Strategy. The Fund?s investment adviser, Advisors Preferred, LLC (the ?Adviser?), delegates execution of the Fund?s investment strategy to the Subadviser, Flexible Plan Investments, Ltd. (?FPI? or the ?Subadviser?). The Subadviser selects investments for the Fund and provides trade placement for fixed income instruments, including cash equivalents. The Adviser provides trade placement for non-fixed income instruments. The Fund is aggressively managed by the Subadviser, which typically results in high portfolio turnover. FPI seeks to achieve the Fund?s investment objective primarily by using the Subadviser?s proprietary Self-Adjusting Trend Following Strategy (?STF Strategy?). The STF Strategy assesses market risk and classifies it into four levels and allocates assets accordingly between equity-related and fixed income-related asset classes. Self-Adjusting Trend Following Strategy The STF Strategy is … Show more… The Fund?s investment adviser, Advisors Preferred, LLC (the ?Adviser?), delegates execution of the Fund?s investment strategy to the Subadviser, Flexible Plan Investments, Ltd. (?FPI? or the ?Subadviser?). The Subadviser selects investments for the Fund and provides trade placement for fixed income instruments, including cash equivalents. The Adviser provides trade placement for non-fixed income instruments. The Fund is aggressively managed by the Subadviser, which typically results in high portfolio turnover. FPI seeks to achieve the Fund?s investment objective primarily by using the Subadviser?s proprietary Self-Adjusting Trend Following Strategy (?STF Strategy?). The STF Strategy assesses market risk and classifies it into four levels and allocates assets accordingly between equity-related and fixed income-related asset classes. Self-Adjusting Trend Following Strategy The STF Strategy is used to allocate Fund assets between long and short equity-related and long fixed income-related investments. This strategy monitors the price trends of the NASDAQ 100 Index to assess market conditions. The proprietary price-based rules can involve index prices at daily market close, and moving average values of daily close prices, including but not limited to 3-day, 5-day, 10-day, 50-day and 200-day moving averages, as well as day-to-day changes of one or more of these moving averages, and the slope of the moving averages. The STF Strategy follows easily identifiable market trends, with a proprietary rule set that seeks to take advantage of both up and down market trends. Since the market risk exposure of the STF Strategy is solely based on the price action of the NASDAQ 100 Index, the STF Strategy aims to out-perform the NASDAQ 100 Index over the long term with less downside risk. The NASDAQ 100 Index includes 100 of the largest domestic and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization. The STF Strategy adjusts overall Fund market risk exposure relative to the NASDAQ 100 Index at four discrete levels, defined by proprietary market trend measures, and according to a NASDAQ 100 Index price-based proprietary rule set: 1. When the rule set indicates no obvious market trend, as defined by the Subadviser?s proprietary indicators, the strategy dictates near-zero exposure to equity market risk (a ?Flat? position), and the two income allocations described below account for nearly all of the allocation of Fund assets. 2. When the rule set indicates a regular up trend, as defined by the Subadviser?s proprietary indicators, the strategy dictates 100% exposure to the NASDAQ 100 Index (a ?1x Long? position), through investments in Exchange Traded Funds (?ETFs?), and Exchange Traded Notes (?ETNs?), futures or swaps contracts. Each of these can be used as substitutes for the NASDAQ 100 Index. The Fund should realize approximately 100% of the NASDAQ 100 Index return, before expenses of the Fund and expenses of the investments used to execute the 1x Long position. To the extent leverage is utilized through leveraged ETFs, futures or swaps, the Fund may have investible funds to include in the two income allocations. 3. When the rule set indicates a strong up trend, as defined by the Subadviser?s proprietary indicators, the strategy dictates a 200% exposure to the NASDAQ 100 Index (a ?2x Long? position), through investment in ETFs, ETNs, futures or swaps contracts. Each of these can be used as substitutes for the NASDAQ 100 Index. The Fund should realize approximately 200% of the NASDAQ 100 Index return, before expenses of the Fund and expenses of the investments used to execute the 2x Long position. To the extent leverage is utilized through leveraged ETFs, futures or swaps, the Fund may have investible funds to include in the two income allocations. 4. When the rule set indicates a down market trend, as defined by the Subadviser?s proprietary indicators, the strategy dictates an inverse or short 100% exposure to the NASDAQ 100 index (a ?1x Short? position), through investments in inverse or leveraged inverse ETFs or ETNs, futures or swaps. Each of these can be used as substitutes for an inverse NASDAQ 100 Index position. The Fund should realize an approximate negative 100% of the NASDAQ 100 Index?s return, before expenses of the Fund and expenses of the investments used to execute the 1x Short position. To the extent leverage is utilized through ETFs, futures or swaps, the Fund may have investible funds to include in the two income allocations. Short to Medium-Term Fixed Income Allocation The Fund will invest directly in short to medium-term fixed income securities. The portion of the Fund invested in short- to medium-term fixed income securities will be greatest when the STF Strategy finds no obvious market trend (risk level 1 above). The Subadviser?s security selection decisions are driven by liquidity, rating and time to maturity. This portion of the Fund?s portfolio is constructed in order to mitigate interest rate and credit risk while optimizing income and will involve investment in the following securities: cash, cash equivalents, and upper medium investment grade to prime investment grade short-term debt securities and money market instruments. Fixed Income/Equity Income Allocation The Fund will also invest in income-producing securities. The portion of the Fund invested in income-producing securities will be greatest when the STF Strategy finds no obvious market trend (risk level 1 above). The Fund does so indirectly through ETFs, other closed-end and open-end investment companies that themselves primarily invest in income-producing securities. The underlying income-producing securities to which the Fund seeks to gain exposure are primarily: U.S. government securities, corporate debt obligations, foreign debt securities (including emerging markets, which the Fund defines, generally, as those with per capita income less than half that of the U.S.), and bonds in the lowest credit rating category, also called ?junk bonds,? convertible bonds, preferred stocks, common stocks, master limited partnerships (?MLPs?), and real estate investment trusts (?REITs?). Subadvisor may also utilize its proprietary Targeted Volatility Analysis (TVA) in conjunction with the use of the two income allocations to seek to target a level of volatility (based on historical standard deviation measures) for the Fund during any of the Fund?s four levels of market risk exposure. The Fund may supplement its exposure to equity markets other than the NASDAQ 100 index through an investment in pooled investment vehicles that focus on other equity segments such as the S&P 500. The Fund invests without restriction as to issuer capitalization, country, credit quality or the maturity of a security. The Adviser selects swap counterparties that it believes are creditworthy based on credit rating and financial strength. In addition, the Subadviser uses the Fund as an asset allocation tool for its other clients, which may lead to purchases and redemptions of Fund shares. Responding to purchase and redemption-related fluctuations in the Fund?s size will result in portfolio turnover not directly related to the preceding investment strategy analysis. Show less