Strategy. The Fund seeks to achieve its investment objective by investing primarily in a portfolio of repurchase agreements. Fund Investments Repurchase agreements, or repos, are short term transactions in which the Fund purchases a security and simultaneously agrees to sell it back to the same counterparty at a later date. The difference in the purchase price and the sale price represents the return on the transaction for the Fund. The Fund will always require the counterparty to deliver eligible securities as defined in the repurchase agreement to the Fund with a market value that is greater than the sale price as collateral in exchange for the funds advanced by the Fund at the outset of the transaction. This collateral seeks to … Show more… The Fund seeks to achieve its investment objective by investing primarily in a portfolio of repurchase agreements. Fund Investments Repurchase agreements, or repos, are short term transactions in which the Fund purchases a security and simultaneously agrees to sell it back to the same counterparty at a later date. The difference in the purchase price and the sale price represents the return on the transaction for the Fund. The Fund will always require the counterparty to deliver eligible securities as defined in the repurchase agreement to the Fund with a market value that is greater than the sale price as collateral in exchange for the funds advanced by the Fund at the outset of the transaction. This collateral seeks to provide the Fund protection should the counterparty not perform based on the terms of the repurchase agreement. The percentage difference between the value of the securities received in the transaction and the purchase price is known as the haircut. Additionally, the Fund will continue to monitor the market value of the securities collateral to seek to maintain the appropriate haircut. For example, if the market value of the securities collateral declines by more than a pre-determined threshold amount, the Fund will require the counterparty to immediately deliver more eligible securities or cash to maintain the agreed upon haircut. The Fund may enter into repurchase agreements with a broad variety of counterparties including, but not limited to, financial institutions, broker/dealers, insurance companies, mortgage bankers, real estate investment trusts (REITs), investment companies and private funds. All counterparties must meet the Advisers credit guidelines. The Fund will limit the collateral backing repurchase agreements to financial obligations and fixed income securities issued by the U.S. Government and U.S. Government agencies. In addition, the Fund will seek to invest in repurchase agreements consistent with the rules and regulations outlined in the U.S. Code of Federal Regulations by federal banking regulators for national banks and federal credit unions. The Funds custodian will hold the securities collateral, although the Fund may engage with a variety of additional qualified custodians for specific transactions when the additional qualified custodian has been approved by the Board of Trustees of the Trust. The Fund may also enter into dollar roll transactions with approved counterparties. Dollar roll transactions are short term (usually 30 days) financings in which the Fund purchases and simultaneously sells (for a future settlement date) agency mortgage-backed security pools. Dollar rolls are similar to repurchase agreements with the key difference being that the Fund is not required to return the exact same securities that were delivered by the borrower. Instead, the Fund must return similar pools with minimum qualifications usually including the issuer, coupon rate, and original maturity of the pools. The Fund may invest in reverse repurchase agreements. In a reverse repurchase agreement, the Fund sells a security and agrees to repurchase the same security at a mutually agreed upon date and price reflecting the interest rate effective for the term of the agreement. For purposes of the 1940 Act, a reverse repurchase agreement is considered borrowing by the Fund and, therefore, a form of leverage. Leverage may cause any gains or losses for the Fund to be magnified. The Funds investment in reverse repurchase agreements may not exceed 33 1/3% of the Funds total assets. Under normal market conditions, the Fund is allowed to hold up to 10% of its total net assets directly in short-term U.S. Government and U.S. Government agency securities to serve as an additional source of immediate liquidity. These securities will include U.S. Treasury Bills and Notes, government agency discount notes, and other short maturity U.S. Government and U.S. Government agency fixed income and mortgage-backed securities that meet the investment criteria for the Fund. These securities will be held primarily to manage the regular subscriptions and redemptions in the Fund, effectively providing a buffer against net redemptions in the Fund and to provide additional cash should new repurchase agreement opportunities arise. Under normal market and interest rate conditions, the Fund will target an effective duration less than the duration of a 1-month U.S. Treasury Bill with a maximum duration of a 3-month U.S. Treasury Bill. The Fund will seek to limit its investments and investment techniques so as to qualify as a permissible investment for nationally chartered banks and federal credit unions under current applicable federal laws and regulations. Nationally chartered banks and federal credit unions should consult with their legal counsel regarding federal laws and regulations applicable to their investment in the Fund. The Fund also encourages state chartered commercial banks to consult their legal counsel regarding whether shares of the Fund are a permissible investment under their state law. The Fund is not a money market fund and its share price may fluctuate. The Fund is not required to follow the portfolio quality and risk diversification or other risk limiting provisions required of money market funds pursuant to Rule 2a-7 and does not qualify for the simplified net asset value method of tax accounting. Unlike a money market fund, the Fund is not subject to the risk-limiting conditions of Rule 2a-7 under the Investment Company Act of 1940 with respect to portfolio maturity, quality, diversification, and liquidity. Because of this, the fund may have exposures to these risks that are different from, and in some cases higher than, a money market fund (see the Principal Risks section). The Fund expects to enter into repurchase agreements with counterparties, such as broker/dealers, REITs, investment companies and private funds, that are not typically used by money market funds. The Fund may not invest more than 15% of its net assets in illiquid securities. An illiquid security is any investment that the Adviser reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. Repurchase agreements with a remaining term in excess of seven (7) days are considered illiquid. Investment Process The investment process is structured to provide a robust oversight structure for the investment strategies pursued by the Adviser. The Advisers portfolio management team is responsible for sourcing borrowers seeking repurchase agreement financing. The Adviser maintains a credit committee (the Advisers Credit Committee) composed of individuals with extensive backgrounds in evaluating counterparty credit, risk management, analyzing fixed income securities, and structuring repurchase and financing agreements. The Advisers Credit Committee is tasked with reviewing the terms under which the Advisers portfolio management team may engage the Fund with specific counterparties and includes members that are not part of the portfolio management team. Based on the due diligence deliverables developed by the Advisers Credit Committee, the Advisers portfolio management team will present counterparties to the Advisers Credit Committee for approval. The Advisers Credit Committee will approve all counterparties for repurchase agreements, taking into consideration the creditworthiness of the counterparty as well as the securities used as collateral for the repurchase agreement, the haircut applied to the collateral, and the legal terms and conditions of the legal documents governing the repurchase agreement. Once a counterparty has been approved and a repurchase agreement funded, the Advisers portfolio management team will then be responsible for the oversight of the counterparty and all transactions associated with that counterparty. The Funds sub-adviser will develop risk management analytics that will be utilized by the Advisers portfolio management team to oversee outstanding repurchase agreements and to seek to insure that the value of the collateral is sufficient according to the terms of each repurchase agreement. All counterparties will be reviewed regularly at a Credit Committee meeting, which is held at least once every quarter, to confirm that the credit and financial terms under which they were approved remain in place and all outstanding repurchase agreements are reviewed daily to verify that the transaction is properly collateralized. Members of the Funds sub-adviser will also present to the Credit Committee to review the compliance with the terms of each repurchase agreement. For securities purchased in lieu of repurchase agreements, the Advisers portfolio management team is responsible for selecting these investments. Show less