non-U.S. markets open on the
following business day. If such events occur, the Funds may value non-U.S.
securities at fair value, taking into account such events, when it calculates
its NAV. Other types of securities that the Funds may hold for which fair
value pricing might be required include, but are not limited to:
(a) investments which are infrequently traded and/or the market price of
which the Adviser believes may be stale; (b) illiquid securities, including
“restricted” securities and private placements for which there is no public
market; (c) securities of an issuer that has entered into a restructuring;
(d) securities whose trading has been halted or suspended; and
(e) fixed income securities that have gone into default and for which there
is not a current market value quotation.
More
detailed information regarding fair value pricing can be found under the heading
titled, “Pricing of Fund Shares.”
Each
Fund has elected and intends to qualify to be taxed as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended,
(the “Code”). As regulated investment companies, the Funds will not be
subject to federal income tax if they distribute their income as required by the
tax law and satisfy certain other requirements described in the
SAI.
The
Funds typically make distributions of dividends and capital gains.
Dividends are taxable as ordinary income or, possibly to a limited extent, as
qualified dividend income, depending on the source of such income to the
distributing Fund and the holding period of a Fund for its dividend-paying
securities and of you for your Fund shares. Some or all of your
distributions may not be eligible for this preferential tax rate. The tax
rate you pay on capital gain distributions will depend on how long a Fund held
the securities that generated the gains, not on how long you owned your Fund
shares. You will be taxed in the same manner whether you receive your
dividends and capital gain distributions in cash or reinvest them in additional
Fund shares. A 3.8% federal surtax applies to net investment income (which
generally will include dividends and capital gains from an investment in a Fund)
of shareholders with adjusted gross incomes over $200,000 for single filers and
$250,000 for married joint filers. Although distributions generally are
taxable when received, certain distributions declared in October, November or
December to shareholders of record on a specified date in such a month but paid
in the following January are taxable as if received the prior
December.
By
law, the Funds must withhold from your taxable distributions and redemption
proceeds, an amount as backup withholding determined at a rate as set forth
under section 3406 of the Code, 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 Internal Revenue Service instructs the Funds to
do so.
If
you sell or exchange your Fund shares, it is a taxable event for you.
Depending on the purchase and sale price of the shares you sell or exchange, you
may have a gain or a loss on the transaction. It will be a capital gain or
loss if you hold your shares in a Fund as a capital asset. Long-term
capital gains are subject to a maximum federal income tax rate of 20% (excluding
the 3.8% net investment income tax described above). State and local taxes
may also apply. You are responsible for any tax liabilities generated by
your transaction and your investment in a Fund. The Code limits the
deductibility of capital losses in certain circumstances.
There
is no requirement that a Fund take into consideration any tax implications when
implementing its investment strategy. Shareholders should note that a Fund
may make taxable distributions of income and capital gains even when share
values have declined. Additional information concerning the taxation of
the Funds and its shareholders is contained in the SAI. You should consult
your own tax advisor concerning federal, state and local taxation of
distributions from the Funds.
DISTRIBUTION
OF FUND SHARES
Distributor
Quasar
Distributors, LLC (“Quasar”), an affiliate of the Funds’ transfer agent, U.S.
Bancorp Fund Services, LLC, is located at 777 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202, and is the distributor for the shares of the Funds.
Quasar is a registered broker-dealer and a member of the Financial Industry
Regulatory Authority, Inc. Shares of the Fund are offered on a continuous
basis.
Distribution
and Service (Rule 12b-1) Plan
The Trust
has adopted a plan pursuant to Rule 12b-1 that allows the Total Return Fund’s
Class A shares, and both Funds’ Investor Class shares, to pay distribution and
service fees for the sale, distribution and servicing of a Fund’s shares.
The plan provides for the payment of a distribution and service fee at the
annual rate of up to 0.25% of average daily net assets of the Total Return
Fund’s Class A shares and up to 0.25% of average daily net assets of each Fund’s
Investor Class shares. Because these fees are paid out of a Fund’s assets,
over time these fees will increase the cost of your investment and may cost you
more than paying other types of sales charges.
Service
Fees – Other Payments to Third Parties
The
Funds may pay service fees to intermediaries such as banks, broker-dealers,
financial advisors or other financial institutions, including affiliates of the
Adviser, for sub-administration, sub-transfer agency and other shareholder
services associated with shareholders whose shares are held of record in
omnibus, other group accounts or accounts traded through registered securities
clearing agents.
The
Funds have policies and procedures in place for the monitoring of payments to
broker-dealers and other financial intermediaries for distribution-related
activities and the following non-distribution activities: sub-transfer agent,
administrative, and other shareholder servicing services.
The
Adviser, out of its own resources, and without additional cost to the Funds or
their shareholders, may provide additional cash payments or non-cash
compensation to intermediaries who sell shares of the Funds. These
additional cash payments are generally made to intermediaries that provide
shareholder servicing, marketing support and/or access to sales meetings, sales
representatives and management representatives of the intermediary. Cash
compensation may also be paid to intermediaries for inclusion of the Funds on a
sales list, including a preferred or select sales list, in other sales programs
or as an expense reimbursement in cases where the intermediary provides
shareholder services to the Funds’ shareholders. The Adviser may also pay
cash compensation in the form of finder’s fees that vary depending on the dollar
amount of the shares sold.
Some
of the following policies are mentioned above. In general, each Fund
reserves the right to:
— |
Refuse,
change, discontinue, or temporarily suspend account services, including
telephone purchase, or telephone redemption privileges, for any
reason;
|
— |
Reject
any purchase request for any reason. Generally, the Funds do this if
the purchase is disruptive to the efficient management of a Fund (due to
the timing of the investment or an investor’s history of excessive
trading);
|
— |
Redeem
all shares in your account if your balance falls below a Fund’s minimum
initial investment requirement due to redemption activity. If,
within 30 days of the Funds’ written request, you have not increased your
account balance, you may be required to redeem your shares. The
Funds will not require you to redeem shares if the value of your account
drops below the investment minimum due to fluctuations of NAV;
and
|
— |
Reject
any purchase or redemption request that does not contain all required
documentation. |
Additionally,
The Funds’ minimum investment requirements may be waived from time to time by
the Adviser, and for the following types of shareholders:
— |
Current
and retired employees, directors/trustees and officers of the Trust, the
Adviser and its affiliates and certain family members of each of them
(i.e.,
spouse, domestic partner, child, parent, sibling, grandchild and
grandparent, in each case including in-law, step and adoptive
relationships);
|
— |
Any
trust, pension, profit sharing or other benefit plan for current and
retired employees, directors/trustees and officers of the Adviser and its
affiliates;
|
— |
Current
employees of the Transfer Agent, broker-dealers who act as selling agents
for the Funds, intermediaries that have marketing agreements in place with
the Adviser and the immediate family members of any of them;
|
— |
Existing
clients of the Adviser, their employees and immediate family members of
such employees;
|
— |
Registered
investment advisers who buy through a broker-dealer or service agent who
has entered into an agreement with the Funds’ distributor;
|
— |
Qualified
broker-dealers who have entered into an agreement with the Funds’
distributor; and
|
— |
Individual
accountholders of a financial intermediary that charges an ongoing fee for
its services or offers shares through a no-load network or platform,
provided the aggregate value of such accounts invested in Institutional
Class shares is at least $1 million or is anticipated by the Adviser to
reach $1 million. |
If
you elect telephone privileges on the account application or in a letter to the
Funds, you may be responsible for any fraudulent telephone orders as long as a
Fund has taken reasonable precautions to verify your identity. If an
account has more than one owner or authorized person, the Fund will accept
telephone instructions from any one owner or authorized person. In
addition, once you place a telephone transaction request, it cannot be canceled
or modified after the close of regular trading on the NYSE (generally, 4:00
p.m., Eastern Time).
Telephone
trades must be received by or prior to market close. During periods of
high market activity, shareholders may encounter higher than usual call wait
times. Please allow sufficient time to ensure that you will be able to
complete your telephone transaction prior to market close. If you are
unable to contact the Funds by telephone, you may also mail your request to the
Funds at the address listed under “How to Purchase Fund Shares.”
You should
be aware that there may be delays, malfunctions or other inconveniences
associated with online transactions. There also may be times when the website is
unavailable for Funds transactions or other purposes. Should this happen,
you should consider performing transactions by another method.
The Funds
employ procedures to confirm that transactions entered online are genuine.
These procedures include passwords, encryption and other precautions reasonably
designed to protect the integrity, confidentiality and security of shareholder
information. In order to conduct transactions on the website, you will
need your account number, username and password. The Funds and their
service providers will not be liable for any loss, liability, cost or expense
for following instructions communicated through the Funds’ website, including
fraudulent or unauthorized instructions.
Your
financial intermediary may establish policies that differ from those of the
Funds. For example, the organization may charge transaction fees, set
higher minimum investments, or impose certain limitations on buying or selling
shares in addition to those identified in this Prospectus. Contact your
financial intermediary for details.
Fund
Mailings
Statements
and reports that the Funds will send to you include the following:
· |
Confirmation
statements (after every transaction that affects your account balance or
your account registration);
|
· |
Annual
and semi-annual shareholder reports (every six months); and
|
· |
Quarterly
account statements. |
Lost
Shareholders, Inactive Accounts and Unclaimed Property. It is
important that the Funds maintain a correct address for each shareholder.
An incorrect address may cause a shareholder’s account statements and
other mailings to be returned to the Funds. Based upon statutory
requirements for returned mail, the Funds will attempt to locate the shareholder
or rightful owner of the account. If the Fund is unable to locate the
shareholder, then it will determine whether the shareholder’s account can
legally be considered abandoned. Your mutual fund account may be
transferred to the state government of your state of residence if no activity
occurs within your account during the “inactivity period” specified in your
state’s abandoned property laws. The Funds are legally obligated to
escheat (or transfer) abandoned property to the appropriate state’s unclaimed
property administrator in accordance with statutory requirements. The
shareholder’s last known address of record determines which state has
jurisdiction. Please proactively contact the Transfer Agent toll-free at
1-855-736-7799 at least annually to ensure your account remains in active
status.
If
you are a resident of the state of Texas, you may designate a representative to
receive notifications that, due to inactivity, your mutual fund account assets
may be delivered to the Texas Comptroller. Please contact the Transfer
Agent if you wish to complete a Texas Designation of Representative
form.
Householding
In
an effort to decrease costs, the Funds intend to reduce the number of duplicate
prospectuses, annual and semi-annual reports, proxy statements and other similar
documents you receive by sending only one copy of each to those addresses shared
by two or more accounts and to shareholders the Transfer Agent reasonably
believes are from the same family or household. Once implemented, if you
would like to discontinue householding for your accounts, please call toll-free
at 1-855-736-7799 (855-SEM-PRXX) to request individual copies of these
documents. Once the Transfer Agent receives notice to stop householding,
the Transfer Agent will begin sending individual copies thirty days after
receiving your request. This policy does not apply to account
statements.
The
Bloomberg Barclays
U.S. MBS Index covers
agency mortgage-backed pass-through securities – both fixed-rate and hybrid ARM
– issued by Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC).
Pool aggregates must have at least $250 million outstanding with a weighted
average maturity of at least one year.
The
Bloomberg Barclays
1-3 Year U.S. Government Index covers U.S. Treasury and agency securities
issued by the U.S. Government with a maturity from 1 up to but not including 3
years. This unmanaged index contains only dollar-denominated issues with
at least $250 million par outstanding.
The
Bloomberg Barclays
1-3 Year U.S. Treasury Index covers U.S. Treasury securities issued by
the U.S. Government with a maturity from 1 up to but not including 3
years. This unmanaged index contains only dollar-denominated issues with
at least $250 million par outstanding.
The
financial highlights tables below are intended to help you understand the
financial performance of each Fund’s shares for the fiscal period shown.
Information
prior to March 28, 2014 is that of the Predecessor
Fund. Certain information reflects financial results for a
single share of the Fund. The total returns in the table represent the
rate that an investor would have earned on an investment in a Fund assuming
reinvestment of all dividends and distributions. The Funds’ information
has been audited by Tait, Weller & Baker LLP , whose report, along with each
Fund’s financial statements, are included in the Funds’ annual report dated
November 30, 2018 , which is available free of charge upon request.
Semper
MBS Total Return Fund –Class A
For
a share outstanding throughout each period |
Year
Ended
November
30,
2018 |
Year
Ended
November
30,
2017 |
December
18,
2015*
Through
November
30,
2016 |
|
|
|
|
Net
asset value, beginning of period |
$10.69
|
$10.56 |
$10.92 |
|
|
|
|
Income
from investment operations: |
|
|
|
Net
investment income^ |
0.53
|
0.44 |
0.56 |
Net
realized and unrealized gain/(loss) on investments |
(0.12)
|
0.21 |
(0.28) |
Total
from investment operations |
0.41
|
0.65 |
0.28 |
|
|
|
|
Less
distributions: |
|
|
|
From
net investment income |
(0.60)
|
(0.52) |
(0.64) |
Total
distributions |
(0.60)
|
(0.52) |
(0.64) |
|
|
|
|
Net
asset value, end of period |
$10.50 |
$10.69 |
$10.56 |
|
|
|
|
Total
return |
3.91%
|
6.34% |
2.66%+ |
|
|
|
|
Ratios/supplemental
data: |
|
|
|
Net
assets, end of period (thousands) |
$24,483
|
$20,873 |
$6,582 |
Ratio
of expenses to average net assets: |
|
|
|
Before
fee waiver and recoupment |
1.00%
|
0.94%** |
1.01%++ |
After
fee waiver and recoupment |
1.00%
|
0.95%** |
1.00%++ |
Ratio
of net investment income to average net assets: |
|
|
|
Before
fee waiver and recoupment |
4.97%
|
4.15% |
5.58%++ |
After
fee waiver and recoupment |
4.97%
|
4.14% |
5.59%++ |
Portfolio
turnover rate |
137%
|
238% |
135%+†
|
* Commencement of
operations.
^ Based on average shares
outstanding.
+ Not annualized.
++ Annualized.
† Portfolio turnover rate
calculated for the year ended November 30, 2016.
** Includes extraordinary
expenses of 0.01% that occurred during the Fund’s fiscal year ended
November 30, 2017.
Semper
MBS Total Return Fund – Investor Class
|
Year
Ended November 30, |
For
a share outstanding throughout each year |
2018 |
2017 |
2016 |
2015 |
2014 |
|
|
|
|
|
|
Net
asset value, beginning of year |
$10.69
|
$10.56 |
$10.91 |
$11.08 |
$10.75 |
|
|
|
|
|
|
Income
from investment operations: |
|
|
|
|
|
Net
investment income^ |
0.51
|
0.45 |
0.58 |
0.51 |
0.55 |
Net
realized and unrealized gain/(loss) on investments |
(0.10)
|
0.20 |
(0.30) |
(0.05) |
0.38 |
Total
from investment operations |
0.41 |
0.65 |
0.28 |
0.46 |
0.93 |
|
|
|
|
|
|
Less
distributions: |
|
|
|
|
|
From
net investment income |
(0.60)
|
(0.52) |
(0.63) |
(0.56) |
(0.57) |
From
net realized gain on investments |
--
|
-- |
-- |
(0.07) |
(0.03) |
Total
distributions |
(0.60)
|
(0.52) |
(0.63) |
(0.63) |
(0.60) |
|
|
|
|
|
|
Net
asset value, end of year |
$10.50 |
$10.69 |
$10.56 |
$10.91 |
$11.08 |
|
|
|
|
|
|
Total
return |
3.92%
|
6.34% |
2.67% |
4.26% |
8.84% |
|
|
|
|
|
|
Ratios/supplemental
data: |
|
|
|
|
|
Net
assets, end of year (thousands) |
$225,054
|
$97,089 |
$79,614 |
$67,073 |
$26,121 |
Ratio
of expenses to average net assets: |
|
|
|
|
|
Before
fee waiver and recoupment |
1.01%
|
0.94%** |
0.97% |
0.99% |
1.12% |
After
fee waiver and recoupment |
1.01%
|
0.95%** |
1.00% |
1.00% |
1.00% |
Ratio
of net investment income to average net assets: |
|
|
|
|
|
Before
fee waiver and recoupment |
4.77%
|
4.20% |
5.45% |
4.65% |
4.83% |
After
fee waiver and recoupment |
4.77%
|
4.19% |
5.42% |
4.64% |
4.95% |
Portfolio
turnover rate |
137%
|
238% |
135% |
166% |
142% |
^ Based on
average shares outstanding.
** Includes
extraordinary expenses of 0.01% that occurred during the Fund’s fiscal year
ended November 30, 2017.
Semper
MBS Total Return Fund – Institutional Class
|
Year
Ended November 30, |
For
a share outstanding throughout each year |
2018 |
2017 |
2016 |
2015 |
2014 |
|
|
|
|
|
|
Net
asset value, beginning of year |
$10.70
|
$10.57 |
$10.92 |
$11.09 |
$10.75 |
|
|
|
|
|
|
Income
from investment operations: |
|
|
|
|
|
Net
investment income^ |
0.55
|
0.47 |
0.60 |
0.54 |
0.58 |
Net
realized and unrealized gain/(loss) on investments |
(0.11)
|
0.21 |
(0.30) |
(0.05) |
0.38 |
Total
from investment operations |
0.44 |
0.68 |
0.30 |
0.49 |
0.96 |
|
|
|
|
|
|
Less
distributions: |
|
|
|
|
|
From
net investment income |
(0.63)
|
(0.55) |
(0.65) |
(0.59) |
(0.59) |
From
net realized gain on investments |
--
|
-- |
-- |
(0.07) |
(0.03) |
Total
distributions |
(0.63)
|
(0.55) |
(0.65) |
(0.66) |
(0.62) |
|
|
|
|
|
|
Net
asset value, end of year |
$10.51 |
$10.70 |
$10.57 |
$10.92 |
$11.09 |
|
|
|
|
|
|
Total
return |
4.20%
|
6.59% |
2.92% |
4.51% |
9.18% |
|
|
|
|
|
|
Ratios/supplemental
data: |
|
|
|
|
|
Net
assets, end of year (thousands) |
$1,693,755
|
$1,008,263 |
$466,344 |
$360,443 |
$126,607 |
Ratio
of expenses to average net assets: |
|
|
|
|
|
Before
fee waiver and recoupment |
0.76%
|
0.70%** |
0.73% |
0.74% |
0.89% |
After
fee waiver and recoupment |
0.76%
|
0.70%** |
0.75% |
0.75% |
0.75% |
Ratio
of net investment income to average net assets: |
|
|
|
|
|
Before
fee waiver and recoupment |
5.13%
|
4.37% |
5.68% |
4.88% |
5.10% |
After
fee waiver and recoupment |
5.13%
|
4.37% |
5.66% |
4.87% |
5.24% |
Portfolio
turnover rate |
137%
|
238% |
135% |
166% |
142% |
^ |
Based
on average shares outstanding. |
** |
Includes extraordinary
expenses of 0.01% that occurred during the Fund’s fiscal year ended
November 30, 2017. |
Semper
Short
Duration Fund – Investor Class
For
a share outstanding throughout each year |
For
the Year Ended November 30, |
2018 |
2017 |
2016 |
2015 |
2014 |
|
|
|
|
|
|
Net
asset value, beginning of year |
$9.92
|
$9.92 |
$10.00 |
$10.19 |
$10.23 |
|
|
|
|
|
|
Income
from investment operations: |
|
|
|
|
|
Net
investment income^ |
0.26
|
0.20 |
0.24 |
0.29 |
0.13 |
Net
realized and unrealized gain/(loss) on investments |
(0.05)
|
0.08 |
(0.07) |
(0.16) |
0.06 |
Total
from investment operations |
0.21
|
0.28 |
0.17 |
0.13 |
0.19 |
|
|
|
|
|
|
Less
distributions: |
|
|
|
|
|
From
net investment income |
(0.26)
|
(0.28) |
(0.25) |
(0.31) |
(0.21) |
From
net realized gain on investments |
--
|
-- |
-- |
(0.01) |
(0.02) |
Total
distributions |
(0.26)
|
(0.28) |
(0.25) |
(0.32) |
(0.23) |
|
|
|
|
|
|
Net
asset value, end of year |
$9.87 |
$9.92 |
$9.92 |
$10.00 |
$10.19 |
|
|
|
|
|
|
Total
Return |
2.17%
|
2.90% |
1.77% |
1.23% |
1.86% |
|
|
|
|
|
|
Ratios/Supplemental
Data: |
|
|
|
|
|
Net
assets, end of year (thousands) |
$62,155
|
$14,088 |
$405 |
$1,591 |
$907 |
Ratio
of expenses to average net assets: |
|
|
|
|
|
Before
fee waiver and expense reimbursement |
1.07%
|
1.22%* |
1.21% |
1.35% |
1.84% |
After
fee waiver and expense reimbursement# |
0.85%
|
0.88%* |
0.85% |
1.02% |
1.13% |
Ratio
of net investment income to average net assets: |
|
|
|
|
|
Before
fee waiver and expense reimbursement |
2.37%
|
1.69% |
2.07% |
2.59% |
0.58% |
After
fee waiver and expense reimbursement |
2.59%
|
2.03% |
2.43% |
2.92% |
1.29% |
Portfolio
turnover rate |
158%
|
141% |
108% |
56% |
92% |
^ Based on average
shares outstanding.
#
Excluding interest expense, the ratio of expenses to average net assets would
have been 0.85% for each of the years ended November 30, 2015 and 2014.
* Includes
extraordinary expenses of 0.03% that occurred during the Fund’s fiscal year
ended November 30, 2017.
Semper
Short Duration Fund – Institutional Class
For
a share outstanding throughout each year |
For
the Year Ended November 30, |
2018 |
2017 |
2016 |
2015 |
2014 |
|
|
|
|
|
|
|
|
Net
asset value, beginning of year |
$9.93
|
$9.93 |
$10.01 |
$10.20 |
$10.24 |
|
|
|
|
|
|
|
|
Income
from investment operations: |
|
|
|
|
|
|
Net
investment income^ |
0.28
|
0.24 |
0.25 |
0.32 |
0.24 |
|
Net
realized and unrealized gain/(loss) on investments |
(0.04)
|
0.07 |
(0.05) |
(0.17) |
(0.03) |
|
Total
from investment operations |
0.24
|
0.31 |
0.20 |
0.15 |
0.21 |
|
|
|
|
|
|
|
|
Less
distributions: |
|
|
|
|
|
|
From
net investment income |
(0.29)
|
(0.31) |
(0.28) |
(0.33) |
(0.23) |
|
From
net realized gain on investment |
--
|
-- |
-- |
(0.01) |
(0.02) |
|
Total
distributions |
(0.29)
|
(0.31) |
(0.28) |
(0.34) |
(0.25) |
|
|
|
|
|
|
|
|
Net
asset value, end of year |
$9.88 |
$9.93 |
$9.93 |
$10.01 |
$10.20 |
|
|
|
|
|
|
|
|
Total
return |
2.45%
|
3.16% |
2.04% |
1.48% |
2.11% |
|
|
|
|
|
|
|
|
Ratios/supplemental
data: |
|
|
|
|
|
|
Net
assets, end of year (thousands) |
$105,295
|
$42,704 |
$41,946 |
$43,016 |
$61,232 |
|
Ratio
of expenses to average net assets: |
|
|
|
|
|
|
Before
fee waiver and expense reimbursement |
0.82%
|
0.97%* |
0.98% |
1.14% |
1.06% |
|
After
fee waiver and expense reimbursement# |
0.60%
|
0.61%* |
0.60% |
0.81% |
0.90% |
|
Ratio
of net investment income to average net assets: |
|
|
|
|
|
|
Before
fee waiver and expense reimbursement |
2.57%
|
2.08% |
2.11% |
2.82% |
2.14% |
|
After
fee waiver and expense reimbursement |
2.79%
|
2.44% |
2.49% |
3.15% |
2.30% |
|
Portfolio
turnover rate |
158%
|
141% |
108% |
56% |
92% |
|
^ |
Based
on average shares outstanding. |
# |
Excluding
interest expense, the ratio of expenses to average net assets would have
been 0.60% for each of the years ended November 30, 2015 and
2014. |
* |
Includes extraordinary
expenses of 0.01% that occurred during the Fund’s fiscal year ended
November 30, 2017. |
Investment
Adviser
Semper
Capital Management, L.P.
52
Vanderbilt Avenue, Suite 401
New
York, New York 10017
Independent
Registered Public Accounting Firm
Tait,
Weller & Baker LLP
Two
Liberty Place
50
South 16th Street, Suite 2900
Philadelphia,
Pennsylvania 19102
Legal
Counsel
Schiff
Hardin LLP
666
Fifth Avenue, Suite 1700
New
York, New York 10103
Custodian
U.S.
Bank National Association
Custody
Operations
1555
North River Center Drive, Suite 302
Milwaukee,
Wisconsin 53212
Transfer
Agent, Fund Accountant and Fund Administrator
U.S.
Bancorp Fund Services, LLC
615
East Michigan Street
Milwaukee,
Wisconsin 53202
Distributor
Quasar
Distributors, LLC
777
East Wisconsin Avenue, 6th Floor
Milwaukee,
Wisconsin 53202
Each
Fund collects non-public information about you from the following
sources:
— |
Information
we receive about you on applications or other
forms; |
— |
Information
you give us orally; and/or |
— |
Information
about your transactions with us or
others. |
We
do not disclose any non-public personal information about our customers or
former customers without the customer’s authorization, except as permitted by
law or in response to inquiries from governmental authorities. We may
share information with affiliated and unaffiliated third parties with whom we
have contracts for servicing the Fund. We will provide unaffiliated third
parties with only the information necessary to carry out their assigned
responsibilities. We maintain physical, electronic and procedural
safeguards to guard your non-public personal information and require third
parties to treat your personal information with the same high degree of
confidentiality.
In
the event that you hold shares of the Funds 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 by those entities with unaffiliated third
parties.
Semper
MBS Total Return Fund
Semper
Short Duration Fund
A
series of Advisors Series Trust
http://www.semperfunds.com/index.html
FOR
MORE INFORMATION
You
can find more information about the Funds in the following
documents:
Statement
of Additional Information
The
SAI provides additional details about the investments and techniques of the
Funds and certain other additional information. A current SAI is on file
with the SEC and is incorporated into this Prospectus by reference. This
means that the SAI is legally considered a part of this Prospectus even though
it is not physically within this Prospectus.
Annual
and Semi-Annual Reports
The
Funds’ annual and semi-annual reports (collectively, the “Shareholder Reports”)
will provide the most recent financial reports and portfolio listings. The
annual report will contain a discussion of the market conditions and investment
strategies that affected a Fund’s performance during a Fund’s previous fiscal
year.
The
SAI and Shareholder Reports will be available free of charge on the Funds’
website at http://www.semperfunds.com/index.html.
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 1-855-736-7799 (855-SEM-PRXX) or by writing
to:
Semper
MBS Total Return Fund
Semper
Short Duration Fund
c/o
U.S. Bancorp Fund Services, LLC
P.O.
Box 701
Milwaukee,
Wisconsin 53201-0701
http://www.semperfunds.com/index.html
Reports
and other information about the Fund are also available:
· |
Free
of charge from the SEC’s EDGAR database on the SEC’s website at
http://www.sec.gov;
or |
(The
Trust’s SEC Investment Company Act file number is 811-07959.)
Shareholders
purchasing Fund shares through a Morgan Stanley Wealth Management transactional
brokerage account will be eligible only for the following front-end sales charge
waivers with respect to Class A shares, which may differ from and may be more
limited than those disclosed elsewhere in this Fund’s Prospectus or
SAI.
Front-end
Sales Charge Waivers on Class A Shares available at Morgan Stanley Wealth
Management
· |
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored
retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh
plans |
· |
Morgan
Stanley employee and employee-related accounts according to Morgan
Stanley’s account linking rules |
· |
Shares
purchased through reinvestment of dividends and capital gains
distributions when purchasing shares of the same
fund |
· |
Shares
purchased through a Morgan Stanley self-directed brokerage
account |
· |
Shares
purchased from the proceeds of redemptions within the same fund family,
provided (i) the repurchase occurs within 90 days following the
redemption, (ii) the redemption and purchase occur in the same account,
and (iii) redeemed shares were subject to a front-end or deferred sales
charge. |