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TOEWS AGILITY SHARES
DYNAMIC |
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TACTICAL INCOME ETF |
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Ticker Symbol: THY |
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Primary Listing Exchange for the Fund: Cboe BZX Exchange,
Inc. |
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PROSPECTUS |
August 28, 2021 |
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Advised by: |
Toews Corporation |
1750 Zion Road, Suite 201 |
Northfield, NJ 08225 |
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https://toewsetfs.com |
1-800-511-9270 |
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This Prospectus provides important information about the Fund
that you should know before investing. Please read it carefully and keep
it for future reference. These securities have not been approved or
disapproved by the Securities and Exchange Commission nor has the
Securities and Exchange Commission passed upon the accuracy or adequacy of
this Prospectus. Any representation to the contrary is a criminal
offense. |
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TABLE OF CONTENTS
FUND
SUMMARY: TOEWS AGILITY SHARES DYNAMIC TACTICAL INCOME
ETF |
1 |
ADDITIONAL INFORMATION
ABOUT PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS |
5 |
Investment
Objectives |
5 |
Principal Investment
Strategies |
5 |
Principal Investment
Risks |
5 |
Temporary
Investments |
9 |
Portfolio Holdings
Disclosure |
9 |
Cybersecurity |
9 |
MANAGEMENT OF THE
FUND |
9 |
Investment
Adviser |
9 |
Portfolio
Managers |
10 |
NET ASSET
VALUE |
10 |
HOW TO BUY AND SELL
SHARES |
11 |
FREQUENT PURCHASES AND
REDEMPTIONS OF FUND SHARES |
12 |
DISTRIBUTION AND
SERVICE PLAN |
12 |
DIVIDENDS, OTHER
DISTRIBUTIONS AND TAXES |
12 |
OTHER
INFORMATION |
14 |
FINANCIAL
HIGHLIGHTS |
15 |
PRIVACY
NOTICE |
16 |
FUND SUMMARY: TOEWS AGILITY
SHARES DYNAMIC TACTICAL INCOME ETF
Investment
Objectives:
The Fund seeks to provide
income.
A secondary objective of the
Fund is to limit risk during unfavorable market conditions.
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.
Shareholder Fees (fees paid
directly from your investment)
Shareholder Fees
(fees paid directly from your investment) |
|
Maximum Sales Charge
(Load) Imposed on Purchases |
None |
Maximum Deferred Sales
Charge (Load) |
None |
Maximum Sales Charge
(Load) Imposed on Reinvested Dividends and Other Distributions |
None |
Redemption Fee |
None |
Annual Fund Operating
Expenses (expenses that you pay each year as a percentage of the value of your
investment)
Annual Fund Operating
Expenses (expenses that you pay each year as a percentage of the
value of your investment) |
|
Management Fees |
0.85% |
Distribution and/or
Service (12b-1) Fees |
0.00% |
Other Expenses |
0.34% |
Acquired Fund Fees and
Expenses(1) |
0.41% |
Total Annual Fund
Operating Expenses |
1.60% |
Fee Waiver and/or Expense
Reimbursement(2) |
(0.24)% |
Total Annual Fund
Operating Expenses After Fee Waiver and/or Expense Reimbursement |
1.36% |
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. Finally, the Example assumes that the Fund’s operating expense
limitation agreement will only be in place for the duration described above.
Although your actual costs may be higher or lower, based upon these assumptions
your costs would be:
|
1 Year |
3 Years |
5 Years |
10 Years |
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$138 |
$481 |
$848 |
$1,880 |
Portfolio
Turnover:
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable
account. These costs, which are not reflected in annual fund operating expenses
or in the Example, may adversely or negatively affect the Fund’s performance.
During the most recent fiscal period, the Fund’s portfolio turnover rate was
595% of the
average value of its portfolio.
Principal Investment
Strategies:
The Fund’s adviser seeks to
achieve the Fund’s investment objectives by investing primarily in exchange
traded funds (“ETFs”); options on ETFs, equities and indices; futures and
options that invest in or are otherwise exposed to domestic and foreign
high-yield debt instruments (also known as “junk bonds”), and U.S. or foreign
cash equivalents. In addition, the Fund may invest directly in domestic and
foreign high-yield debt instruments and U.S. or foreign cash
equivalents.
The Fund may hedge long
positions using futures and/or ETFs. The Fund defines high-yield debt
instruments as corporate bonds or other bonds or debt instruments that are
generally rated lower than Baa3 by Moody’s Investors Service, Inc. (“Moody’s”)
or lower than BBB- by S&P (below investment grade). Up to 100% of the Fund’s
assets may be invested in instruments generally rated below Caa3 by Moody’s or
CCC- by S&P.
The Fund’s secondary objective
is to limit risk during unfavorable market conditions, and when the adviser
determines such conditions exist, the Fund will take a defensive position and/or
be allocated 100% to U.S. Treasuries and/or short-term fixed income securities,
U.S. or foreign cash or cash equivalents. The Fund may invest in US Treasury
bills, notes, and bonds of any duration or length until maturity. The Fund may
invest in futures contracts that derive the value from US Treasury bills, notes,
and bonds of any duration or length until maturity. The Fund may allocate up to
100% to fixed income ETFs and/or other fixed income securities. This strategy is
a tactical market timing strategy in which the portfolio will be allocated 100%
to cash, U.S. Treasuries and/or short-term fixed income securities, U.S. or
foreign cash or cash equivalents for significant periods of time.
The adviser uses technical
analysis, including monitoring price movements and momentum, of high-yield bond
markets in an effort to identify the proper weighting of the Fund’s portfolio.
The adviser buys and sells securities and derivatives described above to
increase or decrease the Fund’s exposure to the high-yield bond market. The
adviser’s decision to buy or sell a Fund holding will be made based on current
market conditions and the adviser’s determination of the appropriate exposure
level to the high-yield bond market. The Fund’s adviser may engage in active and
frequent trading of the Fund’s portfolio securities achieve the Fund’s
investment objective.
Principal
Risks:
As
with all mutual funds, there is the risk that you could lose money through your
investment in the Fund. Many factors affect the Fund’s
net asset value and performance.
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Derivatives Risk:
The Fund’s use of derivatives involves risks different from, or
possibly greater than, the risks associated with investing directly in
securities and other traditional investments. These risks include leverage
risk and correlation or tracking risk. |
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ETF Underlying Fund
Risk: ETFs are subject to investment advisory fees and other expenses,
which will be indirectly paid by the Fund. As a result, your cost of
investing in the Fund will be higher than the cost of investing directly
in ETFs and may be higher than other mutual funds that invest directly in
securities. Each ETF is subject to specific risks, depending on its
investments. |
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ETF Structure Risk:
The Fund is structured as an ETF and as a result is subject to the
special risks, including: |
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Not Individually
Redeemable. Shares are not individually redeemable and may be redeemed by
the Fund at NAV only in large blocks known as “Creation Units.” You may
incur brokerage costs purchasing enough Shares to constitute a Creation
Unit. |
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Trading Issues. Trading
in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares
inadvisable, such as extraordinary market volatility. There can be no
assurance that Shares will continue to meet the listing requirements of
the Exchange. An active trading market for the Fund’s shares may not be
developed or maintained. If the Fund’s shares are traded outside a
collateralized settlement system, the number of financial institutions
that can act as authorized participants that can post collateral on an
agency basis is limited, which may limit the market for the Fund’s shares.
To the extent that those authorized participants exit the business or are
unable to process creation or redemption orders and no other authorized
participants are able to step forward to do so, there may be a
significantly diminished trading market for the Fund’s shares. This could
lead to differences between market price and underlying value of
shares. |
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Liquidity Risk. In
stressed market conditions, the market for the Fund’s shares may become
less liquid in response to deteriorating liquidity in the market for the
Fund’s underlying holdings. This adverse effect on the liquidity of the
Fund’s shares may, in turn, lead to differences between the market value
of the Fund’s shares and the Fund’s net asset
value. |
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Cash Transaction Risk.
Purchases and redemptions of creation units that are made primarily with
cash, rather than through in-kind delivery of portfolio securities may
cause the Fund to incur additional costs including brokerage costs and
taxable capital gains or losses that the Fund may not have incurred if the
Fund had made redemptions in-kind. |
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Market Price Variance
Risk. Individual Shares of the Fund that are listed for trading on the
Exchange can be bought and sold in the secondary market at market prices.
The market prices of Shares will fluctuate in response to changes in NAV
and supply and demand for Shares. There may be times when the market price
and the NAV vary significantly and you may pay more than NAV when buying
Shares on the secondary market, and you may receive less than NAV when you
sell those Shares. The market price of Shares, like the price of any
exchange-traded security, includes a “bid-ask spread” charged by the
exchange specialists, market makers or other participants that trade the
particular security. In times of severe market disruption, the bid-ask
spread often increases significantly. This means that Shares may trade at
a discount to NAV and the discount is likely to be greatest when the price
of Shares is falling fastest, which may be the time that you most want to
sell your Shares. The Fund’s investment results are measured based upon
the daily NAV of the Fund over a period of time. Investors purchasing and
selling Shares in the secondary market may not experience investment
results consistent with those experienced by those creating and redeeming
directly with the Fund. |
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Fixed Income Risk:
When the Fund invests in fixed income securities, the value of your
investment in the Fund will fluctuate with changes in interest rates.
Typically, a rise in interest rates causes a decline in the value of fixed
income securities. In general, the market price of debt securities with
longer maturities will increase or decrease more in response to changes in
interest rates than shorter-term securities. Other risk factors include
credit risk (the debtor may default) and prepayment risk (the debtor may
pay its obligation early, reducing the amount of interest payments). These
risks could affect the value of a particular investment, possibly causing
the Fund’s share price and total return to be reduced and fluctuate more
than other types of investments. |
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Fluctuation of Net
Asset Value Risk: The net asset value (“NAV”) of the Fund’s shares
will generally fluctuate with changes in the market value of the Fund’s
holdings. The market prices of the shares will generally fluctuate in
accordance with changes in NAV as well as the relative supply of and
demand for the shares on the Exchange. The Adviser cannot predict whether
the shares will trade below, at or above their NAV. Price differences may
be due, in large part, to the fact that supply and demand forces at work
in the secondary trading market for the shares will be closely related to,
but not identical to, the same forces influencing the prices of the Fund’s
holdings trading individually or in the aggregate at any point in time. In
addition, unlike conventional ETFs, the Fund is not an index fund. The
Fund is actively managed and does not seek to replicate the performance of
a specified index. Index based ETFs have generally traded at prices which
closely correspond to NAV per share. Actively managed ETFs have a limited
trading history and, therefore, there can be no assurance as to whether
and/or the extent to which the shares will trade at premiums or discounts
to NAV. |
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Foreign Securities
Risk: Because the Fund’s investments may include foreign securities,
the Fund is subject to risks beyond those associated with investing in
domestic securities. Foreign companies are generally not subject to the
same regulatory requirements of U.S. companies thereby resulting in less
publicly available information about these companies. In addition, foreign
accounting, auditing and financial reporting standards generally differ
from those applicable to U.S. companies. Market prices for foreign
securities are not determined at the same time of day as the NAV for the
Fund. Because the Fund may invest in foreign securities that are primarily
listed on foreign exchanges that may trade on weekends or other days when
the Fund does not price its shares, the value of the Fund’s portfolio may
change on days when you may not be able to buy or sell Fund
shares. |
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Futures Risk: The
Fund’s use of futures contracts involves risks different from, or possibly
greater than, the risks associated with investing directly in securities
and other traditional investments. These risks include leverage risk and
correlation or tracking risk. Because futures require only a small initial
investment in the form of a deposit or margin, they involve a high degree
of leverage. Under certain market conditions, futures contracts may become
illiquid. As a result, the Fund may be unable to close out its futures
contracts at a time which is advantageous or take an offsetting defensive
position, potentially resulting in significant losses for the
Fund. |
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High Yield Bond Risk:
Lower-quality bonds, known as “high yield” or “junk” bonds, present
greater risk than bonds of higher quality, including an increased risk of
default. An economic downturn or period of rising interest rates could
adversely affect the market for these bonds and reduce the Fund’s ability
to sell its bonds. The lack of a liquid market for these bonds could
decrease the share price of the ETFs in which the Fund
invests. |
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Issuer Risk: Fund
value might decrease in response to the activities and financial prospects
of an individual company or issuer in the Fund’s portfolio. The value of
an individual issuer can be more volatile than the market as a whole and
can perform differently from the value of the market as a whole. The value
of certain types of companies or issuers can be more volatile due to
increased sensitivity to adverse issuer, political, regulatory, market, or
economic developments. |
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Limited History of
Operations Risk: The Fund is a new ETF with a limited history of
operations for investors to evaluate. |
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Management Risk:
The ability of the Fund to meet its investment objective is directly
related to the adviser’s investment model. The models used by the adviser
to determine or guide investment decisions may not achieve the objectives
of the Fund. The adviser’s assessment of the attractiveness and potential
appreciation of particular investments or markets in which the Fund
invests may prove to be incorrect and there is no guarantee that the
adviser’s investment strategy will produce the desired
results. |
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Market and
Geopolitical Risk: The increasing interconnectivity between global
economies and financial markets increases the likelihood that events or
conditions in one region or financial market may adversely impact issuers
in a different country, region or financial market. Securities in the Fund
may underperform due to inflation (or expectations for inflation),
interest rates, global demand for particular products or resources,
natural disasters, pandemics, epidemics, terrorism, regulatory events and
governmental or quasi-governmental actions. The occurrence of global
events similar to those in recent years, such as terrorist attacks around
the world, natural disasters, social and political discord or debt crises
and downgrades, among others, may result in market volatility and may have
long term effects on both the U.S. and global financial markets. It is
difficult to predict when similar events affecting the U.S. or global
financial markets may occur, the effects that such events may have and the
duration of those effects. Any such event(s) could have a significant
adverse impact on the value and risk profile of the Fund. The current
novel coronavirus (COVID-19) global pandemic and the aggressive responses
taken by many governments, including closing borders, restricting
international and domestic travel, and the imposition of prolonged
quarantines or similar restrictions, as well as the forced or voluntary
closure of, or operational changes to, many retail and other businesses,
has had negative impacts, and in many cases severe negative impacts, on
markets worldwide. It is not known how long such impacts, or any future
impacts of other significant events described above, will or would last,
but there could be a prolonged period of global economic slowdown, which
may impact your investment. Therefore, the Fund could lose money over
short periods due to short-term market movements and over longer periods
during more prolonged market downturns. During a general market downturn,
multiple asset classes may be negatively affected. Changes in market
conditions and interest rates can have the same impact on all types of
securities and instruments. In times of severe market disruptions you
could lose your entire investment |
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Portfolio Turnover
Risk: Portfolio turnover results in higher brokerage commissions,
dealer mark-ups and other transaction costs and may result in taxable
capital gains. Higher costs associated with increased portfolio turnover
may offset gains in the Fund’s performance. |
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Options Risk:
Options are subject to changes in the underlying securities or index
of securities on which such instruments are based. Typically the seller
(writer) of a covered put option assumes the risk of a decline in the
market price of the underlying security below the strike price of the
underlying security less the premium received, and gives up the
opportunity for gain on the underlying security above the exercise price
of the option and the buyer of a put or call option, risks losing the
entire premium invested in the option if it does not exercise the
option. |
Performance:
Because the Fund has less
than a full calendar year of investment operations, no bar chart or Average
Annual Total Returns table is presented for the Fund at this
time. In the future, performance information will be
presented in this section of this Prospectus. Also, shareholder reports
containing financial and performance information are mailed to shareholders
semi-annually.
Adviser: Toews Corporation is the Fund’s
investment adviser.
Portfolio Managers:
Phillip Toews, President, Randall Schroeder, Chief Operating Officer, Jason
Graffius, Head of Research, and Charles Collins, Head of Trading of the adviser,
serve as the Fund’s Co-Portfolio Managers and are primarily responsible for the
day-to-day management of the Fund. Messrs. Toews, Schroeder, Graffius and
Collins have each served the Fund in this capacity since the Fund commenced
operations in June 2020.
Purchase and Sale of Fund
Shares: The Fund will issue and redeem Shares at NAV only in large blocks of
25,000 Shares (each block of Shares is called a “Creation Unit”). Creation Units
are issued and redeemed for cash and/or in-kind for securities. Individual
Shares may only be purchased and sold in secondary market transactions through
brokers. Except when aggregated in Creation Units, the Shares are not redeemable
securities of the Fund.
Shares of the Fund are listed
for trading on Cboe BZX Exchange, Inc. (the “Exchange”) and trade at market
prices rather than NAV. Shares of the Fund may trade at a price that is greater
than, at, or less than NAV.
Tax Information:
Dividends and capital gain distributions you receive from the Fund, whether
you reinvest your distributions in additional Fund shares or receive them in
cash, are taxable to you at either ordinary income or capital gains tax rates
unless you are investing through a tax-free plan. If you are investing through a
tax-free plan, you will be taxed upon withdrawal from your account.
Payments to Broker-Dealers
and Other Financial Intermediaries: If you purchase the Fund through a
broker-dealer or other financial intermediary (such as a bank), the Fund and its
related companies 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 intermediary and your salesperson to
recommend the Fund over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
ADDITIONAL INFORMATION ABOUT
PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS
Investment
Objectives
The Fund seeks to provide
income and long-term growth of capital. A secondary objective of the Fund is to
limit risk during unfavorable market conditions. The Fund’s investment
objective(s) is/are a non-fundamental policy and may be changed by the Fund’s
Board of Trustees upon 60 days’ written notice to shareholders.
Principal Investment
Strategies
The Fund’s adviser seeks to
achieve the Fund’s investment objectives by investing primarily in exchange
traded funds (“ETFs”); options on ETFs, equities and indices; and/or derivative
instruments that invest in or are otherwise exposed to domestic and foreign
high-yield debt instruments and U.S. or foreign cash equivalents. In addition,
the Fund may invest directly domestic and foreign high-yield debt instruments
and U.S. or foreign cash equivalents. The Fund may hedge long positions using
futures, options or ETFs. The Fund’s adviser may engage in active and frequent
trading of the Fund’s portfolio securities and derivatives to achieve the Fund’s
investment objective.
The Fund defines high-yield
debt instruments as corporate bonds or other bonds or debt instruments that are
generally rated lower than Baa3 by Moody’s Investors Service, Inc. (“Moody’s”)
or lower than BBB- by S&P (below investment grade). Up to 100% of the Fund’s
assets may be invested in instruments generally rated below Caa3 by Moody’s or
CCC- by S&P.
When the Fund’s adviser
determines that investment conditions in the high-yield market are favorable,
the Fund will allocate most of its assets to investments in high-yield ETFs,
high-yield debt instruments, which are commonly referred to as “junk bonds”, and
derivatives providing exposure to high-yield ETFs and debt
instruments.
The Fund’s secondary objective
is to limit risk during unfavorable market conditions, and when the adviser
determines such conditions exist, the Fund will take a defensive position and/or
be allocated 100% to U.S. Treasuries and/or short-term fixed income securities,
U.S. or foreign cash or cash equivalents. The Fund may invest in US Treasury
bills, notes, and bonds of any duration or length until maturity. The Fund may
invest in futures contracts that derive the value from US Treasury bills, notes,
and bonds of any duration or length until maturity. The Fund’s allocation to
fixed income ETFs and/or other fixed income securities may be significant. This
strategy is a tactical market timing strategy in which the portfolio will be
allocated 100% to Cash, U.S. Treasuries and/or short-term fixed income
securities, U.S. or foreign cash or cash equivalents for significant periods of
time.
The adviser uses technical
analysis, including monitoring price movements and momentum, of high-yield bond
markets in an effort to identify the proper weighting of the Fund’s portfolio.
The adviser buys and sells securities and derivatives described above to
increase or decrease the Fund’s exposure to the high-yield bond market. The
adviser’s decision to buy or sell a Fund holding will be made based on current
market conditions and the adviser’s determination of the appropriate exposure
level to the high-yield bond market.
The Fund’s adviser may engage
in active and frequent trading of the Fund’s portfolio securities achieve the
Fund’s investment objective.
Principal Investment
Risks
There is no assurance that the
Fund will achieve its investment objective. The Fund’s share price will
fluctuate with changes in the market value of its portfolio securities. When you
sell your Fund shares, they may be worth less than what you paid for them and,
accordingly, you can lose money investing in the Fund. The following risks could
adversely affect the net asset value, total return and the value of the Fund and
your investment. The risk descriptions below provide a more detailed explanation
of the principal investment risks that correspond to the risks described in the
Fund’s Summary section of this Prospectus.
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Derivatives Risk:
The Fund’s use of derivatives involves risks different from, or
possibly greater than, the risks associated with investing directly in
securities and other traditional investments. These risks include leverage
risk and correlation or tracking risk. |
|
● |
ETF Underlying Fund
Risk: ETFs are subject to investment advisory fees and other expenses,
which will be indirectly paid by the Fund. As a result, your cost of
investing in the Fund will be higher than the cost of investing directly
in ETFs and may be higher than other exchange-traded funds that invest
directly in securities such as stocks and bonds. ETFs are listed on
national stock exchanges and are traded like stocks listed on an exchange.
ETF shares may trade at a discount or a premium in market price if there
is a limited market in such shares. ETFs are also subject to brokerage and
other trading costs, which could result in greater expenses to the Fund.
ETFs may employ leverage, which magnifies the changes in the value of the
ETFs. Finally, because the value of ETF shares depends on the demand in
the market, the adviser may not be able to liquidate the Fund’s holdings
at the most optimal time, adversely affecting performance. The Fund
invests in ETFs. You will indirectly bear fees and expenses charged by the
ETFs in addition to the Fund’s direct fees and
expenses. |
Each ETF is subject to specific
risks, depending on the nature of the ETF. These risks could include liquidity
risk, sector risk, foreign and emerging market risk, as well as risks associated
with fixed-income securities, real estate investments, and commodities.
Additional risks of investing in ETFs are described below:
|
○ |
Net Asset Value and
Market Price Risk: The market value of the ETF shares may differ from
their net asset value. This difference in price may be due to the fact
that the supply and demand in the market for ETF shares at any point in
time is not always identical to the supply and demand in the market for
the underlying basket of securities. Accordingly, there may be times when
an ETF share trades at a premium or discount to its net asset value. These
price differences can be significant, especially in times of market
stress. |
|
○ |
Tracking Risk:
Investment in the Fund should be made with the understanding that the
ETFs in which the Fund invests, if passively managed, will not be able to
replicate exactly the performance of the indices they track because the
total return generated by the securities will be reduced by transaction
costs incurred in adjusting the actual balance of the securities. In
addition, the ETFs in which the Fund invests will incur expenses not
incurred by their applicable indices. Certain securities comprising the
indices tracked by the ETFs may, from time to time, temporarily be
unavailable, which may further impede the ETFs’ ability to track their
applicable indices. |
|
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ETF Structure Risks:
The Fund is structured as an ETF and as a result is subject to the
special risks, including: |
|
○ |
Not Individually
Redeemable. Shares are not individually redeemable and may be redeemed
by the Fund at NAV only in large blocks known as “Creation Units.” You may
incur brokerage costs purchasing enough Shares to constitute a Creation
Unit. |
|
○ |
Trading Issues.
Trading in Shares on the Exchange may be halted due to market conditions
or for reasons that, in the view of the Exchange, make trading in Shares
inadvisable, such as extraordinary market volatility. There can be no
assurance that Shares will continue to meet the listing requirements of
the Exchange. An active trading market for the Fund’s shares may not be
developed or maintained. If the Fund’s shares are traded outside a
collateralized settlement system, the number of financial institutions
that can act as authorized participants that can post collateral on an
agency basis is limited, which may limit the market for the Fund’s shares.
To the extent that those authorized participants exit the business or are
unable to process creation or redemption orders and no other authorized
participants are able to step forward to do so, there may be a
significantly diminished trading market for the Fund’s shares. This could
lead to differences between market price and underlying value of
shares. |
|
○ |
Market Price Variance
Risk: Individual Shares of the Fund that are listed for trading on the
Exchange can be bought and sold in the secondary market at market prices.
The market prices of Shares will fluctuate in response to changes in NAV
and supply and demand for Shares. There may be times when the market price
and the NAV vary significantly and you may pay more than NAV when buying
Shares on the secondary market, and you may receive less than NAV when you
sell those Shares. The market price of Shares, like the price of any
exchange-traded security, includes a “bid-ask spread” charged by the
exchange specialists, market makers or other participants that trade the
particular security. In times of severe market disruption, the bid-ask
spread often increases significantly. This means that Shares may trade at
a discount to NAV and the discount is likely to be greatest when the price
of Shares is falling fastest, which may be the time that you most want to
sell your Shares. The Fund’s investment results are measured based upon
the daily NAV of the Fund over a period of time. Investors purchasing and
selling Shares in the secondary market may not experience investment
results consistent with those experienced by those creating and redeeming
directly with the Fund. |
|
● |
In times of market
stress, market makers may step away from their role market making in
shares of ETFs and in executing trades, which can lead to differences
between the market value of Fund shares and the Fund’s net asset
value. |
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The market price for the
Fund’s shares may deviate from the Fund’s net asset value, particularly
during times of market stress, with the result that investors may pay
significantly more or significantly less for Fund shares than the Fund’s
net asset value, which is reflected in the bid and ask price for Fund
shares or in the closing price. |
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When all or a portion of
an ETFs underlying securities trade in a market that is closed when the
market for the Fund’s shares is open, there may be changes from the last
quote of the closed market and the quote from the Fund’s domestic trading
day, which could lead to differences between the market value of the
Fund’s shares and the Fund’s net asset value. |
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In stressed market
conditions, the market for the Fund’s shares may become less liquid in
response to the deteriorating liquidity of the Fund’s portfolio. This
adverse effect on the liquidity of the Fund’s shares may, in turn, lead to
differences between the market value of the Fund’s shares and the Fund’s
net asset value. |
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Fixed Income Risk:
When the Fund invests in fixed income securities, the value of your
investment in the Fund will fluctuate with changes in interest rates.
Typically, a rise in interest rates causes a decline in the value of fixed
income securities. In general, the market price of debt securities with
longer maturities will increase or decrease more in response to changes in
interest rates than shorter-term securities. Other risk factors include
credit risk (the debtor may default) and prepayment risk (the debtor may
pay its obligation early, reducing the amount of interest payments). These
risks could affect the value of a particular investment, possibly causing
the Fund’s share price and total return to be reduced and fluctuate more
than other types of investments. |
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Fluctuation of Net
Asset Value Risk: The NAV of the Fund’s shares will generally
fluctuate with changes in the market value of the Fund’s holdings. The
market prices of the shares will generally fluctuate in accordance with
changes in NAV as well as the relative supply of and demand for the shares
on the Exchange. The Adviser cannot predict whether the shares will trade
below, at or above their NAV. Price differences may be due, in large part,
to the fact that supply and demand forces at work in the secondary trading
market for the shares will be closely related to, but not identical to,
the same forces influencing the prices of the Fund’s holdings trading
individually or in the aggregate at any point in time. In addition, unlike
conventional ETFs, the Fund is not an index fund. The Fund is actively
managed and does not seek to replicate the performance of a specified
index. Index based ETFs have generally traded at prices which closely
correspond to NAV per share. Actively managed ETFs have a limited trading
history and, therefore, there can be no assurance as to whether and/or the
extent to which the shares will trade at premiums or discounts to
NAV. |
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Foreign Securities
Risk: To the extent the Fund invests in ETFs that invest in foreign
debt securities, the Fund could be subject to greater risks because the
Fund’s performance may depend on issues other than the performance of a
particular company or U.S. market sector. Changes in foreign economies and
political climates are more likely to affect the Fund than a
exchange-traded fund that invests exclusively in U.S. companies. There may
also be less government supervision of foreign markets, resulting in
non-uniform accounting practices and less publicly available information.
The values of foreign investments may be affected by changes in exchange
control regulations, application of foreign tax laws (including
withholding tax), changes in governmental administration or economic or
monetary policy (in this country or abroad) or changed circumstances in
dealings between nations. In addition, foreign brokerage commissions,
custody fees and other costs of investing in foreign securities are
generally higher than in the United States. Investments in foreign issues
could be affected by other factors not present in the United States,
including expropriation, armed conflict, confiscatory taxation, and
potential difficulties in enforcing contractual obligations. As a result,
the Fund may be exposed to greater risk and will be more dependent on the
adviser’s ability to assess such risk than if the Fund invested solely in
more developed countries. Market prices for foreign securities are not
determined at the same time of day as the net asset value for the Fund.
Because the Fund may invest in foreign securities that are primarily
listed on foreign exchanges that may trade on weekends or other days when
the Fund does not price its shares, the value of the Fund’s portfolio may
change on days when you may not be able to buy or sell Fund
shares. |
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Futures Risk: The
Fund’s use of futures involves risks different from, or possibly greater
than, the risks associated with investing directly in securities and other
traditional investments. These risks include (i) leverage risk (ii) risk
of mispricing or improper valuation; and (iii) the risk that changes in
the value of the futures contract may not correlate perfectly with the
underlying index. Investments in futures involve leverage, which means a
small percentage of assets invested in futures can have a
disproportionately large impact on the Fund. This risk could cause the
Fund to lose more than the principal amount invested. Futures contracts
may become mispriced or improperly valued when compared to the adviser’s
expectation and may not produce the desired investment results.
Additionally, changes in the value of futures contracts may not track or
correlate perfectly with the underlying index because of temporary, or
even long-term, supply and demand imbalances and because futures do not
pay dividends unlike the stocks upon which they are based. While futures
contracts are generally liquid instruments, under certain market
conditions they may become illiquid. As a result, the Fund may be unable
to close out its futures contracts at a time which is advantageous or take
an offsetting defensive position, potentially resulting in significant
losses for the Fund. The commitment of Fund assets to cover certain
futures positions may impede the adviser’s ability to manage the Fund’s
portfolio effectively any may restrict the Fund’s ability to enter into
offsetting or defensive positions, potentially resulting in significant
losses for the Fund. Futures exchanges may impose daily or intra-day price
change limits and/or limit the volume of trading. Additionally, government
regulation may further reduce liquidity through similar trading
restrictions. The successful use of futures depends upon a variety of
factors, particularly the ability of the adviser to predict movements of
the underlying securities markets, which requires different skills than
predicting changes in the prices of individual securities. There can be no
assurance that any particular futures strategy adopted will succeed. The
commitment of Fund assets to cover certain futures positions may impede
the adviser’s ability to manage the Fund’s portfolio effectively and may
restrict the Fund’s ability to enter into offsetting or defensive
positions, potentially resulting in significant losses for the
Fund. |
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High Yield Bond Risk:
Lower-quality bonds, known as “high yield” or “junk” bonds, present a
significant risk for loss of principal and interest. These bonds offer the
potential for higher return, but also involve greater risk than bonds of
higher quality, including an increased possibility that the bond’s issuer,
obligor or guarantor may not be able to make its payments of interest and
principal (credit quality risk). If that happens, the value of the bond
may decrease, and the Fund’s share price may decrease and its income
distribution may be reduced. An economic downturn or period of rising
interest rates (interest rate risk) could adversely affect the market for
these bonds and reduce the Fund’s ability to sell its bonds (liquidity
risk). Such securities may also include “Rule 144A” securities, which are
subject to resale restrictions. The lack of a liquid market for these
bonds could decrease the Fund’s share price. |
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Issuer Risk: Fund
value might decrease in response to the activities and financial prospects
of an individual company in the Fund’s portfolio. The value of an
individual company can be more volatile than the market as a whole and can
perform differently from the value of the market as a whole. The value of
certain types of companies can be more volatile due to increased
sensitivity to adverse issuer, political, regulatory, market, or economic
developments. |
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Limited History of
Operations Risk: The Fund is a new ETF with a limited history of
operations for investors to evaluate. |
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Management Risk:
The ability of the Fund to meet its investment objective is directly
related to the Adviser’s investment model. The models used by the adviser
to determine or guide investment decisions may not achieve the objectives
of the Fund. The Adviser’s assessment of the attractiveness and potential
appreciation of particular investments or markets in which the Fund
invests may prove to be incorrect and there is no guarantee that the
Adviser’s investment strategy will produce the desired
results. |
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Market and
Geopolitical Risk: The increasing interconnectivity between global
economies and financial markets increases the likelihood that events or
conditions in one region or financial market may adversely impact issuers
in a different country, region or financial market. Securities in the Fund
may underperform due to inflation (or expectations for inflation),
interest rates, global demand for particular products or resources,
natural disasters, pandemics, epidemics, terrorism, regulatory events and
governmental or quasi-governmental actions. The occurrence of global
events similar to those in recent years, such as terrorist attacks around
the world, natural disasters, social and political discord or debt crises
and downgrades, among others, may result in market volatility and may have
long term effects on both the U.S. and global financial markets. It is
difficult to predict when similar events affecting the U.S. or global
financial markets may occur, the effects that such events may have and the
duration of those effects. Any such event(s) could have a significant
adverse impact on the value and risk profile of the Fund. The current
novel coronavirus (COVID-19) global pandemic and the aggressive responses
taken by many governments, including closing borders, restricting
international and domestic travel, and the imposition of prolonged
quarantines or similar restrictions, as well as the forced or voluntary
closure of, or operational changes to, many retail and other businesses,
has had negative impacts, and in many cases severe negative impacts, on
markets worldwide. It is not known how long such impacts, or any future
impacts of other significant events described above, will or would last,
but there could be a prolonged period of global economic slowdown, which
may impact your investment. Therefore, the Fund could lose money over
short periods due to short-term market movements and over longer periods
during more prolonged market downturns. During a general market downturn,
multiple asset classes may be negatively affected. Changes in market
conditions and interest rates can have the same impact on all types of
securities and instruments. In times of severe market disruptions you
could lose your entire investment. |
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Options Risk: The
use of options involves investment strategies and risks different from
those associated with ordinary portfolio securities transactions. The
prices of options are volatile and are influenced by, among other things,
actual and anticipated changes in the value of the underlying instrument,
or in interest or currency exchange rates, including the anticipated
volatility (known as implied volatility), which in turn are affected by
fiscal and monetary policies and by national and international political
and economic events. As such, prior to the exercise or expiration of the
option, the Fund is exposed to implied volatility risk, meaning the value,
as based on implied volatility, of an option may increase due to market
and economic conditions or views based on the sector or industry in which
issuers of the underlying instrument participate, including
company-specific factors. By writing call and put option spreads on
underlying instruments, the Fund’s returns over each will be determined by
the performance of the underlying instrument. If the underlying instrument
appreciates or depreciates sufficiently over the period to offset the net
premium received, the Fund may incur losses. Increases in implied
volatility of options may cause the value of an option to increase, even
if the value of the underlying instrument does not change, which could
result in a reduction in the Fund’s share price. In unusual market
circumstances where implied volatility sharply increases or decreases
causing options spreads to be significantly correlated to the underlying
instrument, the Fund’s strategy may not perform as anticipated. By writing
put options, the Fund takes on the risk of declines in the value of the
underlying instrument, including the possibility of a loss up to the
entire strike price of each option it sells but without the corresponding
opportunity to benefit from potential increases in the value of the
underlying instrument. When the Fund writes a put option, it assumes the
risk that it must purchase the underlying instrument at a strike price
that may be higher than the market price of the instrument. If there is a
broad market decline and the Fund is not able to close out its written put
options, it may result in substantial losses to the Fund. The Fund will
receive a premium from writing options, but the premium received may not
be sufficient to offset any losses sustained from exercised put options.
By writing a call option, the Fund may be obligated to deliver instruments
underlying an option at less than the market price. In the case of an
uncovered call option, there is a risk of unlimited loss. When an
uncovered call is exercised, the Fund must purchase the underlying
instrument to meet its call obligations and the necessary instruments may
be unavailable for purchase. |
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Portfolio Turnover
Risk: A higher portfolio turnover may result in higher transactional
and brokerage costs associated with the turnover which may reduce the
Fund’s return, unless the securities traded can be bought and sold without
corresponding commission costs. Active trading of securities may also
increase the Fund’s realized capital gains or losses, which may affect the
taxes you pay as a Fund shareholder. The Fund’s portfolio turnover rate
may exceed 100% annually. |
Temporary Investments:
To respond to adverse market, economic, political or other conditions, the Fund
may invest 100% of its total assets, without limitation, in high-quality
short-term debt securities and money market instruments. These short-term debt
securities and money market instruments include: shares of money market mutual
funds, commercial paper, certificates of deposit, bankers’ acceptances, U.S.
Government securities and repurchase agreements. While the Fund is in a
defensive position, its ability to achieve its investment objective will be
limited. Furthermore, to the extent that the Fund invests in money market mutual
funds for cash positions, there will be some duplication of expenses because the
Fund pays its pro-rata portion of such money market funds’ advisory fees and
operational fees. The Fund may also invest a substantial portion of its assets
in such instruments at any time to maintain liquidity or pending selection of
investments in accordance with its policies.
Portfolio Holdings
Disclosure: A description of the Fund’s policies and regarding the release
of portfolio holdings information is available in the Fund’s Statement of
Additional Information.
Cybersecurity: The
computer systems, networks and devices used by the Fund and its service
providers to carry out routine business operations employ a variety of
protections designed to prevent damage or interruption from computer viruses,
network failures, computer and telecommunication failures, infiltration by
unauthorized persons and security breaches. Despite the various protections
utilized by the Fund and their service providers, systems, networks, or devices
potentially can be breached. The Fund and its shareholders could be negatively
impacted as a result of a cybersecurity breach.
Cybersecurity breaches can
include unauthorized access to systems, networks, or devices; infection from
computer viruses or other malicious software code; and attacks that shut down,
disable, slow, or otherwise disrupt operations, business processes, or website
access or functionality. Cybersecurity breaches may cause disruptions and impact
the Fund’s business operations, potentially resulting in financial losses;
interference with the Fund’s ability to calculate its NAV; impediments to
trading; the inability of the Fund, the Advisor, and other service providers to
transact business; violations of applicable privacy and other laws; regulatory
fines, penalties, reputational damage, reimbursement or other compensation
costs, or additional compliance costs; as well as the inadvertent release of
confidential information.
Similar adverse consequences
could result from cybersecurity breaches affecting issuers of securities in
which the Fund invests; counterparties with which the Fund engages in
transactions; governmental and other regulatory authorities; exchange and other
financial market operators, banks, brokers, dealers, insurance companies, and
other financial institutions (including financial intermediaries and service
providers for the Fund’s shareholders); and other parties. In addition,
substantial costs may be incurred by these entities in order to prevent any
cybersecurity breaches in the future.
MANAGEMENT OF THE
FUND
Investment
Adviser
Toews Corporation (“Toews”),
located at, 1750 Zion Road, Suite 201, Northfield, NJ 08225, serves as
investment adviser to the Fund. Subject to the authority of the Board of
Trustees, the Toews is responsible for the overall management of the Fund’s
business affairs. Toews is responsible for selecting the Fund’s investments
according to the Fund’s investment objective, polices, and restrictions. Toews
was established in 1994 and serves as an investment adviser primarily for
individual investors. As of April 30, 2021, it had approximately $2.2 billion in
assets under management.
Pursuant to an investment
advisory agreement between the Trust, on behalf of the Fund, and Toews (the
“Investment Advisory Agreement”), the Fund pays the adviser, on a monthly basis,
an annual advisory fee of 0.85% of the Fund’s average daily net assets. For the
period from commencement of operations on June 24, 2020 to April 30, 2021, Toews
received a net advisory fee of 0.85% from the Fund’s average daily net assets. A
discussion regarding the basis for the Board’s approval of the Investment
Management Agreement is available in the Fund’s semi-annual shareholder report
dated October 31, 2020.
Toews has contractually agreed
to reduce its fees and to reimburse expenses, at least through August 31, 2022
to ensure that Net Annual Fund Operating Expenses (exclusive of any (i)
front-end or contingent deferred loads, (ii) brokerage fees and commissions,
(iii) acquired fund fees and expenses, (iv) fees and expenses associated with
instruments in other collective investment vehicles or derivative instruments
(including for example options and swap fees and expenses); (v) borrowing costs
(such as interest and dividend expense on securities sold short), (vi) taxes,
(vii) other fees related to underlying investments, (such as option fees and
expenses or swap fees and expenses); or (vii) extraordinary expenses such as
litigation (which may include indemnification of Fund officers and Trustees or
contractual indemnification of Fund service providers (other than the adviser))
will not exceed 0.95%.
Fee waivers and expense
reimbursements are subject to possible recoupment from the Fund in future years
on a rolling three-year basis (within the three years after the fees have been
waived or reimbursed) if such recoupment can be achieved within the foregoing
expense limits. Fee waiver and reimbursement arrangements can decrease the
Fund’s expenses and boost its performance.
Portfolio
Managers
Mr. Phillip Toews, Mr. Randall
Schroeder, Mr. Jason Graffius and Mr. Charles Collins are Co-Portfolio Managers
primarily responsible for the day-to-day management of the Fund.
Mr. Toews received a BS in
Business and Economics from Bethel College in Newton, Kansas in 1986. From 1987
to 1994, Mr. Toews was a financial counselor at IDS/American Express and Dorset
Financial Services. In 1994, Mr. Toews founded the Adviser and has served as its
President and Chief Executive Officer since inception.
Mr. Schroeder received a BA
from Bethel College in Newton, Kansas in 1988 and a MA from Binghamton
University in Binghamton, New York in 1994. Mr. Schroeder has been associated
with Toews Corporation since 1998 and has served as its Chief Operating Officer
since 2006.
Mr. Graffius received a
Bachelor of Science in Accounting from Rutgers University in Camden, NJ in 2002.
He began working with Toews Corporation in October 2013. Mr. Graffius oversees
the day to day operations and researching of investment opportunities Funds.
Prior to working with Toews Corporation, Mr. Graffius was a Vice President at
BlackRock Financial Management, Inc. (2005-2013) where he worked on the
Structured Finance Team, overseeing Collateralized Debt Obligations along with
various Hedge Funds and Government Mandated Projects. He has also previously
worked at JP Morgan.
Mr. Collins received a Bachelor
of Science in Finance from LaSalle University in 2002. He began working at Toews
Corporation in May of 2016. Mr. Collins currently oversees the daily management
of the Toews Funds. Previous to working at Toews Corporation, Mr. Collins was an
equity derivatives broker with Tullett Prebon where he worked specifically with
index and single stock options and well as trading cash. He started his career
in finance with working on the floor at the NYSE as a specialist clerk and
advanced on to being a distinguished member of the exchange as a floor
broker.
Messrs. Toews, Schroeder,
Graffius and Collins have served as Co-Portfolio managers since June
2020.
The Fund’s Statement of
Additional Information provides additional information about the portfolio
managers’ compensation structure, other accounts managed by each portfolio
manager, and the portfolio managers’ ownership of Fund shares.
NET ASSET VALUE
The net asset value (“NAV”) and
offering price (NAV plus any applicable sales charges) of each class of shares
is determined as of the close of the New York Stock Exchange (“NYSE”) (normally
4:00 p.m. Eastern Time) on each day the NYSE is open for business. NAV is
computed by determining, on a per class basis, the aggregate market value of all
assets of the Fund, less its liabilities, divided by the total number of shares
outstanding ((assets-liabilities)/number of shares = NAV). The NYSE is closed on
weekends and New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The NAV takes into account, on a per class basis, the expenses
and fees of the Fund, including management, administration, and distribution
fees, which are accrued daily. The determination of NAV for a share class for a
particular day is applicable to all applications for the purchase of shares, as
well as all requests for the redemption of shares, received by the Fund (or an
authorized broker or agent, or its authorized designee) before the close of
trading on the NYSE on that day.
Generally, a Fund’s securities
are valued each day at the last quoted sales price on each security’s primary
exchange. Securities traded or dealt in upon one or more securities exchanges
(whether domestic or foreign) for which market quotations are readily available
and not subject to restrictions against resale shall be valued at the last
quoted sales price on the primary exchange or, in the absence of a sale on the
primary exchange, at the mean between the current bid and ask prices on such
exchange. If market quotations are not readily available, securities will be
valued at their fair market value as determined in good faith and evaluated as
to the reliability of the fair value method used by the Board on a quarterly
basis, in accordance with procedures approved by the Board. Securities primarily
traded in the National Association of Securities Dealers’ Automated Quotation
System (“NASDAQ”) National Market System for which market quotations are readily
available shall be valued using the NASDAQ Official Closing Price. If market
quotations are not readily available, securities will be valued at their fair
market value as determined using the “fair value” procedures approved by the
Board. Fair value pricing involves subjective judgments and it is possible that
the fair value determined for a security may be materially different than the
value that could be realized upon the sale of that security. The fair value
prices can differ from market prices when they become available or when a price
becomes available. The Board has delegated execution of these procedures to a
fair value team composed of one or more representatives from each of the (i)
Trust, (ii) administrator, and (iii) adviser. The team may also enlist third
party consultants such as an audit firm or financial officer of a security
issuer on an as-needed basis to assist in determining a security-specific fair
value. The Board reviews and ratifies the execution of this process and the
resultant fair value prices at least quarterly to assure the process produces
reliable results.
The Fund may use independent
pricing services to assist in calculating the value of the Fund’s securities. In
addition, market prices for foreign securities are not determined at the same
time of day as the NAV for a Fund. The Fund may invest in foreign securities
that are primarily listed on foreign exchanges that may trade on weekends or
other days when the Fund does not price its shares, the value of the Fund’s
portfolio may change on days when you may not be able to buy or sell Fund
shares. In computing the NAV, the Fund values foreign securities held by the
Fund at the latest closing price on the exchange in which they are traded
immediately prior to closing of the NYSE. Prices of foreign securities quoted in
foreign currencies are translated into U.S. dollars at current rates. If events
materially affecting the value of a security in a Fund’s portfolio, particularly
foreign securities, occur after the close of trading on a foreign market but
before the Fund prices its shares, the securities will be valued at fair value.
For example, if trading in a portfolio security is halted and does not resume
before the Fund calculates its NAV, the adviser may need to price the security
using the Fund’s fair value pricing guidelines. Without a fair value price,
short-term traders could take advantage of the arbitrage opportunity and dilute
the NAV of long-term investors. Fair valuation of the Fund’s portfolio
securities can serve to reduce arbitrage opportunities available to short-term
traders, but there is no assurance that fair value pricing policies will prevent
dilution of the Fund’s NAV by short term traders. The determination of fair
value involves subjective judgments. As a result, using fair value to price a
security may result in a price materially different from the prices used by
other exchange-traded funds to determine net asset value or the price that may
be realized upon the actual sale of the security.
With respect to any portion of
a Fund’s assets that are invested in one or more open-end management investment
companies that are registered under the 1940 Act, the Fund’s net asset value is
calculated based upon the net asset values of the registered open-end management
investment companies in which the Fund invests, and the prospectuses for these
companies explain the circumstances under which those companies will use fair
value pricing and the effects of using fair value pricing.
Premium/Discount
Information
Most investors will buy and
sell Shares of the Fund in secondary market transactions through brokers at
market prices and the Fund’s Shares will trade at market prices. The market
price of Shares of the Fund may be greater than, equal to, or less than NAV.
Market forces of supply and demand, economic conditions and other factors may
affect the trading prices of Shares of the Fund.
Information regarding how often
the Shares of the Fund traded at a price above (at a premium to) or below (at a
discount to) the NAV of the Fund during the past four calendar quarters, when
available, can be found at https://toewsetfs.com.
HOW
TO BUY AND SELL SHARES
Shares of the Fund are listed
for trading on Cboe BZX Exchange, Inc. under the symbol THY. Share prices are
reported in dollars and cents per Share. Shares can be bought and sold on the
secondary market throughout the trading day like other publicly traded shares,
and Shares typically trade in blocks of less than a Creation Unit. There is no
minimum investment required. Shares may only be purchased and sold on the
secondary market when the Exchange is open for trading. The Exchange is open for
trading Monday through Friday and is closed on weekends and the following
holidays, as observed: New Year’s Day, Martin Luther King, Jr. Day, Presidents’
Day, Good Friday, Memorial Day, Independence Day, Juneteenth, Labor Day,
Thanksgiving Day and Christmas Day.
When buying or selling Shares
through a broker, you will incur customary brokerage commissions and charges,
and you may pay some or all of the spread between the bid and the offered price
in the secondary market on each leg of a round trip (purchase and sale)
transaction.
Authorized participants (“APs”)
may acquire Shares directly from the Fund, and APs may tender their Shares for
redemption directly to the Fund, at NAV per Share only in large blocks, or
Creation Units, of 25,000 Shares. Purchases and redemptions directly with the
Fund must follow each Fund’s procedures, which are described in the
SAI.
The Fund may liquidate and
terminate at any time without shareholder approval.
Share Trading
Prices
The approximate value of Shares
of the Fund, an amount representing on a per share basis the sum of the current
market price of the securities accepted by the Fund in exchange for Shares of
the Fund and an estimated cash component will be disseminated every 15 seconds
throughout the trading day through the facilities of the Consolidated Tape
Association. This approximate value should not be viewed as a “real-time” update
of the NAV per Share of the Fund because the approximate value may not take into
account certain Fund expenses and may not be calculated in the same manner as
the NAV, which is computed once a day, generally at the end of the business day.
The Fund is not involved in, or responsible for, the calculation or
dissemination of the approximate value of the Shares, and the Fund does not make
any warranty as to the accuracy of these values.
Book Entry
Shares are held in book entry
form, which means that no stock certificates are issued. The Depository Trust
Company (“DTC”) or its nominee is the record owner of all outstanding Shares of
the Fund and is recognized as the owner of all Shares for all
purposes.
Investors owning Shares are
beneficial owners as shown on the records of DTC or its participants. DTC serves
as the securities depository for all Shares. Participants in DTC include
securities brokers and dealers, banks, trust companies, clearing corporations
and other institutions that directly or indirectly maintain a custodial
relationship with DTC. As a beneficial owner of Shares, you are not entitled to
receive physical delivery of stock certificates or to have Shares registered in
your name, and you are not considered a registered owner of Shares. Therefore,
to exercise any right as an owner of Shares, you must rely upon the procedures
of DTC and its participants. These procedures are the same as those that apply
to any other securities that you hold in book entry or “street name”
form.
FREQUENT PURCHASES AND
REDEMPTIONS OF FUND SHARES
The Fund’s Shares can only be
purchased and redeemed directly from the Fund in Creation Units by APs, and the
vast majority of trading in the Fund’s Shares occurs on the secondary market.
Because the secondary market trades do not directly involve the Fund, it is
unlikely those trades would cause the harmful effects of market timing,
including dilution, disruption of portfolio management, increases in the Fund’s
trading costs and the realization of capital gains. With regard to the purchase
or redemption of Creation Units directly with the Fund, to the extent effected
in-kind (i.e., for securities), those trades do not cause the harmful
effects that may result from frequent cash trades. To the extent trades are
effected in whole or in part in cash, those trades could result in dilution to
the Fund and increased transaction costs, which could negatively impact the
Fund’s ability to achieve its investment objective. However, direct trading by
APs is critical to ensuring that the Fund’s Shares trade at or close to NAV. The
Fund also employ fair valuation pricing to minimize potential dilution from
market timing. In addition, the Fund impose transaction fees on purchases and
redemptions of Fund Shares to cover the custodial and other costs incurred by
the Fund in effecting trades. These fees increase if an investor substitutes
cash in part or in whole for securities, reflecting the fact that a Fund’s
trading costs increase in those circumstances. Given this structure, the Trust
has determined that it is not necessary to adopt policies and procedures to
detect and deter market timing of the Fund’s Shares.
DISTRIBUTION AND SERVICE
PLAN
The Fund has adopted a
distribution and service plan (“Plan”) pursuant to Rule 12b-1 under the 1940
Act. Under the Plan, the Fund is authorized to pay distribution fees to the
distributor and other firms that provide distribution and shareholder services
(“Service Providers”). If a Service Provider provides these services, the Fund
may pay fees at an annual rate not to exceed 0.25% of average daily net assets,
pursuant to Rule 12b-1 under the 1940 Act.
No distribution or service fees
are currently paid by the Fund, and there are no current plans to impose these
fees. In the event Rule 12b-1 fees were charged, over time they would increase
the cost of an investment in the Fund and may over time, not only increase your
costs but cost more than other charges.
DIVIDENDS, OTHER DISTRIBUTIONS
AND TAXES
Unlike interests in
conventional mutual funds, which typically are bought and sold from and to the
fund only at closing NAVs, the Fund’s Shares are traded throughout the day in
the secondary market on a national securities exchange on an intra-day basis and
are created and redeemed in-kind and/or for cash in Creation Units at each day’s
next calculated NAV. In-kind arrangements are designed to protect ongoing
shareholders from the adverse effects on a Fund’s portfolio that could arise
from frequent cash redemption transactions. In a conventional mutual fund,
redemptions can have an adverse tax impact on taxable shareholders if the mutual
fund needs to sell portfolio securities to obtain cash to meet net fund
redemptions. These sales may generate taxable gains for the ongoing shareholders
of the mutual fund, whereas the Shares’ in-kind redemption mechanism generally
will not lead to a tax event for the Fund or its ongoing
shareholders.
Ordinarily, dividends from net
investment income, if any, are declared and paid monthly by the Fund. The Fund
distributes its net realized capital gains, if any, to shareholders
annually.
Distributions in cash may be
reinvested automatically in additional whole Shares only if the broker through
whom you purchased Shares makes such option available.
Taxes
As with any investment, you
should consider how your investment in Shares will be taxed. The tax information
in this Prospectus is provided as general information. You should consult your
own tax professional about the tax consequences of an investment in
Shares.
Unless your investment in
Shares is made through a tax-exempt entity or tax-deferred retirement account,
such as an individual retirement account, you need to be aware of the possible
tax consequences when:
|
● |
The Fund makes
distributions, |
|
● |
You sell your Shares
listed on the Exchange, and |
|
● |
You purchase or redeem
Creation Units. |
Taxes on
Distributions
As stated above, dividends from
net investment income, if any, ordinarily are declared and paid monthly by the
Fund. The Fund may also pay a special distribution at the end of a calendar year
to comply with federal tax requirements. Distributions from each Fund’s net
investment income, including net short-term capital gains, if any, are taxable
to you as ordinary income, except that each Fund’s dividends attributable to its
“qualified dividend income” (i.e., dividends received on stock of most
domestic and certain foreign corporations with respect to which the Fund
satisfies certain holding period and other restrictions), if any, generally are
subject to federal income tax for non-corporate shareholders who satisfy those
restrictions with respect to their Fund shares at the rate for net capital gain
-- a maximum of 15% for taxable years beginning before 2013. A part of each
Fund’s dividends also may be eligible for the dividends-received deduction
allowed to corporations -- the eligible portion may not exceed the aggregate
dividends each Fund receives from domestic corporations subject to federal
income tax (excluding REITs) and excludes dividends from foreign corporations --
subject to similar restrictions. However, dividends a corporate shareholder
deducts pursuant to that deduction are subject indirectly to the federal
alternative minimum tax.
In general, your distributions
are subject to federal income tax when they are paid, whether you take them in
cash or reinvest them in the Fund (if that option is available). Distributions
reinvested in additional Shares of a Fund through the means of a dividend
reinvestment service, if available, will be taxable to shareholders acquiring
the additional Shares to the same extent as if such distributions had been
received in cash. Distributions of net long-term capital gains, if any, in
excess of net short-term capital losses are taxable as long-term capital gains,
regardless of how long you have held the Shares.
Distributions in excess of a
Fund’s current and accumulated earnings and profits are treated as a tax-free
return of capital to the extent of your basis in the Shares and as capital gain
thereafter. A distribution will reduce a Fund’s NAV per Share and may be taxable
to you as ordinary income or capital gain (as described above) even though, from
an investment standpoint, the distribution may constitute a return of
capital.
By law, the Fund is required to
withhold 28% of your distributions and redemption proceeds if you have not
provided the Fund with a correct Social Security number or other taxpayer
identification number and in certain other situations.
Taxes on Exchange-Listed
Share Sales
Any capital gain or loss
realized upon a sale of Shares is generally treated as long-term capital gain or
loss if the Shares have been held for more than one year and as short-term
capital gain or loss if the Shares have been held for one year or less. The
ability to deduct capital losses from sales of Shares may be limited.
Taxes on Purchase and
Redemption of Creation Units
An AP who exchanges securities
for Creation Units generally will recognize a gain or a loss equal to the
difference between the market value of the Creation Units at the time of the
exchange and the sum of the exchanger’s aggregate basis in the securities
surrendered plus any Cash Component it pays. An AP who exchanges Creation Units
for securities will generally recognize a gain or loss equal to the difference
between the exchanger’s basis in the Creation Units and the sum of the aggregate
market value of the securities received plus any cash equal to the difference
between the NAV of the Shares being redeemed and the value of the securities.
The Internal Revenue Service (“Service”), however, may assert that a loss
realized upon an exchange of securities for Creation Units cannot be deducted
currently under the rules governing “wash sales” or for other reasons. Persons
exchanging securities should consult their own tax advisor with respect to
whether wash sale rules apply and when a loss might be deductible.
Any capital gain or loss
realized upon redemption of Creation Units is generally treated as long-term
capital gain or loss if the Shares have been held for more than one year and as
short-term capital gain or loss if the Shares have been held for one year or
less.
If you purchase or redeem
Creation Units, you will be sent a confirmation statement showing how many
Shares you purchased or sold and at what price. See “Tax Status” in the SAI for
a description of the newly effective requirement regarding basis determination
methods applicable to Share redemptions and each Fund’s obligation to report
basis information to the Service.
The foregoing discussion
summarizes some of the possible consequences under current federal tax law of an
investment in the Fund. It is not a substitute for personal tax advice. Consult
your personal tax advisor about the potential tax consequences of an investment
in the Shares under all applicable tax laws. See “Tax Status” in the SAI for more
information.
Fund Service
Providers
Gemini Fund Services, LLC is
the Fund’s administrator and fund accountant. It has its principal office at
4221 North 203rd Street, Suite 100 Elkhorn, NE 68022, and is primarily in the
business of providing administrative, fund accounting and transfer agent
services to retail and institutional mutual funds. It is an affiliate of the
Distributor.
Brown Brothers Harriman &
Co., is the Fund’s transfer agent and custodian.
Northern Lights Distributors,
LLC (the “Distributor”), 4221 North 203rd Street, Suite 100, Elkhorn,
NE 68022, is the distributor for the shares of the Fund. The Distributor is a
registered broker-dealer and member of the Financial Industry Regulatory
Authority, Inc. (“FINRA”).
Thompson Hine LLP, 41 South
High Street, Suite 1700, Columbus, Ohio 43215, serves as legal counsel to the
Trust.
RSM US LLP, located at 555
Seventeenth Street, Suite 1200 Denver, Colorado 80202, serves as the Fund’s
independent registered public accounting firm. The independent registered public
accounting firm is responsible for auditing the annual financial statements of
the Fund.
OTHER INFORMATION
Continuous
Offering
The method by which Creation
Units of Shares are created and traded may raise certain issues under applicable
securities laws. Because new Creation Units of Shares are issued and sold by the
Fund on an ongoing basis, a “distribution,” as such term is used in the
Securities Act of 1933, as amended (the “Securities Act”), may occur at any
point. Broker-dealers and other persons are cautioned that some activities on
their part may, depending on the circumstances, result in their being deemed
participants in a distribution in a manner which could render them statutory
underwriters and subject them to the prospectus delivery requirement and
liability provisions of the Securities Act.
For example, a broker-dealer
firm or its client may be deemed a statutory underwriter if it takes Creation
Units after placing an order with the Distributor, breaks them down into
constituent Shares and sells the Shares directly to customers or if it chooses
to couple the creation of a supply of new Shares with an active selling effort
involving solicitation of secondary market demand for Shares. A determination of
whether one is an underwriter for purposes of the Securities Act must take into
account all the facts and circumstances pertaining to the activities of the
broker-dealer or its client in the particular case, and the examples mentioned
above should not be considered a complete description of all the activities that
could lead to a characterization as an underwriter.
Broker-dealer firms should also
note that dealers who are not “underwriters” but are effecting transactions in
Shares, whether or not participating in the distribution of Shares, are
generally required to deliver a prospectus. This is because the prospectus
delivery exemption in Section 4(3) of the Securities Act is not available in
respect of such transactions as a result of Section 24(d) of the 1940 Act. As a
result, broker-dealer firms should note that dealers who are not “underwriters”
but are participating in a distribution (as contrasted with engaging in
ordinary secondary market transactions) and thus dealing with the Shares that
are part of an overallotment within the meaning of Section 4(3)(C) of the
Securities Act, will be unable to take advantage of the prospectus delivery
exemption provided by Section 4(3) of the Securities Act. For delivery of
prospectuses to exchange members, the prospectus delivery mechanism of Rule 153
under the Securities Act is only available with respect to transactions on a
national exchange.
Dealers effecting
transactions in the Shares, whether or not participating in this distribution,
are generally required to deliver a Prospectus. This is in addition to any
obligation of dealers to deliver a Prospectus when acting as
underwriters.
Householding: To reduce
expenses, the Fund mails only one copy of the prospectus and each annual and
semi-annual report to those addresses shared by two or more accounts. If you
wish to receive individual copies of these documents, please call the Fund at
800-511-9270 on days the Fund is open for business or contact your financial
institution. The Fund will begin sending you individual copies thirty days after
receiving your request.
FINANCIAL HIGHLIGHTS
The financial highlights table
is intended to help you understand the Fund’s financial performance for the
period of the Fund’s operations. Certain information reflects financial results
for a single Fund share. The financial highlights for the Fund are presented
below. The total returns in the table represent the rate that an investor would
have earned (or lost) on an investment in the Fund (assuming reinvestment of all
dividends and distributions). This information for the Fund has been derived
from the financial statements audited by RSM US LLP, whose report, along with
the Fund’s financial statements, are included in the Fund’s April 30, 2021
annual report, which is available upon request.
Per Share Data and Ratios
for a Share of Beneficial Interest Outstanding Throughout the Period
Presented |
|
|
Dynamic
Tactical |
|
|
|
Income
ETF (a) |
|
|
|
For the
Period Ended |
|
|
|
April 30,
2021 |
|
|
|
|
|
Net asset value,
beginning of period |
|
$ |
25.00 |
|
Activity from investment
operations: |
|
|
|
|
Net investment income
(b) |
|
|
0.43 |
|
Net realized and
unrealized gain (loss) on investments |
|
|
0.66 |
|
Total from investment
operations |
|
|
1.09 |
|
Less distributions
from: |
|
|
|
|
Net investment
income |
|
|
(0.44 |
) |
Net realized
gains |
|
|
(0.36 |
) |
Total
distributions |
|
|
(0.80 |
) |
Net asset value, end of
period |
|
$ |
25.29 |
|
Market price, end of
period |
|
$ |
25.26 |
|
Total return
(c)(d) |
|
|
4.41 |
% |
Market Price Total return
(c)(d) |
|
|
4.29 |
% |
Net assets, end of period
(000s) |
|
$ |
38,564 |
|
Ratio of gross expenses
to average net assets (e)(f)(i) |
|
|
1.19 |
% |
Ratio of net expenses to
average net assets (e)(i) |
|
|
0.95 |
% |
Ratio of net investment
income to average net assets (e)(g)(i) |
|
|
1.99 |
% |
Portfolio Turnover Rate
(d)(h) |
|
|
595 |
% |
(a) |
The Toews Agility Shares
Dynamic Tactical Income ETF commenced operations on June 24,
2020. |
|
|
(b) |
Per share amounts
calculated using the average shares method, which more appropriately
presents the per share data for the period. |
|
|
(c) |
Total return is
calculated assuming a purchase of shares at net asset value on the first
day and a sale at net asset value on the last day of the period.
Distributions are assumed, for the purpose of this calculation, to be
reinvested at the ex-dividend date net asset value per share on their
respective payment dates. Total return would have been lower absent fee
waiver/expense reimbursement. |
|
|
(d) |
Not
annualized. |
|
|
(e) |
Annualized. |
|
|
(f) |
Represents the ratio of
expenses to average net assets absent fee waivers and/or expense
reimbursements by the Adviser. |
|
|
(g) |
Recognition of net
investment income by the Fund is affected by the timing of the declaration
of dividends by the underlying investment companies in which the Fund
invests. |
|
|
(h) |
Excludes securities
received or delivered from in-kind transactions |
|
|
(i) |
Excluding interest
expense, the following ratios would have been: |
Gross expenses to average
net assets |
|
|
1.19 |
% |
Net expenses to average
net assets |
|
|
0.95 |
% |
Net investment income to
average net assets |
|
|
1.99 |
% |
PRIVACY
NOTICE
Northern Lights Fund
Trust
Rev. April
2021
FACTS |
WHAT DOES NORTHERN
LIGHTS FUND TRUST DO WITH YOUR PERSONAL
INFORMATION? |
Why? |
Financial companies
choose how they share your personal information. Federal law
gives consumers the right to limit some, but not all
sharing. Federal law also requires us to tell you how we
collect, share, and protect your personal information. Please
read this notice carefully to understand what we
do. |
What? |
The types of personal
information we collect and share depends on the product or service that
you have with us. This information can include:
● Social
Security number and wire transfer instructions
● account
transactions and transaction history
● investment
experience and purchase history
When you are no longer
our customer, we continue to share your information as described in
this notice. |
How? |
All financial companies
need to share customers’ personal information to run their everyday
business. In the section below, we list the reasons financial
companies can share their customers’ personal information; the reasons
Northern Lights Fund Trust chooses to share; and whether you can limit
this sharing. |
Reasons we can share
your personal information: |
Does Northern Lights
Fund Trust share information? |
Can you limit this
sharing? |
For our everyday
business purposes - such as to process your transactions, maintain
your account(s), respond to court orders and legal investigations, or
report to credit bureaus. |
YES |
NO |
For our marketing
purposes - to offer our products and services to you. |
NO |
We don’t
share |
For joint marketing
with other financial companies. |
NO |
We don’t
share |
For our affiliates’
everyday business purposes - information about your transactions and
records. |
NO |
We don’t
share |
For our affiliates’
everyday business purposes - information about your credit
worthiness. |
NO |
We don’t
share |
For nonaffiliates to
market to you |
NO |
We don’t
share |
QUESTIONS? |
Call
1-631-490-4300 |
PRIVACY
NOTICE
Northern Lights Fund
Trust
What
we do: |
How does Northern
Lights Fund Trust protect my personal information?
|
To protect your personal
information from unauthorized access and use, we use security measures
that comply with federal law. These measures include computer safeguards
and secured files and buildings.
Our service providers are
held accountable for adhering to strict policies and procedures to prevent
any misuse of your nonpublic personal information. |
How does Northern
Lights Fund Trust collect my personal information?
|
We collect your personal
information, for example, when you
● open an
account or deposit money
● direct us to
buy securities or direct us to sell your securities
● seek advice
about your investments
We also collect your
personal information from others, such as credit bureaus, affiliates, or
other companies.
|
Why can’t I limit all
sharing?
|
Federal law gives you the
right to limit only:
● sharing for
affiliates’ everyday business purposes – information about your
creditworthiness.
● affiliates
from using your information to market to you.
● sharing for
nonaffiliates to market to you.
State laws and individual
companies may give you additional rights to limit
sharing. |
Definitions |
Affiliates |
Companies related by
common ownership or control. They can be financial and nonfinancial
companies.
● Northern
Lights Fund Trust does not share with our affiliates. |
Nonaffiliates |
Companies not related by
common ownership or control. They can be financial and nonfinancial
companies.
● Northern
Lights Fund Trust does not share with nonaffiliates so they can market to
you. |
Joint
marketing |
A formal agreement
between nonaffiliated financial companies that together market financial
products or services to you.
● Northern
Lights Fund Trust doesn’t jointly
market. |
TOEWS AGILITY SHARES DYNAMIC
TACTICAL INCOME ETF
Adviser |
Toews
Corporation
1750 Zion Road, Suite
201
Northfield, NJ
08225 |
Distributor |
Northern Lights
Distributors, LLC
4221 North 203rd Street,
Suite 100
Elkhorn, NE
68022 |
Legal
Counsel |
Thompson Hine
LLP 41 South High Street, Suite 1700
Columbus, OH
43215 |
Administrator/
Fund
Account |
Gemini Fund Services,
LLC
4221 North 203rd Street,
Suite 100
Elkhorn, NE
68022 |
Transfer
Agent
and
Custodian |
Brown Brothers
Harriman & Co.
50 Post Office
Square
Boston, MA
02110 |
Independent
Registered
Public
Accounting
Firm |
RSM US
LLP
555 Seventeenth Street,
Suite 1200
Denver, CO
80202 |
Additional information about
the Fund, including the Fund’s policies and procedures with respect to
disclosure of the Fund’s portfolio holdings, is included in the Fund’s Statement
of Additional Information dated August 28, 2021 (the “SAI”). The SAI is
incorporated into this Prospectus by reference (i.e., legally made a part of
this Prospectus). The SAI provides more details about the Fund’s policies and
management. Additional information about the Fund’s investments is also
available in the Fund’s Annual and Semi-Annual Reports to
Shareholders.
To obtain a free copy of the
SAI or other information about the Fund, or to make shareholder inquiries about
the Fund, please call 800-511-9270 or visit https://toewsetfs.com. You may also
write to:
Toews Funds
c/o Gemini Fund Services,
LLC
P.O. Box 541150
Omaha, Nebraska
68154
or over night
4221 North 203rd
Street, Suite 100
Elkhorn,
Nebraska 68022-3474
Reports and other information
about the Fund are available on the EDGAR Database on the SEC’s Internet site at
http://www.sec.gov. Copies of
the information may be obtained, after paying a duplicating fee, by electronic
request at the following E-mail address: [email protected].
Investment Company Act File
#811-21720